Finding 522325 (2024-001)

Significant Deficiency

Requirement

Questioned Costs

Year

2024

Accepted

2025-02-07

Audit: 341590

Organization: Alliance for Strategic Growth, Inc. (IN)

Auditor: Wipfli LLP

AI Summary

Core Issue: The Organization failed to allocate indirect expenses to all programs, specifically missing allocations for the Youthbuild grant.
Impacted Requirements: This non-compliance with the cost allocation plan and indirect cost rate agreement affects grant funding from the Department of Labor.
Recommended Follow-Up: Implement systems to ensure proper allocation of indirect expenses to all benefitting programs as per the established agreements.

Finding Text

Finding Number: 2024 001 Cost Allocation Repeat Finding: No Known or Likely Questioned Costs: None reportable Funding Agency: Department of Labor Title: WIOA Cluster AL Numbers: 17.258, 17.259 & 17.278 Grant Numbers and Award Years: WIOA2206 07/01/22 – 06/30/24 WIOA2306 07/01/23 – 06/30/25 BC2306 07/01/23 – 06/30/24 RR2206 04/01/23 – 10/31/23 RR2406 03/01/24 – 03/01/25 PSG2206 08/01/22 – 12/31/23 Condition: During the year ended June 30, 2024, the Organization did not allocate indirect expenses to all programs that benefitted from such expenses in accordance with its cost allocation plan and negotiated indirect cost rate agreement. There were no indirect expenses allocated to the Organization’s Youthbuild grant during the year. Criteria: Indirect costs are those that have been incurred for common or joint objectives that cannot be readily identified with a particular grant or program. These costs must be allocated to all benefitting programs in accordance with the negotiated indirect cost rate agreement and the Organization’s cost allocation plan. Cause: The Organization did not properly implement its provisional indirect cost rate agreement that was approved by the U.S. Department of Labor. Effect: The Organization was not in compliance with the allowable cost requirements of its grant awards. The impact of this condition on the amount of indirect expenses charged to each federal award is not material to program compliance, but a significant deficiency and non-material non-compliance exists. Recommendations: We recommend the Organization implement systems to properly allocate its indirect expenses to all benefitting programs in accordance with its indirect cost rate agreement and cost allocation plan. View of Responsible Officials: Management agrees with the finding and has committed to a corrective action plan.

Corrective Action Plan

Corrective Action Plan for Current Year Finding Alliance for Strategic Growth, Inc. submits the following corrective action plan for the identified finding for the audit period July 1, 2023 through June 30, 2024. Finding 2024-001: Cost Allocation During the year ended June 30, 2024, the organization did not allocate indirect expenses to all programs that benefitted from such expenses in accordance with its cost allocation plan and negotiated indirect cost rate agreement. Objective: To ensure compliance with the allowable cost requirements of grant awards by properly allocating indirect expenses to all benefiting programs in accordance with the negotiated indirect cost rate agreement and the organization's cost allocation plan. Corrective Action: Step 1: Implement Allocation System • • Responsible Party: Vice President (VP) of Fiscal Services • • Timeline: By January 31, 2025 • • Details: Implemented a cost allocation system to properly allocate its indirect expenses to all programs following its indirect cost rate agreement and cost allocation plan. Step 2: Monitor and Review • • Responsible Party: Chief Executive Officer (CEO), Chief Administrative Officer (CAO), and VP of Fiscal Services • • Timeline: Ongoing, with regular reviews • • Details: Establish a regular review process to monitor the pooled expense accounts and cost allocation to ensure the costs are properly allocated to all programs. Step 3: Report and Document • • Responsible Party: VP of Fiscal Services • • Timeline: Ongoing, with regular reports • • Details: Document all steps taken to address the finding process. Prepare quarterly reports on the status of indirect cost allocation, maintain records of the allocation, and present them to CEO and CAO. Expected Outcomes: • • Full compliance with the allowable cost requirements of grant awards. • • Accurate and equitable allocation of indirect expenses to all benefiting programs. • • Improved internal controls and accountability. _________________________________ Shauna Jester, VP of Fiscal Services

Other Findings in this Audit

522326 2024-001

Significant Deficiency
522327 2024-001

Significant Deficiency
1098767 2024-001

Significant Deficiency
1098768 2024-001

Significant Deficiency
1098769 2024-001

Significant Deficiency

Programs in Audit

ALN	Program Name	Expenditures
17.278	Wia Dislocated Worker Formula Grants	$675,077
17.259	Wia Youth Activities	$622,407
17.258	Wia Adult Program	$613,466
17.274	Youthbuild	$379,997
17.225	Unemployment Insurance	$211,380
93.558	Temporary Assistance for Needy Families	$157,040
84.126	Rehabilitation Services_vocational Rehabilitation Grants to States	$89,440
17.285	Apprenticeship USA Grants	$54,564
17.277	Workforce Investment Act (wia) National Emergency Grants	$43,128
17.268	H-1b Job Training Grants	$40,571