Community Action Organization of Scioto County, IncNon-Profit

2 CFR 2900.4 gives regulatory effect to the Department of Labor for 2 CFR Subpart F § 200.510(b) which requires the auditee to prepare a Schedule of Expenditures of Federal Awards (the Schedule) for the period covered by the Consortium’s financial statements which must include the total federal awards expended as determined in accordance with § 200.502. At a minimum, the schedule must: (1) List individual Federal programs by Federal agency. (2) For Federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included. (3) Provide total Federal awards expended for each individual Federal program and the AL number or other identifying number when the AL information is not available. (4) Include the total amount provided to subrecipients from each Federal program. (5) For loan or loan guarantee programs described in § 200.502 Basis for determining Federal awards expended, paragraph (b), identify in the notes to the schedule the balances outstanding at the end of the audit period. (6) Include notes that describe the significant accounting policies used in preparing the schedule, and note whether or not the auditee has elected to use the 10 percent de minimis cost rate as covered in § 200.414 Indirect (F&A) costs. The Consortium chose to report their Schedule of Federal Awards on a cash basis. The fiscal agent's accounting system operated on a full accrual basis and the federal schedule that was presented for audit was taken from the CFIS system for tracking federal expenditures for the Ohio Department of Job and Family Services. However, the Consortium was not able to provide support from the accounting system to reconcile the amounts reported on the Schedule to the accounting system. Due to the lack of support for the federal schedule, we were unable to ensure that activity upon which we based our testing of the compliance for major federal programs was complete and therefore we could not obtain the necessary assurances to form an opinion over the major federal programs’ compliance. Noncompliance with grant requirements as well as errors and omissions on the Schedule of Expenditures of Federal Awards could have an adverse effect on future grant awards by the awarding agency in addition to an inaccurate assessment of major federal programs that would be subjected to audit. Management should review all grant and loan award documents in order to execute policies and procedures which help ensure compliance with grant and loan requirements, including Schedule reporting requirements. The Consortium should implement a system to track all federal expenditures and related information separately from other expenditures and report federal expenditures with proper support including, but not limited to, grant agreements, calculation of the expenditures, and any federal reporting requirements. This will help ensure the Consortium is in compliance with grant and loan requirements, the Schedule is complete and accurate, and major federal programs are accurately identified for audit.

2 CFR § 2900.4 gives regulatory effect to the U.S. Department of Labor for 2 CFR § 200.332(a)(3) which requires a pass-through entity to impose any additional requirements on the subrecipient necessary in order for the pass-through entity to meet its own responsibility to the Federal awarding agency including identification of any required financial and performance reports. Additionally, Ohio Admin. Code § 5101:9-7-29(D)(2)(c) requires WIOA local area fiscal agents to submit the completed quarterly financial statement to the Bureau of County Finance and Technical Assistance (BCFTA) no later than the tenth calendar day of the second month following the quarter the report represents. Ohio Admin. Code § 5101:9-7-29(D)(1)(b)(i) further requires the fiscal agent, when reviewing the quarterly financial data, to reconcile any difference between the WIOA local area's financial records and financial data submitted to BCFTA via CFIS. Ohio Admin Code § 5101:9-7-04(E) states in part that as expenditures are incurred, they become accrued expenses and shall be reported as accruals. Ohio Admin Code § 5101:9-7-04(F) provides that the WIOA local area shall maintain documentation in accordance with the records retention requirements in rule 5101:9-9-21 of the Administrative Code. This documentation may be subject to inspection, monitoring, and audit by ODJFS and the Ohio auditor of state. Due to the lack of effect control procedures over reporting, the following issues were noted related to the quarterly submissions: 1. The fiscal agent did not maintain quarterly certification on file for the first and second quarter of calendar year 2023. Copies had to be obtained from CFIS and those copies were not the originals signed by approving authorities. 2. For all submissions, the fiscal agent was unable to provide system reports from their accounting system that reconciled to the actual financial data (i.e. beginning balances, revenues, expenses, ending balances) submitted to BCFTA via CFIS. 3. For all submissions, the fiscal agent was unable to provide any support for the amounts they reported as accruals on the certifications. This could lead to questions regarding accuracy of the amounts reported to the Ohio Department of Job and Family Services. The Consortium should develop and implement procedures to ensure quarterly reports are filed no later than the tenth calendar day of the second month following the quarter the report represents. In addition, all data reported thru these quarterly reports should be supported by the accounting system of the Fiscal Agent.

