Finding 1147300 (2024-006)

Federal Grantor: Department of Labor Pass-Through: Iowa Workforce Development Program: Workforce Innovation and Opportunity Act (WIOA) Cluster Award No. and Year: 24-N-CI-WI-OA and 2024 Federal Assistance Listing Number: 17.258, 17.259, 17.278 Compliance Requirement: Subrecipient Monitoring Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: In accordance with Title 2 U.S. Code of Federal Regulations (CFR) 200.332, pass-through entities must comply with the following: 2 CFR 200.332(b) – Evaluate each subrecipient’s risk of noncompliance for purposes of determining the appropriate subrecipient monitoring related to the subaward. This evaluation of risk may include consideration of such factors listed in 2 CFR 200.332(b)(1) through (4). 2 CFR 200.332(d) – Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include the information at 2 CFR 200.332(d)(1) through (4). 2 CFR 200.332(f) – Verify that every subrecipient is audited as required by Subpart F of this part when it is expected that the subrecipient’s Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in 200.501. Condition: The County did not have any formal controls in place for evaluating each subrecipient’s risk of noncompliance or the purpose of determining the appropriate subrecipient monitoring for the WIOA Cluster. Cause: The County did not follow their procedures to evaluate the risk of noncompliance or monitor the activities of each subrecipient, and the County did not maintain documentation of their verification that every subrecipient is audited, as required. Effect: The County’s control policies were not consistently followed which require compliance with Subrecipient Monitoring requirements in 2 CFR 200.332 and did not comply with subrecipient monitoring requirements related to the program. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: The entire population of two (2) subrecipients were selected for testing. The condition noted above was identified during our procedures related to subrecipient monitoring and was pervasive to the program. Repeat Finding from Prior Years: No. Recommendation: We recommend that the County adhere to their policies and procedures in accordance with 2 CFR 200.332 to ensure compliance with subrecipient monitoring requirements. Views of Responsible Officials: Management agrees with the finding. See separate corrective action plan.