Audit 7960

Information on the federal program: Federal Agency: Department of Labor Pass-Through Entity: Indiana Department of Workforce Development Federal Program: WIOA Assistance Listing Number: 17.258, 17.259, 17.278 Compliance Requirement: Cash Management Audit Findings: Significant Deficiency, Noncompliance Criteria: According to Title 2 U.S. Code of Federal Regulations (“CFR”) Part 200, paragraph 305, non-federal entities are required to minimize the time that elapses between the transfer of funds from the federal funding source and the disbursement of those funds by the non-federal entity for the program’s intended purposes. Condition: EmployIndy made draws on the WIOA grant prior to incurring expenditures related to those draws. Cause: The condition was caused by an oversight by management that resulted in estimate draws being submitted. Effect: As a result of these matters, EmployIndy made draws prior to incurring expenses. The WIOA grant is a cost reimbursement grant and therefore, the costs should be incurred prior to requesting draws on the grant. Questioned costs: There are no questioned costs. Context: As part of our SEFA tie out procedures, we noted a deferred revenue balance for the WIOA grants of approximately $437,000. Management noted that estimate draws are submitted to DWD prior to expenses being incurred. Management did not have a timely and effective process in place to ensure draws reconcile to expenditures. Upon further analysis, management determined that approximately $137,000 of the deferred revenue balance should be recorded as revenue for fiscal year 2022. At June 30, 2022, EmployIndy recorded deferred revenue of $300,000 for the WIOA grant indicating that expenses were not incurred for the cash that had been drawn. Identification as a repeat finding, if applicable: This is not a repeat finding. Recommendation: We recommend that management designate a specific individual to be responsible for monitoring grant activity and only submit draw requests when expenses have been incurred. The amount of the draw should reflect the actual expenditures incurred for the period. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.

Information on the federal program: Federal Agency: Department of Labor Pass-Through Entity: Indiana Department of Workforce Development Federal Program: WIOA Assistance Listing Number: 17.258, 17.259, 17.278 Compliance Requirement: Cash Management Audit Findings: Significant Deficiency, Noncompliance Criteria: According to Title 2 U.S. Code of Federal Regulations (“CFR”) Part 200, paragraph 305, non-federal entities are required to minimize the time that elapses between the transfer of funds from the federal funding source and the disbursement of those funds by the non-federal entity for the program’s intended purposes. Condition: EmployIndy made draws on the WIOA grant prior to incurring expenditures related to those draws. Cause: The condition was caused by an oversight by management that resulted in estimate draws being submitted. Effect: As a result of these matters, EmployIndy made draws prior to incurring expenses. The WIOA grant is a cost reimbursement grant and therefore, the costs should be incurred prior to requesting draws on the grant. Questioned costs: There are no questioned costs. Context: As part of our SEFA tie out procedures, we noted a deferred revenue balance for the WIOA grants of approximately $437,000. Management noted that estimate draws are submitted to DWD prior to expenses being incurred. Management did not have a timely and effective process in place to ensure draws reconcile to expenditures. Upon further analysis, management determined that approximately $137,000 of the deferred revenue balance should be recorded as revenue for fiscal year 2022. At June 30, 2022, EmployIndy recorded deferred revenue of $300,000 for the WIOA grant indicating that expenses were not incurred for the cash that had been drawn. Identification as a repeat finding, if applicable: This is not a repeat finding. Recommendation: We recommend that management designate a specific individual to be responsible for monitoring grant activity and only submit draw requests when expenses have been incurred. The amount of the draw should reflect the actual expenditures incurred for the period. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.

Information on the federal program: Federal Agency: Department of Labor Pass-Through Entity: Indiana Department of Workforce Development Federal Program: WIOA Assistance Listing Number: 17.258, 17.259, 17.278 Compliance Requirement: Cash Management Audit Findings: Significant Deficiency, Noncompliance Criteria: According to Title 2 U.S. Code of Federal Regulations (“CFR”) Part 200, paragraph 305, non-federal entities are required to minimize the time that elapses between the transfer of funds from the federal funding source and the disbursement of those funds by the non-federal entity for the program’s intended purposes. Condition: EmployIndy made draws on the WIOA grant prior to incurring expenditures related to those draws. Cause: The condition was caused by an oversight by management that resulted in estimate draws being submitted. Effect: As a result of these matters, EmployIndy made draws prior to incurring expenses. The WIOA grant is a cost reimbursement grant and therefore, the costs should be incurred prior to requesting draws on the grant. Questioned costs: There are no questioned costs. Context: As part of our SEFA tie out procedures, we noted a deferred revenue balance for the WIOA grants of approximately $437,000. Management noted that estimate draws are submitted to DWD prior to expenses being incurred. Management did not have a timely and effective process in place to ensure draws reconcile to expenditures. Upon further analysis, management determined that approximately $137,000 of the deferred revenue balance should be recorded as revenue for fiscal year 2022. At June 30, 2022, EmployIndy recorded deferred revenue of $300,000 for the WIOA grant indicating that expenses were not incurred for the cash that had been drawn. Identification as a repeat finding, if applicable: This is not a repeat finding. Recommendation: We recommend that management designate a specific individual to be responsible for monitoring grant activity and only submit draw requests when expenses have been incurred. The amount of the draw should reflect the actual expenditures incurred for the period. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.

Information on the federal program: Federal Agency: Department of Labor Pass-Through Entity: Indiana Department of Workforce Development Federal Program: WIOA Assistance Listing Number: 17.258, 17.259, 17.278 Compliance Requirement: Cash Management Audit Findings: Significant Deficiency, Noncompliance Criteria: According to Title 2 U.S. Code of Federal Regulations (“CFR”) Part 200, paragraph 305, non-federal entities are required to minimize the time that elapses between the transfer of funds from the federal funding source and the disbursement of those funds by the non-federal entity for the program’s intended purposes. Condition: EmployIndy made draws on the WIOA grant prior to incurring expenditures related to those draws. Cause: The condition was caused by an oversight by management that resulted in estimate draws being submitted. Effect: As a result of these matters, EmployIndy made draws prior to incurring expenses. The WIOA grant is a cost reimbursement grant and therefore, the costs should be incurred prior to requesting draws on the grant. Questioned costs: There are no questioned costs. Context: As part of our SEFA tie out procedures, we noted a deferred revenue balance for the WIOA grants of approximately $437,000. Management noted that estimate draws are submitted to DWD prior to expenses being incurred. Management did not have a timely and effective process in place to ensure draws reconcile to expenditures. Upon further analysis, management determined that approximately $137,000 of the deferred revenue balance should be recorded as revenue for fiscal year 2022. At June 30, 2022, EmployIndy recorded deferred revenue of $300,000 for the WIOA grant indicating that expenses were not incurred for the cash that had been drawn. Identification as a repeat finding, if applicable: This is not a repeat finding. Recommendation: We recommend that management designate a specific individual to be responsible for monitoring grant activity and only submit draw requests when expenses have been incurred. The amount of the draw should reflect the actual expenditures incurred for the period. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.

Information on the federal program: Federal Agency: Department of Labor Pass-Through Entity: Indiana Department of Workforce Development Federal Program: WIOA Assistance Listing Number: 17.258, 17.259, 17.278 Compliance Requirement: Activities Allowed or Unallowed Audit Findings: Material Weakness, Noncompliance Criteria: 2 CFR 200.403 establishes principles and standards for determining costs for federal awards carried out through grants, cost reimbursement contracts, and other agreements with state and local governments. To be allowable, under federal awards, cost must meet certain criteria: a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. g) Be adequately documented. h) Cost must be incurred during the approved budget period. Additionally, 2 CFR 200.303 indicates that non-Federal Entities receiving Federal awards must 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 terms and conditions of the Federal award. Condition: For 8 of the 60 samples selected, EmployIndy was unable to reconcile the provided support to the selection amounts. As a result, we were unable to determine the allowability of these sample selections under the WIOA grant. Cause: The condition was caused by a lack of internal controls over WIOA subrecipient/service provider claims for accrued expenditures. Effect: As a result of these matters, expenditures could be inaccurately charged to the federal grant. Questioned costs: There are $265,000 of known questioned costs as this is the amount of the WIOA expenditures tested that could not be reconciled to source documents. Context: During our testing procedures over WIOA disbursements for the activities allowed or unallowed compliance requirement, Crowe was unable to reconcile and tie 8 of the 60 samples to source documents after multiple attempts of asking management to aid in reconciling the support to selection totals. Identification as a repeat finding, if applicable: Not applicable. This is not a repeat finding. Recommendation: We recommend that management implement a consistent multi-stage review process for expenditures that are to be allocated to the WIOA cluster and that management clearly organize and retain records of purchase to support amounts being listed as expenditures on their SEFA. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.

Information on the federal program: Federal Agency: Department of Labor Pass-Through Entity: Indiana Department of Workforce Development Federal Program: WIOA Assistance Listing Number: 17.258, 17.259, 17.278 Compliance Requirement: Activities Allowed or Unallowed Audit Findings: Material Weakness, Noncompliance Criteria: 2 CFR 200.403 establishes principles and standards for determining costs for federal awards carried out through grants, cost reimbursement contracts, and other agreements with state and local governments. To be allowable, under federal awards, cost must meet certain criteria: a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. g) Be adequately documented. h) Cost must be incurred during the approved budget period. Additionally, 2 CFR 200.303 indicates that non-Federal Entities receiving Federal awards must 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 terms and conditions of the Federal award. Condition: For 8 of the 60 samples selected, EmployIndy was unable to reconcile the provided support to the selection amounts. As a result, we were unable to determine the allowability of these sample selections under the WIOA grant. Cause: The condition was caused by a lack of internal controls over WIOA subrecipient/service provider claims for accrued expenditures. Effect: As a result of these matters, expenditures could be inaccurately charged to the federal grant. Questioned costs: There are $265,000 of known questioned costs as this is the amount of the WIOA expenditures tested that could not be reconciled to source documents. Context: During our testing procedures over WIOA disbursements for the activities allowed or unallowed compliance requirement, Crowe was unable to reconcile and tie 8 of the 60 samples to source documents after multiple attempts of asking management to aid in reconciling the support to selection totals. Identification as a repeat finding, if applicable: Not applicable. This is not a repeat finding. Recommendation: We recommend that management implement a consistent multi-stage review process for expenditures that are to be allocated to the WIOA cluster and that management clearly organize and retain records of purchase to support amounts being listed as expenditures on their SEFA. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.