The Consortium should have established and maintained effective internal control over Federal award expenditures to provide reasonable assurance that the Consortium was managing Federal awards in compliance with Federal statutes, regulations and the terms and conditions of the Federal award. These controls should have included proper approval / authorization of all outgoing payments being made by the fiscal agent on behalf of the Consortium. It appeared the procedure that was supposed to be in place was that both the Director and the Comptroller were to sign off on all invoices prior to payments being made. Due to the lack of controls over expenditures, during testing there was no indication on the invoice that the Director and Comptroller reviewed and approved the expenditures for ten out of the fifteen expenditures tested for the WIOA Cluster. There was also no indication on the invoice that the Director and Comptroller reviewed and approved the expenditures for eight out of the fourteen expenditures tested for the National Emergency Grant. Policies and procedures should be established and implemented to verify that controls over federal expenditures to timely prevent or detect noncompliance are in place and operating effectively. Failure to do so increases the likelihood of unallowable expenditures and material non-compliance with program requirements going undetected. The Director and Comptroller should review and approve each invoice in order to determine that expenditures are in accordance with grant requirements and Federal laws and such approval should be documented on each invoice.

Criteria: Effective internal control contemplates an adequate monitoring of the amounts recorded in the Schedule of Expenditures of Federal Awards to ensure that the schedule is complete and accurate. Condition: The Organization did not property monitor the amounts recorded in the Schedule of Expenditures of Federal Awards as the report was not complete and accurate. Cause: Management oversight. Recommendation: Management should establish a process to ensure that the Schedule of Expenditures of Federal Awards is complete and accurate. Views of Responsible Officials and Planned Corrective Action: See Corrective Action Plan

Criteria: Reports required for each grant agreement should be completed and submitted timely. Condition: Report was not submitted timely for 2 of the 10 reports selected for testing. Report did not agree to the supporting documentation provided for 2 of the 10 reports selected for testing. Report selected for testing was not provided for 8 of the 10 reports selected for testing. Cause: Management oversight and monitoring. Recommendation: Management should review reports prior to their submission and properly store record of the report summitted, supporting documentation and the date the report was submitted. Views of Responsible Officials and Planned Corrective Action: See Corrective Action Plan

2 CFR 2900.4 gives regulatory effect to the Department of Labor for 2 CFR Subpart F § 200.510(b) which requires the auditee to prepare a Schedule of Expenditures of Federal Awards (the Schedule) for the period covered by the Consortium’s financial statements which must include the total federal awards expended as determined in accordance with § 200.502. At a minimum, the schedule must: (1) List individual Federal programs by Federal agency. (2) For Federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included. (3) Provide total Federal awards expended for each individual Federal program and the AL number or other identifying number when the AL information is not available. (4) Include the total amount provided to subrecipients from each Federal program. (5) For loan or loan guarantee programs described in § 200.502 Basis for determining Federal awards expended, paragraph (b), identify in the notes to the schedule the balances outstanding at the end of the audit period. (6) Include notes that describe the significant accounting policies used in preparing the schedule, and note whether or not the auditee has elected to use the 10 percent de minimis cost rate as covered in § 200.414 Indirect (F&A) costs. The Consortium chose to report their Schedule of Federal Awards on a cash basis. The fiscal agent's accounting system operated on a full accrual basis and the federal schedule that was presented for audit was taken from the CFIS system for tracking federal expenditures for the Ohio Department of Job and Family Services. However, the Consortium was not able to provide support from the accounting system to reconcile the amounts reported on the Schedule to the accounting system. Due to the lack of support for the federal schedule, we were unable to ensure that activity upon which we based our testing of the compliance for major federal programs was complete and therefore we could not obtain the necessary assurances to form an opinion over the major federal programs' compliance. Noncompliance with grant requirements as well as errors and omissions on the Schedule of Expenditures of Federal Awards could have an adverse effect on future grant awards by the awarding agency in addition to an inaccurate assessment of major federal programs that would be subjected to audit. Management should review all grant and loan award documents in order to execute policies and procedures which help ensure compliance with grant and loan requirements, including Schedule reporting requirements. The Consortium should implement a system to track all federal expenditures and related information separately from other expenditures and report federal expenditures with proper support including, but not limited to, grant agreements, calculation of the expenditures, and any federal reporting requirements. This will help ensure the Consortium is in compliance with grant and loan requirements, the Schedule is complete and accurate, and major federal programs are accurately identified for audit.

