Finding Text
Information on the federal program:
Federal Agency: Department of Labor
Pass-Through Entity: Indiana Department of Workforce Development
Federal Program: WIOA
Assistance Listing Number: 17.258, 17.259, 17.278
Compliance Requirement: Subrecipient Monitoring
Audit Findings: Material Weakness, Noncompliance
Criteria: Title 2 Subtitle A Chapter II Part 200 Subpart D, Section 200.331 and 200.332, establishes requirements that pass-through entities must adhere to in regard to their subrecipient grant agreements and the monitoring processes of those subrecipients.
Condition: Through our auditing procedures on subrecipient monitoring compliance requirements, we noted that there was missing award information in the subrecipient contracts that are required per Section 200.332 (a)(1) federal award identification. These missing pieces of information included Federal award identification such as:
1. Subrecipient’s unique identifier
2. Federal award identification number
3. Federal award date
4. Subaward period of performance start and end date
5. Assistance Listings numbers
6. Indirect cost rate for Federal award er CFA subsection 200.414
In addition, EmployIndy does not clearly distinguish within the agreement that the recipient of funding is either a “subrecipient” or a “contractor.”
Cause: EmployIndy does not have an effective system of internal controls in place to effectively structure and review WIOA subaward agreements. Management uses their standard contractual agreement template.
Effect: Due to lack of required information being present within the contracts and the contracts not clearly identifying between a subrecipient and a contractor, there could be noncompliance issues in how the funds are spent and recorded by the subrecipient, which could lead to noncompliance issues for EmployIndy and its subrecipients.
Questioned costs: There are no questioned costs.
Context: Subrecipients represented approximately 31%, $1,908,226, of the total award, $6,137,136. The condition reported was prevalent across each subrecipient participating in the award.
Identification as a repeat finding, if applicable: Not a repeat finding for WIOA; an Entity wide repeat finding for Federal awards
Recommendation: We recommend that EmployIndy rework their contract agreements to clearly distinguish between subrecipients and contractors. EmployIndy should also review Title 2 Subtitle A Chapter II Part 200 Subpart D and ensure their contracts with subrecipients include all of the required information. Management should review their subrecipient monitoring and management policies for subcontractor and contractor determinations, federal award identification, and subrecipient risk assessment and monitoring procedures for each unique federal award.
Views of responsible officials and planned corrective actions: Management acknowledges the finding. See management’s corrective action plan attached to this audit report.