FINDING 2023-008 Subject: Title I Grants to Local Educational Agencies - Matching, Level of Effort, Earmarking Federal Agency: Department of Education Federal Program: Title I Grants to Local Educational Agencies Assistance Listings Number: 84.010 Federal Award Numbers and Years (or Other Identifying Numbers) S010A190014, S010A200014, S010A210014, S010A220014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Matching, Level of Effort, Earmarking Audit Findings: Material Weakness, Modified Opinion Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. Earmarking A portion of the School Corporation's Title I allocation was required to be set aside for parental involvement and homeless reservation. The required amount to be set aside was indicated in the Title I grant application. The School Corporation is responsible for monitoring each required set aside throughout the life of the grant to ensure the obligation is met. There was no oversight or review process in place to ensure monitoring of each required set aside. The School Corporation did not provide documentation to show that the obligation was met, or not met, to service all the homeless students in the School Corporation and did not transfer the unused funds to the next grant award. Level of Effort - Individual Transactions (Vendor and Payroll) Form 9 (financial) data was submitted by the School Corporation to the Indiana Department of Education (IDOE) semi-annually. The data reported included the School Corporation's expenditures recorded during that period. The IDOE calculated Maintenance of Effort based on the expenditure information submitted on the Form 9 for that fiscal year. To verify amounts used by the IDOE in its computation were derived from the records of the School Corporation, costs were reviewed to ensure they were recorded properly as to account and object code and reported correctly on the Form 9. The School Corporation did not have an oversight process in place to ensure that expenditures for payroll and vendor were posted to the correct fund, account, and object codes. Level of Effort - Maintenance of Effort The financial information submitted by the School Corporation to the IDOE through the Form 9 report, was used by the IDOE to calculate the School Corporation's Level of Effort - Maintenance of Effort. There was an oversight or review process at the School Corporation level over vendor and payroll expenditures; however, the oversight and review process was not documented to ensure the data used to complete the Form 9 was reported accurately in the correct fund, account, and object code. Level of Effort - Supplementing Not Supplanting The School Corporation may use Title I funds only to supplement the funds that would, in the absence of the Title I funds, be made available from state and local sources for the education of students participating in a Title I program. To demonstrate compliance, the School Corporation must demonstrate that it has a methodology (through written procedures) and followed the methodology to allocate state and local funds to each Title I school. They also must ensure that the Title I school received all the state and local funds it would otherwise receive if it were not receiving Title I funds. The School Corporation did not provide written procedures for the methodology used for the FY 2021 and FY 2022 Title I applications. The School Corporation had not developed written procedures for methodology; therefore, we were not able to determine how the School Corporation allocated funding per each school. The lack of internal controls and noncompliance were systemic throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 20 USC 6313(c)(3)(A) states:: "A local educational agency shall reserve such funds as are necessary under this part, determined in accordance with subparagraphs (B) and (C), to provide services comparable to those provided to children in schools funded under this part to serve— (i) homeless children and youths, including providing educationally related support services to children in shelters and other locations where children may live; (ii) children in local institutions for neglected children; and (iii) if appropriate, children in local institutions for delinquent children, and neglected or delinquent children in community day programs." 20 USC 6691 states: "Funds made available under this subchapter shall be used to supplement, and not supplant, non-Federal funds that would otherwise be used for activities authorized under this subchapter." Cause A proper system of internal controls was not designed by management of the School Corporation which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, proper documentation was not maintained to ensure the obligation to service homeless students was met or unmet. In addition, a written methodology of the allocation of state and local funds to each Title I school was not provided. Noncompliance with the grant agreement and the compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation design and implement a proper system of internal controls, including policies and procedures that would provide segregation of duties to ensure appropriate reviews, approvals, and oversight are taking place to ensure compliance. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-009 Subject: COVID-19 - Education Stabilization Fund - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425D Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Finding: Material Weakness Condition and Context The Elementary and Secondary School Emergency Relief (ESSER) Fund provided funding to states and school districts to help safely reopen and sustain the safe operation of schools and to address the impact of the coronavirus pandemic on the nation's students. States were required to subgrant a portion of their ESSER allocation to Local Educational Agencies (LEA). Prior to the LEAs receiving their respective subgrants, the LEAs were required to complete an application for ESSER funding, which was submitted to the Indiana Department of Education, the pass-through entity for approval. The application included a district level budget identifying how the LEA intended to spend program funds. The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance related to the vendor, payroll, and payroll benefit costs charged to the grant. The Accounts Payable Specialist entered all the grant disbursement information into the financial software system from invoices to process vendor payments. Prior to checks being issued, the financial software system required approval by the Treasurer to complete the disbursement process. However, documentation of the approval process could not be provided. In addition, an oversight or review after disbursements were processed was not performed. The payroll distribution reports reviewed by the Superintendent of Schools and the Treasurer for accuracy did not contain the fund or account number to ensure the classification and presentation of the payroll disbursements posted to the grant funds. The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause A proper system of internal controls was not implemented by management of the School Corporation, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Questioned Costs There were no known questioned costs. Recommendation We recommended that management of the School Corporation design and implement a proper system of internal controls, including policies and procedures that would provide segregation of duties to ensure appropriate reviews, approvals, and oversight are taking place to ensure compliance. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-009 Subject: COVID-19 - Education Stabilization Fund - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425D Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Finding: Material Weakness Condition and Context The Elementary and Secondary School Emergency Relief (ESSER) Fund provided funding to states and school districts to help safely reopen and sustain the safe operation of schools and to address the impact of the coronavirus pandemic on the nation's students. States were required to subgrant a portion of their ESSER allocation to Local Educational Agencies (LEA). Prior to the LEAs receiving their respective subgrants, the LEAs were required to complete an application for ESSER funding, which was submitted to the Indiana Department of Education, the pass-through entity for approval. The application included a district level budget identifying how the LEA intended to spend program funds. The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance related to the vendor, payroll, and payroll benefit costs charged to the grant. The Accounts Payable Specialist entered all the grant disbursement information into the financial software system from invoices to process vendor payments. Prior to checks being issued, the financial software system required approval by the Treasurer to complete the disbursement process. However, documentation of the approval process could not be provided. In addition, an oversight or review after disbursements were processed was not performed. The payroll distribution reports reviewed by the Superintendent of Schools and the Treasurer for accuracy did not contain the fund or account number to ensure the classification and presentation of the payroll disbursements posted to the grant funds. The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause A proper system of internal controls was not implemented by management of the School Corporation, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Questioned Costs There were no known questioned costs. Recommendation We recommended that management of the School Corporation design and implement a proper system of internal controls, including policies and procedures that would provide segregation of duties to ensure appropriate reviews, approvals, and oversight are taking place to ensure compliance. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-009 Subject: COVID-19 - Education Stabilization Fund - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425D Federal Award Numbers and Years (or Other Identifying Numbers): S425D200013, S425D210013 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Finding: Material Weakness Condition and Context The Elementary and Secondary School Emergency Relief (ESSER) Fund provided funding to states and school districts to help safely reopen and sustain the safe operation of schools and to address the impact of the coronavirus pandemic on the nation's students. States were required to subgrant a portion of their ESSER allocation to Local Educational Agencies (LEA). Prior to the LEAs receiving their respective subgrants, the LEAs were required to complete an application for ESSER funding, which was submitted to the Indiana Department of Education, the pass-through entity for approval. The application included a district level budget identifying how the LEA intended to spend program funds. The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance related to the vendor, payroll, and payroll benefit costs charged to the grant. The Accounts Payable Specialist entered all the grant disbursement information into the financial software system from invoices to process vendor payments. Prior to checks being issued, the financial software system required approval by the Treasurer to complete the disbursement process. However, documentation of the approval process could not be provided. In addition, an oversight or review after disbursements were processed was not performed. The payroll distribution reports reviewed by the Superintendent of Schools and the Treasurer for accuracy did not contain the fund or account number to ensure the classification and presentation of the payroll disbursements posted to the grant funds. The lack of internal controls was a systemic issue throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." Cause A proper system of internal controls was not implemented by management of the School Corporation, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. Questioned Costs There were no known questioned costs. Recommendation We recommended that management of the School Corporation design and implement a proper system of internal controls, including policies and procedures that would provide segregation of duties to ensure appropriate reviews, approvals, and oversight are taking place to ensure compliance. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-010 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425D Federal Award Number and Year (or Other Identifying Number): S425D210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. The School Corporation was required to submit an annual data report to the Indiana Department of Education (IDOE). Data to be submitted included, but was not limited to, current period expenditures, prior period expenditures, and expenditures per activity. During the audit period, the School Corporation submitted a total of four reports: two ESSER I reports, one ESSER II report, and one ESSER III report. The annual data reports were prepared and submitted to the IDOE by the Chief Financial Officer without an oversight or review process to prevent, or detect and correct, errors. Due to the lack of controls the following errors occurred. The ESSER II, Year 2 report, which covered the period of July 2021 to June 30, 2022, was not supported by the School Corporation's records. $1,555,604 in Expenditures for personnel services - salaries was reported as $1,555,604; however, this amount should have been split between Personnel Services - salaries of $1,062,376, and Personnel Services - Benefits of $493,228 according to the School Corporation's records provided. The lack of internal controls was a systemic issue throughout the audit period and noncompliance was isolated to the ESSER II, Year 2 report. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Cause A proper system of internal controls was not designed by management of the School Corporation. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, reports were not accurately submitted to the IDOE. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls, including policies and procedures, that would provide segregation of duties to ensure reviews, approvals, and oversight are taking place to ensure reports are submitted accurately. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-010 Subject: COVID-19 - Education Stabilization Fund - Reporting Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Number: 84.425D Federal Award Number and Year (or Other Identifying Number): S425D210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Reporting Audit Findings: Material Weakness, Modified Opinion Condition and Context The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. The School Corporation was required to submit an annual data report to the Indiana Department of Education (IDOE). Data to be submitted included, but was not limited to, current period expenditures, prior period expenditures, and expenditures per activity. During the audit period, the School Corporation submitted a total of four reports: two ESSER I reports, one ESSER II report, and one ESSER III report. The annual data reports were prepared and submitted to the IDOE by the Chief Financial Officer without an oversight or review process to prevent, or detect and correct, errors. Due to the lack of controls the following errors occurred. The ESSER II, Year 2 report, which covered the period of July 2021 to June 30, 2022, was not supported by the School Corporation's records. $1,555,604 in Expenditures for personnel services - salaries was reported as $1,555,604; however, this amount should have been split between Personnel Services - salaries of $1,062,376, and Personnel Services - Benefits of $493,228 according to the School Corporation's records provided. The lack of internal controls was a systemic issue throughout the audit period and noncompliance was isolated to the ESSER II, Year 2 report. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.302(b) states in part: "The financial management system of each non-Federal entity must provide for the following: . . . (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . ." 34 CFR 76.722 states: "A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720 and in carrying out other responsibilities under the program." Cause A proper system of internal controls was not designed by management of the School Corporation. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, reports were not accurately submitted to the IDOE. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls, including policies and procedures, that would provide segregation of duties to ensure reviews, approvals, and oversight are taking place to ensure reports are submitted accurately. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
2023-002. Finding: Student Enrollment Reporting Federal Agency: U.S. Department of Education Assistance Listing Number: 84.007, 84.063, 84.268 Program Expenditures: $168,796,624 Program Name: Student Financial Assistance Cluster Award Number(s): P063P180116, P007A151286, P007A221285, P063P220115, P268K230115 Questioned Costs: None Southern Illinois University (the “University”) Carbondale (“SIUC”) and Edwardsville (“SIUE”) campuses did not have adequate procedures in place to ensure student enrollment data elements were reported accurately and timely. During our testing of students who withdrew or graduated from the University, we noted 3 out of 40 (7.5%) students did not have enrollment statuses reported accurately and timely. One student was reported as graduated on a date that did not reflect their degree date from the University (SIUE). One student was reported as active in the program despite graduating from the University (SIUE). Lastly, campus-level and program-level enrollment status for one student was not reported timely (SIUC). The sample was not a statistically valid sample. The Direct Loan Program requirements require a school participating in Title IV aid programs to establish and maintain proper administrative and fiscal procedures and all necessary records and submit all reports to the Department of Education (34 CFR 685.309). Uniform Guidance (2 CFR 200.303(a)) requires nonfederal entities receiving federal awards establish and maintain effective internal control to reasonably ensure compliance with Federal laws, statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include procedures to ensure that all student enrollment reporting requirements are reviewed to ensure compliance. University officials indicated there were misunderstandings and clerical errors between the University records, the National Student Clearinghouse, and the National Student Loan Data System rosters that resulted in the untimely updating of student enrollment status changes. Without sufficient controls around enrollment reporting there is a greater risk that student enrollment data will not be reported accurately or timely. Inaccurate or untimely reporting of student enrollment data can result in inconsistencies between the University’s records and the National Students Loan Data System as well as potential delays in the repayment of federal loans. (Finding Code No. 2023-002). RECOMMENDATION We recommend the University establish processes and procedures to ensure student enrollment changes are communicated timely to the Department of Education. UNIVERSITY RESPONSE Agree. The campuses have implemented processes to prevent further errors in enrollment reporting, despite the disconnects and system problems that have been observed.