2 CFR § 2900.4 gives regulatory effect to the Department of Labor for 2 CFR § 200 Subpart E which outlines allowable cost principles. 2 CFR § 200.403 provides, in part, that except where otherwise authorized by statute, costs must meet the following criteria to be allowable under Federal awards: Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles and be adequately documented. Due to a lack of internal control over expenditures and documentation, testing of expenditures identified a payment charged twice to the WIOA Cluster accounting system. As such, the second entry for the payment had no invoice support and was not valid. The total amount tested that had no invoice support was $369,757 and was determined to be unallowable. Failure to maintain adequate support documentation for federal expenditures could result in costs being disallowed by the grantor. Policies and procedures over documentation of expenditures should be developed and implemented. Support should be maintained for all expenditures to ensure that each expenditure charged to the program is for an allowable activity/cost. The expenditure amount is in excess of $25,000 and therefore is considered questioned costs under 2 CFR § 200.516. In addition to this issue, we could not determine if the expenditures in total for this program were supported by the accounting system records since we could not reconcile between the accounting system and the federal schedule. See Finding 2022-004 above for this issue in detail.

2 CFR § 2900.4 gives regulatory effect to the Department of Labor for 2 CFR § 200 Subpart E which outlines allowable cost principles. 2 CFR § 200.403 provides, in part, that except where otherwise authorized by statute, costs must meet the following criteria to be allowable under Federal awards: Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles and be adequately documented. We further noted that 20 CFR § 671.140 states the following as allowable activities: (a) National emergency grants may provide adjustment assistance for eligible dislocated workers, described at WIA section 173(c)(2) or (d)(2). (b) Adjustment assistance includes the core, intensive, and training services authorized at WIA sections 134(d) and 173. The scope of services to be provided in a particular project are negotiated between the Department and the grantee, taking into account the needs of the target population covered by the grant. The scope of services may be changed through grant modifications, if necessary. (c) National emergency grants may provide for supportive services to help workers who require such assistance to participate in activities provided for in the grant. Needs-related payments, in support of other employment and training assistance, may be available for the purpose of enabling dislocated workers who are eligible for such payments to participate in programs of training services. Generally, the terms of a grant must be consistent with Local Board policies governing such financial assistance with formula funds (including the payment levels and duration of payments). However, the terms of the grant agreement may diverge from established Local Board policies, in the following instances: (1) If unemployed dislocated workers served by the project are not able to meet the 13 or 8 weeks enrollment in training requirement at WIA section 134(e)(3)(B) because of the lack of formula or emergency grant funds in the State or local area at the time of dislocation, such individuals may be eligible for needs-related payments if they are enrolled in training by the end of the 6th week following the date of the emergency grant award; (2) Trade-impacted workers who are not eligible for trade readjustment assistance under NAFTA-TAA may be eligible for needs-related payments under a national emergency grant if the worker is enrolled in training by the end of the 16th week following layoff; and (3) Under other circumstances as specified in the national emergency grant application guidelines. (d) A national emergency grant to respond to a declared emergency or natural disaster, as defined at § 671.110(e), may provide short-term disaster relief employment for:  Individuals who are temporarily or permanently laid off as a consequence of the disaster;  Dislocated workers; and  Long-term unemployed individuals. (e) Temporary employment assistance is authorized on disaster projects that provide food, clothing, shelter and other humanitarian assistance for disaster victims; and on projects that perform demolition, cleaning, repair, renovation and reconstruction of damaged and destroyed structures, facilities and lands located within the disaster area. For such temporary jobs, each eligible worker is limited to no more than six months of employment for each single disaster. The amounts, duration and other limitations on wages will be negotiated for each grant. (f) Additional requirements that apply to national emergency grants, including natural disaster grants, are contained in the application instructions. Due to a lack of internal control over expenditures and documentation, testing of expenditures identified a payment charged to the NEG Federal Program twice in the accounting system. As such, the second entry for the payment had no invoice support and was not valid. The total amount tested that had no invoice support was $191,416 and was determined to be unallowable. Failure to maintain adequate support documentation for federal expenditures could result in costs being disallowed by the grantor. Policies and procedures over documentation of expenditures should be developed and implemented. Support should be maintained for all expenditures to ensure that each expenditure charged to the program is for an allowable activity/cost. The expenditure amount is in excess of $25,000 and therefore is considered questioned costs under 2 CFR § 200.516. In addition to this issue, we could not determine if the expenditures in total for this program were supported by the accounting system records since we could not reconcile between the accounting system and the federal schedule. See Finding 2022-004 above for this issue in detail.

