Finding Text
2025-003 – EARMARKING - Federal Program Information: Federal Agency and Program Name - U.S. Department of Labor WIOA Cluster. Federal Assistance Listing Number - 17.258/17.259/17.278 Criteria: 2 CFR 200.303 requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Per the provisions stated in the Uniform Guidance under the WIOA Cluster for Youth Activities: (1) A minimum of 75 percent of the Youth Activity funds allocated to states and local areas, except for the local area expenditures for administration, must be used to provide services to out-of-school youth (29 USC 3164(a)(4)(A), 128 Stat. 1506). (2) Not less than 20 percent of Youth Activity funds allocated to the local area, except for the local area expenditures for administration, must be used to provide paid and unpaid work experiences (29 USC 3164(c)(4)), WIOA, 128 Stat. 1510). Condition: During our testing of the earmarking requirements for the Youth Activities, we noted that approximately 13 percent of Youth Activity funds allocated to the local area, except for the local area expenditures for administration, was used to provide paid and unpaid work experiences, which is not in compliance with the provisions stated in the Uniform Guidance under the WIOA Cluster for Youth Activities. Questioned Costs: Unknown. Context: Total federal expenditures for the WIOA Cluster were $1,115,599 for the year ended June 30, 2025. Cause: The Board’s policies and procedures are not sufficient to ensure that the Board is managing Federal awards in compliance with the provisions set by the Uniform Guidance. Effect: The Board is not in compliance with the federal statutes, regulations, and terms and conditions of the federal award. Recommendation: We recommend that the Board regularly review the grant expenditures for each of its programs and activities to ensure that all requirements for earmarking within the Uniform Guidance are met. Views of Responsible Officials: We agree with the finding and will take the necessary corrective actions as noted in the corrective action plan attached.