Finding 526749 (2024-005)

Department of Labor Federal Financial Assistance Listing #17.270, YF-38599-22-60-A-19, 7/1/2023 – 6/30/2024 Reentry Employment Opportunities Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 CFR 200.303(a) states 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 the terms and conditions of the federal award. 2 CFR 200.328 requires the auditee to submit financial reports as required by the federal award. Section 12.l. of the grant agreement requires quarterly financial reports on the ETA-9130 Financial Report which notes all financial data is required to be reported cumulative from grant inception, through the end of each reporting period. Expenditure data is required to be reported on an accrual basis. Condition: We identified that the 9130 financial reports were completed on the cash basis of accounting and were completed as of the date the report was submitted and not based on the specified quarterly reporting period. Additionally, documentation was not retained to support the numbers reported and there was no documented review or approval over the 9130 quarterly reports. Cause: Documentation was not retained to support the amounts being reported on the 9130 quarterly reports. Additionally, there was no documented review and approval. Effect: Without retaining documentation to support the amounts reported and to support oversight over the reporting process, demonstrating that the program complies with laws, regulations, and other compliance requirements is difficult. Questioned Costs: None reported. Context: In a statistical sample of four quarters, two quarters were selected for testing. Repeat Finding from Prior Year: No Recommendation: We recommend that management review the grant reporting requirements to ensure and understanding of the required reporting information. In addition, we suggest the Organization’s internal control procedures be reviewed and updated to include steps to retain the documentation which supports the information being reported to the federal government. Those procedures should also incorporate documentation of the review and approval of the quarterly reports prior to submission. Views of Responsible Officials: Management is in agreement.