2 CFR § 2900.4 gives regulatory effect to the U.S. Department of Labor for 2 CFR § 200.332(a)(3) which requires a pass-through entity to impose any additional requirements on the subrecipient necessary in order for the pass-through entity to meet its own responsibility to the Federal awarding agency including identification of any required financial and performance reports. Additionally, Ohio Admin. Code 5101:9-7-29 (D)(2)(c) requires WIOA local area fiscal agents to submit the completed quarterly financial statement to the Bureau of County Finance and Technical Assistance (BCFTA) no later than the tenth calendar day of the second month following the quarter the report represents. Ohio Admin. Code § 5101:9-7-29(D)(1)(b)(i) further requires the fiscal agent, when reviewing the quarterly financial data, to reconcile any difference between the WIOA local area's financial records and financial data submitted to BCFTA via CFIS. Ohio Admin Code § 5101:9-7-04(E) states in part that as expenditures are incurred, they become accrued expenses and shall be reported as accruals. Ohio Admin Code § 5101:9-7-04(F) provides that the WIOA local area shall maintain documentation in accordance with the records retention requirements in rule 5101:9-9-21 of the Administrative Code. This documentation may be subject to inspection, monitoring, and audit by ODJFS and the Ohio auditor of state. Due to the lack of effect control procedures over reporting, the following issues were noted related to the quarterly submissions: 1. The quarterly financial certification for the third quarter of calendar year 2021 was not filed until December 1, 2021, the fourth quarter of calendar year 2021 was not filed until February 14, 2022, the second quarter of calendar year 2022 was not filed until August 12, 2022, the third quarter of calendar year 2022 was not filed until November 16, 2022, the fourth quarter of calendar year 2022 was not filed until February 13, 2023. These were considered late filings. 2. The fiscal agent did not maintain quarterly certification on file for the first quarter of calendar year 2022. Copies had to be obtained from CFIS and those copies were not the originals signed by approving authorities. 3. For all submissions, the fiscal agent was unable to provide system reports from their accounting system that reconciled to the actual financial data (i.e. beginning balances, revenues, expenses, ending balances) submitted to BCFTA via CFIS. 4. For all submissions, the fiscal agent was unable to provide any support for the amounts they reported as accruals on the certifications. 5. The ending balance reported on the quarterly financial certification for the second quarter of calendar year 2022 did not agree to the beginning balance reported for the third quarter of calendar year 2022, the ending balance reported on the quarterly financial certification for the second quarter of calendar year 2021 does not agree to the beginning balance of the third quarter of calendar year 2021, the ending balance reported on the quarterly financial certification for the 4th quarter of calendar year 2021 did not agree to the beginning balance of the first quarter of calendar year 2022. 6. For the fourth quarter of 2021, the month to month beginning and ending balances do not agree. This could lead to questions regarding accuracy of the amounts reported to the Ohio Department of Job and Family Services. The Consortium should develop and implement procedures to ensure quarterly reports are filed no later than the tenth calendar day of the second month following the quarter the report represents. In addition, all data reported thru these quarterly reports should be supported by the accounting system of the Fiscal Agent.

The Consortium should have established and maintained effective internal control over Federal award expenditures to provide reasonable assurance that the Consortium was managing Federal awards in compliance with Federal statutes, regulations and the terms and conditions of the Federal award. These controls should have included proper approval / authorization of all outgoing payments being made by the fiscal agent on behalf of the Consortium. It appeared the procedure that was supposed to be in place was that both the Director and the Comptroller were to sign off on all invoices prior to payments being made. Due to the lack of controls over expenditures, during testing there was no indication on the invoice that the Director and Comptroller reviewed and approved the expenditures for nine out of seventeen expenditures tested for the WIOA Cluster. There was also no indication on the invoice that the Director and Comptroller reviewed and approved the expenditures for eleven out of seventeen expenditures tested for the National Emergency Grant. Policies and procedures should be established and implemented to verify that controls over federal expenditures to timely prevent or detect noncompliance are in place and operating effectively. Failure to do so increases the likelihood of unallowable expenditures and material non-compliance with program requirements going undetected. The Director and Comptroller should review and approve each invoice in order to determine that expenditures are in accordance with grant requirements and Federal laws and such approval should be documented on each invoice.

