Audit 7495

Part III – Federal Award Findings and Questioned Costs Reference: 2023-001 U.S. Department of Health and Human Services Pass-through entity: New York State Office of Temporary and Disability Assistance Temporary Assistance for Needy Families 93.558 Program Year: 2022 Criteria: According to the Uniform Guidance in CFR Part 200, Part 4, activities allowed or unallowed and allowable costs/cost principles (A/B) include the use of funds to reduce dependence on federally funded government assistance programs and promote job preparedness and work opportunities. Management is required to design and effectively implement internal controls that will provide reasonable assurance that the Organization complies with activities allowed or unallowed and allowable costs/cost principles requirements, according to the Uniform Guidance. According to the Uniform Guidance in CFR Part 200, Part 4, eligibility (E) for individuals participating in job preparedness and work opportunities will be for those deemed to be financially needy based upon a pre-determined definition established by New York State. Management is required to design and effectively implement internal controls that will provide reasonable assurance that the Organization complies with eligibility requirements, according to the Uniform Guidance. Cause/Condition: The Organization’s current policies and procedures are not operating effectively to ensure only allowable activities and allowable costs (in this case, the hours worked) were allocated and charged to the federal program. In 9 of 40 cases tested, timecards to substantiate hours worked as part of the job preparedness and work opportunities program were not signed by a designated individual or were signed but not until after audit procedures were performed. The Organization’s current policies and procedures are not operating effectively to ensure only individuals who have been deemed to be eligible are participating and being paid through the job preparedness and work opportunities program(s). In 6 of 40 cases tested, Section 5 of Form LDSS 4770 was not signed by a designated individual indicating their review and determination the applicant is eligible for participation. Context: In both cases we haphazardly selected a sample of 40 employees’ participating in summer workforce program during the fiscal year ending June 30, 2023. Questioned Costs: No known questioned costs. Part III – Federal Award Findings and Questioned Costs (Continued) Reference: 2023-001 (Continued) Effect: The Organization’s internal control over compliance related to activities allowed or unallowed or allowable costs/cost principles as well as over eligibility did not operate as designed thus increasing the likelihood for noncompliance and future potential questioned costs. Recommendation: We recommend that management review existing policies and procedures over compliance requirements related to activities allowed or unallowed, allowable costs/cost principles, as well as eligibility, and ensure internal control procedures are adequate and operating as intended. We also suggest that management develop a means for testing and monitoring the operational effectiveness of those internal controls over compliance and document any mitigating controls that are developed and implemented. Management’s Response: Due to a series of circumstances such as high turnover at CNY Works in the youth department, including the departure of the Director of Youth Services at the end of the summer of 2022 and later the successor in the middle of the Summer Youth Employment Program of 2023, youth department operating with one full-time employee and having a vacuum on direct leadership in the department were factors in which unfortunately led to this finding. CNY Work youth staff along with the Executive Director, Deputy Director and Director of Youth Services will review current policies and procedures to ensure these are operating effectively reflecting allowable activities and allowable costs (including hours worked by youth in the program) are allocated and charged accurately to the federal program, underlining the importance of internal controls to ensure documents are signed by designated individuals to comply with requirements. The Director of Youth Services and Deputy Director will review timesheets, eligibility forms, and signatures, along with other requirements of the program to ensure internal control procedures are adequate and operating as intended. Finally, management will develop a method for monitoring the operational effectiveness of the applied internal controls on compliance and document any mitigating controls that are developed and implemented.

Part III – Federal Award Findings and Questioned Costs Reference: 2023-001 U.S. Department of Health and Human Services Pass-through entity: New York State Office of Temporary and Disability Assistance Temporary Assistance for Needy Families 93.558 Program Year: 2022 Criteria: According to the Uniform Guidance in CFR Part 200, Part 4, activities allowed or unallowed and allowable costs/cost principles (A/B) include the use of funds to reduce dependence on federally funded government assistance programs and promote job preparedness and work opportunities. Management is required to design and effectively implement internal controls that will provide reasonable assurance that the Organization complies with activities allowed or unallowed and allowable costs/cost principles requirements, according to the Uniform Guidance. According to the Uniform Guidance in CFR Part 200, Part 4, eligibility (E) for individuals participating in job preparedness and work opportunities will be for those deemed to be financially needy based upon a pre-determined definition established by New York State. Management is required to design and effectively implement internal controls that will provide reasonable assurance that the Organization complies with eligibility requirements, according to the Uniform Guidance. Cause/Condition: The Organization’s current policies and procedures are not operating effectively to ensure only allowable activities and allowable costs (in this case, the hours worked) were allocated and charged to the federal program. In 9 of 40 cases tested, timecards to substantiate hours worked as part of the job preparedness and work opportunities program were not signed by a designated individual or were signed but not until after audit procedures were performed. The Organization’s current policies and procedures are not operating effectively to ensure only individuals who have been deemed to be eligible are participating and being paid through the job preparedness and work opportunities program(s). In 6 of 40 cases tested, Section 5 of Form LDSS 4770 was not signed by a designated individual indicating their review and determination the applicant is eligible for participation. Context: In both cases we haphazardly selected a sample of 40 employees’ participating in summer workforce program during the fiscal year ending June 30, 2023. Questioned Costs: No known questioned costs. Part III – Federal Award Findings and Questioned Costs (Continued) Reference: 2023-001 (Continued) Effect: The Organization’s internal control over compliance related to activities allowed or unallowed or allowable costs/cost principles as well as over eligibility did not operate as designed thus increasing the likelihood for noncompliance and future potential questioned costs. Recommendation: We recommend that management review existing policies and procedures over compliance requirements related to activities allowed or unallowed, allowable costs/cost principles, as well as eligibility, and ensure internal control procedures are adequate and operating as intended. We also suggest that management develop a means for testing and monitoring the operational effectiveness of those internal controls over compliance and document any mitigating controls that are developed and implemented. Management’s Response: Due to a series of circumstances such as high turnover at CNY Works in the youth department, including the departure of the Director of Youth Services at the end of the summer of 2022 and later the successor in the middle of the Summer Youth Employment Program of 2023, youth department operating with one full-time employee and having a vacuum on direct leadership in the department were factors in which unfortunately led to this finding. CNY Work youth staff along with the Executive Director, Deputy Director and Director of Youth Services will review current policies and procedures to ensure these are operating effectively reflecting allowable activities and allowable costs (including hours worked by youth in the program) are allocated and charged accurately to the federal program, underlining the importance of internal controls to ensure documents are signed by designated individuals to comply with requirements. The Director of Youth Services and Deputy Director will review timesheets, eligibility forms, and signatures, along with other requirements of the program to ensure internal control procedures are adequate and operating as intended. Finally, management will develop a method for monitoring the operational effectiveness of the applied internal controls on compliance and document any mitigating controls that are developed and implemented.