2023-002. Finding: Student Enrollment Reporting Federal Agency: U.S. Department of Education Assistance Listing Number: 84.007, 84.063, 84.268 Program Expenditures: $168,796,624 Program Name: Student Financial Assistance Cluster Award Number(s): P063P180116, P007A151286, P007A221285, P063P220115, P268K230115 Questioned Costs: None Southern Illinois University (the “University”) Carbondale (“SIUC”) and Edwardsville (“SIUE”) campuses did not have adequate procedures in place to ensure student enrollment data elements were reported accurately and timely. During our testing of students who withdrew or graduated from the University, we noted 3 out of 40 (7.5%) students did not have enrollment statuses reported accurately and timely. One student was reported as graduated on a date that did not reflect their degree date from the University (SIUE). One student was reported as active in the program despite graduating from the University (SIUE). Lastly, campus-level and program-level enrollment status for one student was not reported timely (SIUC). The sample was not a statistically valid sample. The Direct Loan Program requirements require a school participating in Title IV aid programs to establish and maintain proper administrative and fiscal procedures and all necessary records and submit all reports to the Department of Education (34 CFR 685.309). Uniform Guidance (2 CFR 200.303(a)) requires nonfederal entities receiving federal awards establish and maintain effective internal control to reasonably ensure compliance with Federal laws, statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include procedures to ensure that all student enrollment reporting requirements are reviewed to ensure compliance. University officials indicated there were misunderstandings and clerical errors between the University records, the National Student Clearinghouse, and the National Student Loan Data System rosters that resulted in the untimely updating of student enrollment status changes. Without sufficient controls around enrollment reporting there is a greater risk that student enrollment data will not be reported accurately or timely. Inaccurate or untimely reporting of student enrollment data can result in inconsistencies between the University’s records and the National Students Loan Data System as well as potential delays in the repayment of federal loans. (Finding Code No. 2023-002). RECOMMENDATION We recommend the University establish processes and procedures to ensure student enrollment changes are communicated timely to the Department of Education. UNIVERSITY RESPONSE Agree. The campuses have implemented processes to prevent further errors in enrollment reporting, despite the disconnects and system problems that have been observed.
2023-002. Finding: Student Enrollment Reporting Federal Agency: U.S. Department of Education Assistance Listing Number: 84.007, 84.063, 84.268 Program Expenditures: $168,796,624 Program Name: Student Financial Assistance Cluster Award Number(s): P063P180116, P007A151286, P007A221285, P063P220115, P268K230115 Questioned Costs: None Southern Illinois University (the “University”) Carbondale (“SIUC”) and Edwardsville (“SIUE”) campuses did not have adequate procedures in place to ensure student enrollment data elements were reported accurately and timely. During our testing of students who withdrew or graduated from the University, we noted 3 out of 40 (7.5%) students did not have enrollment statuses reported accurately and timely. One student was reported as graduated on a date that did not reflect their degree date from the University (SIUE). One student was reported as active in the program despite graduating from the University (SIUE). Lastly, campus-level and program-level enrollment status for one student was not reported timely (SIUC). The sample was not a statistically valid sample. The Direct Loan Program requirements require a school participating in Title IV aid programs to establish and maintain proper administrative and fiscal procedures and all necessary records and submit all reports to the Department of Education (34 CFR 685.309). Uniform Guidance (2 CFR 200.303(a)) requires nonfederal entities receiving federal awards establish and maintain effective internal control to reasonably ensure compliance with Federal laws, statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include procedures to ensure that all student enrollment reporting requirements are reviewed to ensure compliance. University officials indicated there were misunderstandings and clerical errors between the University records, the National Student Clearinghouse, and the National Student Loan Data System rosters that resulted in the untimely updating of student enrollment status changes. Without sufficient controls around enrollment reporting there is a greater risk that student enrollment data will not be reported accurately or timely. Inaccurate or untimely reporting of student enrollment data can result in inconsistencies between the University’s records and the National Students Loan Data System as well as potential delays in the repayment of federal loans. (Finding Code No. 2023-002). RECOMMENDATION We recommend the University establish processes and procedures to ensure student enrollment changes are communicated timely to the Department of Education. UNIVERSITY RESPONSE Agree. The campuses have implemented processes to prevent further errors in enrollment reporting, despite the disconnects and system problems that have been observed.
2023-002. Finding: Student Enrollment Reporting Federal Agency: U.S. Department of Education Assistance Listing Number: 84.007, 84.063, 84.268 Program Expenditures: $168,796,624 Program Name: Student Financial Assistance Cluster Award Number(s): P063P180116, P007A151286, P007A221285, P063P220115, P268K230115 Questioned Costs: None Southern Illinois University (the “University”) Carbondale (“SIUC”) and Edwardsville (“SIUE”) campuses did not have adequate procedures in place to ensure student enrollment data elements were reported accurately and timely. During our testing of students who withdrew or graduated from the University, we noted 3 out of 40 (7.5%) students did not have enrollment statuses reported accurately and timely. One student was reported as graduated on a date that did not reflect their degree date from the University (SIUE). One student was reported as active in the program despite graduating from the University (SIUE). Lastly, campus-level and program-level enrollment status for one student was not reported timely (SIUC). The sample was not a statistically valid sample. The Direct Loan Program requirements require a school participating in Title IV aid programs to establish and maintain proper administrative and fiscal procedures and all necessary records and submit all reports to the Department of Education (34 CFR 685.309). Uniform Guidance (2 CFR 200.303(a)) requires nonfederal entities receiving federal awards establish and maintain effective internal control to reasonably ensure compliance with Federal laws, statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include procedures to ensure that all student enrollment reporting requirements are reviewed to ensure compliance. University officials indicated there were misunderstandings and clerical errors between the University records, the National Student Clearinghouse, and the National Student Loan Data System rosters that resulted in the untimely updating of student enrollment status changes. Without sufficient controls around enrollment reporting there is a greater risk that student enrollment data will not be reported accurately or timely. Inaccurate or untimely reporting of student enrollment data can result in inconsistencies between the University’s records and the National Students Loan Data System as well as potential delays in the repayment of federal loans. (Finding Code No. 2023-002). RECOMMENDATION We recommend the University establish processes and procedures to ensure student enrollment changes are communicated timely to the Department of Education. UNIVERSITY RESPONSE Agree. The campuses have implemented processes to prevent further errors in enrollment reporting, despite the disconnects and system problems that have been observed.
2023-002. Finding: Student Enrollment Reporting Federal Agency: U.S. Department of Education Assistance Listing Number: 84.007, 84.063, 84.268 Program Expenditures: $168,796,624 Program Name: Student Financial Assistance Cluster Award Number(s): P063P180116, P007A151286, P007A221285, P063P220115, P268K230115 Questioned Costs: None Southern Illinois University (the “University”) Carbondale (“SIUC”) and Edwardsville (“SIUE”) campuses did not have adequate procedures in place to ensure student enrollment data elements were reported accurately and timely. During our testing of students who withdrew or graduated from the University, we noted 3 out of 40 (7.5%) students did not have enrollment statuses reported accurately and timely. One student was reported as graduated on a date that did not reflect their degree date from the University (SIUE). One student was reported as active in the program despite graduating from the University (SIUE). Lastly, campus-level and program-level enrollment status for one student was not reported timely (SIUC). The sample was not a statistically valid sample. The Direct Loan Program requirements require a school participating in Title IV aid programs to establish and maintain proper administrative and fiscal procedures and all necessary records and submit all reports to the Department of Education (34 CFR 685.309). Uniform Guidance (2 CFR 200.303(a)) requires nonfederal entities receiving federal awards establish and maintain effective internal control to reasonably ensure compliance with Federal laws, statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include procedures to ensure that all student enrollment reporting requirements are reviewed to ensure compliance. University officials indicated there were misunderstandings and clerical errors between the University records, the National Student Clearinghouse, and the National Student Loan Data System rosters that resulted in the untimely updating of student enrollment status changes. Without sufficient controls around enrollment reporting there is a greater risk that student enrollment data will not be reported accurately or timely. Inaccurate or untimely reporting of student enrollment data can result in inconsistencies between the University’s records and the National Students Loan Data System as well as potential delays in the repayment of federal loans. (Finding Code No. 2023-002). RECOMMENDATION We recommend the University establish processes and procedures to ensure student enrollment changes are communicated timely to the Department of Education. UNIVERSITY RESPONSE Agree. The campuses have implemented processes to prevent further errors in enrollment reporting, despite the disconnects and system problems that have been observed.
2023-002. Finding: Student Enrollment Reporting Federal Agency: U.S. Department of Education Assistance Listing Number: 84.007, 84.063, 84.268 Program Expenditures: $168,796,624 Program Name: Student Financial Assistance Cluster Award Number(s): P063P180116, P007A151286, P007A221285, P063P220115, P268K230115 Questioned Costs: None Southern Illinois University (the “University”) Carbondale (“SIUC”) and Edwardsville (“SIUE”) campuses did not have adequate procedures in place to ensure student enrollment data elements were reported accurately and timely. During our testing of students who withdrew or graduated from the University, we noted 3 out of 40 (7.5%) students did not have enrollment statuses reported accurately and timely. One student was reported as graduated on a date that did not reflect their degree date from the University (SIUE). One student was reported as active in the program despite graduating from the University (SIUE). Lastly, campus-level and program-level enrollment status for one student was not reported timely (SIUC). The sample was not a statistically valid sample. The Direct Loan Program requirements require a school participating in Title IV aid programs to establish and maintain proper administrative and fiscal procedures and all necessary records and submit all reports to the Department of Education (34 CFR 685.309). Uniform Guidance (2 CFR 200.303(a)) requires nonfederal entities receiving federal awards establish and maintain effective internal control to reasonably ensure compliance with Federal laws, statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include procedures to ensure that all student enrollment reporting requirements are reviewed to ensure compliance. University officials indicated there were misunderstandings and clerical errors between the University records, the National Student Clearinghouse, and the National Student Loan Data System rosters that resulted in the untimely updating of student enrollment status changes. Without sufficient controls around enrollment reporting there is a greater risk that student enrollment data will not be reported accurately or timely. Inaccurate or untimely reporting of student enrollment data can result in inconsistencies between the University’s records and the National Students Loan Data System as well as potential delays in the repayment of federal loans. (Finding Code No. 2023-002). RECOMMENDATION We recommend the University establish processes and procedures to ensure student enrollment changes are communicated timely to the Department of Education. UNIVERSITY RESPONSE Agree. The campuses have implemented processes to prevent further errors in enrollment reporting, despite the disconnects and system problems that have been observed.
