Finding 35940 (2022-002)

Material Weakness
Requirement
A
Questioned Costs
$1
Year
2022
Accepted
2023-09-06
Audit: 27011
Organization: Johnson County, Iowa (IA)
Auditor: Eide Bailly LLP

AI Summary

  • Core Issue: The County failed to maintain effective internal controls over federal awards, leading to disallowed expenditures of $84,000 due to inadequate documentation for costs related to Garcia Professional Services, LLC.
  • Impacted Requirements: Compliance with 2 CFR 200.303(a) and 2 CFR 200.403 was not met, as the contract lacked necessary terms and documentation for allowable costs.
  • Recommended Follow-Up: Implement a robust internal control process to ensure compliance with federal requirements and proper documentation for all expenditures.

Finding Text

U.S. Department of Labor Federal Financial Assistance Listing 17.258/17.259/17.278 WIOA Cluster Activities Allowed or Unallowed Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria ? 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. 2 CFR 200.403 outlines factors affecting the allowability of costs including that these costs ?be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles? and ?be adequately documented?. Condition ? A portion of the County?s expenditures identified as eligible and claimed under the WIOA Cluster program were disallowed by the United States Department of Labor due the lack of appropriate documentation justifying specific costs charged to the program related to one vendor ? Garcia Professional Services, LLC. Also, the local board?s contract entered into with Garcia Professional Solutions, LLC. did not adequately address the required contract terms as follows: 1. Total dollar value of the contract to justify procurement method utilized. 2. Terms for payment to ensure payments are only made for verified services received and adequately documented. 3. Contract provisions stipulated in Appendix II to Part 200 of the Uniform Guidance, including Equal Employment Opportunity, Rights to Inventions Made Under a Contract or Agreement, Debarment and Suspension, and Byrd Anti-Lobbying Amendment. Cause ? The County made payments based on the local board?s contract and did not have an internal control process in place to ensure allowable activities or unallowed requirements were met. Effect ? Ineligible expenditures were reported under the program. Questioned Costs ? The total amount reported that should have been excluded was $84,000. Context/Sampling ? An initial nonstatistical sample of 7 expenditures were selected for testing, which accounted for $384,133 of $1,239,983 program expenditures. There was one error identified for expenditures without adequate documentation related to Garcia Professional Solutions, LLC. It was determined that there were 12 payments to Garcia Professional Solutions, LLC. in the amount of $84,000 that were charged to the program. Repeat Finding from Prior Years ? No. Recommendation ? We recommend the County implement a control process which includes the applicable activities allowable or unallowed requirements. View of Responsible Officials ? Johnson County disagrees with the underlying premises of this finding. The expenditures referred to above were expenditures of the East Central Iowa Workforce Development Board (ECIWDB) and not direct expenses of the County. The ECIWDB contracted with Johnson County to provide fiscal agent services. The ECIWDB then entered into a contract with Garcia Professional Solutions, LLC (?GPS?) to provide administrative support services for the Board. Iowa Workforce Development did not provide adequate guidance to ECIWDB as to the DOL-required terms and the terms of that services contract between ECIWDB and GPS did not contain any standards of documentation which DOL later claimed applied to said contract. The County had no input into the contract between the ECIWDB and GPS, nor was the County a party to said contract. Any alleged deficiencies within that contract between the ECIWDB and GPS are solely the responsibility of the ECIWDB Board and/or Iowa Workforce Development. In our fiscal agent role, the County was obliged to honor payment requests submitted to the Board; in that regard we had to make payments to GPS provided those payment requests were invoiced to ECIWDB consistent with the ECIWDB-GPS contract, which they were.

Categories

Questioned Costs Procurement, Suspension & Debarment Allowable Costs / Cost Principles

Other Findings in this Audit

  • 35938 2022-002
    Material Weakness
  • 35939 2022-003
    Material Weakness
  • 35941 2022-003
    Material Weakness
  • 35942 2022-002
    Material Weakness
  • 35943 2022-003
    Material Weakness
  • 35944 2022-002
    Material Weakness
  • 35945 2022-003
    Material Weakness
  • 612380 2022-002
    Material Weakness
  • 612381 2022-003
    Material Weakness
  • 612382 2022-002
    Material Weakness
  • 612383 2022-003
    Material Weakness
  • 612384 2022-002
    Material Weakness
  • 612385 2022-003
    Material Weakness
  • 612386 2022-002
    Material Weakness
  • 612387 2022-003
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
14.272 National Resilient Disaster Recovery Competition $1.49M
10.557 Special Supplemental Nutrition Program for Women, Infants, and Children $721,682
17.259 Wia Youth Activities $606,289
21.027 Coronavirus State and Local Fiscal Recovery Funds $418,333
17.258 Wia Adult Program $296,822
17.278 Wia Dislocated Worker Formula Grants $278,696
66.475 Gulf of Mexico Program $219,015
93.994 Maternal and Child Health Services Block Grant to the States $216,317
16.575 Crime Victim Assistance $196,248
93.940 Hiv Prevention Activities_health Department Based $192,097
93.217 Family Planning_services $174,763
93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (elc) $173,829
20.205 Highway Planning and Construction $164,279
15.226 Payments in Lieu of Taxes $71,641
93.074 Hospital Preparedness Program (hpp) and Public Health Emergency Preparedness (phep) Aligned Cooperative Agreements $70,118
12.112 Payments to States in Lieu of Real Estate Taxes $62,699
93.778 Medical Assistance Program $61,414
10.561 State Administrative Matching Grants for the Supplemental Nutrition Assistance Program $51,972
93.268 Immunization Cooperative Agreements $44,000
93.354 Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response $33,805
16.738 Edward Byrne Memorial Justice Assistance Grant Program $33,333
21.019 Coronavirus Relief Fund $21,309
20.531 Technical Assistance and Workforce Development $20,664
20.600 State and Community Highway Safety $19,730
93.667 Social Services Block Grant $14,157
93.658 Foster Care_title IV-E $13,872
20.219 Recreational Trails Program $13,605
93.596 Child Care Mandatory and Matching Funds of the Child Care and Development Fund $13,556
93.659 Adoption Assistance $7,592
97.036 Disaster Grants - Public Assistance (presidentially Declared Disasters) $3,862
17.207 Employment Service/wagner-Peyser Funded Activities $3,560
97.039 Hazard Mitigation Grant $2,525
93.472 Title IV-E Prevention and Family Services and Programs (a) $1,850
93.556 Promoting Safe and Stable Families $1,596
93.116 Project Grants and Cooperative Agreements for Tuberculosis Control Programs $1,550
20.509 Formula Grants for Rural Areas and Tribal Transit Program $1,341
93.767 Children's Health Insurance Program $1,075
16.710 Public Safety Partnership and Community Policing Grants $781
21.009 Volunteer Income Tax Assistance (vita) Matching Grant Program $490
93.566 Refugee and Entrant Assistance_state Administered Programs $60