Finding Text
2023-005 SUBRECIPIENT MONITORING (REPEAT OF PRIOR YEAR FINDING 2022-06)
Federal Program Information:, Federal Agency and Program Name, Federal Assistance Listing Number
U.S. Department of Labor, WIOA Cluster, 17.258/17.259/17.278
Criteria: 2 CFR 200.303 requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).”
Recipients must ensure that commercial organizations that are subrecipients under WIOA Title I and expend more than the minimum level specified in 2 CFR Part 200, Subpart F, have either an organization-wide audit conducted in accordance with 2 CFR Part 200 or a program-specific financial and compliance audit (20 CFR section 683.210).
2 CFR 200.332(b) requires that all pass-through entities must:
Evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraphs (d) and (e) of this section.
Condition: Upon inquiry of management, the Board did not perform any subrecipient monitoring procedures related to the Board’s grant agreement with its subrecipient for the fiscal year ended June 30, 2023.
Questioned Costs: Unknown
Context: Total federal expenditures for the WIOA Cluster were $4,165,604 for the year ended June 30, 2023, which included $1,350,121 of expenditures to subrecipients.
Cause: Although the Board has policies and procedures in place surrounding the subrecipient monitoring compliance requirements, due to staffing issues during the fiscal year and lack of knowledge of all the federal compliance requirements, no subrecipient monitoring was completed.
Effect: The Board is not in compliance with the federal statutes, regulations, and terms and conditions of the federal award.
Recommendation: We recommend that the Board review its policies and procedures for sufficiency and commit the appropriate personnel to subrecipient monitoring to ensure that the Board is in compliance with all federal requirements.
Views of Responsible Officials: We agree with the finding and will take the necessary corrective actions as noted in the corrective action plan attached.