Finding Reference Number: 2021-002 Criteria: Effective internal control contemplates an adequate monitoring of the amounts recorded in the Schedule of Expenditures of Federal Awards to ensure that schedule is complete and accurate. Condition: The Organization did not property monitor the amounts recorded in the Schedule of Expenditures of Federal Awards as the report was not complete and accurate. Cause: Management oversight. Recommendation: Management should establish a process to ensure that the Schedule of Expenditures of Federal Awards is complete and accurate. Views of Responsible Officials and Planned Corrective Action: See Corrective Action Plan

2 CFR Subpart F § 200.510(b) requires the auditee prepare a Schedule of Expenditures of Federal Awards (the Schedule) for the period covered by the Consortium’s financial statements which must include the total federal awards expended as determined in accordance with § 200.502. At a minimum, the schedule must: (1) List individual Federal programs by Federal agency. (2) For Federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included. (3) Provide total Federal awards expended for each individual Federal program and the AL number or other identifying number when the AL information is not available. (4) Include the total amount provided to subrecipients from each Federal program. (5) For loan or loan guarantee programs described in § 200.502 Basis for determining Federal awards expended, paragraph (b), identify in the notes to the schedule the balances outstanding at the end of the audit period. (6) Include notes that describe the significant accounting policies used in preparing the schedule, and note whether or not the auditee has elected to use the 10 percent de minimis cost rate as covered in § 200.414 Indirect (F&A) costs. The Consortium chose to report their Schedule of Federal Awards on a cash basis. The fiscal agent's accounting system operated on a full accrual basis and the federal schedule that was presented for audit was taken from the CFIS system for tracking federal expenditures for the Ohio Department of Job and Family Services. However, the Consortium was not able to provide support from the accounting system to reconcile the amounts reported on the Schedule to the accounting system. Due to the lack of support for the federal schedule, we were unable to ensure that activity upon which we based our testing of the compliance for major federal programs was complete and therefore we could not pinion over the major federal programs’ compliance. Noncompliance with grant requirements as well as errors and omissions on the Schedule of Expenditures of Federal Awards could have an adverse effect on future grant awards by the awarding agency in addition to an inaccurate assessment of major federal programs that would be subjected to audit. Management should review all grant and loan award documents in order to execute policies and procedures which help ensure compliance with grant requirements, including Schedule reporting requirements. The Consortium should implement a system to track all federal expenditures and related information separately from other expenditures and report federal expenditures with proper support including, but not limited to, grant agreements, calculation of the expenditures, and any federal reporting requirements. This will help

2 CFR § 2900.4 gives regulatory effect to the Department of Labor for 2 CFR § 200 Subpart E which outlines allowable costs principles. This guidance provides that for a cost to be allowable, it must (1) be for a purpose the specific award permits and (2) fall within 2 CFR 200 Subpart E - Cost Principles. WIOA, 128 Stat. 1525 et seq. outlines the various allowable activities for this program. During testing of fiscal year 2021, there were costs charged to the WIOA Cluster that were not supported by invoices. The total amount tested that had no invoice support was $11,484 between 4 different checks. Thus, we could not determine if these costs were allowable or not. Failure to maintain adequate support documentation for federal expenditures could result in costs being disallowed by the grantor. Support should be maintained for all expenditures to ensure that each expenditure charged to the program is for an allowable activity/cost. It is likely that the projected expenditure amount is in excess of $25,000 and therefore is considered questioned costs under 2 CFR § 200.516. In addition to this issue, we could not determine if the expenditures in total for this program were supported by the accounting system records since we could not reconcile between the accounting system and the federal schedule. See Finding 2021-003 above for this issue in detail.

