Finding Text
2023-101
Cluster name: WIOA Cluster
Assistance Listings numbers and names: 17.258 WIOA Adult Program
17.259 WIOA Youth Activities
17.278 WIOA Dislocated Worker Formula Grants
Award number and years: Dl21-002288 A1, April 1, 2021 through June 30, 2023
Federal agency: U.S. Department of Labor
Pass-through grantor: Arizona Department of Economic Security
Compliance requirement: Earmarking
Questioned costs: $116,512
Condition—Contrary to federal regulation, the County’s Workforce Development Department (Department) failed to ensure that it spent the required 75 percent, or $305,536, of WIOA Youth Activities monies earmarked to provide services to out-of-school youth from April 2021 through June 2023. Instead, the Department spent only 46 percent, or $189,024, of the required 75 percent and spent the remaining 29 percent, or $116,512, to provide services to in-school youth, which was an allowable activity because it did not meet the earmarking requirements.
Effect—County out-of-school youth did not receive $116,512 in services that the federal program intended.
Cause—The Department used a tracking mechanism to report its in-school youth and out-of-school youth spending throughout the fiscal year but did not have written policies and procedures requiring it to properly monitor and adjust its spending to provide in-school and out-of-school youth services to ensure earmarking requirements are met during the fiscal year and throughout the award period. While the Department submitted a waiver to the pass-through grantor to modify the earmarking ratio to address the demographic constraints experienced by the County, the Department lacked sufficient time to implement prior-year audit recommendations during fiscal year 2023 due to the County’s fiscal year 2022 single audit report not being issued until September 29, 2023, nearly 3 months after the end of the County’s 2023 fiscal year-end.
Criteria—Federal regulation requires the Department to earmark and spend no less than 75 percent of its WIOA Youth Activities monies on out-of-school youth services. Additionally, federal regulation also requires the Department to monitor such expenditures and report them to the pass-through grantor monthly throughout the award period to ensure it is spending the monies in a timely manner to meet the earmarking requirement (20 CFR §681.410). Also, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303).
Recommendations—The Department should:
1. Spend no less than the required 75 percent of its WIOA Youth Activities monies to provide out-of-school youth services.
2. Develop written policies and procedures for its WIOA Youth Activities program to:
a. Work with the pass-through grantor to develop an effective strategy to recruit and retain qualified out-of-school youth who will benefit from program services.
b. Monitor its out-of-school services spending throughout the fiscal year and award period.
c. Adjust spending to meet the earmarking requirement if out-of-school youth participation is lower than expected.
The County’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.
This finding is similar to prior-year finding 2022-101 and was initially reported in fiscal year 2022.