Information on the federal program: Federal Agency: Department of Labor Pass-Through Entity: Indiana Department of Workforce Development Federal Program: WIOA Assistance Listing Number: 17.258, 17.259, 17.278 Compliance Requirement: Activities Allowed or Unallowed Audit Findings: Material Weakness, Noncompliance Criteria: 2 CFR 200.403 establishes principles and standards for determining costs for federal awards carried out through grants, cost reimbursement contracts, and other agreements with state and local governments. To be allowable, under federal awards, cost must meet certain criteria: a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. g) Be adequately documented. h) Cost must be incurred during the approved budget period. Additionally, 2 CFR 200.303 indicates that non-Federal Entities receiving Federal awards must 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 terms and conditions of the Federal award. Condition: For 8 of the 60 samples selected, EmployIndy was unable to reconcile the provided support to the selection amounts. As a result, we were unable to determine the allowability of these sample selections under the WIOA grant. Cause: The condition was caused by a lack of internal controls over WIOA subrecipient/service provider claims for accrued expenditures. Effect: As a result of these matters, expenditures could be inaccurately charged to the federal grant. Questioned costs: There are $265,000 of known questioned costs as this is the amount of the WIOA expenditures tested that could not be reconciled to source documents. Context: During our testing procedures over WIOA disbursements for the activities allowed or unallowed compliance requirement, Crowe was unable to reconcile and tie 8 of the 60 samples to source documents after multiple attempts of asking management to aid in reconciling the support to selection totals. Identification as a repeat finding, if applicable: Not applicable. This is not a repeat finding. Recommendation: We recommend that management implement a consistent multi-stage review process for expenditures that are to be allocated to the WIOA cluster and that management clearly organize and retain records of purchase to support amounts being listed as expenditures on their SEFA. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.

Information on the federal program: Federal Agency: Department of Labor Pass-Through Entity: Indiana Department of Workforce Development Federal Program: WIOA Assistance Listing Number: 17.258, 17.259, 17.278 Compliance Requirement: Activities Allowed or Unallowed Audit Findings: Material Weakness, Noncompliance Criteria: 2 CFR 200.403 establishes principles and standards for determining costs for federal awards carried out through grants, cost reimbursement contracts, and other agreements with state and local governments. To be allowable, under federal awards, cost must meet certain criteria: a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. g) Be adequately documented. h) Cost must be incurred during the approved budget period. Additionally, 2 CFR 200.303 indicates that non-Federal Entities receiving Federal awards must 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 terms and conditions of the Federal award. Condition: For 8 of the 60 samples selected, EmployIndy was unable to reconcile the provided support to the selection amounts. As a result, we were unable to determine the allowability of these sample selections under the WIOA grant. Cause: The condition was caused by a lack of internal controls over WIOA subrecipient/service provider claims for accrued expenditures. Effect: As a result of these matters, expenditures could be inaccurately charged to the federal grant. Questioned costs: There are $265,000 of known questioned costs as this is the amount of the WIOA expenditures tested that could not be reconciled to source documents. Context: During our testing procedures over WIOA disbursements for the activities allowed or unallowed compliance requirement, Crowe was unable to reconcile and tie 8 of the 60 samples to source documents after multiple attempts of asking management to aid in reconciling the support to selection totals. Identification as a repeat finding, if applicable: Not applicable. This is not a repeat finding. Recommendation: We recommend that management implement a consistent multi-stage review process for expenditures that are to be allocated to the WIOA cluster and that management clearly organize and retain records of purchase to support amounts being listed as expenditures on their SEFA. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.

Federal Agency: Department of Labor Pass-Through Entity: Indiana Department of Workforce Development Federal Program: WIOA Assistance Listing Number: 17.258, 17.259, 17.278 Compliance Requirement: Activities Allowed or Unallowed Audit Findings: Material Weakness Criteria: 2 CFR 200.403 establishes principles and standards for determining costs for federal awards carried out through grants, cost reimbursement contracts, and other agreements with state and local governments. To be allowable, under federal awards, cost must meet certain criteria: a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. g) Be adequately documented. h) Cost must be incurred during the approved budget period. Additionally, 2 CFR 200.303 indicates that non-Federal Entities receiving Federal awards must 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 terms and conditions of the Federal award. Condition: EmployIndy did not formally review and approve 16 selected WIOA non-payroll expenditures in a sample of 60 to determine that they are allowable under the WIOA federal regulations. Cause: The condition was caused by a lack of internal controls over WIOA subrecipient/service provider claims for accrued expenditures. Effect: As a result of these matters, expenditures could be inaccurately charged to the federal grant. Questioned costs: There are no questioned costs. Context: During our testing procedures over WIOA disbursements for the activities allowed or unallowed compliance requirement, we identified recurring monthly expenditures that are not formally reviewed by management for allowability under the WIOA grant. We also identified expenditures submitted to EmployIndy by service providers that did not have a formal sign-off/review by EmployIndy management appropriately allocating these expenses to the WIOA grant. We noted that 16 of the 60 non-payroll items selected for testing did not have appropriate documented review. Identification as a repeat finding, if applicable: Not applicable. This is not a repeat finding. Recommendation: We recommend that management implement a consistent multi-stage review process for expenditures that are to be allocated to the WIOA cluster and that management clearly organize and retain records of purchase to support amounts being listed as expenditures on their SEFA. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.

Federal Agency: Department of Labor Pass-Through Entity: Indiana Department of Workforce Development Federal Program: WIOA Assistance Listing Number: 17.258, 17.259, 17.278 Compliance Requirement: Activities Allowed or Unallowed Audit Findings: Material Weakness Criteria: 2 CFR 200.403 establishes principles and standards for determining costs for federal awards carried out through grants, cost reimbursement contracts, and other agreements with state and local governments. To be allowable, under federal awards, cost must meet certain criteria: a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. g) Be adequately documented. h) Cost must be incurred during the approved budget period. Additionally, 2 CFR 200.303 indicates that non-Federal Entities receiving Federal awards must 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 terms and conditions of the Federal award. Condition: EmployIndy did not formally review and approve 16 selected WIOA non-payroll expenditures in a sample of 60 to determine that they are allowable under the WIOA federal regulations. Cause: The condition was caused by a lack of internal controls over WIOA subrecipient/service provider claims for accrued expenditures. Effect: As a result of these matters, expenditures could be inaccurately charged to the federal grant. Questioned costs: There are no questioned costs. Context: During our testing procedures over WIOA disbursements for the activities allowed or unallowed compliance requirement, we identified recurring monthly expenditures that are not formally reviewed by management for allowability under the WIOA grant. We also identified expenditures submitted to EmployIndy by service providers that did not have a formal sign-off/review by EmployIndy management appropriately allocating these expenses to the WIOA grant. We noted that 16 of the 60 non-payroll items selected for testing did not have appropriate documented review. Identification as a repeat finding, if applicable: Not applicable. This is not a repeat finding. Recommendation: We recommend that management implement a consistent multi-stage review process for expenditures that are to be allocated to the WIOA cluster and that management clearly organize and retain records of purchase to support amounts being listed as expenditures on their SEFA. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.

Federal Agency: Department of Labor Pass-Through Entity: Indiana Department of Workforce Development Federal Program: WIOA Assistance Listing Number: 17.258, 17.259, 17.278 Compliance Requirement: Activities Allowed or Unallowed Audit Findings: Material Weakness Criteria: 2 CFR 200.403 establishes principles and standards for determining costs for federal awards carried out through grants, cost reimbursement contracts, and other agreements with state and local governments. To be allowable, under federal awards, cost must meet certain criteria: a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. g) Be adequately documented. h) Cost must be incurred during the approved budget period. Additionally, 2 CFR 200.303 indicates that non-Federal Entities receiving Federal awards must 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 terms and conditions of the Federal award. Condition: EmployIndy did not formally review and approve 16 selected WIOA non-payroll expenditures in a sample of 60 to determine that they are allowable under the WIOA federal regulations. Cause: The condition was caused by a lack of internal controls over WIOA subrecipient/service provider claims for accrued expenditures. Effect: As a result of these matters, expenditures could be inaccurately charged to the federal grant. Questioned costs: There are no questioned costs. Context: During our testing procedures over WIOA disbursements for the activities allowed or unallowed compliance requirement, we identified recurring monthly expenditures that are not formally reviewed by management for allowability under the WIOA grant. We also identified expenditures submitted to EmployIndy by service providers that did not have a formal sign-off/review by EmployIndy management appropriately allocating these expenses to the WIOA grant. We noted that 16 of the 60 non-payroll items selected for testing did not have appropriate documented review. Identification as a repeat finding, if applicable: Not applicable. This is not a repeat finding. Recommendation: We recommend that management implement a consistent multi-stage review process for expenditures that are to be allocated to the WIOA cluster and that management clearly organize and retain records of purchase to support amounts being listed as expenditures on their SEFA. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.

Federal Agency: Department of Labor Pass-Through Entity: Indiana Department of Workforce Development Federal Program: WIOA Assistance Listing Number: 17.258, 17.259, 17.278 Compliance Requirement: Activities Allowed or Unallowed Audit Findings: Material Weakness Criteria: 2 CFR 200.403 establishes principles and standards for determining costs for federal awards carried out through grants, cost reimbursement contracts, and other agreements with state and local governments. To be allowable, under federal awards, cost must meet certain criteria: a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. g) Be adequately documented. h) Cost must be incurred during the approved budget period. Additionally, 2 CFR 200.303 indicates that non-Federal Entities receiving Federal awards must 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 terms and conditions of the Federal award. Condition: EmployIndy did not formally review and approve 16 selected WIOA non-payroll expenditures in a sample of 60 to determine that they are allowable under the WIOA federal regulations. Cause: The condition was caused by a lack of internal controls over WIOA subrecipient/service provider claims for accrued expenditures. Effect: As a result of these matters, expenditures could be inaccurately charged to the federal grant. Questioned costs: There are no questioned costs. Context: During our testing procedures over WIOA disbursements for the activities allowed or unallowed compliance requirement, we identified recurring monthly expenditures that are not formally reviewed by management for allowability under the WIOA grant. We also identified expenditures submitted to EmployIndy by service providers that did not have a formal sign-off/review by EmployIndy management appropriately allocating these expenses to the WIOA grant. We noted that 16 of the 60 non-payroll items selected for testing did not have appropriate documented review. Identification as a repeat finding, if applicable: Not applicable. This is not a repeat finding. Recommendation: We recommend that management implement a consistent multi-stage review process for expenditures that are to be allocated to the WIOA cluster and that management clearly organize and retain records of purchase to support amounts being listed as expenditures on their SEFA. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.