2023-002. Finding: Student Enrollment Reporting Federal Agency: U.S. Department of Education Assistance Listing Number: 84.007, 84.063, 84.268 Program Expenditures: $168,796,624 Program Name: Student Financial Assistance Cluster Award Number(s): P063P180116, P007A151286, P007A221285, P063P220115, P268K230115 Questioned Costs: None Southern Illinois University (the “University”) Carbondale (“SIUC”) and Edwardsville (“SIUE”) campuses did not have adequate procedures in place to ensure student enrollment data elements were reported accurately and timely. During our testing of students who withdrew or graduated from the University, we noted 3 out of 40 (7.5%) students did not have enrollment statuses reported accurately and timely. One student was reported as graduated on a date that did not reflect their degree date from the University (SIUE). One student was reported as active in the program despite graduating from the University (SIUE). Lastly, campus-level and program-level enrollment status for one student was not reported timely (SIUC). The sample was not a statistically valid sample. The Direct Loan Program requirements require a school participating in Title IV aid programs to establish and maintain proper administrative and fiscal procedures and all necessary records and submit all reports to the Department of Education (34 CFR 685.309). Uniform Guidance (2 CFR 200.303(a)) requires nonfederal entities receiving federal awards establish and maintain effective internal control to reasonably ensure compliance with Federal laws, statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include procedures to ensure that all student enrollment reporting requirements are reviewed to ensure compliance. University officials indicated there were misunderstandings and clerical errors between the University records, the National Student Clearinghouse, and the National Student Loan Data System rosters that resulted in the untimely updating of student enrollment status changes. Without sufficient controls around enrollment reporting there is a greater risk that student enrollment data will not be reported accurately or timely. Inaccurate or untimely reporting of student enrollment data can result in inconsistencies between the University’s records and the National Students Loan Data System as well as potential delays in the repayment of federal loans. (Finding Code No. 2023-002). RECOMMENDATION We recommend the University establish processes and procedures to ensure student enrollment changes are communicated timely to the Department of Education. UNIVERSITY RESPONSE Agree. The campuses have implemented processes to prevent further errors in enrollment reporting, despite the disconnects and system problems that have been observed.
2023-002. Finding: Student Enrollment Reporting Federal Agency: U.S. Department of Education Assistance Listing Number: 84.007, 84.063, 84.268 Program Expenditures: $168,796,624 Program Name: Student Financial Assistance Cluster Award Number(s): P063P180116, P007A151286, P007A221285, P063P220115, P268K230115 Questioned Costs: None Southern Illinois University (the “University”) Carbondale (“SIUC”) and Edwardsville (“SIUE”) campuses did not have adequate procedures in place to ensure student enrollment data elements were reported accurately and timely. During our testing of students who withdrew or graduated from the University, we noted 3 out of 40 (7.5%) students did not have enrollment statuses reported accurately and timely. One student was reported as graduated on a date that did not reflect their degree date from the University (SIUE). One student was reported as active in the program despite graduating from the University (SIUE). Lastly, campus-level and program-level enrollment status for one student was not reported timely (SIUC). The sample was not a statistically valid sample. The Direct Loan Program requirements require a school participating in Title IV aid programs to establish and maintain proper administrative and fiscal procedures and all necessary records and submit all reports to the Department of Education (34 CFR 685.309). Uniform Guidance (2 CFR 200.303(a)) requires nonfederal entities receiving federal awards establish and maintain effective internal control to reasonably ensure compliance with Federal laws, statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include procedures to ensure that all student enrollment reporting requirements are reviewed to ensure compliance. University officials indicated there were misunderstandings and clerical errors between the University records, the National Student Clearinghouse, and the National Student Loan Data System rosters that resulted in the untimely updating of student enrollment status changes. Without sufficient controls around enrollment reporting there is a greater risk that student enrollment data will not be reported accurately or timely. Inaccurate or untimely reporting of student enrollment data can result in inconsistencies between the University’s records and the National Students Loan Data System as well as potential delays in the repayment of federal loans. (Finding Code No. 2023-002). RECOMMENDATION We recommend the University establish processes and procedures to ensure student enrollment changes are communicated timely to the Department of Education. UNIVERSITY RESPONSE Agree. The campuses have implemented processes to prevent further errors in enrollment reporting, despite the disconnects and system problems that have been observed.
Federal Agencies: U.S. Department of Energy; U.S. Health and Human Services; and U.S. Department of State Program Names: Research and Development Cluster; Professional and Cultural Exchange Program ALN #s: 81.086, 81.049, 93.859, 19.415 Award Numbers: DE-EE0009418, DE-SC0021123, RGM129216B, SECAGD21CA3070; Federal Award Year 2022 - 2023 Questioned Costs: None 2023-005. Finding: Cash Management – Timeliness of Subrecipient Payments Northern Illinois University (the University) did not make certain subrecipient payments timely under the Research and Development Cluster and the Professional and Cultural Exchange Program. Out of 31 subrecipient payments tested which were made by the University under the Research and Development Cluster, 11 payments (35%) were not made within 30 days after receipt of the billing from the subrecipient. Payments to the subrecipients were made 35-166 days after receipt of the billing. The sample was not intended to be, and was not, a statistically valid sample. Out of two subrecipient payments tested which were made by the University under the Professional and Cultural Exchange Program, one payment (50%) was not made within 30 days after receipt of the billing from the subrecipient. Payment to the subrecipient was made 31 days after receipt of the billing. The sample was not intended to be, and was not, a statistically valid sample. Under Uniform Guidance (2 CFR 200.305(b)(3)), when the reimbursement method is used, the Federal awarding agency or pass-through entity must make payment within 30 calendar days after receipt of the billing, unless the Federal awarding agency or pass-through entity reasonably believes the request to be improper. Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls deigned to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure subrecipient payments are made timely. The University officials stated the payment delays were due to the additional steps required to obtain the Principal Investigator review and approval to ensure payments are proper. Additionally, payments due at the end of the calendar year were further delayed due to University closure, holidays, and regular business schedules. Without proper program cash management policies and procedures, late subrecipient payments could result in the loss of future funding. (Finding Code No. 2023-005) Recommendation: We recommend the University review current processes, policies and procedures to minimize the time elapsing between the transfer of federal funds to the subrecipient. University Response: Accepted. The University will review its current processes, policies and procedures to minimize the time between the transfer of federal funds to the subrecipient.
Federal Agencies: U.S. Department of Energy; U.S. Health and Human Services; and U.S. Department of State Program Names: Research and Development Cluster; Professional and Cultural Exchange Program ALN #s: 81.086, 81.049, 93.859, 19.415 Award Numbers: DE-EE0009418, DE-SC0021123, RGM129216B, SECAGD21CA3070; Federal Award Year 2022 - 2023 Questioned Costs: None 2023-005. Finding: Cash Management – Timeliness of Subrecipient Payments Northern Illinois University (the University) did not make certain subrecipient payments timely under the Research and Development Cluster and the Professional and Cultural Exchange Program. Out of 31 subrecipient payments tested which were made by the University under the Research and Development Cluster, 11 payments (35%) were not made within 30 days after receipt of the billing from the subrecipient. Payments to the subrecipients were made 35-166 days after receipt of the billing. The sample was not intended to be, and was not, a statistically valid sample. Out of two subrecipient payments tested which were made by the University under the Professional and Cultural Exchange Program, one payment (50%) was not made within 30 days after receipt of the billing from the subrecipient. Payment to the subrecipient was made 31 days after receipt of the billing. The sample was not intended to be, and was not, a statistically valid sample. Under Uniform Guidance (2 CFR 200.305(b)(3)), when the reimbursement method is used, the Federal awarding agency or pass-through entity must make payment within 30 calendar days after receipt of the billing, unless the Federal awarding agency or pass-through entity reasonably believes the request to be improper. Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls deigned to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure subrecipient payments are made timely. The University officials stated the payment delays were due to the additional steps required to obtain the Principal Investigator review and approval to ensure payments are proper. Additionally, payments due at the end of the calendar year were further delayed due to University closure, holidays, and regular business schedules. Without proper program cash management policies and procedures, late subrecipient payments could result in the loss of future funding. (Finding Code No. 2023-005) Recommendation: We recommend the University review current processes, policies and procedures to minimize the time elapsing between the transfer of federal funds to the subrecipient. University Response: Accepted. The University will review its current processes, policies and procedures to minimize the time between the transfer of federal funds to the subrecipient.
Federal Agencies: U.S. Department of Energy; U.S. Health and Human Services; and U.S. Department of State Program Names: Research and Development Cluster; Professional and Cultural Exchange Program ALN #s: 81.086, 81.049, 93.859, 19.415 Award Numbers: DE-EE0009418, DE-SC0021123, RGM129216B, SECAGD21CA3070; Federal Award Year 2022 - 2023 Questioned Costs: None 2023-005. Finding: Cash Management – Timeliness of Subrecipient Payments Northern Illinois University (the University) did not make certain subrecipient payments timely under the Research and Development Cluster and the Professional and Cultural Exchange Program. Out of 31 subrecipient payments tested which were made by the University under the Research and Development Cluster, 11 payments (35%) were not made within 30 days after receipt of the billing from the subrecipient. Payments to the subrecipients were made 35-166 days after receipt of the billing. The sample was not intended to be, and was not, a statistically valid sample. Out of two subrecipient payments tested which were made by the University under the Professional and Cultural Exchange Program, one payment (50%) was not made within 30 days after receipt of the billing from the subrecipient. Payment to the subrecipient was made 31 days after receipt of the billing. The sample was not intended to be, and was not, a statistically valid sample. Under Uniform Guidance (2 CFR 200.305(b)(3)), when the reimbursement method is used, the Federal awarding agency or pass-through entity must make payment within 30 calendar days after receipt of the billing, unless the Federal awarding agency or pass-through entity reasonably believes the request to be improper. Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls deigned to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure subrecipient payments are made timely. The University officials stated the payment delays were due to the additional steps required to obtain the Principal Investigator review and approval to ensure payments are proper. Additionally, payments due at the end of the calendar year were further delayed due to University closure, holidays, and regular business schedules. Without proper program cash management policies and procedures, late subrecipient payments could result in the loss of future funding. (Finding Code No. 2023-005) Recommendation: We recommend the University review current processes, policies and procedures to minimize the time elapsing between the transfer of federal funds to the subrecipient. University Response: Accepted. The University will review its current processes, policies and procedures to minimize the time between the transfer of federal funds to the subrecipient.
Federal Agencies: U.S. Department of Energy; U.S. Health and Human Services; and U.S. Department of State Program Names: Research and Development Cluster; Professional and Cultural Exchange Program ALN #s: 81.086, 81.049, 93.859, 19.415 Award Numbers: DE-EE0009418, DE-SC0021123, RGM129216B, SECAGD21CA3070; Federal Award Year 2022 - 2023 Questioned Costs: None 2023-005. Finding: Cash Management – Timeliness of Subrecipient Payments Northern Illinois University (the University) did not make certain subrecipient payments timely under the Research and Development Cluster and the Professional and Cultural Exchange Program. Out of 31 subrecipient payments tested which were made by the University under the Research and Development Cluster, 11 payments (35%) were not made within 30 days after receipt of the billing from the subrecipient. Payments to the subrecipients were made 35-166 days after receipt of the billing. The sample was not intended to be, and was not, a statistically valid sample. Out of two subrecipient payments tested which were made by the University under the Professional and Cultural Exchange Program, one payment (50%) was not made within 30 days after receipt of the billing from the subrecipient. Payment to the subrecipient was made 31 days after receipt of the billing. The sample was not intended to be, and was not, a statistically valid sample. Under Uniform Guidance (2 CFR 200.305(b)(3)), when the reimbursement method is used, the Federal awarding agency or pass-through entity must make payment within 30 calendar days after receipt of the billing, unless the Federal awarding agency or pass-through entity reasonably believes the request to be improper. Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls deigned to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure subrecipient payments are made timely. The University officials stated the payment delays were due to the additional steps required to obtain the Principal Investigator review and approval to ensure payments are proper. Additionally, payments due at the end of the calendar year were further delayed due to University closure, holidays, and regular business schedules. Without proper program cash management policies and procedures, late subrecipient payments could result in the loss of future funding. (Finding Code No. 2023-005) Recommendation: We recommend the University review current processes, policies and procedures to minimize the time elapsing between the transfer of federal funds to the subrecipient. University Response: Accepted. The University will review its current processes, policies and procedures to minimize the time between the transfer of federal funds to the subrecipient.
