Finding Text
Finding 2022-003: Internal Controls related to Compliance with Grant Agreement. Information on the federal program: Assistance Listing Number 17.268 - H1-B Job Training Grant, U.S. Department of Labor, Employment Training Administration. Award number: HG-34352-20-60-A-53. Compliance requirements: Allowable Costs/Cost Principles, Reporting. Type of finding: Material Weakness. Condition: AJAC did not have appropriate internal control policies and procedures to ensure compliance with grant and contract requirements. Effect or potential effect: Findings of noncompliance and inaccuracies and delays in reporting of accounting information. Cause: This condition was the result of lack of oversight and improper policies and procedures. Criteria: Uniform Guidance 2 CFR 200.303 requires that all non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the organization is managing the federal awards. Context: AJAC did not have appropriate internal control policies and procedures to ensure compliance with grants and contracts, including in the areas of: 1) priority service to veterans, 2) project modification process, 3) formal procurement standards, 4) records management, 5) personnel policies, 6) financial reporting, 7) cash management, 8) match policies, 9) cost allocation, and 10) formal audit and audit resolution systems. Questioned costs: None. Recommendations: We recommend management review AJAC’s current policies and procedures to ensure compliance. We recommend that management provide regular monitoring and oversight of the internal control policies and procedures of the organization. Views of the responsible officials and planned corrective actions: Internal control policies and procedures were updated in order to address this finding. All policies and procedures related to federal grant agreement compliance will be reviewed and updated on an annual basis by AJAC Directors and Supervisors.