Information on the federal program: Federal Agency: Department of Labor Pass-Through Entity: Indiana Department of Workforce Development Federal Program: WIOA Assistance Listing Number: 17.258, 17.259, 17.278 Compliance Requirement: Activities Allowed or Unallowed Audit Findings: Material Weakness, Noncompliance Criteria: 2 CFR 200.403 establishes principles and standards for determining costs for federal awards carried out through grants, cost reimbursement contracts, and other agreements with state and local governments. To be allowable, under federal awards, cost must meet certain criteria: a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. g) Be adequately documented. h) Cost must be incurred during the approved budget period. Additionally, 2 CFR 200.303 indicates that non-Federal Entities receiving Federal awards must 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 terms and conditions of the Federal award. Condition: EmployIndy did not retain up-to-date contracts for 5 out of 8 employees tested and was unable to reconcile fund codes and employee payroll charged to the WIOA grant. It was also noted that for 8 out of 13 timecards selected for testing, it did not appear that the time was approved to be recorded to the WIOA grant. Cause: The condition was caused by a lack of internal controls over EmployIndy administrative payroll processing. Effect: As a result of these matters, expenditures could be inaccurately charged to the federal grant. Questioned costs: There are $23,000 of known questioned costs related to this issue. Context: During our testing procedures over WIOA disbursements for the activities allowed or unallowed compliance requirement, we identified several payroll expenditures charged to the WIOA cluster for which valid contracts were not provided, employee time records did not reflect hours spent on WIOA activities, and reconciliations for the allocation of employee payroll to WIOA were not provided. Identification as a repeat finding, if applicable: Not applicable. This is not a repeat finding. Recommendation: We recommend that management implement a consistent multi-stage review process for expenditures that are to be allocated to the WIOA cluster and that management clearly organize and retain records of purchase to support amounts being listed as expenditures on their SEFA. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.

Information on the federal program: Federal Agency: Department of Labor Pass-Through Entity: Indiana Department of Workforce Development Federal Program: WIOA Assistance Listing Number: 17.258, 17.259, 17.278 Compliance Requirement: Activities Allowed or Unallowed Audit Findings: Material Weakness, Noncompliance Criteria: 2 CFR 200.403 establishes principles and standards for determining costs for federal awards carried out through grants, cost reimbursement contracts, and other agreements with state and local governments. To be allowable, under federal awards, cost must meet certain criteria: a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. g) Be adequately documented. h) Cost must be incurred during the approved budget period. Additionally, 2 CFR 200.303 indicates that non-Federal Entities receiving Federal awards must 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 terms and conditions of the Federal award. Condition: EmployIndy did not retain up-to-date contracts for 5 out of 8 employees tested and was unable to reconcile fund codes and employee payroll charged to the WIOA grant. It was also noted that for 8 out of 13 timecards selected for testing, it did not appear that the time was approved to be recorded to the WIOA grant. Cause: The condition was caused by a lack of internal controls over EmployIndy administrative payroll processing. Effect: As a result of these matters, expenditures could be inaccurately charged to the federal grant. Questioned costs: There are $23,000 of known questioned costs related to this issue. Context: During our testing procedures over WIOA disbursements for the activities allowed or unallowed compliance requirement, we identified several payroll expenditures charged to the WIOA cluster for which valid contracts were not provided, employee time records did not reflect hours spent on WIOA activities, and reconciliations for the allocation of employee payroll to WIOA were not provided. Identification as a repeat finding, if applicable: Not applicable. This is not a repeat finding. Recommendation: We recommend that management implement a consistent multi-stage review process for expenditures that are to be allocated to the WIOA cluster and that management clearly organize and retain records of purchase to support amounts being listed as expenditures on their SEFA. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.

Information on the federal program: Federal Agency: Department of Labor Pass-Through Entity: Indiana Department of Workforce Development Federal Program: WIOA Assistance Listing Number: 17.258, 17.259, 17.278 Compliance Requirement: Activities Allowed or Unallowed Audit Findings: Material Weakness, Noncompliance Criteria: 2 CFR 200.403 establishes principles and standards for determining costs for federal awards carried out through grants, cost reimbursement contracts, and other agreements with state and local governments. To be allowable, under federal awards, cost must meet certain criteria: a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. g) Be adequately documented. h) Cost must be incurred during the approved budget period. Additionally, 2 CFR 200.303 indicates that non-Federal Entities receiving Federal awards must 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 terms and conditions of the Federal award. Condition: EmployIndy did not retain up-to-date contracts for 5 out of 8 employees tested and was unable to reconcile fund codes and employee payroll charged to the WIOA grant. It was also noted that for 8 out of 13 timecards selected for testing, it did not appear that the time was approved to be recorded to the WIOA grant. Cause: The condition was caused by a lack of internal controls over EmployIndy administrative payroll processing. Effect: As a result of these matters, expenditures could be inaccurately charged to the federal grant. Questioned costs: There are $23,000 of known questioned costs related to this issue. Context: During our testing procedures over WIOA disbursements for the activities allowed or unallowed compliance requirement, we identified several payroll expenditures charged to the WIOA cluster for which valid contracts were not provided, employee time records did not reflect hours spent on WIOA activities, and reconciliations for the allocation of employee payroll to WIOA were not provided. Identification as a repeat finding, if applicable: Not applicable. This is not a repeat finding. Recommendation: We recommend that management implement a consistent multi-stage review process for expenditures that are to be allocated to the WIOA cluster and that management clearly organize and retain records of purchase to support amounts being listed as expenditures on their SEFA. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.

Information on the federal program: Federal Agency: Department of Labor Pass-Through Entity: Indiana Department of Workforce Development Federal Program: WIOA Assistance Listing Number: 17.258, 17.259, 17.278 Compliance Requirement: Activities Allowed or Unallowed Audit Findings: Material Weakness, Noncompliance Criteria: 2 CFR 200.403 establishes principles and standards for determining costs for federal awards carried out through grants, cost reimbursement contracts, and other agreements with state and local governments. To be allowable, under federal awards, cost must meet certain criteria: a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. g) Be adequately documented. h) Cost must be incurred during the approved budget period. Additionally, 2 CFR 200.303 indicates that non-Federal Entities receiving Federal awards must 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 terms and conditions of the Federal award. Condition: EmployIndy did not retain up-to-date contracts for 5 out of 8 employees tested and was unable to reconcile fund codes and employee payroll charged to the WIOA grant. It was also noted that for 8 out of 13 timecards selected for testing, it did not appear that the time was approved to be recorded to the WIOA grant. Cause: The condition was caused by a lack of internal controls over EmployIndy administrative payroll processing. Effect: As a result of these matters, expenditures could be inaccurately charged to the federal grant. Questioned costs: There are $23,000 of known questioned costs related to this issue. Context: During our testing procedures over WIOA disbursements for the activities allowed or unallowed compliance requirement, we identified several payroll expenditures charged to the WIOA cluster for which valid contracts were not provided, employee time records did not reflect hours spent on WIOA activities, and reconciliations for the allocation of employee payroll to WIOA were not provided. Identification as a repeat finding, if applicable: Not applicable. This is not a repeat finding. Recommendation: We recommend that management implement a consistent multi-stage review process for expenditures that are to be allocated to the WIOA cluster and that management clearly organize and retain records of purchase to support amounts being listed as expenditures on their SEFA. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.

Information on the federal program: Federal Agency: Department of Labor Pass-Through Entity: Indiana Department of Workforce Development Federal Program: WIOA Assistance Listing Number: 17.258, 17.259, 17.278 Compliance Requirement: Subrecipient Monitoring Audit Findings: Material Weakness, Noncompliance Criteria: Title 2 Subtitle A Chapter II Part 200 Subpart D, Section 200.331 and 200.332, establishes requirements that pass-through entities must adhere to in regard to their subrecipient grant agreements and the monitoring processes of those subrecipients. Condition: The EmployIndy subrecipient, Eckerd Connects, was reimbursed for personnel and fringe expenses that were allocated to the WIOA grants based off of a fixed allocation percentage for each ALN instead of actual time on task. Cause: The condition was caused by a lack of internal controls over WIOA subrecipient/service provider claims for accrued expenditures. Effect: As a result of these matters, expenditures could be inaccurately charged to the federal grant. Questioned costs: There are no questioned costs. Context: During testing, Crowe identified multiple monthly accrued expenditures of the Eckerd Connects subrecipient in which a fixed allocation for the separate WIOA grants was used each month to allocate personnel and fringe expenses. Identification as a repeat finding, if applicable: Not applicable. This is not a repeat finding. Recommendation: We recommend EmployIndy review subrecipient source documents to ensure accrued expenditures are appropriately supported by invoices or time-records showing time on task spent on specific grants. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.

Information on the federal program: Federal Agency: Department of Labor Pass-Through Entity: Indiana Department of Workforce Development Federal Program: WIOA Assistance Listing Number: 17.258, 17.259, 17.278 Compliance Requirement: Subrecipient Monitoring Audit Findings: Material Weakness, Noncompliance Criteria: Title 2 Subtitle A Chapter II Part 200 Subpart D, Section 200.331 and 200.332, establishes requirements that pass-through entities must adhere to in regard to their subrecipient grant agreements and the monitoring processes of those subrecipients. Condition: The EmployIndy subrecipient, Eckerd Connects, was reimbursed for personnel and fringe expenses that were allocated to the WIOA grants based off of a fixed allocation percentage for each ALN instead of actual time on task. Cause: The condition was caused by a lack of internal controls over WIOA subrecipient/service provider claims for accrued expenditures. Effect: As a result of these matters, expenditures could be inaccurately charged to the federal grant. Questioned costs: There are no questioned costs. Context: During testing, Crowe identified multiple monthly accrued expenditures of the Eckerd Connects subrecipient in which a fixed allocation for the separate WIOA grants was used each month to allocate personnel and fringe expenses. Identification as a repeat finding, if applicable: Not applicable. This is not a repeat finding. Recommendation: We recommend EmployIndy review subrecipient source documents to ensure accrued expenditures are appropriately supported by invoices or time-records showing time on task spent on specific grants. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.

Information on the federal program: Federal Agency: Department of Labor Pass-Through Entity: Indiana Department of Workforce Development Federal Program: WIOA Assistance Listing Number: 17.258, 17.259, 17.278 Compliance Requirement: Subrecipient Monitoring Audit Findings: Material Weakness, Noncompliance Criteria: Title 2 Subtitle A Chapter II Part 200 Subpart D, Section 200.331 and 200.332, establishes requirements that pass-through entities must adhere to in regard to their subrecipient grant agreements and the monitoring processes of those subrecipients. Condition: The EmployIndy subrecipient, Eckerd Connects, was reimbursed for personnel and fringe expenses that were allocated to the WIOA grants based off of a fixed allocation percentage for each ALN instead of actual time on task. Cause: The condition was caused by a lack of internal controls over WIOA subrecipient/service provider claims for accrued expenditures. Effect: As a result of these matters, expenditures could be inaccurately charged to the federal grant. Questioned costs: There are no questioned costs. Context: During testing, Crowe identified multiple monthly accrued expenditures of the Eckerd Connects subrecipient in which a fixed allocation for the separate WIOA grants was used each month to allocate personnel and fringe expenses. Identification as a repeat finding, if applicable: Not applicable. This is not a repeat finding. Recommendation: We recommend EmployIndy review subrecipient source documents to ensure accrued expenditures are appropriately supported by invoices or time-records showing time on task spent on specific grants. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.

