Finding Text
ASSISTANCE LISTING 11.307 - ECONOMIC ADJUSTMENT ASSISTANCE DIRECT AWARD FROM U.S. DEPARTMENT OF COMMERCE GRANT AWARD NUMBERS: 08-79-05298; 113048 FINDING NO. 2022-001: NON-COMPLIANCE AND SIGNIFICANT DEFICIENCY IN INTERNAL CONTROL OVER NONCOMPLIANCE WITH REPORTING REQUIREMENTS Condition: SER-Jobs did not submit its quarterly program progress reports and semi-annual financial report (SF-425) within the timelines specified in the criteria section below. For instance, quarterly program progress reports for the quarters ended December 2021 and June 2022 were submitted on March 1, 2022, and September 13, 2022, respectively, whereas the semi-annual financial report (SF-425) for the period ended September 30, 2021 was submitted on November 11, 2021. Criteria: Per the terms and conditions of the grant agreement, quarterly program progress reports and semi-annual financial report (SF-425) are required to be submitted within 30 days of the end of each quarter or semi-annual period, as applicable. Cause: Management executed the grant agreement in October 2019 but first utilized other funding sources in the initial years to fund construction activities for the workforce training center for which Economic Adjustment Assistance (EAA) grant was awarded. The third-party project manager hired by management to prepare all reports was entirely focused on providing all required reports to those other funding sources. Per management, project staff turnover at the grantor agency due to the COVID-19 pandemic also created difficulties to maintain contact during this period. As funding from the EAA was used for construction activities, in later part of 2021 fiscal year, management became more focused on provision of reports required under the grant agreement. Perspective Information: For testing reporting compliance, we selected two (2) quarterly program progress reports out of the four (4) quarterly reports that were submitted during the fiscal year 2022. A single semi-annual report was due in fiscal year 2022. Questioned Costs: None noted. Effect or Potential Effect: SER-Jobs is not in compliance with the terms and conditions of the grant award document. Identification of Repeat Finding: Not applicable since this is a new finding. Recommendation: We recommend that SER-Jobs strengthen its oversight over preparation and submission of the required reports under EAA grant agreement and establish adequate procedures to ensure timely submission of all reports within the expected timelines specified in the grant agreement. Views of Responsible Officials: Management does not disagree with this finding. See management?s corrective action plan on page 33.