Finding Text
Reporting Federal Agency: U.S. Department of Labor Federal Program Title: WIOA Cluster (WIOA Adult Program; WIOA Youth Activities; WIOA Dislocated Worker Formula Grants) ALN: 17.258, 17.259, 17.278 Award Identification Number: 23A55AY000015; AA-38542-22-55-A-32; AA-36332-21-55-A-32, 23A55AT000046; 23A55AW000038; 23A55AY000015 Pass-Through Agency: State of Nevada, Department of Employment, Training and Rehabilitation (DETR) Pass-Through Award Number and Period: PY23-A-01-WIOA; PY24-A-01-WIOA; PY23-Y-01-WIOA; PY24-Y- 01-WIOA; PY23-DY-01-GR; PY23-DW-01-WIOA; PY24-DW-01- WIOA (All for the period 4/1/2023 – 6/30/2026) Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria or specific requirement: Pursuant to 2 CFR 200.328, federal financial reports must be accurate, complete, and submitted timely. The Department of Labor requires ETA financial reports to be submitted quarterly with cumulative expenditure information from grant inception through the reporting period. Effective controls over grant reporting are required under 2 CFR 200.303. Condition: Audit procedures included reviewing all quarterly financial reports submitted under the WIOA Cluster during fiscal year 2025. Testing identified that the fourth-quarter fiscal year 2025 financial report submitted to the grantor was an exact duplicate of the third-quarter report. As a result, fourth-quarter expenditures, obligations, and other financial activity were not reported. Management was unable to provide evidence that the report had been independently reviewed prior to submission, and no corrected report had been subsequently filed with the grantor agency. Further inquiry determined that the reporting process lacked procedures requiring reconciliation of reported amounts to accounting records before submission. The condition indicates that reporting controls failed to identify a significant reporting error prior to submission to the awarding agency. Questioned costs: Unknown. Context: The audit reviewed the entire population of four quarterly reports required during fiscal year 2025. One of the four reports reviewed was materially inaccurate and incomplete, representing a reporting error affecting an entire quarter of grant activity. Cause: Management did not maintain effective review controls over grant reporting. Staff turnover and changes in reporting responsibilities contributed to the failure; however, the underlying cause was the absence of a formal reconciliation and review process designed to verify report accuracy prior to submission. Effect: Required federal financial reporting was inaccurate and incomplete. The awarding agency did not receive accurate cumulative financial information necessary to monitor grant performance, funding utilization, and compliance with federal requirements. The condition constitutes material noncompliance with federal reporting requirements. Repeat Finding: No. Recommendation: Management should implement a formal reporting review process requiring reconciliation of all quarterly reports to underlying accounting records prior to submission. Reports should be independently reviewed and approved by a qualified individual and evidence of the review should be retained. Management should also submit any required corrected reports to the granting agency. Views of responsible officials: There is no disagreement with the audit finding. Nevadaworks will strengthen its federal reporting process by implementing a reporting calendar, requiring reconciliation of reports to accounting records before submission, and establishing documented independent review and approval procedures. Any necessary corrected reports will be submitted to the awarding agency.