Finding Text
2022-002 ACTIVITIES ALLOWED OR UNALLOWED
Federal Program Information: Federal Agency and Program Name Federal Assistance Listing Number
U.S. Department of Labor, WIOA Cluster, 17.258/17.259/17.278
Criteria: 2 CFR 200.303 requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).”
2 CFR 200.403(g) states that costs must “Be adequately documented.”
Condition: During our testing of activities allowed or unallowed, it was noted that for six of the 60 items tested, management could not provide adequate supporting documentation for the items selected for testing. Additionally, for 20 of the 60 items tested, management could not provide adequate support that the charges were properly reviewed and approved prior to payment.
Questioned Costs: $202,486 – Assistance Listing #17.258/#17.259/#17.278
Context: Total federal expenditures for the WIOA Cluster were $3,927,799 for the year ended June 30, 2022.
Cause: The Board did not retain adequate documentation to support the charges to the federal program, and did not demonstrate that proper internal controls are in place and operating effectively to ensure that unallowable charges to the federal program do not occur.
Effect: The Board is not in compliance with the federal statutes, regulations, and terms and conditions of the federal award. Additionally, unallowable payments to the federal program may have occurred due to the lack of effective internal controls in place.
Recommendation: We recommend that the Board design and implement controls to ensure that all charges to federal programs are adequately reviewed and approved prior to payment, and that adequate supporting documentation for all federal program charges is maintained.
Views of Responsible Officials: We agree with the finding and will take the necessary corrective actions as noted in the corrective action plan attached.