FAC Explorer

Finding 1172396 (2025-001)

Material Weakness Repeat Finding
Requirement
G
Questioned Costs
-
Year
2025
Accepted
2026-02-04
Audit: 385452
Organization: Local Area Workforce Development-North Central (PR)
Auditor: ORTIZ RIVERA RIVERA & CO LLC

AI Summary

  • Core Issue: The Local Area only used 48% of allocated funds for out-of-school youth, falling short of the 50% requirement set by a waiver.
  • Impacted Requirements: The earmarking compliance requirement mandates that at least 50% of funds be spent on services for out-of-school youth.
  • Recommended Follow-Up: Implement monitoring procedures and conduct regular reviews of expenditures to ensure compliance with earmarking requirements.

Finding Text

Finding: 2025-001 Federal Agency: Uinted States Department of Labor Pass Through Agency: Puerto Rico Department of Economic Development Federal Program Title: WIOA Youth Activities Assistance Listing Number: 17.259 Compliance Requirement: Matching, Level of Effort, Earmarking Type of Finding: Significant Deficiency in Internal Control Over Compliance (SD) Responsible Official: Yasira Vélez, Executive Director Condition During our audits test of the earmarking compliance requirements for the Youth Program funds of the program 2024-2025, we noted that the Local Area only expended 48% of the funds allocated to provided services to out-of-school youth. Criteria A minimum of 75 percent of the Youth Activities funds allocated to State and local area, except for the area expenditure for administration, must be used to provide services to out-of-school youth (Section129(a)(4)(A), WIOA, 128 Stat.1506). However, pursuant to a waiver granted by the U.S. Department of Labor, the required utilization rate was reduced to 50 percent. Cause The Local Area failed to timely identify the noncompliance with the earmarking requirements for the Youth Program and did not adequately plan activities for outof-school youth to ensure compliance with the established requirements. Effect As a result, the Local Area did not comply with the earmarking requirements for the Youth Activities program. Recommendation We recommend that the Local Area establish monitoring procedures and perform periodic reviews of expenditures to ensure compliance with earmarking requirements throughout the grant period. Questioned Costs N/A

Corrective Action Plan

Reportable Condition: See Condition 2025-001 Recommendation We recommend the Local Area monitoring the earmarking procedures for the Youth Program on a quarterly basis to ensure that at the end of the to two years meet the requirement establish. If deviations or failure to meet the earmark are noted, communications must be generated to youth program staff to take corrective actions before the elapse of the funding period. Action Taken The Executive Director has begun meetings with staff to establish a short-term plan to discuss strategies to increase the number of youth participants in the Program. In addition, at these meetings, the Executive Director has instructed the Program Executive and Program Manager to maintain control over the budget allocated and the activities to be carried out and to coordinate the planning of future activities. With regard to the Finance Area, the Chief Financial Officer is instructed that at least every two months or at the request of the Assistance Manager submit the “Encumbrance Budget Report” to see the changes in budget and be able to make decisions related to changes in the approved budget by the Labor Department Program. In the meetings to be held, the results obtained and the status of the activities carried out in order to be accountable for the actions carried out must be reported. This to maintain continuous monitoring of the program, before the end of the validity of the funds.

Categories

Matching / Level of Effort / Earmarking

Programs in Audit

ALN Program Name Expenditures
17.278 WIOA DISLOCATED WORKER FORMULA GRANTS $8.56M
17.258 WIOA ADULT PROGRAM $1.69M
17.259 WIOA YOUTH ACTIVITIES $1.50M