Finding Text
Federal agency: U.S. Department of Labor
Federal cluster: Workforce Innovation and Opportunity Act
Program titles: WIOA cluster
CFDA number: 17.258, 17.259, 17.278
Federal Award year: July 1, 2020 through July 31, 2021
Finding Type: Noncompliance
Finding 2021-001, Earmarking Testing, WIOA
Criteria:
Uniform Guidance defines earmarking as requirements that specify the minimum and/or maximum
amount or percentage of the program’s funding that must/may be used for specified activities, including
funds provided to subrecipients. Earmarking may also be specified in relation to the types of participants
covered.
Per the WIOA cluster specific compliance requirements, for Youth Participants, not less than 20% of
Youth Activity funds allocated to the local area, except for the local area expenditures for administration,
must be used to provide paid and unpaid work experiences (Section 129(c)(4)), WIOA, 128 Stat. 1510).
Condition:
Program Year 2019 WIOA Youth program did not meet the required 20% earmarking requirement to
allocate 20% of total Youth Activity funds, except for the local area expenditures for administration,
for paid and unpaid work experiences.
During the audit testing, the Program Year 2019 WIOA program failed to meet the 20%
earmarking requirement. $472,891 was expected to be earmarked for the Youth Activity funds;
however, the actual funds earmarked totaled $343,130.
Questioned Costs: $129,761
Context and Effect:
The issues noted above create the potential for funding to not be renewed for the WIOA grant if
earmarking requirements are not adequately met in accordance with 2 CFR 200.
Cause:
Due to the economic and legal conditions created by COVID-19, EPG’s subrecipients were unable to
meet the 20% earmarking requirement.
Identification as a Repeat Finding, if Applicable: This is a repeat finding.Recommendation:
We recommend EPG implements a more stringent monitoring process to ensure that the
subrecipients are correctly meeting the 20% earmarking requirement per the Compliance Supplement
requirements. We also recommend that EPG trains and/or informs the subrecipients regarding the
proper accounting of expenditures to ensure that all expenditures of Youth Funds meet the
requirements for “paid and unpaid work experiences” can be reported as such.
Responsible Official:
Chief Financial Officer of EPG
Views of Responsible Official and Planned Corrective Action: Management concurs with the audit
finding. See the accompanying management’s plan for corrective action.