Youth Conservation Corps

FINDING 2021-002 ? NON-COMPLIANCE AND LIMITED CONTROLS OVER SUSPENSION AND DEBARMENT Criteria ? In accordance with 2 CFR 200.213 and 2 CFR part 180 non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred, or otherwise excluded. ?Covered transactions? include contracts for goods and services awarded under a non-procurement transaction that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR section 180.220. The requirement is for non-federal entities to check for suspended and debarred persons before entering covered transactions. In addition, 2 CFR 200.303 requires that ?The 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?? Condition ? The Organization adopted a federal suspension and debarment policy during 2021. However, several vendors in covered transaction were already providing services prior to implementing the new policy, so the Organization did not get a chance to perform the proper suspension and debarment check on SAM.gov for these vendors, prior to engaging them to provide goods and services to the Organization. Questioned Costs ? None, as management subsequently demonstrated that none of the tested vendors involved in covered transactions had been suspended or debarred. Effect ? The Organization did not perform proper suspension and debarment procedures regarding certain vendors of covered transaction prior to obtaining their services. This could have resulted in disallowed costs by the federal grantor. Cause ? The Organization did not have certain written policies, procedures and controls to ensure compliance with the federal suspension and debarment requirements until September 2021. Recommendation ? We recommend that the Organization strengthen procedures and internal controls to ensure that the Uniform Guidance suspension and debarment requirements are met and that support for the dates and results of suspension and debarment checks is retained. Views of Responsible Officials ? We agree with the auditors? finding and the accompanying recommendation that the Organization strengthen procedures and internal controls to ensure that the Uniform Guidance suspension and debarment requirements are met.

FINDING 2020-003 ? LACK OF WRITTEN FISCAL POLICIES AND PROCEDURES (REPEAT FINDING) Criteria ? In accordance with 2 CFR 200.303, ?The 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?? Condition ? The Organization is either lacking or has nonconforming written policies and procedures for the following administrative functions, required by the Uniform Guidance: 1. Payments (Cash Management) - 2 CFR 200.302(b)(6) 2. Allowable Costs - 2 CFR 200.302(b)(7) 3. Competition - 2 CFR 200.319(c) 4. Procurement - 2 CFR 200.318(a) 5. Suspension and Debarment - 2 CFR 200.214 6. Compensation (Personal Services) - 2 CFR 200.430(a)(1) 7. Compensation (Fringe Benefits - Leave) - 2 CFR 200.431(b)(1) 8. Travel Costs - 2 CFR 200.475 9. Record Retention - 2 CFR 200.334 Questioned Costs ? None Effect ? The Organization did not have these fiscal policies and procedures in place to reasonably ensure that program functions are achieved effectively, efficiently and in compliance with Federal statutes, regulations, and the terms and conditions of the award. The Organization was not in compliance with the administrative requirements set forth in the Uniform Guidance. Cause ? The Organization was not aware of the requirement for certain written policies and procedures to describe its internal practices. Recommendation ? We recommend that the Organization design and implement internal control procedures to ensure that the Uniform Guidance administrative requirements are met. Views of Responsible Officials ? We agree with the auditors? finding and the accompanying recommendation that the Organization design and implement internal control procedures to ensure that the Uniform Guidance administrative requirements are met. The 2019 audit that identified this weakness was not completed until November 2020. The 2019 audit was delayed significantly by COVID restrictions as well as a lack of experience with a single audit by our outsourced accounting firm. The Finance Department had drafted policies and procedures that addressed the majority of the weaknesses. However, these policies were not approved the by Board of Directors until early 2021.

FINDING 2020-004 ? LATE GRANT REPORTING AND LIMITED CONTROLS OVER TIMELY REPORTING (REPEAT FINDING) Criteria ? The grant agreement with the DOL specifies that financial reports (ETA-9130) and narrative progress reports are due no later than forty-five calendar days after the end of each specified reporting quarter, specifically March 31, June 30, September 30, and December 31. A final financial report is required to be submitted no later than 90 calendar days after the grant period of performance ends. A closeout report will be submitted during the closeout process. Condition ? We inspected three of the four quarterly reports as well as the closeout report submitted for the major program?s 2020 performance year and found that one of the narrative progress reports (quarter ended March 31, 2020) was submitted seven days late. Questioned Costs ? None Effect ? Delayed reporting affects the grantor?s ability to exercise effective grantee oversight and could result in grantor's withholding of payments and other adverse actions. Cause ? Management oversight. Recommendation ? We recommend that the Organization strengthen its internal controls over reporting to ensure timely submission of all future reports. Views of Responsible Officials ? We agree with the auditors? finding and the accompanying recommendation that the Organization design and implement internal control procedures to ensure the timely submission of all future reports. Significant progress was made on this in 2020. As noted in the finding, only one narrative report was late by seven days.

