Finding Text
2025-002 Improve Internal Controls and Compliance with Reporting Requirements Federal Program(s) Information Federal Agency: U.S. Department of Labor Award Name: WIOA Dislocated Worker National Reserve Demonstration Grants, Community Project Funding/Congressionally Directed Spending Assistance Listing Number: 17.280, 17.289 Award Year: 2025 Compliance Requirement: Reporting Type of Finding Compliance Internal Control Over Compliance – Significant Deficiency Criteria or Specific Requirement Uniform Guidance (2 CFR §200.328) and federal award terms for assistance listing numbers 17.280 and 17.289 require recipients to submit accurate financial and performance reports on a quarterly basis, within 45 calendar days following the quarter end. Reports must reflect actual financial activity for the period and agree to the underlying records of the Organization. Condition and Context We tested two quarters of financial and performance reports for each award. For the quarter ending June 30, 2025, the required reports were not submitted within the deadline of 45 calendar days after quarter end for both awards. Additionally, the report submitted for the 17.280 grant for the same quarter did not agree to the underlying accounting records. Cause The Organization did not have effective controls to ensure timely submission of required quarterly reports and did not perform adequate review to reconcile the 17.280 grant report to the accounting records prior to submission. Effect or Potential Effect Untimely submission and lack of reconciliation of reports increases the risk of inaccurate reporting, and constitutes noncompliance with federal requirements. No questioned costs are reported as these issues are administrative in nature. Recommendation The Organization should strengthen internal controls to ensure timely submission of all required financial and performance reports, and implement procedures to verify that reports reconcile to the underlying accounting records prior to submission. Views of Responsible Official Management’s corrective action plan is included at the end of this report after the Schedule of Prior Year Findings.