Audit 392981

2025-002 - EARMARKING (REPEAT OF PRIOR YEAR FINDINGS 2024-002; 2023-003; 2022-03) Federal Program Information: Federal Agency and Program Name- U.S. Department of Labor WIOA Cluster Federal Assistance Listing Number - 17.258/17.259/ 17.278 Criteria: 2 CFR 200.303 requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Condition: During our testing of earmarking, it was noted that for 2 of the 60 transactions tested, management could not provide adequate support that the charge was properly reviewed and approved prior to payment. Questioned Costs: Unknown. Context: Total federal expenditures for the WIOA Cluster were $2,843,125 for the year ended June 30, 2025. Cause: The Board did not demonstrate that proper internal controls are in place and operating effectively to ensure the expenditures of the WIOA Cluster are within the earmarking requirements noted within the Uniform Guidance. Effect: Transactions that were part of the earmarking calculations could have been coded improperly or not met the earmarking requirements due to lack of effective internal controls. Recommendation: We recommend that the Board implement controls and procedures to ensure that all requirements for earmarking within the Uniform Guidance are properly followed. Views of Responsible Officials: We agree with the finding and will take the necessary corrective actions as noted in the corrective action plan attached.

2025-003 - REPORTING (REPEAT OF PRIOR YEAR FINDINGS 2024-003, 2023-004; 2022-05) Federal Program Information: Federal Agency and Program Name : U.S. Department of Labor WIOA Cluster Federal Assistance Listing Number - 17.258/17.259/ 17.278 2 CFR 200.303 requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” The Board is required to submit MACC reports to WorkForce WV on a monthly basis. Condition: During our testing of reporting, for all MACC reports selected for testing management could not provide adequate support that the MACC reports were properly reviewed and approved prior to being submitted. Questioned Costs: Unknown. Context: Total federal expenditures for the WIOA Cluster were $2,843,125 for the year ended June 30, 2025. Cause: The Board did not have adequate policies and internal controls in place to ensure that all required reports for the WIOA Cluster were reviewed and approved prior to submission. Effect: The Board is not in compliance with the federal statutes, regulations, and terms and conditions of the federal award. Recommendation: We recommend that the Board design and implement controls to ensure that all required reporting is submitted accurately and in a timely fashion. Views of Responsible Officials: We agree with the finding and will take the necessary corrective actions as noted in the corrective action plan attached.

2025-004 - ACTIVITIES ALLOWED OR UNALLOWED Federal Program Information: Federal Agency and Program Name - U.S. Department of Labor WIOA Cluster. Federal Assistance Listing Number - 17.258/17.259/ 17.278 Criteria: 2 CFR 200.303 requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Condition: During our testing of activities allowed or unallowed, it was noted that for 1 of the 60 nonpayroll items tested, management could not provide adequate support that the charge was properly reviewed and approved prior to payment. Questioned Costs: Unknown. Context: Total federal expenditures for the WIOA Cluster were $2,843,125 for the year ended June 30, 2025. Cause: The Board did not demonstrate that proper internal controls are in place and operating effectively to ensure that unallowable charges to the federal program do not occur. Effect: Unallowable payments to the federal program may have occurred due to the lack of effective internal controls in place. Recommendation: We recommend that the Board design and implement controls to ensure that all charges to federal programs are adequately reviewed and approved prior to payment. Views of Responsible Officials: We agree with the finding and will take the necessary corrective actions as noted in the corrective action plan attached.