Finding 1156454 (2024-002)

Federal Agency: U.S. Department of Labor Federal Program Title: Reintegration of Ex-Offenders Assistance Listing No. 17.270 Award Periods: 2024 Type of Finding: • Significant Deficiency in Internal Control Over Compliance – Cash Management and Reporting Questioned Costs: None Condition: During our testing of 5 drawdown requests and 4 reports. CLA noted no instance of a review process performed by the Organization prior to the submission of those drawdown requests or reports. All drawdown requests and reports were submitted by the outsourced accountant, but proof of review by the organization was not documented. Criteria: Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving federal awards establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure drawdowns and reports are formally reviewed by someone who did not prepare the drawdown or report to verify the correct amount is required. Context: The Organization did not maintain adequate documentation related to internal controls over cash management and reporting. Cause: The Organization did not have effective internal controls over compliance in place to ensure that cash management and reporting procedures were followed and documented. Effect: Failure to properly approve drawdowns, reports and maintain documentation may result in drawdown requests for unapproved or unrelated costs charged to the grant. Recommendation: The Organization should update and strengthen their policies to match UG and DOL guidelines, and create an internal control for drawdown request and report approval and review. The Organization should ensure these policies are followed for all drawdowns, reports and that documentation related to these policies are maintained. Views of Responsible Officials: There is no disagreement with the audit finding.