Finding 1098769 (2024-001)

Finding Number: 2024 001 Cost Allocation Repeat Finding: No Known or Likely Questioned Costs: None reportable Funding Agency: Department of Labor Title: WIOA Cluster AL Numbers: 17.258, 17.259 & 17.278 Grant Numbers and Award Years: WIOA2206 07/01/22 – 06/30/24 WIOA2306 07/01/23 – 06/30/25 BC2306 07/01/23 – 06/30/24 RR2206 04/01/23 – 10/31/23 RR2406 03/01/24 – 03/01/25 PSG2206 08/01/22 – 12/31/23 Condition: During the year ended June 30, 2024, the Organization did not allocate indirect expenses to all programs that benefitted from such expenses in accordance with its cost allocation plan and negotiated indirect cost rate agreement. There were no indirect expenses allocated to the Organization’s Youthbuild grant during the year. Criteria: Indirect costs are those that have been incurred for common or joint objectives that cannot be readily identified with a particular grant or program. These costs must be allocated to all benefitting programs in accordance with the negotiated indirect cost rate agreement and the Organization’s cost allocation plan. Cause: The Organization did not properly implement its provisional indirect cost rate agreement that was approved by the U.S. Department of Labor. Effect: The Organization was not in compliance with the allowable cost requirements of its grant awards. The impact of this condition on the amount of indirect expenses charged to each federal award is not material to program compliance, but a significant deficiency and non-material non-compliance exists. Recommendations: We recommend the Organization implement systems to properly allocate its indirect expenses to all benefitting programs in accordance with its indirect cost rate agreement and cost allocation plan. View of Responsible Officials: Management agrees with the finding and has committed to a corrective action plan.