Information on the federal program: Federal Agency: Department of Labor Pass-Through Entity: Indiana Department of Workforce Development Federal Program: WIOA Assistance Listing Number: 17.258, 17.259, 17.278 Compliance Requirement: Subrecipient Monitoring Audit Findings: Material Weakness, Noncompliance Criteria: Title 2 Subtitle A Chapter II Part 200 Subpart D, Section 200.331 and 200.332, establishes requirements that pass-through entities must adhere to in regard to their subrecipient grant agreements and the monitoring processes of those subrecipients. Condition: The EmployIndy subrecipient, Eckerd Connects, was reimbursed for personnel and fringe expenses that were allocated to the WIOA grants based off of a fixed allocation percentage for each ALN instead of actual time on task. Cause: The condition was caused by a lack of internal controls over WIOA subrecipient/service provider claims for accrued expenditures. Effect: As a result of these matters, expenditures could be inaccurately charged to the federal grant. Questioned costs: There are no questioned costs. Context: During testing, Crowe identified multiple monthly accrued expenditures of the Eckerd Connects subrecipient in which a fixed allocation for the separate WIOA grants was used each month to allocate personnel and fringe expenses. Identification as a repeat finding, if applicable: Not applicable. This is not a repeat finding. Recommendation: We recommend EmployIndy review subrecipient source documents to ensure accrued expenditures are appropriately supported by invoices or time-records showing time on task spent on specific grants. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.

Information on the federal program: Federal Agency: Department of Labor Pass-Through Entity: Indiana Department of Workforce Development Federal Program: WIOA Assistance Listing Number: 17.258, 17.259, 17.278 Compliance Requirement: Subrecipient Monitoring Audit Findings: Material Weakness, Noncompliance Criteria: Title 2 Subtitle A Chapter II Part 200 Subpart D, Section 200.331 and 200.332, establishes requirements that pass-through entities must adhere to in regard to their subrecipient grant agreements and the monitoring processes of those subrecipients. Condition: Through our auditing procedures on subrecipient monitoring compliance requirements, we noted that there was missing award information in the subrecipient contracts that are required per Section 200.332 (a)(1) federal award identification. These missing pieces of information included Federal award identification such as: 1. Subrecipient’s unique identifier 2. Federal award identification number 3. Federal award date 4. Subaward period of performance start and end date 5. Assistance Listings numbers 6. Indirect cost rate for Federal award er CFA subsection 200.414 In addition, EmployIndy does not clearly distinguish within the agreement that the recipient of funding is either a “subrecipient” or a “contractor.” Cause: EmployIndy does not have an effective system of internal controls in place to effectively structure and review WIOA subaward agreements. Management uses their standard contractual agreement template. Effect: Due to lack of required information being present within the contracts and the contracts not clearly identifying between a subrecipient and a contractor, there could be noncompliance issues in how the funds are spent and recorded by the subrecipient, which could lead to noncompliance issues for EmployIndy and its subrecipients. Questioned costs: There are no questioned costs. Context: Subrecipients represented approximately 31%, $1,908,226, of the total award, $6,137,136. The condition reported was prevalent across each subrecipient participating in the award. Identification as a repeat finding, if applicable: Not a repeat finding for WIOA; an Entity wide repeat finding for Federal awards Recommendation: We recommend that EmployIndy rework their contract agreements to clearly distinguish between subrecipients and contractors. EmployIndy should also review Title 2 Subtitle A Chapter II Part 200 Subpart D and ensure their contracts with subrecipients include all of the required information. Management should review their subrecipient monitoring and management policies for subcontractor and contractor determinations, federal award identification, and subrecipient risk assessment and monitoring procedures for each unique federal award. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.

Information on the federal program: Federal Agency: Department of Labor Pass-Through Entity: Indiana Department of Workforce Development Federal Program: WIOA Assistance Listing Number: 17.258, 17.259, 17.278 Compliance Requirement: Subrecipient Monitoring Audit Findings: Material Weakness, Noncompliance Criteria: Title 2 Subtitle A Chapter II Part 200 Subpart D, Section 200.331 and 200.332, establishes requirements that pass-through entities must adhere to in regard to their subrecipient grant agreements and the monitoring processes of those subrecipients. Condition: Through our auditing procedures on subrecipient monitoring compliance requirements, we noted that there was missing award information in the subrecipient contracts that are required per Section 200.332 (a)(1) federal award identification. These missing pieces of information included Federal award identification such as: 1. Subrecipient’s unique identifier 2. Federal award identification number 3. Federal award date 4. Subaward period of performance start and end date 5. Assistance Listings numbers 6. Indirect cost rate for Federal award er CFA subsection 200.414 In addition, EmployIndy does not clearly distinguish within the agreement that the recipient of funding is either a “subrecipient” or a “contractor.” Cause: EmployIndy does not have an effective system of internal controls in place to effectively structure and review WIOA subaward agreements. Management uses their standard contractual agreement template. Effect: Due to lack of required information being present within the contracts and the contracts not clearly identifying between a subrecipient and a contractor, there could be noncompliance issues in how the funds are spent and recorded by the subrecipient, which could lead to noncompliance issues for EmployIndy and its subrecipients. Questioned costs: There are no questioned costs. Context: Subrecipients represented approximately 31%, $1,908,226, of the total award, $6,137,136. The condition reported was prevalent across each subrecipient participating in the award. Identification as a repeat finding, if applicable: Not a repeat finding for WIOA; an Entity wide repeat finding for Federal awards Recommendation: We recommend that EmployIndy rework their contract agreements to clearly distinguish between subrecipients and contractors. EmployIndy should also review Title 2 Subtitle A Chapter II Part 200 Subpart D and ensure their contracts with subrecipients include all of the required information. Management should review their subrecipient monitoring and management policies for subcontractor and contractor determinations, federal award identification, and subrecipient risk assessment and monitoring procedures for each unique federal award. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.

Information on the federal program: Federal Agency: Department of Labor Pass-Through Entity: Indiana Department of Workforce Development Federal Program: WIOA Assistance Listing Number: 17.258, 17.259, 17.278 Compliance Requirement: Subrecipient Monitoring Audit Findings: Material Weakness, Noncompliance Criteria: Title 2 Subtitle A Chapter II Part 200 Subpart D, Section 200.331 and 200.332, establishes requirements that pass-through entities must adhere to in regard to their subrecipient grant agreements and the monitoring processes of those subrecipients. Condition: Through our auditing procedures on subrecipient monitoring compliance requirements, we noted that there was missing award information in the subrecipient contracts that are required per Section 200.332 (a)(1) federal award identification. These missing pieces of information included Federal award identification such as: 1. Subrecipient’s unique identifier 2. Federal award identification number 3. Federal award date 4. Subaward period of performance start and end date 5. Assistance Listings numbers 6. Indirect cost rate for Federal award er CFA subsection 200.414 In addition, EmployIndy does not clearly distinguish within the agreement that the recipient of funding is either a “subrecipient” or a “contractor.” Cause: EmployIndy does not have an effective system of internal controls in place to effectively structure and review WIOA subaward agreements. Management uses their standard contractual agreement template. Effect: Due to lack of required information being present within the contracts and the contracts not clearly identifying between a subrecipient and a contractor, there could be noncompliance issues in how the funds are spent and recorded by the subrecipient, which could lead to noncompliance issues for EmployIndy and its subrecipients. Questioned costs: There are no questioned costs. Context: Subrecipients represented approximately 31%, $1,908,226, of the total award, $6,137,136. The condition reported was prevalent across each subrecipient participating in the award. Identification as a repeat finding, if applicable: Not a repeat finding for WIOA; an Entity wide repeat finding for Federal awards Recommendation: We recommend that EmployIndy rework their contract agreements to clearly distinguish between subrecipients and contractors. EmployIndy should also review Title 2 Subtitle A Chapter II Part 200 Subpart D and ensure their contracts with subrecipients include all of the required information. Management should review their subrecipient monitoring and management policies for subcontractor and contractor determinations, federal award identification, and subrecipient risk assessment and monitoring procedures for each unique federal award. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.

Information on the federal program: Federal Agency: Department of Labor Pass-Through Entity: Indiana Department of Workforce Development Federal Program: WIOA Assistance Listing Number: 17.258, 17.259, 17.278 Compliance Requirement: Subrecipient Monitoring Audit Findings: Material Weakness, Noncompliance Criteria: Title 2 Subtitle A Chapter II Part 200 Subpart D, Section 200.331 and 200.332, establishes requirements that pass-through entities must adhere to in regard to their subrecipient grant agreements and the monitoring processes of those subrecipients. Condition: Through our auditing procedures on subrecipient monitoring compliance requirements, we noted that there was missing award information in the subrecipient contracts that are required per Section 200.332 (a)(1) federal award identification. These missing pieces of information included Federal award identification such as: 1. Subrecipient’s unique identifier 2. Federal award identification number 3. Federal award date 4. Subaward period of performance start and end date 5. Assistance Listings numbers 6. Indirect cost rate for Federal award er CFA subsection 200.414 In addition, EmployIndy does not clearly distinguish within the agreement that the recipient of funding is either a “subrecipient” or a “contractor.” Cause: EmployIndy does not have an effective system of internal controls in place to effectively structure and review WIOA subaward agreements. Management uses their standard contractual agreement template. Effect: Due to lack of required information being present within the contracts and the contracts not clearly identifying between a subrecipient and a contractor, there could be noncompliance issues in how the funds are spent and recorded by the subrecipient, which could lead to noncompliance issues for EmployIndy and its subrecipients. Questioned costs: There are no questioned costs. Context: Subrecipients represented approximately 31%, $1,908,226, of the total award, $6,137,136. The condition reported was prevalent across each subrecipient participating in the award. Identification as a repeat finding, if applicable: Not a repeat finding for WIOA; an Entity wide repeat finding for Federal awards Recommendation: We recommend that EmployIndy rework their contract agreements to clearly distinguish between subrecipients and contractors. EmployIndy should also review Title 2 Subtitle A Chapter II Part 200 Subpart D and ensure their contracts with subrecipients include all of the required information. Management should review their subrecipient monitoring and management policies for subcontractor and contractor determinations, federal award identification, and subrecipient risk assessment and monitoring procedures for each unique federal award. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.