Federal Agencies: Department of Education Program Names: Education Stabilization Fund ALN #s: 84.425F Award Numbers: P425F202766 - 20B; Federal Award Year 2022 - 2023 Questioned Costs: $29,018 2023-006. Finding: Period of Performance – Service Period Beyond Grant’s Period of Performance Northern Illinois University (the University) charged an expenditure to the grant whereby a portion of the expenditure had a service period extending beyond the grant's period of performance, and the University’s controls did not detect the error. For one out of 42 institutional expenditures tested (2.4%), a portion of one expenditure had a service period through November 28, 2027, which extends beyond the grant's period of performance of June 30, 2023, and was charged to the grant for reimbursement. The total amount charged extending beyond the period of performance was $29,018. The sample was not intended to be, and was not, a statistically valid sample. The period of performance for the Higher Education Emergency Relief Fund - Institutional Awarded ended on June 30, 2023. Uniform Grant Guidance (2 CFR 200.403(h)) states that costs must be incurred during the approved budget period. Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls deigned to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure only expenditures within the period of performance are charged to the grant. University officials stated this was due to employee misapplication of the period of performance guidance for this maintenance agreement. Charging an expenditure outside of the period of performance could result in the University repaying the amount requested for reimbursement or loss of future funding. (Finding Code No. 2023-006) Recommendation: We recommend the University review current processes, policies and procedures to ensure only expenditures within the period of performance are charged to a grant. University Response: Accepted. This was an isolated occurrence resulting from various policy guidance governing HEERF funding. The University has controls to ensure that only expenditures within the period of performance are charged to the grant. The University will provide additional training on cost allocation to staff. In addition, the University is taking immediate steps to resolve the questioned cost.
Federal Agencies: Department of the State Program Names: Professional and Cultural Exchange Program ALN #s: 19.415 Award Numbers: SECAGD21CA3070; Federal Award Year 2022 - 2023 Questioned Costs: None 2023-007. Finding: Timeliness of Federal Funding Accountability and Transparency Act Reporting Northern Illinois University (the University) did not timely report subaward data to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) under the Professional and Cultural Exchange Program. One out of one subaward obligations/modifications were not reported in FSRS within the last day of the month following the month in which the subaward/subaward amendment obligation was made. The subaward modification was reported 161 days after the due date. Transactions Tested Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements 1 0 1 0 0 Dollar Amount of Tested Transactions Subaward not reported Report not timely Subaward amount incorrect Subaward missing key elements $ 100,000 $ 0 $ 100,000 $ 0 $ 0 Under the requirements of the Federal Funding Accountability and Transparency Act (Pub. L.No. 109-282), as amended by section 6202 of Public Law 110-252, hereafter referred as the “Transparency Act” that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). The non-federal entity is required to report each obligating action to FSRS. The action must be reported in FSRS no later than the last day of the month following the month in which the subaward/subaward amendment was made. Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls deigned to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure reports are submitted timely. The University officials stated the delayed reporting was due to workload transitions and staffing turnover. Without proper program reporting policies and procedures, the submission of late reports results in noncompliance with Federal regulation and could result in the loss of future funding. (Finding Code No. 2023-007) Recommendation: We recommend the University review current processes and procedures to ensure Federal Funding Accountability and Transparency Act reporting requirements are completed timely. University Response: Agreed. The University has already taken proactive steps to ensure Federal Funding Accountability and Transparency Act reporting requirements are completed timely.
2023-005. FINDING Failure to Notify Students and Parents Upon Disbursement of Funds Federal Agency: U.S. Department of Education Assistance Listing Numbers: 84.379; 84.268 Program Names: Student Financial Assistance Cluster - Teacher Education Assistance for College and Higher Education Grants Federal Direct Student Loans Program Expenditures: $25,460; $20,224,493 Award Number: P379T221351; P268K221351 Questioned Costs: None The Chicago State University (University) did not notify the students and parents upon disbursement of grant funds and loans. During testing of five students, who received Teacher Education Assistance for College and Higher Education Grants (TEACH) totaling $14,145, we noted five (100%) students were not notified by the University indicating the funds were credited to the students’ accounts. The sample methods used in performing this testing were not statistically valid. In addition, during testing of 40 students, who received Federal Direct Loans totaling $700,656, we noted 38 (95%) students with grant disbursements totaling $695,212 were not notified by the University indicating the funds were credited to the students’ accounts. The sample methods used in performing this testing were not statistically valid. The Code of Federal Regulations (Code) (34 CFR § 668.165 (a)(3)(i)) requires the University to notify students or parents in writing no earlier than 30 days before, and no later than 30 days after, crediting the student’s ledger account at the University with TEACH Grant funds and Federal Direct Loans. Further, the Code (2 CFR § 200.303) requires the nonfederal entity receiving federal awards to establish and maintain effective internal control over the federal award to provide reasonable assurance the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal controls include procedures to ensure timely notification of disbursements to students receiving TEACH Grants and Federal Direct Loans. University management indicated the failure to timely notify students and parents upon disbursements of TEACH Grants and Direct Loans was due to resource constraints. Failure to timely notify students and parents regarding grant and loan disbursements is a noncompliance with the Code. (Finding Code No. 2023-005, 2022-005) RECOMMENDATION We recommend the University strengthen controls to ensure timely notification is sent to students and parents upon disbursement of grant funds and loans. UNIVERSITY RESPONSE The University agrees with the recommendation. Upon discovery, the corrective action was immediately implemented so that by the end of Fisal Year 2023, the University was in compliance with the requirements.
2023-005. FINDING Failure to Notify Students and Parents Upon Disbursement of Funds Federal Agency: U.S. Department of Education Assistance Listing Numbers: 84.379; 84.268 Program Names: Student Financial Assistance Cluster - Teacher Education Assistance for College and Higher Education Grants Federal Direct Student Loans Program Expenditures: $25,460; $20,224,493 Award Number: P379T221351; P268K221351 Questioned Costs: None The Chicago State University (University) did not notify the students and parents upon disbursement of grant funds and loans. During testing of five students, who received Teacher Education Assistance for College and Higher Education Grants (TEACH) totaling $14,145, we noted five (100%) students were not notified by the University indicating the funds were credited to the students’ accounts. The sample methods used in performing this testing were not statistically valid. In addition, during testing of 40 students, who received Federal Direct Loans totaling $700,656, we noted 38 (95%) students with grant disbursements totaling $695,212 were not notified by the University indicating the funds were credited to the students’ accounts. The sample methods used in performing this testing were not statistically valid. The Code of Federal Regulations (Code) (34 CFR § 668.165 (a)(3)(i)) requires the University to notify students or parents in writing no earlier than 30 days before, and no later than 30 days after, crediting the student’s ledger account at the University with TEACH Grant funds and Federal Direct Loans. Further, the Code (2 CFR § 200.303) requires the nonfederal entity receiving federal awards to establish and maintain effective internal control over the federal award to provide reasonable assurance the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Effective internal controls include procedures to ensure timely notification of disbursements to students receiving TEACH Grants and Federal Direct Loans. University management indicated the failure to timely notify students and parents upon disbursements of TEACH Grants and Direct Loans was due to resource constraints. Failure to timely notify students and parents regarding grant and loan disbursements is a noncompliance with the Code. (Finding Code No. 2023-005, 2022-005) RECOMMENDATION We recommend the University strengthen controls to ensure timely notification is sent to students and parents upon disbursement of grant funds and loans. UNIVERSITY RESPONSE The University agrees with the recommendation. Upon discovery, the corrective action was immediately implemented so that by the end of Fisal Year 2023, the University was in compliance with the requirements.
FINDING 2023-001 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program Assistance Listings Numbers: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY 21-22, FY 22-23, 222IN059N8903, 232IN059N8903 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters INDIANA STATE BOARD OF ACCOUNTS 15 INDIANA STATE BOARD OF ACCOUNTS 15 SOUTHEAST FOUNTAIN SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAMs exclusions, collecting a certification from that vendor, or adding a clause or condition to the covered transaction with that vendor. Upon inquiry of the School Corporation in order to review the procedures in place for verifying that a vendor with which it plans to enter into a covered transaction is not suspended, debarred, or otherwise excluded, the School Corporation disclosed procedures had not been performed to ensure vendors were not suspended or debarred prior to entering into covered transaction. Three covered transactions, that equaled or exceeded $25,000, were identified. All three transactions, totaling $1,408,264, were selected for testing. For one of three vendors, the School Corporation had not performed procedures to ensure the vendor was not suspended or debarred, or otherwise excluded or disqualified from participating in federal assistance programs or activities for suspension or debarment. The total amount spent with the vendor was $169,723. The lack of internal controls was a systemic issue throughout the audit period. The noncompliance was isolated to fiscal year 2022-2023. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you tend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." INDIANA STATE BOARD OF ACCOUNTS 16 SOUTHEAST FOUNTAIN SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause A proper system of internal controls was not designed by management of the School Corporation, which would include a segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper system of implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, vendors were not verified by the School Corporation to not be suspended or debarred from participating in federally funded activities. Noncompliance with the grant agreement and the compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls and obtain documentation that vendors with covered transactions are not suspended or debarred. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-001 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program Assistance Listings Numbers: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY 21-22, FY 22-23, 222IN059N8903, 232IN059N8903 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters INDIANA STATE BOARD OF ACCOUNTS 15 INDIANA STATE BOARD OF ACCOUNTS 15 SOUTHEAST FOUNTAIN SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAMs exclusions, collecting a certification from that vendor, or adding a clause or condition to the covered transaction with that vendor. Upon inquiry of the School Corporation in order to review the procedures in place for verifying that a vendor with which it plans to enter into a covered transaction is not suspended, debarred, or otherwise excluded, the School Corporation disclosed procedures had not been performed to ensure vendors were not suspended or debarred prior to entering into covered transaction. Three covered transactions, that equaled or exceeded $25,000, were identified. All three transactions, totaling $1,408,264, were selected for testing. For one of three vendors, the School Corporation had not performed procedures to ensure the vendor was not suspended or debarred, or otherwise excluded or disqualified from participating in federal assistance programs or activities for suspension or debarment. The total amount spent with the vendor was $169,723. The lack of internal controls was a systemic issue throughout the audit period. The noncompliance was isolated to fiscal year 2022-2023. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you tend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." INDIANA STATE BOARD OF ACCOUNTS 16 SOUTHEAST FOUNTAIN SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause A proper system of internal controls was not designed by management of the School Corporation, which would include a segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper system of implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, vendors were not verified by the School Corporation to not be suspended or debarred from participating in federally funded activities. Noncompliance with the grant agreement and the compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls and obtain documentation that vendors with covered transactions are not suspended or debarred. