Finding 1079343 (2023-002)

Significant Deficiency
Requirement
L
Questioned Costs
-
Year
2023
Accepted
2024-10-16

AI Summary

  • Core Issue: Quarterly Financial Reports for 2nd, 3rd, and 4th Quarters had errors due to improper timing of expense reporting.
  • Impacted Requirements: Reports must be submitted on an accrual basis as per Form ETA-9130 instructions.
  • Recommended Follow-up: Management should establish a robust accounting system and internal controls to ensure accurate accrual reporting, with a corrective action plan by December 31, 2024.

Finding Text

Federal Grantor: U.S. Department of Labor; Pass-through Grantor: Not applicable.; Federal Assistance Listing No.: 17.285; Program Title: Registered Apprenticeship; Award Year: 2023; Compliance Requirement: Reporting; Known Questioned Costs: Not applicable. Criteria: As outlined in the Funding Opportunity Announcement, Funding Opportunity Number FOA-ETA-23.09 for the Registered Apprenticeship program, management is required to submit Quarterly Financial Reports utilizing Form ETA-9130. These reports are due by the 15th day of the second month after each calendar-year quarter. Federal expenditures must be reported on an accrual basis. If the recipient's accounting system is not on an accrual basis, the recipient must develop and report such accrual information through best estimates based on an analysis of documentation on hand. Condition: During our audit, we noted the Quarterly Financial Reports prepared for 2nd Quarter, 3rd Quarter, and 4th Quarter were prepared with errors due to timing of expenses requested for reimbursement. Cause: Management did not develop an adequate system for accounting and reporting of expenditures on the accrual basis as required by the instructions for Form ETA-9130. Effect: Reports prepared for 2nd Quarter, 3rd Quarter, and 4th Quarter contained inaccuracies. Recommendation: We recommend management develop an adequate system for accounting and reporting expenditures on the accrual basis of accounting as required by the instructions for Form ETA-9130. Additionally, we recommend management develop internal controls sufficient enough to ensure that the processes for accounting and reporting expenditures on an accrual basis of accounting are designed and operating effectively. Management's Response: We will engage with an outside consultant/independent CPA firm to review and manage the internal control process. This corrective action will be implemented by December 31, 2024 by the Administrator and Board.

Categories

Cash Management Reporting Internal Control / Segregation of Duties

Other Findings in this Audit

  • 502900 2023-001
    Significant Deficiency
  • 502901 2023-002
    Significant Deficiency
  • 1079342 2023-001
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
17.285 Registered Apprenticeship $801,732
17.278 Wioa Dislocated Worker Formula Grants $50,361
17.259 Wioa Youth Activities $42,241
17.258 Wioa Adult Program $39,760