Information on the federal program: Federal Agency: Department of Labor Pass-Through Entity: Indiana Department of Workforce Development Federal Program: WIOA Assistance Listing Number: 17.258, 17.259, 17.278 Compliance Requirement: Cash Management Audit Findings: Significant Deficiency, Noncompliance Criteria: According to Title 2 U.S. Code of Federal Regulations (“CFR”) Part 200, paragraph 305, non-federal entities are required to minimize the time that elapses between the transfer of funds from the federal funding source and the disbursement of those funds by the non-federal entity for the program’s intended purposes. Condition: EmployIndy made draws on the WIOA grant prior to incurring expenditures related to those draws. Cause: The condition was caused by an oversight by management that resulted in estimate draws being submitted. Effect: As a result of these matters, EmployIndy made draws prior to incurring expenses. The WIOA grant is a cost reimbursement grant and therefore, the costs should be incurred prior to requesting draws on the grant. Questioned costs: There are no questioned costs. Context: As part of our SEFA tie out procedures, we noted a deferred revenue balance for the WIOA grants of approximately $437,000. Management noted that estimate draws are submitted to DWD prior to expenses being incurred. Management did not have a timely and effective process in place to ensure draws reconcile to expenditures. Upon further analysis, management determined that approximately $137,000 of the deferred revenue balance should be recorded as revenue for fiscal year 2022. At June 30, 2022, EmployIndy recorded deferred revenue of $300,000 for the WIOA grant indicating that expenses were not incurred for the cash that had been drawn. Identification as a repeat finding, if applicable: This is not a repeat finding. Recommendation: We recommend that management designate a specific individual to be responsible for monitoring grant activity and only submit draw requests when expenses have been incurred. The amount of the draw should reflect the actual expenditures incurred for the period. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.

Information on the federal program: Federal Agency: Department of Labor Pass-Through Entity: Indiana Department of Workforce Development Federal Program: WIOA Assistance Listing Number: 17.258, 17.259, 17.278 Compliance Requirement: Cash Management Audit Findings: Significant Deficiency, Noncompliance Criteria: According to Title 2 U.S. Code of Federal Regulations (“CFR”) Part 200, paragraph 305, non-federal entities are required to minimize the time that elapses between the transfer of funds from the federal funding source and the disbursement of those funds by the non-federal entity for the program’s intended purposes. Condition: EmployIndy made draws on the WIOA grant prior to incurring expenditures related to those draws. Cause: The condition was caused by an oversight by management that resulted in estimate draws being submitted. Effect: As a result of these matters, EmployIndy made draws prior to incurring expenses. The WIOA grant is a cost reimbursement grant and therefore, the costs should be incurred prior to requesting draws on the grant. Questioned costs: There are no questioned costs. Context: As part of our SEFA tie out procedures, we noted a deferred revenue balance for the WIOA grants of approximately $437,000. Management noted that estimate draws are submitted to DWD prior to expenses being incurred. Management did not have a timely and effective process in place to ensure draws reconcile to expenditures. Upon further analysis, management determined that approximately $137,000 of the deferred revenue balance should be recorded as revenue for fiscal year 2022. At June 30, 2022, EmployIndy recorded deferred revenue of $300,000 for the WIOA grant indicating that expenses were not incurred for the cash that had been drawn. Identification as a repeat finding, if applicable: This is not a repeat finding. Recommendation: We recommend that management designate a specific individual to be responsible for monitoring grant activity and only submit draw requests when expenses have been incurred. The amount of the draw should reflect the actual expenditures incurred for the period. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.

Information on the federal program: Federal Agency: Department of Labor Pass-Through Entity: Indiana Department of Workforce Development Federal Program: WIOA Assistance Listing Number: 17.258, 17.259, 17.278 Compliance Requirement: Cash Management Audit Findings: Significant Deficiency, Noncompliance Criteria: According to Title 2 U.S. Code of Federal Regulations (“CFR”) Part 200, paragraph 305, non-federal entities are required to minimize the time that elapses between the transfer of funds from the federal funding source and the disbursement of those funds by the non-federal entity for the program’s intended purposes. Condition: EmployIndy made draws on the WIOA grant prior to incurring expenditures related to those draws. Cause: The condition was caused by an oversight by management that resulted in estimate draws being submitted. Effect: As a result of these matters, EmployIndy made draws prior to incurring expenses. The WIOA grant is a cost reimbursement grant and therefore, the costs should be incurred prior to requesting draws on the grant. Questioned costs: There are no questioned costs. Context: As part of our SEFA tie out procedures, we noted a deferred revenue balance for the WIOA grants of approximately $437,000. Management noted that estimate draws are submitted to DWD prior to expenses being incurred. Management did not have a timely and effective process in place to ensure draws reconcile to expenditures. Upon further analysis, management determined that approximately $137,000 of the deferred revenue balance should be recorded as revenue for fiscal year 2022. At June 30, 2022, EmployIndy recorded deferred revenue of $300,000 for the WIOA grant indicating that expenses were not incurred for the cash that had been drawn. Identification as a repeat finding, if applicable: This is not a repeat finding. Recommendation: We recommend that management designate a specific individual to be responsible for monitoring grant activity and only submit draw requests when expenses have been incurred. The amount of the draw should reflect the actual expenditures incurred for the period. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.

Information on the federal program: Federal Agency: Department of Labor Pass-Through Entity: Indiana Department of Workforce Development Federal Program: WIOA Assistance Listing Number: 17.258, 17.259, 17.278 Compliance Requirement: Cash Management Audit Findings: Significant Deficiency, Noncompliance Criteria: According to Title 2 U.S. Code of Federal Regulations (“CFR”) Part 200, paragraph 305, non-federal entities are required to minimize the time that elapses between the transfer of funds from the federal funding source and the disbursement of those funds by the non-federal entity for the program’s intended purposes. Condition: EmployIndy made draws on the WIOA grant prior to incurring expenditures related to those draws. Cause: The condition was caused by an oversight by management that resulted in estimate draws being submitted. Effect: As a result of these matters, EmployIndy made draws prior to incurring expenses. The WIOA grant is a cost reimbursement grant and therefore, the costs should be incurred prior to requesting draws on the grant. Questioned costs: There are no questioned costs. Context: As part of our SEFA tie out procedures, we noted a deferred revenue balance for the WIOA grants of approximately $437,000. Management noted that estimate draws are submitted to DWD prior to expenses being incurred. Management did not have a timely and effective process in place to ensure draws reconcile to expenditures. Upon further analysis, management determined that approximately $137,000 of the deferred revenue balance should be recorded as revenue for fiscal year 2022. At June 30, 2022, EmployIndy recorded deferred revenue of $300,000 for the WIOA grant indicating that expenses were not incurred for the cash that had been drawn. Identification as a repeat finding, if applicable: This is not a repeat finding. Recommendation: We recommend that management designate a specific individual to be responsible for monitoring grant activity and only submit draw requests when expenses have been incurred. The amount of the draw should reflect the actual expenditures incurred for the period. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.

Information on the federal program: Federal Agency: Department of Labor Pass-Through Entity: Indiana Department of Workforce Development Federal Program: WIOA Assistance Listing Number: 17.258, 17.259, 17.278 Compliance Requirement: Activities Allowed or Unallowed Audit Findings: Material Weakness, Noncompliance Criteria: 2 CFR 200.403 establishes principles and standards for determining costs for federal awards carried out through grants, cost reimbursement contracts, and other agreements with state and local governments. To be allowable, under federal awards, cost must meet certain criteria: a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. g) Be adequately documented. h) Cost must be incurred during the approved budget period. Additionally, 2 CFR 200.303 indicates that non-Federal Entities receiving Federal awards must 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 terms and conditions of the Federal award. Condition: For 8 of the 60 samples selected, EmployIndy was unable to reconcile the provided support to the selection amounts. As a result, we were unable to determine the allowability of these sample selections under the WIOA grant. Cause: The condition was caused by a lack of internal controls over WIOA subrecipient/service provider claims for accrued expenditures. Effect: As a result of these matters, expenditures could be inaccurately charged to the federal grant. Questioned costs: There are $265,000 of known questioned costs as this is the amount of the WIOA expenditures tested that could not be reconciled to source documents. Context: During our testing procedures over WIOA disbursements for the activities allowed or unallowed compliance requirement, Crowe was unable to reconcile and tie 8 of the 60 samples to source documents after multiple attempts of asking management to aid in reconciling the support to selection totals. Identification as a repeat finding, if applicable: Not applicable. This is not a repeat finding. Recommendation: We recommend that management implement a consistent multi-stage review process for expenditures that are to be allocated to the WIOA cluster and that management clearly organize and retain records of purchase to support amounts being listed as expenditures on their SEFA. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.

Information on the federal program: Federal Agency: Department of Labor Pass-Through Entity: Indiana Department of Workforce Development Federal Program: WIOA Assistance Listing Number: 17.258, 17.259, 17.278 Compliance Requirement: Activities Allowed or Unallowed Audit Findings: Material Weakness, Noncompliance Criteria: 2 CFR 200.403 establishes principles and standards for determining costs for federal awards carried out through grants, cost reimbursement contracts, and other agreements with state and local governments. To be allowable, under federal awards, cost must meet certain criteria: a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. g) Be adequately documented. h) Cost must be incurred during the approved budget period. Additionally, 2 CFR 200.303 indicates that non-Federal Entities receiving Federal awards must 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 terms and conditions of the Federal award. Condition: For 8 of the 60 samples selected, EmployIndy was unable to reconcile the provided support to the selection amounts. As a result, we were unable to determine the allowability of these sample selections under the WIOA grant. Cause: The condition was caused by a lack of internal controls over WIOA subrecipient/service provider claims for accrued expenditures. Effect: As a result of these matters, expenditures could be inaccurately charged to the federal grant. Questioned costs: There are $265,000 of known questioned costs as this is the amount of the WIOA expenditures tested that could not be reconciled to source documents. Context: During our testing procedures over WIOA disbursements for the activities allowed or unallowed compliance requirement, Crowe was unable to reconcile and tie 8 of the 60 samples to source documents after multiple attempts of asking management to aid in reconciling the support to selection totals. Identification as a repeat finding, if applicable: Not applicable. This is not a repeat finding. Recommendation: We recommend that management implement a consistent multi-stage review process for expenditures that are to be allocated to the WIOA cluster and that management clearly organize and retain records of purchase to support amounts being listed as expenditures on their SEFA. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.