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-001 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program Assistance Listings Numbers: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY 21-22, FY 22-23, 222IN059N8903, 232IN059N8903 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters INDIANA STATE BOARD OF ACCOUNTS 15 INDIANA STATE BOARD OF ACCOUNTS 15 SOUTHEAST FOUNTAIN SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAMs exclusions, collecting a certification from that vendor, or adding a clause or condition to the covered transaction with that vendor. Upon inquiry of the School Corporation in order to review the procedures in place for verifying that a vendor with which it plans to enter into a covered transaction is not suspended, debarred, or otherwise excluded, the School Corporation disclosed procedures had not been performed to ensure vendors were not suspended or debarred prior to entering into covered transaction. Three covered transactions, that equaled or exceeded $25,000, were identified. All three transactions, totaling $1,408,264, were selected for testing. For one of three vendors, the School Corporation had not performed procedures to ensure the vendor was not suspended or debarred, or otherwise excluded or disqualified from participating in federal assistance programs or activities for suspension or debarment. The total amount spent with the vendor was $169,723. The lack of internal controls was a systemic issue throughout the audit period. The noncompliance was isolated to fiscal year 2022-2023. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you tend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." INDIANA STATE BOARD OF ACCOUNTS 16 SOUTHEAST FOUNTAIN SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause A proper system of internal controls was not designed by management of the School Corporation, which would include a segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper system of implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, vendors were not verified by the School Corporation to not be suspended or debarred from participating in federally funded activities. Noncompliance with the grant agreement and the compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls and obtain documentation that vendors with covered transactions are not suspended or debarred. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-001 Subject: Child Nutrition Cluster - Procurement and Suspension and Debarment Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program Assistance Listings Numbers: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY 21-22, FY 22-23, 222IN059N8903, 232IN059N8903 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Procurement and Suspension and Debarment Audit Findings: Material Weakness, Other Matters INDIANA STATE BOARD OF ACCOUNTS 15 INDIANA STATE BOARD OF ACCOUNTS 15 SOUTHEAST FOUNTAIN SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context Prior to entering into subawards and covered transactions with federal award funds, recipients are required to verify that such contractors and subrecipients are not suspended, debarred, or otherwise excluded. "Covered transactions" include, but are not limited to, contracts for goods and services awarded under a nonprocurement transaction (i.e., grant agreement) that are expected to equal or exceed $25,000. The verification is to be done by checking the SAMs exclusions, collecting a certification from that vendor, or adding a clause or condition to the covered transaction with that vendor. Upon inquiry of the School Corporation in order to review the procedures in place for verifying that a vendor with which it plans to enter into a covered transaction is not suspended, debarred, or otherwise excluded, the School Corporation disclosed procedures had not been performed to ensure vendors were not suspended or debarred prior to entering into covered transaction. Three covered transactions, that equaled or exceeded $25,000, were identified. All three transactions, totaling $1,408,264, were selected for testing. For one of three vendors, the School Corporation had not performed procedures to ensure the vendor was not suspended or debarred, or otherwise excluded or disqualified from participating in federal assistance programs or activities for suspension or debarment. The total amount spent with the vendor was $169,723. The lack of internal controls was a systemic issue throughout the audit period. The noncompliance was isolated to fiscal year 2022-2023. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 180.300 states: "When you enter into a covered transaction with another person at the next lower tier, you must verify that the person with whom you tend to do business is not excluded or disqualified. You do this by: (a) Checking SAM Exclusions; or (b) Collecting a certification from that person; or (c) Adding a clause or condition to the covered transaction with that person." INDIANA STATE BOARD OF ACCOUNTS 16 SOUTHEAST FOUNTAIN SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause A proper system of internal controls was not designed by management of the School Corporation, which would include a segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper system of implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, vendors were not verified by the School Corporation to not be suspended or debarred from participating in federally funded activities. Noncompliance with the grant agreement and the compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls and obtain documentation that vendors with covered transactions are not suspended or debarred. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
2023-002 ACTIVITIES ALLOWED OR UNALLOWED (REPEAT OF PRIOR YEAR FINDING 2022-02) Federal Program Information: Federal Agency and Program Name Federal Assistance Listing Number U.S. Department of Labor, WIOA Cluster, 17.258/17.259/17.278 Criteria: 2 CFR 200.303 requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” 2 CFR 200.403(g) states that costs must “Be adequately documented.” Condition: During our testing of activities allowed or unallowed, for 11 of the 60 nonpayroll items tested, management could not provide adequate support that the charges were properly reviewed and approved prior to payment. Questioned Costs: Unknown Context: Total federal expenditures for the WIOA Cluster were $4,165,604 for the year ended June 30, 2023. Cause: The Board did not demonstrate that proper internal controls are in place and operating effectively to ensure that unallowable charges to the federal program do not occur. Effect: Unallowable payments to the federal program may have occurred due to the lack of effective internal controls in place. Recommendation: We recommend that the Board design and implement controls to ensure that all charges to federal programs are adequately reviewed and approved prior to payment. Views of Responsible Officials: We agree with the finding and will take the necessary corrective actions as noted in the corrective action plan attached.
2023-003 EARMARKING (REPEAT OF PRIOR YEAR FINDING 2022-03) Federal Program Information:, Federal Agency and Program Name, Federal Assistance Listing Number U.S. Department of Labor, WIOA Cluster, 17.258/17.259/17.278 Criteria: 2 CFR 200.303 requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Per the provisions stated in the Uniform Guidance under the WIOA Cluster for Local Areas: (1) A local area may expend no more than 10 percent of the Adult, Dislocated Worker, and Youth Activities funds allocated to the local area under Sections 128(b) (WIOA, 128 Stat. 1502) and 133(b) (WIOA, 128 Stat. 1516) for within state allocations. The funds provided for administrative costs by one of the three fund sources (Adult, Dislocated Worker, Youth Activities) can be used for administrative costs of the other two sources. (2) The amount that may be spent on incumbent worker training may not exceed 20 percent of the amount of the combined total of federal funds allocated to local areas to carry out the Adult and Dislocated Worker programs for a program year (20 CFR section 680.800; Section 134(d)(4), WIOA, 128 Stat. 1535). (3) WIOA authorizes workforce investment areas, with the approval of the governor, to transfer up to 100 percent of the Adult Activities funds to Dislocated Workers Activities, and up to 100 percent of Dislocated Workers Activities funds to Adult Activities (Section 133(b)(4), WIOA, 128 Stat. 1518). (4) At the discretion of the local board, not more than 10 percent of the total funds allocated to the local area under section 128(b) and under section 133(b)(2)-(3) may be used to implement a pay-for-performance contract strategy as defined in WIOA Section 3(47) (WIOA Section 129(c)(1)(D) and 134(d)(1)(A)(iii)). (5) As no state has received prior approval for implementation of a PFP contract strategy, no funds from the program years prior to PY 2019 are available for PFP contract strategies or for the accompanying extended disbursement. However, these funds could still be used for other types of performance-based contracting, but the life of those funds remains the normal two-year limit for local WIOA grant funds. Per the provisions stated in the Uniform Guidance under the WIOA Cluster for Youth Activities: (1) A minimum of 75 percent of the Youth Activity funds allocated to states and local areas, except for the local area expenditures for administration, must be used to provide services to out-of-school youth (Section 129(a)(4)(A), WIOA, 128 Stat. 1506). (2) Not less than 20 percent of Youth Activity funds allocated to the local area, except for the local area expenditures for administration, must be used to provide paid and unpaid work experiences (Section 129(c)(4)), WIOA, 128 Stat. 1510). Condition: Upon inquiry of management, it was noted that the Board did not perform procedures to ensure that the expenditures of the WIOA Cluster were within the earmarking requirements noted in the Uniform Guidance during the fiscal year ended June 30, 2023. Questioned Costs: Unknown Context: Total federal expenditures for the WIOA Cluster were $4,165,604 for the year ended June 30, 2023. Cause: The Board did not perform the appropriate procedures to verify that the expenditures of the WIOA Cluster were within the earmarking requirements noted within the Uniform Guidance. Effect: The Board is not in compliance with the federal statutes, regulations, and terms and conditions of the federal award. Recommendation: We recommend that the Board implement controls and procedures to ensure that all requirements for earmarking within the Uniform Guidance are properly followed. Views of Responsible Officials: We agree with the finding and will take the necessary corrective actions as noted in the corrective action plan attached.
2023-004 REPORTING, (REPEAT OF PRIOR YEAR FINDING 2022-05) Federal Program Information:, Federal Agency and Program Name, Federal Assistance Listing Number U.S. Department of Labor, WIOA Cluster, 17.258/17.259/17.278 Criteria: 2 CFR 200.303 requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” ETA-9130, Financial Report (OMB No. 1205-0461) – All ETA grantees are required to submit quarterly financial reports for each grant award they receive. Reports are required to be prepared using the specific format and instructions for the applicable program(s); in this case, Workforce Innovation and Opportunity Act instructions for the following: Statewide Adult; Workforce Statewide Youth; Statewide Dislocated Worker; Local Adult; Local Youth; and Local Dislocated Worker. Reports are due 45 days after the end of the reporting quarter. Financial data is required to be reported cumulatively from grant inception through the end of each reporting period. 2 CFR 170 Appendix A, as it relates to reporting for the Federal Funding Accountability and Transparency Act, “unless the auditee is exempt as provided in paragraph d. of this award term, the auditee must report each action that equals or exceeds $30,000 in Federal funds for a subaward to a non-Federal entity or Federal agency as noted in paragraph e. no later than the end of the month following the month in which the obligation was made.” Condition: During our testing of reporting, for all ETA-9130 reports selected for testing management could not provide adequate support that the ETA-9130 reports were properly reviewed and approved prior to being submitted. Additionally, the entity made first tier subawards of greater than $30,000, but could not provide supporting documentation that the necessary reports were filed to satisfy the requirements of the Federal Funding Accountability and Transparency Act (FFATA). Questioned Costs: Unknown Context: Total federal expenditures for the WIOA Cluster were $4,165,604 for the year ended June 30, 2023. Cause: The Board did not have adequate policies and internal controls in place to ensure that all required reports for the WIOA Cluster and FFATA were submitted accurately and in a timely fashion. Effect: The Board is not in compliance with the federal statutes, regulations, and terms and conditions of the federal award. Recommendation: We recommend that the Board design and implement controls to ensure that all required reporting is submitted accurately and in a timely fashion. Views of Responsible Officials: We agree with the finding and will take the necessary corrective actions as noted in the corrective action plan attached.
2023-005 SUBRECIPIENT MONITORING (REPEAT OF PRIOR YEAR FINDING 2022-06) Federal Program Information:, Federal Agency and Program Name, Federal Assistance Listing Number U.S. Department of Labor, WIOA Cluster, 17.258/17.259/17.278 Criteria: 2 CFR 200.303 requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Recipients must ensure that commercial organizations that are subrecipients under WIOA Title I and expend more than the minimum level specified in 2 CFR Part 200, Subpart F, have either an organization-wide audit conducted in accordance with 2 CFR Part 200 or a program-specific financial and compliance audit (20 CFR section 683.210). 2 CFR 200.332(b) requires that all pass-through entities must: Evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraphs (d) and (e) of this section. Condition: Upon inquiry of management, the Board did not perform any subrecipient monitoring procedures related to the Board’s grant agreement with its subrecipient for the fiscal year ended June 30, 2023. Questioned Costs: Unknown Context: Total federal expenditures for the WIOA Cluster were $4,165,604 for the year ended June 30, 2023, which included $1,350,121 of expenditures to subrecipients. Cause: Although the Board has policies and procedures in place surrounding the subrecipient monitoring compliance requirements, due to staffing issues during the fiscal year and lack of knowledge of all the federal compliance requirements, no subrecipient monitoring was completed. Effect: The Board is not in compliance with the federal statutes, regulations, and terms and conditions of the federal award. Recommendation: We recommend that the Board review its policies and procedures for sufficiency and commit the appropriate personnel to subrecipient monitoring to ensure that the Board is in compliance with all federal requirements. Views of Responsible Officials: We agree with the finding and will take the necessary corrective actions as noted in the corrective action plan attached.
