Finding Text
Part III – Federal Award Findings and Questioned Costs
Reference: 2024-001
U.S. Department of Health and Human Services
Pass-through entity: New York State Department of Labor
WIOA Cluster 17.258, 17.259 and 17.278
Program Year: 2023
Criteria:
According to the Uniform Guidance in CFR Part 200, Part 4, activities allowed or
unallowed and allowable costs/cost principles (A/B) include the use of funds to
reduce an individual’s dependence on federally funded government assistance
programs and promote job preparedness and work opportunities. Management
is required to design and effectively implement internal controls that will provide
reasonable assurance that the Organization complies with activities allowed or
unallowed and allowable costs/cost principles requirements, according to the
Uniform Guidance.
According to the Uniform Guidance in CFR Part 200, Part 4, eligibility (E) for
individuals participating in job preparedness and work opportunities will be for
those deemed to be financially needy based upon a pre-determined definition
established by New York State. Management is required to design and
effectively implement internal controls that will provide reasonable assurance that
the Organization complies with eligibility requirements, according to the Uniform
Guidance.
Cause/Condition:
The Organization’s current policies and procedures are not operating effectively
to ensure only allowable activities and allowable costs (in this case, the hours
worked) were allocated and charged to the federal program. In 1 of 25 cases
tested, a timecard to substantiate hours worked as part of the job preparedness
and work opportunities program was not able to be located and provided.
The Organization’s current policies and procedures are not operating effectively
to ensure only individuals who have been deemed to be eligible are participating
and being paid through the job preparedness and work opportunities program(s).
In 1 of 25 cases tested, Form LDSS 4770 was not able to be located to make the
determination the applicant is eligible for participation.
Context:
In both cases we haphazardly selected a sample of 25 employees’ participating
in the workforce program during the fiscal year ending June 30, 2024.
25
Part III – Federal Award Findings and Questioned Costs (Continued)
Reference: 2024-001 (Continued)
Questioned Costs:
No known questioned costs
Effect:
The Organization’s internal control over compliance related to activities allowed
or unallowed or allowable costs/cost principles, as well as over eligibility, did not
operate as designed. As such, immaterial noncompliance occurred. Without
effective operation of the current policies and procedures, an increased likelihood
for noncompliance and potential questioned costs in future years exists.
Recommendation:
We recommend that management review existing policies and procedures over
compliance requirements related to activities allowed or unallowed, allowable
costs/cost principles, as well as eligibility, and ensure internal control procedures
are adequate and operating as intended. We also suggest that management
develop a means for testing and monitoring the operational effectiveness of
those internal controls over compliance and document any mitigating controls
that are developed and implemented.
Management’s Response:
See response on the next page.