Audit 388356

Assistance Listing Number and Title: ALN 17.270, Reentry Employment Opportunities Federal Agency: U.S. Department of Labor Federal Award Numbers: YF-39537-23-60-A-4 Grant period: February 1, 2023 through July 31, 2026 Criteria: The Organization's Reentry Employment Opportunities (REO) grants are subject to subrecipient monitoring requirements. As a result, the Organization must conduct risk assessments, monitor subrecipients, follow up on any identified deficiencies, and ensure compliance with the 30-day rule for processing subrecipient payment requests. Condition: The Organization did not fully comply with federal subrecipient monitoring requirements for REO grants. Specifically, risk assessments procedures were not performed prior to first payments to subrecipient, and certain follow up procedures for monitoring were not done timely. Additionally, payment requests from subrecipients were not processed within the required 30-day timeframe. Cause: The Organization lacked a formalized monitoring plan and sufficient staffing resources to ensure timely reviews and follow-up on identified deficiencies. Effect: The grantee could not perform necessary subrecipient monitoring procedures timely. Context: The Organization provided payments to four subrecipients during the year. All four subrecipients had risk assessments performed after payments were made. As a result, the Organization could not provide documentation showing that it met compliance requirements for subrecipient monitoring, such as verifying eligibility (including confirming subrecipients were not suspended or debarred) or appropriately assessing subrecipient risk. Further, one subrecipient out of the four submitted their Corrective Action Plan response to the Site Visit Report after the 30 day deadline and there was no extension granted. As a result, the Organization did not comply with internal monitoring policies to follow up/ensure that Corrective Action Plans be submitted within 30 days. For the 24 subawardee payments selected, none of the payments were processed within the required 30-day rule. Questioned costs: None Repeat Finding: No Recommendation: We recommend the Organization clearly define roles and responsibilities for tracking compliance with unique requirements of Federal contracts. This includes implementing a system of review and approval to ensure the compliance surrounding subrecipient monitoring has been done. Views of responsible officials of the auditee: The Organization concurs with the finding. The Organization has taken and continues to take corrective actions to strengthen its subrecipient monitoring framework and ensure full compliance with federal requirements under 2 CFR 200. Specifically, the Organization has implemented the following actions: revised subaward agreements, formalized subrecipient monitoring policies and procedures, implemented pre-award risk assessments prior to payment, enhanced post-award monitoring, and improved payment processing controls.

Assistance Listing Number and Title: ALN 17.270, Reentry Employment Opportunities Federal Agency: U.S. Department of Labor Federal Award Numbers: YF-39537-23-60-A-4 Grant period: February 1, 2023 through July 31, 2026 Criteria: The Uniform Guidance requires recipients to establish and maintain effective internal controls that provide reasonable assurance costs charged to federal awards are allowable, allocable, and properly documented in accordance with the terms of the award. Condition: The Organization has policies and procedures in place that require a Change of Status (COS) form to be completed and approved when an employee's job changes, the allocation of their time between various projects changes, and other payroll modifications. However, based on our testing, we noted multiple instances where these forms are not completed and provided to the payroll department timely. As a result, the labor distribution reports generated from the payroll system did not have the accurate information. We noted that the grants were not overbilled, and the allocations used for billing were reflective of the time spent on the program due to the biller detecting the error in the labor distribution reports in their review; however, having incorrect or untimely COS forms creates additional risks in the grant billing and financial reporting. Cause: The Organization did not promptly update project allocations when employees began working across multiple projects, resulting in inaccurate payroll data relative to the Change of Status (COS) form requirements. Effect: There was a variance between amounts reported and billed to the grant and the labor distribution report. Context: Out of a sample of 40 payroll disbursements, four were selected from an employee who works across multiple federal grant programs. Of the four selected payroll disbursements for this employee, there was a variance on two payroll transactions between amounts reported and billed to the grant and the labor distribution report. Questioned costs: None Repeat Finding: No Recommendation: We recommend that the Organization review in policies and procedures surrounding COS forms and perform additional training to relevant staff to ensure COS forms are prepared, approved, and entered into the system in advance of the effective date of a payroll change. We also recommend the Organization perform regular time studies for employees who split their time between multiple projects to determine that allocations are accurate. Views of responsible officials of the auditee: The Organization agrees with the findings and has implemented procedures to ensure timely receipt of the change of status form by the payroll department. A tracking log of all requested COS’s is maintained by the payroll department to ensure all changes have been entered into the payroll system in the proper period.

Assistance Listing Number and Title: ALN 17.270, Reentry Employment Opportunities Federal Agency: U.S. Department of Labor Federal Award Numbers: YF-39537-23-60-A-4 and 24A60PE000026-01-00 Grant period: February 1, 2023 through July 31, 2026 and July 1, 2024 to December 31, 2027 Criteria: The Uniform Guidance requires recipients to maintain accurate and complete reporting systems. Financial management systems must provide accurate, current, and complete disclosure of financial results in accordance with the requirements of the federal award and grant agreement. In addition, the grant agreement requires submission of quarterly ETA-9130 Financial Reports and quarterly narrative reports no later than 45 days after the end of each quarter. Quarterly ETA-9130 Financial Reports are required to report cumulative amounts. All reports must reconcile to official accounting records and comply with prescribed content and format requirements, which includes reporting match expenditures. Condition: The Organization did not properly submit required reports timely in compliance with the terms of the grant agreements. Cause: The Organization had a misunderstanding regarding the requirements and deadlines of the reports. Effect: The Organization was out of compliance with specific reporting requirements that are required per the grant agreements. Context: The March 2025 Quarterly ETA-9130 report was submitted three days late without an approved extension. Of the four quarters tested, this was the only instance of a late submission that had no extension period granted. The Quarterly ETA-9130 reports for September 2024, December 2024, and March 2025 were submitted using quarterly financial information rather than the required cumulative financial information. Further, one grant agreement specified match requirements, and match expenditures were not reported on the quarterly reports. Questioned costs: None Repeat Finding: No Recommendation: We recommend the Organization increase its training on grant reporting requirements to ensure timelines are met and all required elements per the grant agreements are reported. Views of responsible officials of the auditee: The Organization agrees with the findings and has implemented written procedures to ensure timely submission of reports and training of staff.