2023-006 ELIGIBILITY (REPEAT OF PRIOR YEAR FINDING 2022-07) Federal Program Information:, Federal Agency and Program Name, Federal Assistance Listing Number U.S. Department of Labor, WIOA Cluster, 17.258/17.259/17.278 Criteria: 2 CFR 200.303 requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Per the provisions of the Workforce Innovation and Opportunity Act (WIOA), “A person is eligible to receive services under Youth Activities if they are an out-of-school youth or an in-school youth (Section 129(a)(1), WIOA, 128 Stat. 1504)”, and meet the definition of such as defined in the Uniform Guidance. Condition: During our testing of WIOA participants, it was noted by management that the eligibility determination for Youth Activities is maintained and conducted by the Board’s subrecipient. According to management, there are no procedures performed at the Board to verify the eligibility of Youth Activities participants to ensure that all federal compliance requirements are being adhered to. Additionally, 2 of the 60 individual adult program applications selected for testing were not reviewed by a case manager. Questioned Costs: Unknown Context: Total federal expenditures for the WIOA Cluster were $4,165,604 for the year ended June 30, 2023. Cause: The Board does not perform any procedures to ensure that the Youth Activities participants meet all the federal compliance requirements for participation in the program. Further, the Board did not review two individual adult program applications for eligibility. Effect: A Youth Activities participant(s)/Adult Activities participant(s) may be granted access to the Board’s program when they do not meet the prescribed eligibility requirements. Recommendation: We recommend that the Board implement policies and procedures to ensure that the necessary controls are in place to properly verify the eligibility of all Youth and Adult Activities participants. Views of Responsible Officials: We agree with the finding and will take the necessary corrective actions as noted in the corrective action plan attached.
2023-007 ALLOCATION OF GRANT EXPENSES (REPEAT OF PRIOR YEAR FINDING 2022-08) Federal Program Information:, Federal Agency and Program Name, Federal Assistance Listing Number U.S. Department of Labor, WIOA Cluster, 17.258/17.259/17.278 Criteria: 2 CFR 200.303 requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Condition: During our testing of WIOA Cluster expenditures, it was noted that the Board did not regularly reconcile expenditures to the appropriate assistance listing numbers within the WIOA Cluster during the year. Further, it was determined that expenses are being split among expired grants as well as active grants in the client accounting software. Questioned Costs: Unknown Context: Total federal expenditures for the WIOA Cluster were $4,165,604 for the year ended June 30, 2023. Cause: Due to staffing changes during the year, grant expenditures were not regularly reconciled and allocated to the appropriate grant number based on actual expenses. Effect: Expenses were not properly allocated to the correct Assistance Listing number within the WIOA cluster. Recommendation: We recommend that the Board implement policies and procedures to ensure that all expenses are for actual expenses incurred, and that timely reconciliations are performed to ensure the expenses are properly charged to the correct assistance listing number and grant. Views of Responsible Officials: We agree with the finding and will take the necessary corrective actions as noted in the corrective action plan attached.
2023-002 ACTIVITIES ALLOWED OR UNALLOWED (REPEAT OF PRIOR YEAR FINDING 2022-02) Federal Program Information: Federal Agency and Program Name Federal Assistance Listing Number U.S. Department of Labor, WIOA Cluster, 17.258/17.259/17.278 Criteria: 2 CFR 200.303 requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” 2 CFR 200.403(g) states that costs must “Be adequately documented.” Condition: During our testing of activities allowed or unallowed, for 11 of the 60 nonpayroll items tested, management could not provide adequate support that the charges were properly reviewed and approved prior to payment. Questioned Costs: Unknown Context: Total federal expenditures for the WIOA Cluster were $4,165,604 for the year ended June 30, 2023. Cause: The Board did not demonstrate that proper internal controls are in place and operating effectively to ensure that unallowable charges to the federal program do not occur. Effect: Unallowable payments to the federal program may have occurred due to the lack of effective internal controls in place. Recommendation: We recommend that the Board design and implement controls to ensure that all charges to federal programs are adequately reviewed and approved prior to payment. Views of Responsible Officials: We agree with the finding and will take the necessary corrective actions as noted in the corrective action plan attached.
2023-003 EARMARKING (REPEAT OF PRIOR YEAR FINDING 2022-03) Federal Program Information:, Federal Agency and Program Name, Federal Assistance Listing Number U.S. Department of Labor, WIOA Cluster, 17.258/17.259/17.278 Criteria: 2 CFR 200.303 requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Per the provisions stated in the Uniform Guidance under the WIOA Cluster for Local Areas: (1) A local area may expend no more than 10 percent of the Adult, Dislocated Worker, and Youth Activities funds allocated to the local area under Sections 128(b) (WIOA, 128 Stat. 1502) and 133(b) (WIOA, 128 Stat. 1516) for within state allocations. The funds provided for administrative costs by one of the three fund sources (Adult, Dislocated Worker, Youth Activities) can be used for administrative costs of the other two sources. (2) The amount that may be spent on incumbent worker training may not exceed 20 percent of the amount of the combined total of federal funds allocated to local areas to carry out the Adult and Dislocated Worker programs for a program year (20 CFR section 680.800; Section 134(d)(4), WIOA, 128 Stat. 1535). (3) WIOA authorizes workforce investment areas, with the approval of the governor, to transfer up to 100 percent of the Adult Activities funds to Dislocated Workers Activities, and up to 100 percent of Dislocated Workers Activities funds to Adult Activities (Section 133(b)(4), WIOA, 128 Stat. 1518). (4) At the discretion of the local board, not more than 10 percent of the total funds allocated to the local area under section 128(b) and under section 133(b)(2)-(3) may be used to implement a pay-for-performance contract strategy as defined in WIOA Section 3(47) (WIOA Section 129(c)(1)(D) and 134(d)(1)(A)(iii)). (5) As no state has received prior approval for implementation of a PFP contract strategy, no funds from the program years prior to PY 2019 are available for PFP contract strategies or for the accompanying extended disbursement. However, these funds could still be used for other types of performance-based contracting, but the life of those funds remains the normal two-year limit for local WIOA grant funds. Per the provisions stated in the Uniform Guidance under the WIOA Cluster for Youth Activities: (1) A minimum of 75 percent of the Youth Activity funds allocated to states and local areas, except for the local area expenditures for administration, must be used to provide services to out-of-school youth (Section 129(a)(4)(A), WIOA, 128 Stat. 1506). (2) Not less than 20 percent of Youth Activity funds allocated to the local area, except for the local area expenditures for administration, must be used to provide paid and unpaid work experiences (Section 129(c)(4)), WIOA, 128 Stat. 1510). Condition: Upon inquiry of management, it was noted that the Board did not perform procedures to ensure that the expenditures of the WIOA Cluster were within the earmarking requirements noted in the Uniform Guidance during the fiscal year ended June 30, 2023. Questioned Costs: Unknown Context: Total federal expenditures for the WIOA Cluster were $4,165,604 for the year ended June 30, 2023. Cause: The Board did not perform the appropriate procedures to verify that the expenditures of the WIOA Cluster were within the earmarking requirements noted within the Uniform Guidance. Effect: The Board is not in compliance with the federal statutes, regulations, and terms and conditions of the federal award. Recommendation: We recommend that the Board implement controls and procedures to ensure that all requirements for earmarking within the Uniform Guidance are properly followed. Views of Responsible Officials: We agree with the finding and will take the necessary corrective actions as noted in the corrective action plan attached.
2023-004 REPORTING, (REPEAT OF PRIOR YEAR FINDING 2022-05) Federal Program Information:, Federal Agency and Program Name, Federal Assistance Listing Number U.S. Department of Labor, WIOA Cluster, 17.258/17.259/17.278 Criteria: 2 CFR 200.303 requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” ETA-9130, Financial Report (OMB No. 1205-0461) – All ETA grantees are required to submit quarterly financial reports for each grant award they receive. Reports are required to be prepared using the specific format and instructions for the applicable program(s); in this case, Workforce Innovation and Opportunity Act instructions for the following: Statewide Adult; Workforce Statewide Youth; Statewide Dislocated Worker; Local Adult; Local Youth; and Local Dislocated Worker. Reports are due 45 days after the end of the reporting quarter. Financial data is required to be reported cumulatively from grant inception through the end of each reporting period. 2 CFR 170 Appendix A, as it relates to reporting for the Federal Funding Accountability and Transparency Act, “unless the auditee is exempt as provided in paragraph d. of this award term, the auditee must report each action that equals or exceeds $30,000 in Federal funds for a subaward to a non-Federal entity or Federal agency as noted in paragraph e. no later than the end of the month following the month in which the obligation was made.” Condition: During our testing of reporting, for all ETA-9130 reports selected for testing management could not provide adequate support that the ETA-9130 reports were properly reviewed and approved prior to being submitted. Additionally, the entity made first tier subawards of greater than $30,000, but could not provide supporting documentation that the necessary reports were filed to satisfy the requirements of the Federal Funding Accountability and Transparency Act (FFATA). Questioned Costs: Unknown Context: Total federal expenditures for the WIOA Cluster were $4,165,604 for the year ended June 30, 2023. Cause: The Board did not have adequate policies and internal controls in place to ensure that all required reports for the WIOA Cluster and FFATA were submitted accurately and in a timely fashion. Effect: The Board is not in compliance with the federal statutes, regulations, and terms and conditions of the federal award. Recommendation: We recommend that the Board design and implement controls to ensure that all required reporting is submitted accurately and in a timely fashion. Views of Responsible Officials: We agree with the finding and will take the necessary corrective actions as noted in the corrective action plan attached.
2023-005 SUBRECIPIENT MONITORING (REPEAT OF PRIOR YEAR FINDING 2022-06) Federal Program Information:, Federal Agency and Program Name, Federal Assistance Listing Number U.S. Department of Labor, WIOA Cluster, 17.258/17.259/17.278 Criteria: 2 CFR 200.303 requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Recipients must ensure that commercial organizations that are subrecipients under WIOA Title I and expend more than the minimum level specified in 2 CFR Part 200, Subpart F, have either an organization-wide audit conducted in accordance with 2 CFR Part 200 or a program-specific financial and compliance audit (20 CFR section 683.210). 2 CFR 200.332(b) requires that all pass-through entities must: Evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraphs (d) and (e) of this section. Condition: Upon inquiry of management, the Board did not perform any subrecipient monitoring procedures related to the Board’s grant agreement with its subrecipient for the fiscal year ended June 30, 2023. Questioned Costs: Unknown Context: Total federal expenditures for the WIOA Cluster were $4,165,604 for the year ended June 30, 2023, which included $1,350,121 of expenditures to subrecipients. Cause: Although the Board has policies and procedures in place surrounding the subrecipient monitoring compliance requirements, due to staffing issues during the fiscal year and lack of knowledge of all the federal compliance requirements, no subrecipient monitoring was completed. Effect: The Board is not in compliance with the federal statutes, regulations, and terms and conditions of the federal award. Recommendation: We recommend that the Board review its policies and procedures for sufficiency and commit the appropriate personnel to subrecipient monitoring to ensure that the Board is in compliance with all federal requirements. Views of Responsible Officials: We agree with the finding and will take the necessary corrective actions as noted in the corrective action plan attached.
2023-006 ELIGIBILITY (REPEAT OF PRIOR YEAR FINDING 2022-07) Federal Program Information:, Federal Agency and Program Name, Federal Assistance Listing Number U.S. Department of Labor, WIOA Cluster, 17.258/17.259/17.278 Criteria: 2 CFR 200.303 requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Per the provisions of the Workforce Innovation and Opportunity Act (WIOA), “A person is eligible to receive services under Youth Activities if they are an out-of-school youth or an in-school youth (Section 129(a)(1), WIOA, 128 Stat. 1504)”, and meet the definition of such as defined in the Uniform Guidance. Condition: During our testing of WIOA participants, it was noted by management that the eligibility determination for Youth Activities is maintained and conducted by the Board’s subrecipient. According to management, there are no procedures performed at the Board to verify the eligibility of Youth Activities participants to ensure that all federal compliance requirements are being adhered to. Additionally, 2 of the 60 individual adult program applications selected for testing were not reviewed by a case manager. Questioned Costs: Unknown Context: Total federal expenditures for the WIOA Cluster were $4,165,604 for the year ended June 30, 2023. Cause: The Board does not perform any procedures to ensure that the Youth Activities participants meet all the federal compliance requirements for participation in the program. Further, the Board did not review two individual adult program applications for eligibility. Effect: A Youth Activities participant(s)/Adult Activities participant(s) may be granted access to the Board’s program when they do not meet the prescribed eligibility requirements. Recommendation: We recommend that the Board implement policies and procedures to ensure that the necessary controls are in place to properly verify the eligibility of all Youth and Adult Activities participants. Views of Responsible Officials: We agree with the finding and will take the necessary corrective actions as noted in the corrective action plan attached.