2 CFR § 2900.4 gives regulatory effect to the Department of Labor for 2 CFR § 200 Subpart E which outlines allowable costs principles. This guidance provides that for a cost to be allowable, it must (1) be for a purpose the specific award permits and (2) fall within 2 CFR 200 Subpart E - Cost Principles. We further noted that 20 CFR section 671.140 states the following as allowable activities: (a) National emergency grants may provide adjustment assistance for eligible dislocated workers, described at WIA section 173(c)(2) or (d)(2). (b) Adjustment assistance includes the core, intensive, and training services authorized at WIA sections 134(d) and 173. The scope of services to be provided in a particular project are negotiated between the Department and the grantee, taking into account the needs of the target population covered by the grant. The scope of services may be changed through grant modifications, if necessary. (c) National emergency grants may provide for supportive services to help workers who require such assistance to participate in activities provided for in the grant. Needs-related payments, in support of other employment and training assistance, may be available for the purpose of enabling dislocated workers who are eligible for such payments to participate in programs of training services. Generally, the terms of a grant must be consistent with Local Board policies governing such financial assistance with formula funds (including the payment levels and duration of payments). However, the terms of the grant agreement may diverge from established Local Board policies, in the following instances: (1) If unemployed dislocated workers served by the project are not able to meet the 13 or 8 weeks enrollment in training requirement at WIA section 134(e)(3)(B) because of the lack of formula or emergency grant funds in the State or local area at the time of dislocation, such individuals may be eligible for needs-related payments if they are enrolled in training by the end of the 6th week following the date of the emergency grant award; (2) Trade-impacted workers who are not eligible for trade readjustment assistance under NAFTA-TAA may be eligible for needs-related payments under a national emergency grant if the worker is enrolled in training by the end of the 16th week following layoff; and (3) Under other circumstances as specified in the national emergency grant application guidelines. (d) A national emergency grant to respond to a declared emergency or natural disaster, as defined at § 671.110(e), may provide short-term disaster relief employment for: (1) Individuals who are temporarily or permanently laid off as a consequence of the disaster; (2) Dislocated workers; and (3) Long-term unemployed individuals. (e) Temporary employment assistance is authorized on disaster projects that provide food, clothing, shelter and other humanitarian assistance for disaster victims; and on projects that perform demolition, cleaning, repair, renovation and reconstruction of damaged and destroyed structures, facilities and lands located within the disaster area. For such temporary jobs, each eligible worker is limited to no more than six months of employment for each single disaster. The amounts, duration and other limitations on wages will be negotiated for each grant. (f) Additional requirements that apply to national emergency grants, including natural disaster grants, are contained in the application instructions. During testing of fiscal year 2021, there were costs charged to this grant that were not supported by invoices. The total amount tested that had no invoice support was $14,615 between 7 different checks. Thus, we could not determine if these costs were allowable or not. Failure to maintain adequate support documentation for federal expenditures could result in costs being disallowed by the grantor. Support should be maintained for all expenditures to ensure that each expenditure charged to the program is for an allowable activity/cost. It is likely that the projected expenditure amount is in excess of $25,000 and therefore is considered questioned costs under 2 CFR § 200.516. In addition to this issue, we could not determine if the expenditures in total for this program were supported by the accounting system records since we could not reconcile between the accounting system and the federal schedule. See Finding 2021-003 above for this issue in detail.

2 CFR § 2900.4 gives regulatory effect to the U.S. Department of Labor for 2 CFR § 200.332(a)(3) which requires a pass-through entity to impose any additional requirements on the subrecipient necessary in order for the pass-through entity to meet its own responsibility to the Federal awarding agency including identification of any required financial and performance reports. Additionally, Ohio Admin. Code 5101:9- 7-29 (D)(2)(c) requires WIOA local areas to submit the completed quarterly financial statement to the Bureau of County Finance and Technical Assistance (BCFTA) no later than the tenth calendar day of the second month following the quarter the report represents. Ohio Admin. Code 5101:9-7-29 further requires the fiscal agent to reconcile any difference between the WIOA local area's financial records and financial data submitted to BCFTA via CFIS. The following issues were noted related to the quarterly submissions: 1. The quarterly financial certification for the fourth quarter of calendar year 2018 was not filed until February 13, 2019, the third quarter of calendar year 2020 was not filed until at least November 17, 2020. Both of these were considered late filings. 2. For all submissions in fiscal years 2019, 2020, and 2021, the fiscal agent was unable to provide system reports from their accounting system that reconciled to the actual financial data (i.e. beginning balances, revenues, expenses, ending balances) submitted to BCFTA via CFIS. Instead, for 2019 and 2020, the fiscal agent provided only manually maintained records of undetailed transactions to support the amounts they reported on the financial reports. Then for 2021, they provided nothing to support what was reported. 3. For all submissions in fiscal years 2019, 2020, and 2021, the fiscal agent was unable to provide any support for the amounts they reported as accruals on the certifications. This could lead to questions regarding accuracy of the amounts reported to Ohio Department of Job and Family Services. The Consortium should implement procedures to ensure quarterly reports are filed no later than the tenth calendar day of the second month following the quarter the report represents. In addition, all data reported thru these quarterly reports should be supported by the accounting system of the Fiscal Agent.