Information on the federal program: Federal Agency: Department of Labor Pass-Through Entity: Indiana Department of Workforce Development Federal Program: WIOA Assistance Listing Number: 17.258, 17.259, 17.278 Compliance Requirement: Activities Allowed or Unallowed Audit Findings: Material Weakness, Noncompliance Criteria: 2 CFR 200.403 establishes principles and standards for determining costs for federal awards carried out through grants, cost reimbursement contracts, and other agreements with state and local governments. To be allowable, under federal awards, cost must meet certain criteria: a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. g) Be adequately documented. h) Cost must be incurred during the approved budget period. Additionally, 2 CFR 200.303 indicates that non-Federal Entities receiving Federal awards must 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 terms and conditions of the Federal award. Condition: For 8 of the 60 samples selected, EmployIndy was unable to reconcile the provided support to the selection amounts. As a result, we were unable to determine the allowability of these sample selections under the WIOA grant. Cause: The condition was caused by a lack of internal controls over WIOA subrecipient/service provider claims for accrued expenditures. Effect: As a result of these matters, expenditures could be inaccurately charged to the federal grant. Questioned costs: There are $265,000 of known questioned costs as this is the amount of the WIOA expenditures tested that could not be reconciled to source documents. Context: During our testing procedures over WIOA disbursements for the activities allowed or unallowed compliance requirement, Crowe was unable to reconcile and tie 8 of the 60 samples to source documents after multiple attempts of asking management to aid in reconciling the support to selection totals. Identification as a repeat finding, if applicable: Not applicable. This is not a repeat finding. Recommendation: We recommend that management implement a consistent multi-stage review process for expenditures that are to be allocated to the WIOA cluster and that management clearly organize and retain records of purchase to support amounts being listed as expenditures on their SEFA. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.

Information on the federal program: Federal Agency: Department of Labor Pass-Through Entity: Indiana Department of Workforce Development Federal Program: WIOA Assistance Listing Number: 17.258, 17.259, 17.278 Compliance Requirement: Activities Allowed or Unallowed Audit Findings: Material Weakness, Noncompliance Criteria: 2 CFR 200.403 establishes principles and standards for determining costs for federal awards carried out through grants, cost reimbursement contracts, and other agreements with state and local governments. To be allowable, under federal awards, cost must meet certain criteria: a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. g) Be adequately documented. h) Cost must be incurred during the approved budget period. Additionally, 2 CFR 200.303 indicates that non-Federal Entities receiving Federal awards must 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 terms and conditions of the Federal award. Condition: For 8 of the 60 samples selected, EmployIndy was unable to reconcile the provided support to the selection amounts. As a result, we were unable to determine the allowability of these sample selections under the WIOA grant. Cause: The condition was caused by a lack of internal controls over WIOA subrecipient/service provider claims for accrued expenditures. Effect: As a result of these matters, expenditures could be inaccurately charged to the federal grant. Questioned costs: There are $265,000 of known questioned costs as this is the amount of the WIOA expenditures tested that could not be reconciled to source documents. Context: During our testing procedures over WIOA disbursements for the activities allowed or unallowed compliance requirement, Crowe was unable to reconcile and tie 8 of the 60 samples to source documents after multiple attempts of asking management to aid in reconciling the support to selection totals. Identification as a repeat finding, if applicable: Not applicable. This is not a repeat finding. Recommendation: We recommend that management implement a consistent multi-stage review process for expenditures that are to be allocated to the WIOA cluster and that management clearly organize and retain records of purchase to support amounts being listed as expenditures on their SEFA. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.

Federal Agency: Department of Labor Pass-Through Entity: Indiana Department of Workforce Development Federal Program: WIOA Assistance Listing Number: 17.258, 17.259, 17.278 Compliance Requirement: Activities Allowed or Unallowed Audit Findings: Material Weakness Criteria: 2 CFR 200.403 establishes principles and standards for determining costs for federal awards carried out through grants, cost reimbursement contracts, and other agreements with state and local governments. To be allowable, under federal awards, cost must meet certain criteria: a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. g) Be adequately documented. h) Cost must be incurred during the approved budget period. Additionally, 2 CFR 200.303 indicates that non-Federal Entities receiving Federal awards must 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 terms and conditions of the Federal award. Condition: EmployIndy did not formally review and approve 16 selected WIOA non-payroll expenditures in a sample of 60 to determine that they are allowable under the WIOA federal regulations. Cause: The condition was caused by a lack of internal controls over WIOA subrecipient/service provider claims for accrued expenditures. Effect: As a result of these matters, expenditures could be inaccurately charged to the federal grant. Questioned costs: There are no questioned costs. Context: During our testing procedures over WIOA disbursements for the activities allowed or unallowed compliance requirement, we identified recurring monthly expenditures that are not formally reviewed by management for allowability under the WIOA grant. We also identified expenditures submitted to EmployIndy by service providers that did not have a formal sign-off/review by EmployIndy management appropriately allocating these expenses to the WIOA grant. We noted that 16 of the 60 non-payroll items selected for testing did not have appropriate documented review. Identification as a repeat finding, if applicable: Not applicable. This is not a repeat finding. Recommendation: We recommend that management implement a consistent multi-stage review process for expenditures that are to be allocated to the WIOA cluster and that management clearly organize and retain records of purchase to support amounts being listed as expenditures on their SEFA. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.

Federal Agency: Department of Labor Pass-Through Entity: Indiana Department of Workforce Development Federal Program: WIOA Assistance Listing Number: 17.258, 17.259, 17.278 Compliance Requirement: Activities Allowed or Unallowed Audit Findings: Material Weakness Criteria: 2 CFR 200.403 establishes principles and standards for determining costs for federal awards carried out through grants, cost reimbursement contracts, and other agreements with state and local governments. To be allowable, under federal awards, cost must meet certain criteria: a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. g) Be adequately documented. h) Cost must be incurred during the approved budget period. Additionally, 2 CFR 200.303 indicates that non-Federal Entities receiving Federal awards must 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 terms and conditions of the Federal award. Condition: EmployIndy did not formally review and approve 16 selected WIOA non-payroll expenditures in a sample of 60 to determine that they are allowable under the WIOA federal regulations. Cause: The condition was caused by a lack of internal controls over WIOA subrecipient/service provider claims for accrued expenditures. Effect: As a result of these matters, expenditures could be inaccurately charged to the federal grant. Questioned costs: There are no questioned costs. Context: During our testing procedures over WIOA disbursements for the activities allowed or unallowed compliance requirement, we identified recurring monthly expenditures that are not formally reviewed by management for allowability under the WIOA grant. We also identified expenditures submitted to EmployIndy by service providers that did not have a formal sign-off/review by EmployIndy management appropriately allocating these expenses to the WIOA grant. We noted that 16 of the 60 non-payroll items selected for testing did not have appropriate documented review. Identification as a repeat finding, if applicable: Not applicable. This is not a repeat finding. Recommendation: We recommend that management implement a consistent multi-stage review process for expenditures that are to be allocated to the WIOA cluster and that management clearly organize and retain records of purchase to support amounts being listed as expenditures on their SEFA. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.

Federal Agency: Department of Labor Pass-Through Entity: Indiana Department of Workforce Development Federal Program: WIOA Assistance Listing Number: 17.258, 17.259, 17.278 Compliance Requirement: Activities Allowed or Unallowed Audit Findings: Material Weakness Criteria: 2 CFR 200.403 establishes principles and standards for determining costs for federal awards carried out through grants, cost reimbursement contracts, and other agreements with state and local governments. To be allowable, under federal awards, cost must meet certain criteria: a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. g) Be adequately documented. h) Cost must be incurred during the approved budget period. Additionally, 2 CFR 200.303 indicates that non-Federal Entities receiving Federal awards must 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 terms and conditions of the Federal award. Condition: EmployIndy did not formally review and approve 16 selected WIOA non-payroll expenditures in a sample of 60 to determine that they are allowable under the WIOA federal regulations. Cause: The condition was caused by a lack of internal controls over WIOA subrecipient/service provider claims for accrued expenditures. Effect: As a result of these matters, expenditures could be inaccurately charged to the federal grant. Questioned costs: There are no questioned costs. Context: During our testing procedures over WIOA disbursements for the activities allowed or unallowed compliance requirement, we identified recurring monthly expenditures that are not formally reviewed by management for allowability under the WIOA grant. We also identified expenditures submitted to EmployIndy by service providers that did not have a formal sign-off/review by EmployIndy management appropriately allocating these expenses to the WIOA grant. We noted that 16 of the 60 non-payroll items selected for testing did not have appropriate documented review. Identification as a repeat finding, if applicable: Not applicable. This is not a repeat finding. Recommendation: We recommend that management implement a consistent multi-stage review process for expenditures that are to be allocated to the WIOA cluster and that management clearly organize and retain records of purchase to support amounts being listed as expenditures on their SEFA. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.

Federal Agency: Department of Labor Pass-Through Entity: Indiana Department of Workforce Development Federal Program: WIOA Assistance Listing Number: 17.258, 17.259, 17.278 Compliance Requirement: Activities Allowed or Unallowed Audit Findings: Material Weakness Criteria: 2 CFR 200.403 establishes principles and standards for determining costs for federal awards carried out through grants, cost reimbursement contracts, and other agreements with state and local governments. To be allowable, under federal awards, cost must meet certain criteria: a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. g) Be adequately documented. h) Cost must be incurred during the approved budget period. Additionally, 2 CFR 200.303 indicates that non-Federal Entities receiving Federal awards must 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 terms and conditions of the Federal award. Condition: EmployIndy did not formally review and approve 16 selected WIOA non-payroll expenditures in a sample of 60 to determine that they are allowable under the WIOA federal regulations. Cause: The condition was caused by a lack of internal controls over WIOA subrecipient/service provider claims for accrued expenditures. Effect: As a result of these matters, expenditures could be inaccurately charged to the federal grant. Questioned costs: There are no questioned costs. Context: During our testing procedures over WIOA disbursements for the activities allowed or unallowed compliance requirement, we identified recurring monthly expenditures that are not formally reviewed by management for allowability under the WIOA grant. We also identified expenditures submitted to EmployIndy by service providers that did not have a formal sign-off/review by EmployIndy management appropriately allocating these expenses to the WIOA grant. We noted that 16 of the 60 non-payroll items selected for testing did not have appropriate documented review. Identification as a repeat finding, if applicable: Not applicable. This is not a repeat finding. Recommendation: We recommend that management implement a consistent multi-stage review process for expenditures that are to be allocated to the WIOA cluster and that management clearly organize and retain records of purchase to support amounts being listed as expenditures on their SEFA. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.

