Audit 369762

Significant deficiency in internal controls over compliance related to subrecipient monitoring. Federal Agency: Department of Labor Program Titles: Workforce Innovation and Opportunity Act Dislocated Worker Program Assistance Listing Number: 17.278 Award Numbers: 24A60CP000141-01-01 Award Periods: April 1, 2024 through September 30, 2025 Criteria Internal controls requirements contained in Title 2 U.S. Code of Federal Regulations (CFR) 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Subpart D requires a pass-through entity to adopt compliance policies to ensure sub-recipients comply with requirements under the award, and evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of such agreements for the purposes of determining appropriate subrecipient monitoring. Condition/Context for Evaluation The Organization does not have a formal subrecipient monitoring policy to implement Subrecipient Monitoring procedures as required by 2 CFR Part 200.332. For the one subrecipient selected for testing, the Organization could not produce documentation of the required subrecipient risk assessment and the subrecipient agreement was missing certain required elements. Questioned Costs None noted Cause The Organization does not have a formal subrecipient monitoring policy that includes retention of a documented subrecipient risk assessment, as well as, use of a standard subaward agreement template including all required subaward agreement elements. Effect Subrecipient Monitoring procedures may not be properly determined without completion of a documented subrecipient risk assessment. In addition, the subaward agreement may not include all subaward terms as required by 200.332(b). Repeat Finding Not Applicable. Recommendation We recommend that management develop and formalize a subrecipient monitoring policy in accordance with 2 CFR Part 200, including use of a documented subrecipient risk assessment, as well as, creation of a Federal subaward agreement template which includes all require elements. Views of Responsible Officials Management agrees that even though subrecipient risk was discussed and considered, the subrecipient risk assessment was not documented in accordance with 2 CFR Part 200. In addition, management agrees that the underlying subaward agreement did not include all elements required by the same Part.

Significant deficiency in internal controls over compliance related to reporting. Federal Agency: Department of Labor Program Titles: Workforce Innovation and Opportunity Act Dislocated Worker Program Assistance Listing Number: 17.278 Award Numbers: 24A60CP000141-01-01 Award Periods: April 1, 2024 through September 30, 2025 Criteria Under the requirements of the Federal Funding Accountability and Transparency Act (Pub. L. No. 109-282) (Transparency Act) that are codified in 2 Code of Federal Regulations (CFR) Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements who make first tier subawards of $30,000 or more are required to register the covered subawards in the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) and report the required subaward data no later than the last day of the month following the month the subaward was made. Condition/Context for Evaluation During the year ended December 31, 2024, the Organization lacked a process to report required subaward data in the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) and report subaward data through FSRS for those subrecipients receiving over $30,000. Transactions Tested Subaward Not Reported Report Not Timely Subaward Amount Incorrect Subaward Missing Key Elements 1 1 1 N/A 1 Dollar Amount of Transactions Tested Subaward Not Reported Report Not Timely Subaward Amount Incorrect Subaward Missing Key Elements N/A $682,395 $682,395 N/A N/A Effect or Potential Effect The Organization did not comply with the subaward reporting requirements as specified in 2 CFR 170. Questioned Costs None noted. Cause Internal controls were not designed adequately to ensure required reporting in FSRS was made. Repeat Finding No Recommendation We recommend that the Organization implement the necessary internal controls to ensure required reporting is made in the FSRS. In addition, we recommend the Organization make efforts to complete the required reporting for the subaward noted above. Views of Responsible Officials Management agrees that the required FSRS report was not made.