Finding 569379 (2024-002)

Finding F2024-002 – Untimely Submission and Lack of Formal Approval of Reports (Repeat Finding) Assistance Listing Number: 93.558 Assistance Listing Program Title: 477 Cluster: Temporary Assistance for Needy Families (TANF) Federal Agency: U.S. Department of Labor Pass Through Entity: City of Los Angeles Community Development Department Federal Award Number: 144365-1, 144413-1 Federal Award Year: July 1, 2023 to June 30, 2024 Compliance Requirement: Reporting A. Untimely Submission of Quarterly General Ledger Reconciliation Criteria El Proyecto is required to use the City of Los Angeles (the City) template forms to submit the General Ledger Reconciliation Report to the City by the end of the month following each quarter. Condition In performing reporting compliance testwork of the four (4) quarterly General Ledger Reconciliation Reports selected for testwork, we noted that two (2) reports for the quarter ended December 31, 2023 were not submitted within the required timeframe, as follows: Program Title Contract Number Reporting Quarter Ended Due Date Submission Date Days Late Hire LA's Youth Program - CalWORKs TANF [North Valley] 144365-1 December 2023 January 31, 2024 February 5, 2024 5 Hire LA's Youth Program - CalWORKs TANF [South Valley and North Valley] 144413-1 December 2023 January 31, 2024 February 5, 2024 5 Cause El Proyecto does not have adequate monitoring controls in place to ensure that required reports were submitted to the City within the required timeframe. Effect Late submission of required reports will result in noncompliance with the grant and funding agreement. Questioned Costs Not applicable. Recommendation We recommend that El Proyecto strengthen its controls to ensure compliance with grant reporting requirements, as specified in the award documents. We recommend that El Proyecto develop a tracking schedule for grant report submission due dates, maintain formal documentation of reports submitted, increase management oversight and review procedures, and perform additional staff training, as needed, regarding federal grants reporting requirements. Views of Responsible Officials and Planned Corrective Actions This finding is classified as a repeat finding due to the timing of the audit process. The Single Audit Report for the fiscal year ended September 30, 2023 was issued on June 14, 2024. Therefore, the same grant reporting process was in place during the majority of fiscal year 2024. As a result, El Proyecto did not have a reasonable opportunity to implement corrective actions for the full fiscal year 2024. Nonetheless, El Proyecto acknowledges the finding and has since taken steps to strengthen monitoring measures to prevent recurrence. El Proyecto implemented the above additional monitoring measures on August 31, 2024, to ensure that preparation and the submission of grant expenditure reports by grant staff are submitted in a timely manner. Person Responsible: Yulin Lin Position of Responsible Party: Controller Completion Date: August 31, 2024 B. Lack of Formal Review of the Quarterly General Ledger Reconciliation Reports by Authorized Personnel Criteria In accordance with FMD Directive No. 24–002, El Proyecto must submit to the City the quarterly General Ledger Reconciliation Report by the end of the month following each quarter. A template form provided by the City includes a preparer and reviewer section. In accordance with El Proyecto’s formal policies and procedures, quarterly and monthly reports must be reviewed and approved by one of the following individuals: • Haimanot Fekado, Program Director • Mary Hernandez, Chief Operating Officer • Corinne Sanchez, Chief Executive Officer Condition In performing reporting compliance testwork, of the four (4) quarterly General Ledger Reconciliation Reports selected for testwork, we noted that all four (4) were not properly signed as reviewed and approved by one of the authorized personnel listed above, as follows: Program Title Contract Number Reporting Quarter Ended Hire LA's Youth Program - CalWORKs TANF [North Valley] 144365-1 December 2023 Hire LA's Youth Program - CalWORKs TANF [South Valley and North Valley] 144413-1 December 2023 Hire LA's Youth Program - CalWORKs TANF [North Valley] 144365-1 June 2024 Hire LA's Youth Program - CalWORKs TANF [South Valley and North Valley] 144413-1 June 2024   Cause El Proyecto does not have adequate monitoring controls in place to ensure that reports submitted are properly reviewed and approved by authorized personnel. Effect Lack of formal review and approval may result in errors not being identified and corrected prior to submission to the City. Questioned Costs Not applicable. Recommendation We recommend that El Proyecto strengthen its monitoring controls to ensure that formal policies and procedures for the review and approval of reports are properly adhered to. Views of Responsible Officials and Planned Corrective Actions Refer to part A above.