Finding No.: 2021-003
Federal Agency: U.S. Department of Labor
AL Program: 17.225 Unemployment Insurance
Federal Award No.: UI-34839-20-55-A-70
Area: Activities Allowed or Unallowed
Questioned Costs: $11,820
Criteria:
1. In accordance with 2 CFR Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award Section 200.303, grant recipient must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.
2. In accordance with applicable program requirements, funds may be used only for the payment of Pandemic Unemployment Assistance (PUA) benefits and for PUA-related state administrative costs.
Condition: During the audit, the following matters were noted:
1. Internal control over the administration of activities allowed or unallowed requirements are not implemented. The Republic’s internal controls are unlikely to operate effectively, as we cannot verify the controls implemented in the program. This is due to the unavailability of the individuals responsible for performing these controls during the audit fieldwork.
2. For 9 (or 4%) of 60 transactions tested, aggregating $43,674 of $16.2 million in total program expenditures, deductions of $11,820 were deducted from PUA and FPUC benefits as follows:
No. Claim
ID Date PUA FPUC Total Benefits Withholding SS HCF ROP Cross Act Total Deductions Net Amount Disbursed Amount
1 43381 10/02/2020 $3,176 $4,800 7,976 $883 $559 $199 $200 $1,841 $6,135 $6,135
2 43562 10/16/2020 3,573 5,400 8,973 823 628 224 800 2,475 6,498 6,498
3 43825 11/13/2020 3,573 – 3,573 346 250 89 – 685 2,888 2,888
4 43701 11/13/2020 5,161 – 5,161 499 362 129 – 990 4,171 4,171
5 43882 11/17/2020 4,367 – 4,367 423 305 109 – 837 3,530 3,530
6 43967 11/20/2020 5,161 – 5,161 499 362 129 – 990 4,171 4,171
7 44077 12/02/2020 5,161 – 5,161 499 362 129 – 990 4,171 4,171
8 44127 12/11/2020 5,161 4,800 9,961 1,075 698 249 – 2,022 7,939 7,939
9 44268 12/23/2020 5,161 – 5,161 499 362 129 – 990 4,171 4,171
Total: $40,494 $15,000 $55,494 $5,546 $3,888 $1,386 $1,000 $11,820 $43,674 $43,674
Cause: The Republic did not maintain effective internal controls over management of the program or monitor compliance with applicable activities allowed or unallowed requirements.
Effect: Condition 1: The Republic is not in compliance with applicable internal control requirements. This represents a material weakness, and the Compliance reports is modified accordingly.
Condition 2: The Republic is in noncompliance with applicable activities allowed or unallowed requirements. The reportable questioned cost is $11,820.
Recommendation: The Republic should establish and maintain internal controls over the administration of the program and effectively monitor program costs for compliance with allowable costs requirements. The Republic should establish and maintain internal controls and document roles and processes to address potential future personnel turnover.
Views of Responsible Officials: The Republic’s Corrective Action Plan does not indicate disagreement and provides planned corrective action. The identified questioned costs were subsequently refunded in FY2022 and FY2023.