Finding Text
Reference Number: 2023-003 – Review of Participant Applications
Federal Program Title: WIOA Cluster
Federal Assistance Listing Number: 17.258
Federal Agency: Department of Labor (DOL)
Pass-Through Entity: State of California Employment Development Program
Federal Award Number and Year: AA211079, AA311059, 170305366
Category of Finding: Eligibility
Type of Finding: Significant Deficiency in Internal Control over Compliance
Criteria
Title 2 Code of Federal Regulations (2 CFR) §200.303 states that 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).
Condition
During our review of participant intake forms for the WIOA programs, we noted that forty (40) forms did not contain documentation of review and approval by the Executive Director and there was no documented process for case management participant eligibility determinations.
Cause
The Organization has experienced significant turnover in key personnel in the Organization’s finance department and management in past years. Absent robust accounting policies and procedures, when vacancies occur, information can be lost and as individuals are getting up to speed, some processes may not be fully executed if they are manual and not fully embedded into an automated system.
Effect
No documented review processes for participant intake forms or participant eligibility determinations are deficiencies in internal control and could result in ineligible participants being noted as eligible and included in the program.
Questioned Costs
Questioned costs were not identified.
Context
For the forty (40) participate intake forms selected for testing, all forty were missing evidence of review.
The sample was not a statistically valid sample.
Recommendation
We recommend that the Organization develop and document review processes to ensure all participant intake forms are reviewed by a second person in addition to the case manager and that all participant eligibility determinations are reviewed.
Views of Responsible Officials and Planned Corrective Action
Person responsible: Leona Smith Di Faustino, Interim Executive Director
Corrective Action Plan: During the period being audited internal controls for program participants documents were not reviewed by the former Executive Director. The new Executive Director has implemented a check and balance procedure that requires the Case Manager, Program Manager, and Executive Director to review and sign off on participant application forms and to be documented on the participants application before the participant can move forward in the program.
Anticipated Implementation Date: June 30, 2024