Finding Text
Matching, Level of Effort, and Earmarking 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: For local areas, WIOA earmarking requirements include: not less than 20% of local Youth Activity funds (excluding local administration) must be used for paid and unpaid work experiences (29 USC 3164(c)(4)). Reports used to monitor earmarking must be accurate (2 CFR 200.303). Condition: Management monitors compliance with WIOA earmarking requirements through information reported in quarterly financial and expenditure reports. As described in Finding 2025-006, the fourth-quarter fiscal year 2025 financial report submitted to the granting agency was inaccurate and did not include actual fourth-quarter activity. Because the expenditure reports used to monitor earmarking compliance were incomplete and inaccurate, management was unable to demonstrate compliance with applicable local-area earmarking requirements for fiscal year 2025. In particular, management could not provide reliable support demonstrating that expenditures subject to WIOA earmarking provisions were properly accumulated and monitored throughout the fiscal year for all awards listed above. Questioned costs: Unknown. Context: Our sample represents the entire population. Cause: Controls over expenditure reporting and compliance monitoring did not operate effectively. Deficiencies in quarterly reporting, combined with inadequate reconciliation procedures and staff turnover, resulted in management's inability to maintain accurate information necessary to monitor earmarking compliance throughout the fiscal year. Effect: Nevadaworks could not demonstrate compliance with applicable local-area earmarking requirements. Because the expenditure information necessary to evaluate compliance was incomplete and unreliable, compliance with federal earmarking requirements could not be verified. This represents material noncompliance with WIOA compliance requirements. Repeat Finding: No. Recommendation: Management should establish procedures requiring periodic reconciliation of expenditure reports to the general ledger and independent review of earmarking calculations throughout the year. Compliance with earmarking requirements should be documented and monitored quarterly to ensure potential compliance issues are identified and addressed timely. Views of responsible officials: Nevadaworks will implement a quarterly review process to monitor compliance with applicable WIOA earmarking requirements using reconciled expenditure data and documented compliance reviews prepared in conjunction with quarterly reporting.