2023-007 ALLOCATION OF GRANT EXPENSES (REPEAT OF PRIOR YEAR FINDING 2022-08) Federal Program Information:, Federal Agency and Program Name, Federal Assistance Listing Number U.S. Department of Labor, WIOA Cluster, 17.258/17.259/17.278 Criteria: 2 CFR 200.303 requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Condition: During our testing of WIOA Cluster expenditures, it was noted that the Board did not regularly reconcile expenditures to the appropriate assistance listing numbers within the WIOA Cluster during the year. Further, it was determined that expenses are being split among expired grants as well as active grants in the client accounting software. Questioned Costs: Unknown Context: Total federal expenditures for the WIOA Cluster were $4,165,604 for the year ended June 30, 2023. Cause: Due to staffing changes during the year, grant expenditures were not regularly reconciled and allocated to the appropriate grant number based on actual expenses. Effect: Expenses were not properly allocated to the correct Assistance Listing number within the WIOA cluster. Recommendation: We recommend that the Board implement policies and procedures to ensure that all expenses are for actual expenses incurred, and that timely reconciliations are performed to ensure the expenses are properly charged to the correct assistance listing number and grant. Views of Responsible Officials: We agree with the finding and will take the necessary corrective actions as noted in the corrective action plan attached.
2023-002 ACTIVITIES ALLOWED OR UNALLOWED (REPEAT OF PRIOR YEAR FINDING 2022-02) Federal Program Information: Federal Agency and Program Name Federal Assistance Listing Number U.S. Department of Labor, WIOA Cluster, 17.258/17.259/17.278 Criteria: 2 CFR 200.303 requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” 2 CFR 200.403(g) states that costs must “Be adequately documented.” Condition: During our testing of activities allowed or unallowed, for 11 of the 60 nonpayroll items tested, management could not provide adequate support that the charges were properly reviewed and approved prior to payment. Questioned Costs: Unknown Context: Total federal expenditures for the WIOA Cluster were $4,165,604 for the year ended June 30, 2023. Cause: The Board did not demonstrate that proper internal controls are in place and operating effectively to ensure that unallowable charges to the federal program do not occur. Effect: Unallowable payments to the federal program may have occurred due to the lack of effective internal controls in place. Recommendation: We recommend that the Board design and implement controls to ensure that all charges to federal programs are adequately reviewed and approved prior to payment. Views of Responsible Officials: We agree with the finding and will take the necessary corrective actions as noted in the corrective action plan attached.
2023-003 EARMARKING (REPEAT OF PRIOR YEAR FINDING 2022-03) Federal Program Information:, Federal Agency and Program Name, Federal Assistance Listing Number U.S. Department of Labor, WIOA Cluster, 17.258/17.259/17.278 Criteria: 2 CFR 200.303 requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Per the provisions stated in the Uniform Guidance under the WIOA Cluster for Local Areas: (1) A local area may expend no more than 10 percent of the Adult, Dislocated Worker, and Youth Activities funds allocated to the local area under Sections 128(b) (WIOA, 128 Stat. 1502) and 133(b) (WIOA, 128 Stat. 1516) for within state allocations. The funds provided for administrative costs by one of the three fund sources (Adult, Dislocated Worker, Youth Activities) can be used for administrative costs of the other two sources. (2) The amount that may be spent on incumbent worker training may not exceed 20 percent of the amount of the combined total of federal funds allocated to local areas to carry out the Adult and Dislocated Worker programs for a program year (20 CFR section 680.800; Section 134(d)(4), WIOA, 128 Stat. 1535). (3) WIOA authorizes workforce investment areas, with the approval of the governor, to transfer up to 100 percent of the Adult Activities funds to Dislocated Workers Activities, and up to 100 percent of Dislocated Workers Activities funds to Adult Activities (Section 133(b)(4), WIOA, 128 Stat. 1518). (4) At the discretion of the local board, not more than 10 percent of the total funds allocated to the local area under section 128(b) and under section 133(b)(2)-(3) may be used to implement a pay-for-performance contract strategy as defined in WIOA Section 3(47) (WIOA Section 129(c)(1)(D) and 134(d)(1)(A)(iii)). (5) As no state has received prior approval for implementation of a PFP contract strategy, no funds from the program years prior to PY 2019 are available for PFP contract strategies or for the accompanying extended disbursement. However, these funds could still be used for other types of performance-based contracting, but the life of those funds remains the normal two-year limit for local WIOA grant funds. Per the provisions stated in the Uniform Guidance under the WIOA Cluster for Youth Activities: (1) A minimum of 75 percent of the Youth Activity funds allocated to states and local areas, except for the local area expenditures for administration, must be used to provide services to out-of-school youth (Section 129(a)(4)(A), WIOA, 128 Stat. 1506). (2) Not less than 20 percent of Youth Activity funds allocated to the local area, except for the local area expenditures for administration, must be used to provide paid and unpaid work experiences (Section 129(c)(4)), WIOA, 128 Stat. 1510). Condition: Upon inquiry of management, it was noted that the Board did not perform procedures to ensure that the expenditures of the WIOA Cluster were within the earmarking requirements noted in the Uniform Guidance during the fiscal year ended June 30, 2023. Questioned Costs: Unknown Context: Total federal expenditures for the WIOA Cluster were $4,165,604 for the year ended June 30, 2023. Cause: The Board did not perform the appropriate procedures to verify that the expenditures of the WIOA Cluster were within the earmarking requirements noted within the Uniform Guidance. Effect: The Board is not in compliance with the federal statutes, regulations, and terms and conditions of the federal award. Recommendation: We recommend that the Board implement controls and procedures to ensure that all requirements for earmarking within the Uniform Guidance are properly followed. Views of Responsible Officials: We agree with the finding and will take the necessary corrective actions as noted in the corrective action plan attached.
2023-004 REPORTING, (REPEAT OF PRIOR YEAR FINDING 2022-05) Federal Program Information:, Federal Agency and Program Name, Federal Assistance Listing Number U.S. Department of Labor, WIOA Cluster, 17.258/17.259/17.278 Criteria: 2 CFR 200.303 requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” ETA-9130, Financial Report (OMB No. 1205-0461) – All ETA grantees are required to submit quarterly financial reports for each grant award they receive. Reports are required to be prepared using the specific format and instructions for the applicable program(s); in this case, Workforce Innovation and Opportunity Act instructions for the following: Statewide Adult; Workforce Statewide Youth; Statewide Dislocated Worker; Local Adult; Local Youth; and Local Dislocated Worker. Reports are due 45 days after the end of the reporting quarter. Financial data is required to be reported cumulatively from grant inception through the end of each reporting period. 2 CFR 170 Appendix A, as it relates to reporting for the Federal Funding Accountability and Transparency Act, “unless the auditee is exempt as provided in paragraph d. of this award term, the auditee must report each action that equals or exceeds $30,000 in Federal funds for a subaward to a non-Federal entity or Federal agency as noted in paragraph e. no later than the end of the month following the month in which the obligation was made.” Condition: During our testing of reporting, for all ETA-9130 reports selected for testing management could not provide adequate support that the ETA-9130 reports were properly reviewed and approved prior to being submitted. Additionally, the entity made first tier subawards of greater than $30,000, but could not provide supporting documentation that the necessary reports were filed to satisfy the requirements of the Federal Funding Accountability and Transparency Act (FFATA). Questioned Costs: Unknown Context: Total federal expenditures for the WIOA Cluster were $4,165,604 for the year ended June 30, 2023. Cause: The Board did not have adequate policies and internal controls in place to ensure that all required reports for the WIOA Cluster and FFATA were submitted accurately and in a timely fashion. Effect: The Board is not in compliance with the federal statutes, regulations, and terms and conditions of the federal award. Recommendation: We recommend that the Board design and implement controls to ensure that all required reporting is submitted accurately and in a timely fashion. Views of Responsible Officials: We agree with the finding and will take the necessary corrective actions as noted in the corrective action plan attached.
2023-005 SUBRECIPIENT MONITORING (REPEAT OF PRIOR YEAR FINDING 2022-06) Federal Program Information:, Federal Agency and Program Name, Federal Assistance Listing Number U.S. Department of Labor, WIOA Cluster, 17.258/17.259/17.278 Criteria: 2 CFR 200.303 requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Recipients must ensure that commercial organizations that are subrecipients under WIOA Title I and expend more than the minimum level specified in 2 CFR Part 200, Subpart F, have either an organization-wide audit conducted in accordance with 2 CFR Part 200 or a program-specific financial and compliance audit (20 CFR section 683.210). 2 CFR 200.332(b) requires that all pass-through entities must: Evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraphs (d) and (e) of this section. Condition: Upon inquiry of management, the Board did not perform any subrecipient monitoring procedures related to the Board’s grant agreement with its subrecipient for the fiscal year ended June 30, 2023. Questioned Costs: Unknown Context: Total federal expenditures for the WIOA Cluster were $4,165,604 for the year ended June 30, 2023, which included $1,350,121 of expenditures to subrecipients. Cause: Although the Board has policies and procedures in place surrounding the subrecipient monitoring compliance requirements, due to staffing issues during the fiscal year and lack of knowledge of all the federal compliance requirements, no subrecipient monitoring was completed. Effect: The Board is not in compliance with the federal statutes, regulations, and terms and conditions of the federal award. Recommendation: We recommend that the Board review its policies and procedures for sufficiency and commit the appropriate personnel to subrecipient monitoring to ensure that the Board is in compliance with all federal requirements. Views of Responsible Officials: We agree with the finding and will take the necessary corrective actions as noted in the corrective action plan attached.
2023-006 ELIGIBILITY (REPEAT OF PRIOR YEAR FINDING 2022-07) Federal Program Information:, Federal Agency and Program Name, Federal Assistance Listing Number U.S. Department of Labor, WIOA Cluster, 17.258/17.259/17.278 Criteria: 2 CFR 200.303 requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Per the provisions of the Workforce Innovation and Opportunity Act (WIOA), “A person is eligible to receive services under Youth Activities if they are an out-of-school youth or an in-school youth (Section 129(a)(1), WIOA, 128 Stat. 1504)”, and meet the definition of such as defined in the Uniform Guidance. Condition: During our testing of WIOA participants, it was noted by management that the eligibility determination for Youth Activities is maintained and conducted by the Board’s subrecipient. According to management, there are no procedures performed at the Board to verify the eligibility of Youth Activities participants to ensure that all federal compliance requirements are being adhered to. Additionally, 2 of the 60 individual adult program applications selected for testing were not reviewed by a case manager. Questioned Costs: Unknown Context: Total federal expenditures for the WIOA Cluster were $4,165,604 for the year ended June 30, 2023. Cause: The Board does not perform any procedures to ensure that the Youth Activities participants meet all the federal compliance requirements for participation in the program. Further, the Board did not review two individual adult program applications for eligibility. Effect: A Youth Activities participant(s)/Adult Activities participant(s) may be granted access to the Board’s program when they do not meet the prescribed eligibility requirements. Recommendation: We recommend that the Board implement policies and procedures to ensure that the necessary controls are in place to properly verify the eligibility of all Youth and Adult Activities participants. Views of Responsible Officials: We agree with the finding and will take the necessary corrective actions as noted in the corrective action plan attached.
