Audit 413441

2025-001 Suspension and Debarment Federal Agency: U.S. Department of Labor Federal Program Title: Reintegration of Ex-Offenders Assistance Listing No. 17.270 Award Periods: July 1, 2023 – December 31, 2026 Type of Finding: • Material Weakness in Internal Control Over Compliance – Suspension and Debarment • Other Matter Questioned Costs: None Condition: During our testing of 5 suspension and debarment samples, CLA noted no documentation was maintained related to verifying vendors were not suspended or debarred for any of the 5 samples (100%) prior to disbursement. The statement of work outlines use of all of these vendors, but inclusion in the description in the statement of work of entities does not preclude the requirement to test for suspension and debarment issues. Though verification was done at the time of the audit, no support could be provided to show the control took place prior to use of the vendor. Criteria: Uniform Grant Guidance (200.214) states the non-Federal entity is subject to the debarment and suspension regulations as 2 CFR part 180, requiring no federal funds be awarded to parties that are suspended, debarred, or otherwise excluded from federal programs. Context: The Organization did not maintain adequate documentation related to verification that vendors were not suspended or debarred prior to use of such vendor for the 5 items sampled. The sampling methodology used is not, and is not intended to be statistically valid. Effect: Failure to properly approve contractors and maintain documentation may result in federal funds being charged to the grant for activities related to suspended or debarred vendors. Cause: The Organization did not have effective internal controls over compliance in place to ensure documentation of suspension and debarment procedures were followed prior to use of the vendor. Repeat Finding: The finding is a repeat of the prior year finding number 2024-001. Recommendation: We recommend that the Organization implement procedures to verify vendors against applicable suspension and debarment requirements prior to the disbursement of funds and retain documentation evidencing the verification performed. Views of Responsible Officials: There is no disagreement with the audit finding.

2025-002 Cash Management and Reporting Federal Agency: U.S. Department of Labor Federal Program Title: Reintegration of Ex-Offenders Assistance Listing No. 17.270 Award Periods: July 1, 2023 – December 31, 2026 Type of Finding: • Significant Deficiency in Internal Control Over Compliance – Cash Management and Reporting Questioned Costs: None Condition: During our testing of five drawdown requests and four reports, CLA noted that two drawdown requests and two reports were submitted without evidence of management review and approval. The Organization did not implement its review process over drawdown requests until September 2025, therefore, the two drawdowns selected for testing that occurred prior to implementation did not have documentation of review. In addition, no review process was documented for two reports tested prior to submission. While all financial reports were prepared and submitted by the outsourced accountant, management review and approval was not documented for two of the four items tested. Criteria: Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving federal awards establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure drawdowns and reports are formally reviewed by someone who did not prepare the drawdown or report to verify the correct amount is required. Context: The Organization did not maintain adequate documentation related to internal controls over cash management and reporting. The sampling methodology used is not, and is not intended to be statistically valid. Cause: For some instances, the Organization did not have effective internal controls over compliance in place to ensure that cash management and reporting procedures were followed and documented. Effect: Failure to properly approve drawdowns, reports and maintain documentation may result in drawdown requests for unapproved or unrelated costs charged to the grant. Repeat Finding: The finding is a repeat of the prior year finding number 2024-002. Recommendation: The Organization should formalize and consistently apply its review and approval controls over drawdown requests and grant reports. Management should review all submissions prior to filing and maintain documentation evidencing the review and approval performed. Views of Responsible Officials: There is no disagreement with the audit finding.