Finding Text
Assistance Listing Number, Federal Agency, and Program Name - ALN 17.207 Employment Services Cluster, ALN 17.258, 17.259, and 17.278 WIOA Cluster Federal Award Identification Number and Year - Wagner Peyser ES -MWSC Operations, AY 20 WIOA Adult Pass-through Entity - Michigan Department of Labor and Economic Opportunity - Workforce Development Agency Finding Type - Significant deficiency Repeat Finding - No Criteria - An auditee must prepare appropriate financial statements, including the schedule of expenditures of federal awards (the "Schedule"), as required by 2 CFR 200.508. The Schedule should be for the period covered by the auditee's financial statements, which must include the total federal awards expended. Condition - The controls in place were not adequate to ensure the Schedule was complete and accurate. Questioned Costs - Not applicable Identification of How Questioned Costs Were Computed - Not applicable Context - The original Schedule provided for audit did not reconcile to the general ledger and changed by approximately $480,000 between the original and final version. The most significant changes impacted the WIOA cluster and TANF federal programs. Cause and Effect - An accurate Schedule is a necessary component of major program selection. Without proper processes and controls to determine the completeness and accuracy of the Schedule, DESC risks noncompliance with federal requirements. Recommendation - DESC should perform a thorough review of the Schedule and ensure it reconciles to the underlying general ledger prior to the onset of the audit. Views of Responsible Officials and Planned Corrective Actions - DESC has replaced members and expanded the number of members on the fiscal/accounting team, including an experienced accounting manager and senior accountant, and implemented a training program to ensure all fiscal/accounting team members are aware of and understands their duties and responsibilities as related to the reconciliation of the grants in their portfolio, which is the basis for the creation of the Schedule. Additionally, audit procedures are being put in place to ensure that the Schedule is created and reviewed, at minimum, on a semiannual basis.