Finding Text
Condition and Context: During our audit, we noted that YPIC overdrew on its WIOA Adult Program in 2022, resulting in deferred revenue of $195,123. This error was identified in the 2022 audit but not corrected by management or resolved in the correct grant period. As a result, YPIC retained federal funds beyond the period of availability, which is not in compliance with the Uniform Guidance requirements.
Criteria: Per 20 CFR 683.110, funds allocated by the state to the local area under subpart-A sections 128(b) and 133(b), for any program year are available for expenditure only during that program year and the succeeding program year. Funds not expended by a local area in a two-year period must be returned to the state.
Cause and Effect: The cause was an error made in requesting reimbursement. The effect is that YPIC retained federal funds beyond the period of availability, which may require repayment to the state of Arizona.
Recommendation: We recommend that YPIC implement a monthly reconciliation process to align drawdowns with allowable expenditures within the grant period. We also recommend additional training to finance personnel on federal grant compliance requirements.
Management’s Response: See corrective action plan.