2023-005 – FAILURE TO COMPLETE THE SINGLE AUDIT TIMELY AND TO SUBMIT THE REQUIRED REPORTING PACKAGE TO THE FEDERAL AUDIT CLEARINGHOUSE Federal Program: Not applicable. Type of Finding: Significant deficiency in internal control over compliance; noncompliance. Repeat finding – reported in the prior year as finding 2022-004. Criteria: 2 CFR 200.501(a) requires a non-Federal entity that expends $750,000 or more in Federal awards during its fiscal year to have a single or program-specific audit conducted for that year. 2 CFR 200.512(a) requires the audit to be completed and the reporting package and data collection form (Form SF-SAC) to be submitted within the earlier of 30 calendar days after receipt of the auditor's reports or nine months after the end of the audit period, and 2 CFR 200.512(b) requires the auditee to electronically submit the data collection form and reporting package to the Federal Audit Clearinghouse. The Institute's grant agreements also require that an annual audit be performed. Condition: The audits of the Institute for the years ended December 31, 2022, 2023, and 2024 were not completed, and the reporting packages and data collection forms were not submitted to the Federal Audit Clearinghouse within the periods required by 2 CFR 200.512. Cause: The Institute has not established or implemented written policies, procedures, and related internal controls sufficient to ensure that the annual Single Audit is completed and that the reporting package and data collection form are submitted to the Federal Audit Clearinghouse by the required due date. Responsibility for monitoring these deadlines has not been assigned to specific personnel. Effect: The Institute did not comply with the audit and reporting requirements of the Uniform Guidance. Late submission of the reporting package may cause Federal awarding agencies and pass-through entities to impose additional award conditions or other remedies for noncompliance under 2 CFR 200.208 and 2 CFR 200.339, and precludes the Institute from qualifying as a low-risk auditee under 2 CFR 200.520. Questioned Costs: None Recommendation: The Institute should adopt written policies and procedures that assign responsibility for engaging the auditor, completing the annual Single Audit, and submitting the reporting package and data collection form to the Federal Audit Clearinghouse within nine months after each fiscal year end, and should maintain a compliance calendar to monitor those deadlines. Management's Views and Response: The Institute has engaged an auditor to complete the December 31, 2022, 2023, 2024, and 2025 Single Audits concurrently, and will submit each reporting package and data collection form to the Federal Audit Clearinghouse as each audit is completed. Thereafter, the Institute will complete the audit and submit the reporting package within nine months after year end.
2023-006 – WRITTEN PROCUREMENT POLICIES AND PROCEDURES DO NOT CONFORM TO THE UNIFORM GUIDANCE PROCUREMENT STANDARDS Federal Program: Assistance Listing Number 17.258 and 17.278 – WIOA Adult & Dislocated Worker Grant Cluster. Federal awarding agency: U.S. Department of Labor, Employment and Training Administration. Pass-through entity: Eastern Kentucky Concentrated Employment Program, Inc. and Kentucky Education and Labor Cabinet. Type of Finding: Significant deficiency in internal control over compliance; Allowable Costs. Repeat finding – reported in the prior year as finding 2022-005. Criteria: Uniform Guidance at 2 CFR 200.318 requires non-Federal entities to maintain and use documented procurement procedures that are consistent with applicable state and local laws and regulations and conform to Federal procurement standards. Written policies should address matters including conflicts of interest, methods of procurement, contractor oversight, and full and open competition. Condition: During our review of procurement policies and procedures, we noted that the Institute had not adopted written procurement policies and procedures that conform to the procurement requirements of Uniform Guidance. Specifically, the Institute's policies did not adequately address the Federal procurement standards contained in 2 CFR Part 200. Cause: The Institute has not completed the revision of its written procurement policies and procedures to conform to the Uniform Guidance, and personnel responsible for grant administration have not been trained on the Uniform Guidance procurement standards. Effect: Without conforming written procurement policies, the Institute may not consistently apply Federal procurement requirements when expending Federal funds. This increases the risk of noncompliance and the use of procurement methods that do not meet Federal requirements. Questioned Costs: None Recommendation: We recommend that management adopt and implement written procurement policies and procedures that comply with 2 CFR 200.317 through 200.327. The policies should address procurement methods, conflicts of interest, contractor selection, suspension and debarment, required cost or price analyses, contractor oversight, full and open competition, and documentation of procurement decisions. Management's Views and Response: The Institute will adopt written procurement policies and procedures that conform to the Uniform Guidance procurement standards, present them to the Board of Directors for approval, and train the personnel responsible for procurement on their use.