Finding 1159823 (2022-007)

Finding No.: 2022-007 Federal Agency: U.S. Department of Labor AL Program: 17.225 Unemployment Insurance Federal Award No.: UI-34839-20-55-A-70 Area: Reporting Questioned Costs: $0 Criteria: In accordance with the 2 CFR section 200.303 Internal Controls, the recipient of Federal award must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. In addition, in accordance with the 2022 OMB Compliance Supplement, Part 3, Section L: Reporting Compliance Requirements, for financial reporting, the reported amounts should be supported by the underlying accounting records that support the audited financial statements and the Schedule of Expenditures of Federal Awards. Condition: Internal controls over the reporting requirements are not implemented. The Republic’s internal controls are unlikely to operate effectively, as we are unable to ascertain proper review of the required reports, including the accuracy of reported amounts. For 4 (or 33%) of 12 ETA 9130, Financial Status Report tested, cumulative expenditures reported are not accurately supported by the underlying accounting records as follows: No. Report Period Document Number Program Category Cumulative Expenditures per ETA 9130 Cumulative Expenditures per accounting records Absolute Amount of Variance 1 Quarterly Report - Q1 10/01/2020-12/31/2020 UI34839CA0 FPUC Administration – FY21 $122,647 $64,533 $58,114 2 Quarterly Report - Q1 10/01/2020-12/31/2020 UI34839C80 PUA Administration – FY21 188,221 166,157 22,064 Total for Q1: 310,868 230,690 80,178 3 Quarterly Report - Q2 01/01/2021-3/31/2021 UI34839CA0 FPUC Administration – FY21 122,647 64,533 58,114 4 Quarterly Report - Q2 01/01/2021-3/31/2021 UI34839C80 PUA Administration – FY21 188,221 209,597 21,376 Total for Q2: 310,868 274,130 79,490 Grand Total: $621,736 $504,820 $159,668 Cause: The Republic did not maintain effective internal controls over the review process of the ETA 9130 Financial Status Reports. Effect: The Republic is in noncompliance with applicable internal control requirements. This represents a significant deficiency, and the compliance report is modified accordingly. No question cost is presented as there is no effect on the amount expended or received from the Federal award. Identification as a Repeat Finding: Finding 2021-005 Recommendation: The Republic should strengthen monitoring controls over applicable reporting requirements. Responsible personnel should reconcile reported amounts to the underlying accounting records. Views of Responsible Officials: The Republic’s Corrective Action Plan does not indicate disagreement and provides planned corrective action.