Information on the federal program: Federal Agency: Department of Labor Pass-Through Entity: Indiana Department of Workforce Development Federal Program: WIOA Assistance Listing Number: 17.258, 17.259, 17.278 Compliance Requirement: Activities Allowed or Unallowed Audit Findings: Material Weakness, Noncompliance Criteria: 2 CFR 200.403 establishes principles and standards for determining costs for federal awards carried out through grants, cost reimbursement contracts, and other agreements with state and local governments. To be allowable, under federal awards, cost must meet certain criteria: a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. g) Be adequately documented. h) Cost must be incurred during the approved budget period. Additionally, 2 CFR 200.303 indicates that non-Federal Entities receiving Federal awards must 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 terms and conditions of the Federal award. Condition: EmployIndy did not retain up-to-date contracts for 5 out of 8 employees tested and was unable to reconcile fund codes and employee payroll charged to the WIOA grant. It was also noted that for 8 out of 13 timecards selected for testing, it did not appear that the time was approved to be recorded to the WIOA grant. Cause: The condition was caused by a lack of internal controls over EmployIndy administrative payroll processing. Effect: As a result of these matters, expenditures could be inaccurately charged to the federal grant. Questioned costs: There are $23,000 of known questioned costs related to this issue. Context: During our testing procedures over WIOA disbursements for the activities allowed or unallowed compliance requirement, we identified several payroll expenditures charged to the WIOA cluster for which valid contracts were not provided, employee time records did not reflect hours spent on WIOA activities, and reconciliations for the allocation of employee payroll to WIOA were not provided. Identification as a repeat finding, if applicable: Not applicable. This is not a repeat finding. Recommendation: We recommend that management implement a consistent multi-stage review process for expenditures that are to be allocated to the WIOA cluster and that management clearly organize and retain records of purchase to support amounts being listed as expenditures on their SEFA. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.

Information on the federal program: Federal Agency: Department of Labor Pass-Through Entity: Indiana Department of Workforce Development Federal Program: WIOA Assistance Listing Number: 17.258, 17.259, 17.278 Compliance Requirement: Activities Allowed or Unallowed Audit Findings: Material Weakness, Noncompliance Criteria: 2 CFR 200.403 establishes principles and standards for determining costs for federal awards carried out through grants, cost reimbursement contracts, and other agreements with state and local governments. To be allowable, under federal awards, cost must meet certain criteria: a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. g) Be adequately documented. h) Cost must be incurred during the approved budget period. Additionally, 2 CFR 200.303 indicates that non-Federal Entities receiving Federal awards must 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 terms and conditions of the Federal award. Condition: EmployIndy did not retain up-to-date contracts for 5 out of 8 employees tested and was unable to reconcile fund codes and employee payroll charged to the WIOA grant. It was also noted that for 8 out of 13 timecards selected for testing, it did not appear that the time was approved to be recorded to the WIOA grant. Cause: The condition was caused by a lack of internal controls over EmployIndy administrative payroll processing. Effect: As a result of these matters, expenditures could be inaccurately charged to the federal grant. Questioned costs: There are $23,000 of known questioned costs related to this issue. Context: During our testing procedures over WIOA disbursements for the activities allowed or unallowed compliance requirement, we identified several payroll expenditures charged to the WIOA cluster for which valid contracts were not provided, employee time records did not reflect hours spent on WIOA activities, and reconciliations for the allocation of employee payroll to WIOA were not provided. Identification as a repeat finding, if applicable: Not applicable. This is not a repeat finding. Recommendation: We recommend that management implement a consistent multi-stage review process for expenditures that are to be allocated to the WIOA cluster and that management clearly organize and retain records of purchase to support amounts being listed as expenditures on their SEFA. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.

Information on the federal program: Federal Agency: Department of Labor Pass-Through Entity: Indiana Department of Workforce Development Federal Program: WIOA Assistance Listing Number: 17.258, 17.259, 17.278 Compliance Requirement: Activities Allowed or Unallowed Audit Findings: Material Weakness, Noncompliance Criteria: 2 CFR 200.403 establishes principles and standards for determining costs for federal awards carried out through grants, cost reimbursement contracts, and other agreements with state and local governments. To be allowable, under federal awards, cost must meet certain criteria: a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. g) Be adequately documented. h) Cost must be incurred during the approved budget period. Additionally, 2 CFR 200.303 indicates that non-Federal Entities receiving Federal awards must 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 terms and conditions of the Federal award. Condition: EmployIndy did not retain up-to-date contracts for 5 out of 8 employees tested and was unable to reconcile fund codes and employee payroll charged to the WIOA grant. It was also noted that for 8 out of 13 timecards selected for testing, it did not appear that the time was approved to be recorded to the WIOA grant. Cause: The condition was caused by a lack of internal controls over EmployIndy administrative payroll processing. Effect: As a result of these matters, expenditures could be inaccurately charged to the federal grant. Questioned costs: There are $23,000 of known questioned costs related to this issue. Context: During our testing procedures over WIOA disbursements for the activities allowed or unallowed compliance requirement, we identified several payroll expenditures charged to the WIOA cluster for which valid contracts were not provided, employee time records did not reflect hours spent on WIOA activities, and reconciliations for the allocation of employee payroll to WIOA were not provided. Identification as a repeat finding, if applicable: Not applicable. This is not a repeat finding. Recommendation: We recommend that management implement a consistent multi-stage review process for expenditures that are to be allocated to the WIOA cluster and that management clearly organize and retain records of purchase to support amounts being listed as expenditures on their SEFA. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.

Information on the federal program: Federal Agency: Department of Labor Pass-Through Entity: Indiana Department of Workforce Development Federal Program: WIOA Assistance Listing Number: 17.258, 17.259, 17.278 Compliance Requirement: Activities Allowed or Unallowed Audit Findings: Material Weakness, Noncompliance Criteria: 2 CFR 200.403 establishes principles and standards for determining costs for federal awards carried out through grants, cost reimbursement contracts, and other agreements with state and local governments. To be allowable, under federal awards, cost must meet certain criteria: a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. g) Be adequately documented. h) Cost must be incurred during the approved budget period. Additionally, 2 CFR 200.303 indicates that non-Federal Entities receiving Federal awards must 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 terms and conditions of the Federal award. Condition: EmployIndy did not retain up-to-date contracts for 5 out of 8 employees tested and was unable to reconcile fund codes and employee payroll charged to the WIOA grant. It was also noted that for 8 out of 13 timecards selected for testing, it did not appear that the time was approved to be recorded to the WIOA grant. Cause: The condition was caused by a lack of internal controls over EmployIndy administrative payroll processing. Effect: As a result of these matters, expenditures could be inaccurately charged to the federal grant. Questioned costs: There are $23,000 of known questioned costs related to this issue. Context: During our testing procedures over WIOA disbursements for the activities allowed or unallowed compliance requirement, we identified several payroll expenditures charged to the WIOA cluster for which valid contracts were not provided, employee time records did not reflect hours spent on WIOA activities, and reconciliations for the allocation of employee payroll to WIOA were not provided. Identification as a repeat finding, if applicable: Not applicable. This is not a repeat finding. Recommendation: We recommend that management implement a consistent multi-stage review process for expenditures that are to be allocated to the WIOA cluster and that management clearly organize and retain records of purchase to support amounts being listed as expenditures on their SEFA. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.

Information on the federal program: Federal Agency: Department of Labor Pass-Through Entity: Indiana Department of Workforce Development Federal Program: WIOA Assistance Listing Number: 17.258, 17.259, 17.278 Compliance Requirement: Subrecipient Monitoring Audit Findings: Material Weakness, Noncompliance Criteria: Title 2 Subtitle A Chapter II Part 200 Subpart D, Section 200.331 and 200.332, establishes requirements that pass-through entities must adhere to in regard to their subrecipient grant agreements and the monitoring processes of those subrecipients. Condition: The EmployIndy subrecipient, Eckerd Connects, was reimbursed for personnel and fringe expenses that were allocated to the WIOA grants based off of a fixed allocation percentage for each ALN instead of actual time on task. Cause: The condition was caused by a lack of internal controls over WIOA subrecipient/service provider claims for accrued expenditures. Effect: As a result of these matters, expenditures could be inaccurately charged to the federal grant. Questioned costs: There are no questioned costs. Context: During testing, Crowe identified multiple monthly accrued expenditures of the Eckerd Connects subrecipient in which a fixed allocation for the separate WIOA grants was used each month to allocate personnel and fringe expenses. Identification as a repeat finding, if applicable: Not applicable. This is not a repeat finding. Recommendation: We recommend EmployIndy review subrecipient source documents to ensure accrued expenditures are appropriately supported by invoices or time-records showing time on task spent on specific grants. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.

Information on the federal program: Federal Agency: Department of Labor Pass-Through Entity: Indiana Department of Workforce Development Federal Program: WIOA Assistance Listing Number: 17.258, 17.259, 17.278 Compliance Requirement: Subrecipient Monitoring Audit Findings: Material Weakness, Noncompliance Criteria: Title 2 Subtitle A Chapter II Part 200 Subpart D, Section 200.331 and 200.332, establishes requirements that pass-through entities must adhere to in regard to their subrecipient grant agreements and the monitoring processes of those subrecipients. Condition: The EmployIndy subrecipient, Eckerd Connects, was reimbursed for personnel and fringe expenses that were allocated to the WIOA grants based off of a fixed allocation percentage for each ALN instead of actual time on task. Cause: The condition was caused by a lack of internal controls over WIOA subrecipient/service provider claims for accrued expenditures. Effect: As a result of these matters, expenditures could be inaccurately charged to the federal grant. Questioned costs: There are no questioned costs. Context: During testing, Crowe identified multiple monthly accrued expenditures of the Eckerd Connects subrecipient in which a fixed allocation for the separate WIOA grants was used each month to allocate personnel and fringe expenses. Identification as a repeat finding, if applicable: Not applicable. This is not a repeat finding. Recommendation: We recommend EmployIndy review subrecipient source documents to ensure accrued expenditures are appropriately supported by invoices or time-records showing time on task spent on specific grants. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.

Information on the federal program: Federal Agency: Department of Labor Pass-Through Entity: Indiana Department of Workforce Development Federal Program: WIOA Assistance Listing Number: 17.258, 17.259, 17.278 Compliance Requirement: Subrecipient Monitoring Audit Findings: Material Weakness, Noncompliance Criteria: Title 2 Subtitle A Chapter II Part 200 Subpart D, Section 200.331 and 200.332, establishes requirements that pass-through entities must adhere to in regard to their subrecipient grant agreements and the monitoring processes of those subrecipients. Condition: The EmployIndy subrecipient, Eckerd Connects, was reimbursed for personnel and fringe expenses that were allocated to the WIOA grants based off of a fixed allocation percentage for each ALN instead of actual time on task. Cause: The condition was caused by a lack of internal controls over WIOA subrecipient/service provider claims for accrued expenditures. Effect: As a result of these matters, expenditures could be inaccurately charged to the federal grant. Questioned costs: There are no questioned costs. Context: During testing, Crowe identified multiple monthly accrued expenditures of the Eckerd Connects subrecipient in which a fixed allocation for the separate WIOA grants was used each month to allocate personnel and fringe expenses. Identification as a repeat finding, if applicable: Not applicable. This is not a repeat finding. Recommendation: We recommend EmployIndy review subrecipient source documents to ensure accrued expenditures are appropriately supported by invoices or time-records showing time on task spent on specific grants. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.

