Finding 2024-001: Earmarking
Statement of Condition: The Organization did not meet the earmarking requirements for the WIOA Youth services for providing paid and unpaid work experience.
Criteria: Under section 129 of the Workforce Investment Act of 1998 section (A)(4)(c) at least 75 percent of funds allotted for Youth Activities must be used to provide youth workforce investment activities for out-of-school youth. Under section 129 of the Workforce Investment Act of 1998 section (C)(4) not less than 20 percent of Youth Activity funds allocated to the local area must be used to provide paid and unpaid work experience.
Cause: The Organizations did not have proper controls in place to track youth expenditures to ensure that the Organization was meeting the earmarking requirements of the youth program.
Effect of the Condition: The Organization did not meet the required expenditures of the WIOA Youth program for providing paid and unpaid work experience.
Action Taken: Management acknowledges failure to meet WIOA Youth grant earmarking requirements. To rectify stated deficiencies, SCPA Works staff shall continue to enforce the following safeguards (established March of 2024) to ensure future compliance with stated requirements:
• Monthly Spend Rate reviews: following the fiscal close of every month and subsequent to all state reporting deadlines, the SCPA Works Finance Department shall continue to prepare relevant spend rate reports to be shared with leadership staff no later than the conclusion of the subsequent month. The monthly report shall include the grant title, grant budget, categorical year to date cumulative expenditures as reported on the Financial Status Report (FSR), calculated earmark target, and the year-to-date expenditure percentage compared to the calculated earmark target. Leadership staff shall devise any necessary spending plans with applicable vendors and coordinate the need for Corrective Action Plans.
• Priority annual budgeting: SCPA Works leadership staff shall continue to provide contracted vendor annual budgets in excess of required earmark percentages. Specifically, SCPA Works shall require contracted vendor budgets to exceed the value of 20% of all active WIOA Youth grant allotments to be budgeted as Work Experience staffing or participant costs. Actual percentages may vary but a targeted percentage of no less than 30% of all active WIOA Youth grant allotments at the start of the program year shall be required as Work Experience. This safeguard will provide allowance in the event of actual Work Experience expenditure shortfalls.
• Monthly Contracted Vendor forecasting: SCPA Works shall continue to require WIOA Youth grant contracted vendors to submit an annual spending forecast by the 15th calendar day on a monthly basis. The forecast shall list the relevant contract budget amount, the actual year-to-date expenditures, the anticipated expenditures for the remainder of the program year, and the balance of any under or overutilized budgetary funds.
All remedies as detailed above shall continue to be enforced as established as of March 2024.