2 CFR Subpart F § 200.510(b) requires the auditee prepare a Schedule of Expenditures of Federal Awards (the Schedule) for the period covered by the Consortium’s financial statements which must include the total federal awards expended as determined in accordance with § 200.502. At a minimum, the schedule must: (1) List individual Federal programs by Federal agency. (2) For Federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included. (3) Provide total Federal awards expended for each individual Federal program and the AL number or other identifying number when the AL information is not available. (4) Include the total amount provided to subrecipients from each Federal program. (5) For loan or loan guarantee programs described in § 200.502 Basis for determining Federal awards expended, paragraph (b), identify in the notes to the schedule the balances outstanding at the end of the audit period. (6) Include notes that describe the significant accounting policies used in preparing the schedule, and note whether or not the auditee has elected to use the 10 percent de minimis cost rate as covered in § 200.414 Indirect (F&A) costs. The Consortium chose to report their Schedule of Federal Awards on a cash basis. The fiscal agent's accounting system operated on a full accrual basis and the federal schedule that was presented for audit was taken from the CFIS system for tracking federal expenditures for the Ohio Department of Job and Family Services. However, the Consortium was not able to provide support from the accounting system to reconcile the amounts reported on the Schedule to the accounting system. Due to the lack of support for the federal schedule, we were unable to ensure that activity upon which we based our testing of the compliance for major federal programs was complete and therefore we could not pinion over the major federal programs’ compliance. Noncompliance with grant requirements as well as errors and omissions on the Schedule of Expenditures of Federal Awards could have an adverse effect on future grant awards by the awarding agency in addition to an inaccurate assessment of major federal programs that would be subjected to audit. Management should review all grant and loan award documents in order to execute policies and procedures which help ensure compliance with grant requirements, including Schedule reporting requirements. The Consortium should implement a system to track all federal expenditures and related information separately from other expenditures and report federal expenditures with proper support including, but not limited to, grant agreements, calculation of the expenditures, and any federal reporting requirements. This will help

2 CFR § 2900.4 gives regulatory effect to the U.S. Department of Labor for 2 CFR § 200.332(a)(3) which requires a pass-through entity to impose any additional requirements on the subrecipient necessary in order for the pass-through entity to meet its own responsibility to the Federal awarding agency including identification of any required financial and performance reports. Additionally, Ohio Admin. Code 5101:9- 7-29 (D)(2)(c) requires WIOA local areas to submit the completed quarterly financial statement to the Bureau of County Finance and Technical Assistance (BCFTA) no later than the tenth calendar day of the second month following the quarter the report represents. Ohio Admin. Code 5101:9-7-29 further requires the fiscal agent to reconcile any difference between the WIOA local area's financial records and financial data submitted to BCFTA via CFIS. The following issues were noted related to the quarterly submissions: 1. The quarterly financial certification for the fourth quarter of calendar year 2018 was not filed until February 13, 2019, the third quarter of calendar year 2020 was not filed until at least November 17, 2020. Both of these were considered late filings. 2. For all submissions in fiscal years 2019, 2020, and 2021, the fiscal agent was unable to provide system reports from their accounting system that reconciled to the actual financial data (i.e. beginning balances, revenues, expenses, ending balances) submitted to BCFTA via CFIS. Instead, for 2019 and 2020, the fiscal agent provided only manually maintained records of undetailed transactions to support the amounts they reported on the financial reports. Then for 2021, they provided nothing to support what was reported. 3. For all submissions in fiscal years 2019, 2020, and 2021, the fiscal agent was unable to provide any support for the amounts they reported as accruals on the certifications. This could lead to questions regarding accuracy of the amounts reported to Ohio Department of Job and Family Services. The Consortium should implement procedures to ensure quarterly reports are filed no later than the tenth calendar day of the second month following the quarter the report represents. In addition, all data reported thru these quarterly reports should be supported by the accounting system of the Fiscal Agent.