2023-007 ALLOCATION OF GRANT EXPENSES (REPEAT OF PRIOR YEAR FINDING 2022-08) Federal Program Information:, Federal Agency and Program Name, Federal Assistance Listing Number U.S. Department of Labor, WIOA Cluster, 17.258/17.259/17.278 Criteria: 2 CFR 200.303 requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Condition: During our testing of WIOA Cluster expenditures, it was noted that the Board did not regularly reconcile expenditures to the appropriate assistance listing numbers within the WIOA Cluster during the year. Further, it was determined that expenses are being split among expired grants as well as active grants in the client accounting software. Questioned Costs: Unknown Context: Total federal expenditures for the WIOA Cluster were $4,165,604 for the year ended June 30, 2023. Cause: Due to staffing changes during the year, grant expenditures were not regularly reconciled and allocated to the appropriate grant number based on actual expenses. Effect: Expenses were not properly allocated to the correct Assistance Listing number within the WIOA cluster. Recommendation: We recommend that the Board implement policies and procedures to ensure that all expenses are for actual expenses incurred, and that timely reconciliations are performed to ensure the expenses are properly charged to the correct assistance listing number and grant. Views of Responsible Officials: We agree with the finding and will take the necessary corrective actions as noted in the corrective action plan attached.
2023-002 ACTIVITIES ALLOWED OR UNALLOWED (REPEAT OF PRIOR YEAR FINDING 2022-02) Federal Program Information: Federal Agency and Program Name Federal Assistance Listing Number U.S. Department of Labor, WIOA Cluster, 17.258/17.259/17.278 Criteria: 2 CFR 200.303 requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” 2 CFR 200.403(g) states that costs must “Be adequately documented.” Condition: During our testing of activities allowed or unallowed, for 11 of the 60 nonpayroll items tested, management could not provide adequate support that the charges were properly reviewed and approved prior to payment. Questioned Costs: Unknown Context: Total federal expenditures for the WIOA Cluster were $4,165,604 for the year ended June 30, 2023. Cause: The Board did not demonstrate that proper internal controls are in place and operating effectively to ensure that unallowable charges to the federal program do not occur. Effect: Unallowable payments to the federal program may have occurred due to the lack of effective internal controls in place. Recommendation: We recommend that the Board design and implement controls to ensure that all charges to federal programs are adequately reviewed and approved prior to payment. Views of Responsible Officials: We agree with the finding and will take the necessary corrective actions as noted in the corrective action plan attached.
2023-003 EARMARKING (REPEAT OF PRIOR YEAR FINDING 2022-03) Federal Program Information:, Federal Agency and Program Name, Federal Assistance Listing Number U.S. Department of Labor, WIOA Cluster, 17.258/17.259/17.278 Criteria: 2 CFR 200.303 requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Per the provisions stated in the Uniform Guidance under the WIOA Cluster for Local Areas: (1) A local area may expend no more than 10 percent of the Adult, Dislocated Worker, and Youth Activities funds allocated to the local area under Sections 128(b) (WIOA, 128 Stat. 1502) and 133(b) (WIOA, 128 Stat. 1516) for within state allocations. The funds provided for administrative costs by one of the three fund sources (Adult, Dislocated Worker, Youth Activities) can be used for administrative costs of the other two sources. (2) The amount that may be spent on incumbent worker training may not exceed 20 percent of the amount of the combined total of federal funds allocated to local areas to carry out the Adult and Dislocated Worker programs for a program year (20 CFR section 680.800; Section 134(d)(4), WIOA, 128 Stat. 1535). (3) WIOA authorizes workforce investment areas, with the approval of the governor, to transfer up to 100 percent of the Adult Activities funds to Dislocated Workers Activities, and up to 100 percent of Dislocated Workers Activities funds to Adult Activities (Section 133(b)(4), WIOA, 128 Stat. 1518). (4) At the discretion of the local board, not more than 10 percent of the total funds allocated to the local area under section 128(b) and under section 133(b)(2)-(3) may be used to implement a pay-for-performance contract strategy as defined in WIOA Section 3(47) (WIOA Section 129(c)(1)(D) and 134(d)(1)(A)(iii)). (5) As no state has received prior approval for implementation of a PFP contract strategy, no funds from the program years prior to PY 2019 are available for PFP contract strategies or for the accompanying extended disbursement. However, these funds could still be used for other types of performance-based contracting, but the life of those funds remains the normal two-year limit for local WIOA grant funds. Per the provisions stated in the Uniform Guidance under the WIOA Cluster for Youth Activities: (1) A minimum of 75 percent of the Youth Activity funds allocated to states and local areas, except for the local area expenditures for administration, must be used to provide services to out-of-school youth (Section 129(a)(4)(A), WIOA, 128 Stat. 1506). (2) Not less than 20 percent of Youth Activity funds allocated to the local area, except for the local area expenditures for administration, must be used to provide paid and unpaid work experiences (Section 129(c)(4)), WIOA, 128 Stat. 1510). Condition: Upon inquiry of management, it was noted that the Board did not perform procedures to ensure that the expenditures of the WIOA Cluster were within the earmarking requirements noted in the Uniform Guidance during the fiscal year ended June 30, 2023. Questioned Costs: Unknown Context: Total federal expenditures for the WIOA Cluster were $4,165,604 for the year ended June 30, 2023. Cause: The Board did not perform the appropriate procedures to verify that the expenditures of the WIOA Cluster were within the earmarking requirements noted within the Uniform Guidance. Effect: The Board is not in compliance with the federal statutes, regulations, and terms and conditions of the federal award. Recommendation: We recommend that the Board implement controls and procedures to ensure that all requirements for earmarking within the Uniform Guidance are properly followed. Views of Responsible Officials: We agree with the finding and will take the necessary corrective actions as noted in the corrective action plan attached.
2023-004 REPORTING, (REPEAT OF PRIOR YEAR FINDING 2022-05) Federal Program Information:, Federal Agency and Program Name, Federal Assistance Listing Number U.S. Department of Labor, WIOA Cluster, 17.258/17.259/17.278 Criteria: 2 CFR 200.303 requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” ETA-9130, Financial Report (OMB No. 1205-0461) – All ETA grantees are required to submit quarterly financial reports for each grant award they receive. Reports are required to be prepared using the specific format and instructions for the applicable program(s); in this case, Workforce Innovation and Opportunity Act instructions for the following: Statewide Adult; Workforce Statewide Youth; Statewide Dislocated Worker; Local Adult; Local Youth; and Local Dislocated Worker. Reports are due 45 days after the end of the reporting quarter. Financial data is required to be reported cumulatively from grant inception through the end of each reporting period. 2 CFR 170 Appendix A, as it relates to reporting for the Federal Funding Accountability and Transparency Act, “unless the auditee is exempt as provided in paragraph d. of this award term, the auditee must report each action that equals or exceeds $30,000 in Federal funds for a subaward to a non-Federal entity or Federal agency as noted in paragraph e. no later than the end of the month following the month in which the obligation was made.” Condition: During our testing of reporting, for all ETA-9130 reports selected for testing management could not provide adequate support that the ETA-9130 reports were properly reviewed and approved prior to being submitted. Additionally, the entity made first tier subawards of greater than $30,000, but could not provide supporting documentation that the necessary reports were filed to satisfy the requirements of the Federal Funding Accountability and Transparency Act (FFATA). Questioned Costs: Unknown Context: Total federal expenditures for the WIOA Cluster were $4,165,604 for the year ended June 30, 2023. Cause: The Board did not have adequate policies and internal controls in place to ensure that all required reports for the WIOA Cluster and FFATA were submitted accurately and in a timely fashion. Effect: The Board is not in compliance with the federal statutes, regulations, and terms and conditions of the federal award. Recommendation: We recommend that the Board design and implement controls to ensure that all required reporting is submitted accurately and in a timely fashion. Views of Responsible Officials: We agree with the finding and will take the necessary corrective actions as noted in the corrective action plan attached.
2023-005 SUBRECIPIENT MONITORING (REPEAT OF PRIOR YEAR FINDING 2022-06) Federal Program Information:, Federal Agency and Program Name, Federal Assistance Listing Number U.S. Department of Labor, WIOA Cluster, 17.258/17.259/17.278 Criteria: 2 CFR 200.303 requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Recipients must ensure that commercial organizations that are subrecipients under WIOA Title I and expend more than the minimum level specified in 2 CFR Part 200, Subpart F, have either an organization-wide audit conducted in accordance with 2 CFR Part 200 or a program-specific financial and compliance audit (20 CFR section 683.210). 2 CFR 200.332(b) requires that all pass-through entities must: Evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraphs (d) and (e) of this section. Condition: Upon inquiry of management, the Board did not perform any subrecipient monitoring procedures related to the Board’s grant agreement with its subrecipient for the fiscal year ended June 30, 2023. Questioned Costs: Unknown Context: Total federal expenditures for the WIOA Cluster were $4,165,604 for the year ended June 30, 2023, which included $1,350,121 of expenditures to subrecipients. Cause: Although the Board has policies and procedures in place surrounding the subrecipient monitoring compliance requirements, due to staffing issues during the fiscal year and lack of knowledge of all the federal compliance requirements, no subrecipient monitoring was completed. Effect: The Board is not in compliance with the federal statutes, regulations, and terms and conditions of the federal award. Recommendation: We recommend that the Board review its policies and procedures for sufficiency and commit the appropriate personnel to subrecipient monitoring to ensure that the Board is in compliance with all federal requirements. Views of Responsible Officials: We agree with the finding and will take the necessary corrective actions as noted in the corrective action plan attached.
2023-006 ELIGIBILITY (REPEAT OF PRIOR YEAR FINDING 2022-07) Federal Program Information:, Federal Agency and Program Name, Federal Assistance Listing Number U.S. Department of Labor, WIOA Cluster, 17.258/17.259/17.278 Criteria: 2 CFR 200.303 requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Per the provisions of the Workforce Innovation and Opportunity Act (WIOA), “A person is eligible to receive services under Youth Activities if they are an out-of-school youth or an in-school youth (Section 129(a)(1), WIOA, 128 Stat. 1504)”, and meet the definition of such as defined in the Uniform Guidance. Condition: During our testing of WIOA participants, it was noted by management that the eligibility determination for Youth Activities is maintained and conducted by the Board’s subrecipient. According to management, there are no procedures performed at the Board to verify the eligibility of Youth Activities participants to ensure that all federal compliance requirements are being adhered to. Additionally, 2 of the 60 individual adult program applications selected for testing were not reviewed by a case manager. Questioned Costs: Unknown Context: Total federal expenditures for the WIOA Cluster were $4,165,604 for the year ended June 30, 2023. Cause: The Board does not perform any procedures to ensure that the Youth Activities participants meet all the federal compliance requirements for participation in the program. Further, the Board did not review two individual adult program applications for eligibility. Effect: A Youth Activities participant(s)/Adult Activities participant(s) may be granted access to the Board’s program when they do not meet the prescribed eligibility requirements. Recommendation: We recommend that the Board implement policies and procedures to ensure that the necessary controls are in place to properly verify the eligibility of all Youth and Adult Activities participants. Views of Responsible Officials: We agree with the finding and will take the necessary corrective actions as noted in the corrective action plan attached.
2023-007 ALLOCATION OF GRANT EXPENSES (REPEAT OF PRIOR YEAR FINDING 2022-08) Federal Program Information:, Federal Agency and Program Name, Federal Assistance Listing Number U.S. Department of Labor, WIOA Cluster, 17.258/17.259/17.278 Criteria: 2 CFR 200.303 requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Condition: During our testing of WIOA Cluster expenditures, it was noted that the Board did not regularly reconcile expenditures to the appropriate assistance listing numbers within the WIOA Cluster during the year. Further, it was determined that expenses are being split among expired grants as well as active grants in the client accounting software. Questioned Costs: Unknown Context: Total federal expenditures for the WIOA Cluster were $4,165,604 for the year ended June 30, 2023. Cause: Due to staffing changes during the year, grant expenditures were not regularly reconciled and allocated to the appropriate grant number based on actual expenses. Effect: Expenses were not properly allocated to the correct Assistance Listing number within the WIOA cluster. Recommendation: We recommend that the Board implement policies and procedures to ensure that all expenses are for actual expenses incurred, and that timely reconciliations are performed to ensure the expenses are properly charged to the correct assistance listing number and grant. Views of Responsible Officials: We agree with the finding and will take the necessary corrective actions as noted in the corrective action plan attached.