Heartland Workforce Solutions, Inc.

Finding Number: 2019-001 ?Noncompliance - Allowable Costs/Cost Principles Federal Programs: Workforce Innovation and Opportunity Act Cluster CFDA Numbers: 17.258, 17.259, 17.278 Federal Award Number/Year: PY 18, FY 19 Federal Agency: U.S. Department of Labor Pass-Through Entity: Nebraska Department of Labor Repeat Finding Number: N/A Questioned Costs: $27,041 Statistical Sample: No Criteria: CFR ?200.405 (a) Allocable costs states, that a cost is allocable to a particular Federal award or other cost objective if the goods or services involved are chargeable or assignable to that Federal award or cost objective in accordance with relative benefits received. Condition: Shared delivery cost for a resource room navigator position was charged to WIOA programs as part of the monthly invoice. These costs are allocated and paid by the workforce system partners as part of the shared delivery costs associated with the infrastructure funding agreement. This is based on the budgeted allocation and reconciled to actual costs on a quarterly basis. A reclass of these costs from the WIOA to the partners is made, however this entry was missed resulting in a $27,041 over payment from the WIOA programs. Cause: An error was made during year end closing procedures and an entry to allocate costs was not made prior to the request of federal funds. Effect: Without adequate monitoring and policies, there is an increased risk of loss or misuse of federal funds. Recommendation: We recommend the Organization implement policies and procedures to ensure that all necessary entries are made prior to requesting federal funds. Management?s Response: See Corrective Action Plan.

Heartland Workforce Solutions respectfully submits the following response to the Schedule of Findings and Questioned Costs for the Year Ended June 30, 2019. Finding Number 2019-1-Noncompliance-Allowable Costs/Cost Principles. Condition: Shared delivery costs for a resource room navigator position was charged to the WIOA programs as part of the monthly invoice. These costs are allocated and paid by the workforce system partners as part of the shared delivery cost associated with the funding agreement. This is based on the budgeted allocation and reconciled to actual costs on a quarterly basis. A reclass of these costs from the WIOA to the partners is made, however this entry was missed resulting in a $27,041 over payment from the WIOA programs. Status: As son as the over payment was identified HWS notified the State of Nebraska Department of Labor Controller. HWS worked with the State's accounting department to repay the over payment and correct fund allocations as of June 30, 2019. The full amount was repaid as part of the November 2019 draw down of funds. Corrective Action: Effective immediately HWS as part of their month-end close will make all reclassification entries part of the month end process.