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.