2 CFR Subpart F § 200.510(b) requires the auditee prepare a Schedule of Expenditures of Federal Awards (the Schedule) for the period covered by the Consortium’s financial statements which must include the total federal awards expended as determined in accordance with § 200.502. At a minimum, the schedule must: (1) List individual Federal programs by Federal agency. (2) For Federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included. (3) Provide total Federal awards expended for each individual Federal program and the AL number or other identifying number when the AL information is not available. (4) Include the total amount provided to subrecipients from each Federal program. (5) For loan or loan guarantee programs described in § 200.502 Basis for determining Federal awards expended, paragraph (b), identify in the notes to the schedule the balances outstanding at the end of the audit period. (6) Include notes that describe the significant accounting policies used in preparing the schedule, and note whether or not the auditee has elected to use the 10 percent de minimis cost rate as covered in § 200.414 Indirect (F&A) costs. The Consortium chose to report their Schedule of Federal Awards on a cash basis. The fiscal agent's accounting system operated on a full accrual basis and the federal schedule that was presented for audit was taken from the CFIS system for tracking federal expenditures for the Ohio Department of Job and Family Services. However, the Consortium was not able to provide support from the accounting system to reconcile the amounts reported on the Schedule to the accounting system. Due to the lack of support for the federal schedule, we were unable to ensure that activity upon which we based our testing of the compliance for major federal programs was complete and therefore we could not pinion over the major federal programs’ compliance. Noncompliance with grant requirements as well as errors and omissions on the Schedule of Expenditures of Federal Awards could have an adverse effect on future grant awards by the awarding agency in addition to an inaccurate assessment of major federal programs that would be subjected to audit. Management should review all grant and loan award documents in order to execute policies and procedures which help ensure compliance with grant requirements, including Schedule reporting requirements. The Consortium should implement a system to track all federal expenditures and related information separately from other expenditures and report federal expenditures with proper support including, but not limited to, grant agreements, calculation of the expenditures, and any federal reporting requirements. This will help

2 CFR § 2900.4 gives regulatory effect to the U.S. Department of Labor for 2 CFR § 200.332(a)(3) which requires a pass-through entity to impose any additional requirements on the subrecipient necessary in order for the pass-through entity to meet its own responsibility to the Federal awarding agency including identification of any required financial and performance reports. Additionally, Ohio Admin. Code 5101:9- 7-29 (D)(2)(c) requires WIOA local areas to submit the completed quarterly financial statement to the Bureau of County Finance and Technical Assistance (BCFTA) no later than the tenth calendar day of the second month following the quarter the report represents. Ohio Admin. Code 5101:9-7-29 further requires the fiscal agent to reconcile any difference between the WIOA local area's financial records and financial data submitted to BCFTA via CFIS. The following issues were noted related to the quarterly submissions: 1. The quarterly financial certification for the fourth quarter of calendar year 2018 was not filed until February 13, 2019, the third quarter of calendar year 2020 was not filed until at least November 17, 2020. Both of these were considered late filings. 2. For all submissions in fiscal years 2019, 2020, and 2021, the fiscal agent was unable to provide system reports from their accounting system that reconciled to the actual financial data (i.e. beginning balances, revenues, expenses, ending balances) submitted to BCFTA via CFIS. Instead, for 2019 and 2020, the fiscal agent provided only manually maintained records of undetailed transactions to support the amounts they reported on the financial reports. Then for 2021, they provided nothing to support what was reported. 3. For all submissions in fiscal years 2019, 2020, and 2021, the fiscal agent was unable to provide any support for the amounts they reported as accruals on the certifications. This could lead to questions regarding accuracy of the amounts reported to Ohio Department of Job and Family Services. The Consortium should implement procedures to ensure quarterly reports are filed no later than the tenth calendar day of the second month following the quarter the report represents. In addition, all data reported thru these quarterly reports should be supported by the accounting system of the Fiscal Agent.