Finding 1154135 (2024-002)

Finding 2024-002 Agency: Department of Labor Program: Apprenticeship State Funds (AL No. 17.285) Material Weakness over Subrecipient Monitoring Repeat Finding: No Condition: For all subrecipients of AACC, there was no supporting documentation to show that a risk assessment was performed by the pass-through entity before awarding funds to each subrecipient. Additionally, for monitoring procedures performed AACC used general subrecipient monitoring forms which were all signed in March 2025 which is after the annual monitoring period ending December 31, 2024. The monitoring forms did not include information related to missing support for various subrecipient invoices as noted in finding 2024-001. Additionally, there were no follow-up procedures documented on the forms to ensure corrective action took place. Criteria: As provided in 2 CFR section 200.332: Requirements for pass-through entities, a pass-through entity must evaluate each subrecipient's fraud risk and risk of noncompliance with a subaward to determine the appropriate subrecipient monitoring procedures. Cause: AACC does not have a policy in place to properly document risk assessment of subrecipients before awarding funds to them. AACC does not have a policy in place to ensure all necessary monitoring procedures performed based on its risk assessment are properly documented in a timely manner. Effect: AACC was not in compliance with the Subrecipient Monitoring requirements in accordance with Uniform Guidance. Questioned Costs: Unknown Recommendation: We recommend AACC implements a policy to properly document their assessment of their subrecipients fraud risk and risk of noncompliance to then conclude on satisfactory monitoring procedures. We recommend AACC implements a policy to properly document all necessary monitoring procedures in a timely manner. Auditee Response and Corrective Action Plan: Management agrees with the finding. Refer to the corrective action plan on current findings in Part V of this report.