Information on the federal program: Federal Agency: Department of Labor Pass-Through Entity: Indiana Department of Workforce Development Federal Program: WIOA Assistance Listing Number: 17.258, 17.259, 17.278 Compliance Requirement: Subrecipient Monitoring Audit Findings: Material Weakness, Noncompliance Criteria: Title 2 Subtitle A Chapter II Part 200 Subpart D, Section 200.331 and 200.332, establishes requirements that pass-through entities must adhere to in regard to their subrecipient grant agreements and the monitoring processes of those subrecipients. Condition: The EmployIndy subrecipient, Eckerd Connects, was reimbursed for personnel and fringe expenses that were allocated to the WIOA grants based off of a fixed allocation percentage for each ALN instead of actual time on task. Cause: The condition was caused by a lack of internal controls over WIOA subrecipient/service provider claims for accrued expenditures. Effect: As a result of these matters, expenditures could be inaccurately charged to the federal grant. Questioned costs: There are no questioned costs. Context: During testing, Crowe identified multiple monthly accrued expenditures of the Eckerd Connects subrecipient in which a fixed allocation for the separate WIOA grants was used each month to allocate personnel and fringe expenses. Identification as a repeat finding, if applicable: Not applicable. This is not a repeat finding. Recommendation: We recommend EmployIndy review subrecipient source documents to ensure accrued expenditures are appropriately supported by invoices or time-records showing time on task spent on specific grants. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.

Information on the federal program: Federal Agency: Department of Labor Pass-Through Entity: Indiana Department of Workforce Development Federal Program: WIOA Assistance Listing Number: 17.258, 17.259, 17.278 Compliance Requirement: Subrecipient Monitoring Audit Findings: Material Weakness, Noncompliance Criteria: Title 2 Subtitle A Chapter II Part 200 Subpart D, Section 200.331 and 200.332, establishes requirements that pass-through entities must adhere to in regard to their subrecipient grant agreements and the monitoring processes of those subrecipients. Condition: Through our auditing procedures on subrecipient monitoring compliance requirements, we noted that there was missing award information in the subrecipient contracts that are required per Section 200.332 (a)(1) federal award identification. These missing pieces of information included Federal award identification such as: 1. Subrecipient’s unique identifier 2. Federal award identification number 3. Federal award date 4. Subaward period of performance start and end date 5. Assistance Listings numbers 6. Indirect cost rate for Federal award er CFA subsection 200.414 In addition, EmployIndy does not clearly distinguish within the agreement that the recipient of funding is either a “subrecipient” or a “contractor.” Cause: EmployIndy does not have an effective system of internal controls in place to effectively structure and review WIOA subaward agreements. Management uses their standard contractual agreement template. Effect: Due to lack of required information being present within the contracts and the contracts not clearly identifying between a subrecipient and a contractor, there could be noncompliance issues in how the funds are spent and recorded by the subrecipient, which could lead to noncompliance issues for EmployIndy and its subrecipients. Questioned costs: There are no questioned costs. Context: Subrecipients represented approximately 31%, $1,908,226, of the total award, $6,137,136. The condition reported was prevalent across each subrecipient participating in the award. Identification as a repeat finding, if applicable: Not a repeat finding for WIOA; an Entity wide repeat finding for Federal awards Recommendation: We recommend that EmployIndy rework their contract agreements to clearly distinguish between subrecipients and contractors. EmployIndy should also review Title 2 Subtitle A Chapter II Part 200 Subpart D and ensure their contracts with subrecipients include all of the required information. Management should review their subrecipient monitoring and management policies for subcontractor and contractor determinations, federal award identification, and subrecipient risk assessment and monitoring procedures for each unique federal award. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.

Information on the federal program: Federal Agency: Department of Labor Pass-Through Entity: Indiana Department of Workforce Development Federal Program: WIOA Assistance Listing Number: 17.258, 17.259, 17.278 Compliance Requirement: Subrecipient Monitoring Audit Findings: Material Weakness, Noncompliance Criteria: Title 2 Subtitle A Chapter II Part 200 Subpart D, Section 200.331 and 200.332, establishes requirements that pass-through entities must adhere to in regard to their subrecipient grant agreements and the monitoring processes of those subrecipients. Condition: Through our auditing procedures on subrecipient monitoring compliance requirements, we noted that there was missing award information in the subrecipient contracts that are required per Section 200.332 (a)(1) federal award identification. These missing pieces of information included Federal award identification such as: 1. Subrecipient’s unique identifier 2. Federal award identification number 3. Federal award date 4. Subaward period of performance start and end date 5. Assistance Listings numbers 6. Indirect cost rate for Federal award er CFA subsection 200.414 In addition, EmployIndy does not clearly distinguish within the agreement that the recipient of funding is either a “subrecipient” or a “contractor.” Cause: EmployIndy does not have an effective system of internal controls in place to effectively structure and review WIOA subaward agreements. Management uses their standard contractual agreement template. Effect: Due to lack of required information being present within the contracts and the contracts not clearly identifying between a subrecipient and a contractor, there could be noncompliance issues in how the funds are spent and recorded by the subrecipient, which could lead to noncompliance issues for EmployIndy and its subrecipients. Questioned costs: There are no questioned costs. Context: Subrecipients represented approximately 31%, $1,908,226, of the total award, $6,137,136. The condition reported was prevalent across each subrecipient participating in the award. Identification as a repeat finding, if applicable: Not a repeat finding for WIOA; an Entity wide repeat finding for Federal awards Recommendation: We recommend that EmployIndy rework their contract agreements to clearly distinguish between subrecipients and contractors. EmployIndy should also review Title 2 Subtitle A Chapter II Part 200 Subpart D and ensure their contracts with subrecipients include all of the required information. Management should review their subrecipient monitoring and management policies for subcontractor and contractor determinations, federal award identification, and subrecipient risk assessment and monitoring procedures for each unique federal award. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.

Information on the federal program: Federal Agency: Department of Labor Pass-Through Entity: Indiana Department of Workforce Development Federal Program: WIOA Assistance Listing Number: 17.258, 17.259, 17.278 Compliance Requirement: Subrecipient Monitoring Audit Findings: Material Weakness, Noncompliance Criteria: Title 2 Subtitle A Chapter II Part 200 Subpart D, Section 200.331 and 200.332, establishes requirements that pass-through entities must adhere to in regard to their subrecipient grant agreements and the monitoring processes of those subrecipients. Condition: Through our auditing procedures on subrecipient monitoring compliance requirements, we noted that there was missing award information in the subrecipient contracts that are required per Section 200.332 (a)(1) federal award identification. These missing pieces of information included Federal award identification such as: 1. Subrecipient’s unique identifier 2. Federal award identification number 3. Federal award date 4. Subaward period of performance start and end date 5. Assistance Listings numbers 6. Indirect cost rate for Federal award er CFA subsection 200.414 In addition, EmployIndy does not clearly distinguish within the agreement that the recipient of funding is either a “subrecipient” or a “contractor.” Cause: EmployIndy does not have an effective system of internal controls in place to effectively structure and review WIOA subaward agreements. Management uses their standard contractual agreement template. Effect: Due to lack of required information being present within the contracts and the contracts not clearly identifying between a subrecipient and a contractor, there could be noncompliance issues in how the funds are spent and recorded by the subrecipient, which could lead to noncompliance issues for EmployIndy and its subrecipients. Questioned costs: There are no questioned costs. Context: Subrecipients represented approximately 31%, $1,908,226, of the total award, $6,137,136. The condition reported was prevalent across each subrecipient participating in the award. Identification as a repeat finding, if applicable: Not a repeat finding for WIOA; an Entity wide repeat finding for Federal awards Recommendation: We recommend that EmployIndy rework their contract agreements to clearly distinguish between subrecipients and contractors. EmployIndy should also review Title 2 Subtitle A Chapter II Part 200 Subpart D and ensure their contracts with subrecipients include all of the required information. Management should review their subrecipient monitoring and management policies for subcontractor and contractor determinations, federal award identification, and subrecipient risk assessment and monitoring procedures for each unique federal award. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.

Information on the federal program: Federal Agency: Department of Labor Pass-Through Entity: Indiana Department of Workforce Development Federal Program: WIOA Assistance Listing Number: 17.258, 17.259, 17.278 Compliance Requirement: Subrecipient Monitoring Audit Findings: Material Weakness, Noncompliance Criteria: Title 2 Subtitle A Chapter II Part 200 Subpart D, Section 200.331 and 200.332, establishes requirements that pass-through entities must adhere to in regard to their subrecipient grant agreements and the monitoring processes of those subrecipients. Condition: Through our auditing procedures on subrecipient monitoring compliance requirements, we noted that there was missing award information in the subrecipient contracts that are required per Section 200.332 (a)(1) federal award identification. These missing pieces of information included Federal award identification such as: 1. Subrecipient’s unique identifier 2. Federal award identification number 3. Federal award date 4. Subaward period of performance start and end date 5. Assistance Listings numbers 6. Indirect cost rate for Federal award er CFA subsection 200.414 In addition, EmployIndy does not clearly distinguish within the agreement that the recipient of funding is either a “subrecipient” or a “contractor.” Cause: EmployIndy does not have an effective system of internal controls in place to effectively structure and review WIOA subaward agreements. Management uses their standard contractual agreement template. Effect: Due to lack of required information being present within the contracts and the contracts not clearly identifying between a subrecipient and a contractor, there could be noncompliance issues in how the funds are spent and recorded by the subrecipient, which could lead to noncompliance issues for EmployIndy and its subrecipients. Questioned costs: There are no questioned costs. Context: Subrecipients represented approximately 31%, $1,908,226, of the total award, $6,137,136. The condition reported was prevalent across each subrecipient participating in the award. Identification as a repeat finding, if applicable: Not a repeat finding for WIOA; an Entity wide repeat finding for Federal awards Recommendation: We recommend that EmployIndy rework their contract agreements to clearly distinguish between subrecipients and contractors. EmployIndy should also review Title 2 Subtitle A Chapter II Part 200 Subpart D and ensure their contracts with subrecipients include all of the required information. Management should review their subrecipient monitoring and management policies for subcontractor and contractor determinations, federal award identification, and subrecipient risk assessment and monitoring procedures for each unique federal award. Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.