FINDING 2020-005 ? PAYROLL PROCESS AND RELATED INTERNAL CONTROLS (REPEAT FINDING) Condition ? As noted in finding 2020-002, out of a total of forty transactions tested related to twenty-one employees, the Organization did not maintain proper authorization of the pay rates for two of the tested employees. In addition, on three out of the forty timesheets tested, the allocation of time worked on different programs did not agree to the allocation per the summary worksheet and the general ledger. Criteria ? The Organization must maintain proper documentation of authorized pay rates in employee personnel files. In addition, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Effect ? Payroll and related expenses could be improperly allocated among various grants and other cost centers, resulting in misstatements of expenses and the related revenues for cost reimbursement grants. Cause ? Limited controls over the authorization and allocation of payroll costs. Recommendation ? We recommend that the Organization strengthens its internal controls over payroll to ensure that documentation of properly authorized pay rates is maintained. In addition, controls over the allocation of employees' salaries and wages should be implemented to ensure the allocation is reflective of the actual time spent on each grant and other program or supporting services. Views of Responsible Officials ? We agree with the auditors? finding and the accompanying recommendation that the Organization strengthen its internal controls over payroll to ensure the documentation of properly authorized pay rates is maintained and that the controls over the allocation of employees' salaries and wages should be implemented to ensure the allocation is reflective of the actual time spent on each grant and other program and supporting services.

LACK OF WRITTEN FISCAL POLICIES AND PROCEDURES Criteria ? In accordance with 2 CFR 200.303, ?The 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?? Condition ? When inspecting the results of the latest DOL compliance review, we noted a finding that the Organization lacked written policies and procedures for the following administrative functions, required by the Uniform Guidance: 1. Payments (Cash Management) - 2 CFR 200.302(b)(6) 2. Allowable Costs - 2 CFR 200.302(b)(7) 3. Competition - 2 CFR 200.319(c) 4. Compensation (Personal Services) - 2 CFR 200.430(a)(1) 5. Compensation (Fringe Benefits - Leave) - 2 CFR 200.431(b)(1) 6. Travel Costs - 2 CFR 200.474(a) 7. Record Retention - 2 CFR 200.333 Questioned Costs ? None Effect ? The Organization did not have these fiscal policies and procedures in place to reasonably ensure that program functions are achieved effectively, efficiently and in compliance with Federal statutes, regulations, and the terms and conditions of the award. The Organization was not in compliance with the administrative requirements set forth in the Uniform Guidance. Cause ? The Organization was not aware of the requirement for certain written policies and procedures to describe its internal practices. Recommendation ? We recommend that the Organization design and implement internal control procedures to ensure that the Uniform Guidance administrative requirements are met. Views of Responsible Officials ? We agree with the auditors? finding and the accompanying recommendation that the Organization design and implement internal control procedures to ensure that the Uniform Guidance administrative requirements are met. The outsourcing of the accounting function created some changes in the organization?s prior processes. Revised procedures have been drafted and are under review.

DOCUMENTATION OF AND INTERNAL CONTROLS OVER COMPLIANCE OF MATCHING FUNDS Criteria ? According to the grant agreement, during the grant period of performance and close-out, the Organization will need to provide source documentation and accounting records to show what revenue streams or fund sources were used as matching funds to pay for grant expenses. Further, in accordance with 2.CFR 200.303, the non-Federal entity must ?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. Condition ? The Organization could not provide source documentation or accounting records which tracked the progress toward meeting the DOL 2017-2020 grant award matching funds requirement. Questioned Costs ? None Effect ? The Organization may not meet the matching requirement or could be unable to support its assertion that it had raised and spent such matching funds on allowable grant award activities and costs. This could lead to adverse action by the DOL including the possible return of grant award funds in the amount of the matching fund requirement shortfall. Cause ? Inadequate internal controls over the completeness and accuracy of the source documentation and accounting records to support the progress toward meeting the matching funds requirement reported to DOL quarterly. Recommendation ? We recommend that the Organization implement policies, procedures and internal controls to ensure the completeness and accuracy of the source documentation and accounting records to support the progress toward meeting the matching funds requirement reported to DOL quarterly. Views of Responsible Officials - We agree with the auditors? finding and the accompanying recommendation that the Organization implement policies, procedures and internal controls to ensure the completeness and accuracy of the source documentation and accounting records to support the progress toward meeting the matching funds requirement reported to DOL quarterly.

LACK OF COMPETITIVE PROCUREMENT Criteria ? In accordance with 2 CFR 200.319 (a), ?All procurement transactions must be conducted in a manner providing full and open competition consistent with the standards of this section?? and in accordance with 2 CFR 200.320 (f), ?Procurement by noncompetitive proposals. Procurement by noncompetitive proposals is procurement through solicitation of a proposal from only one source and may be used only when one or more of the following circumstances apply: 1. The item is available only from a single source; 2. The public exigency or emergency for the requirement will not permit a delay resulting from competitive solicitation; 3. The Federal awarding agency or pass-through entity expressly authorizes noncompetitive proposals in response to a written request from the non-Federal entity; or 4. After solicitation of a number of sources, competition is determined inadequate.? Condition ? When inspecting the results of the latest DOL compliance review, we noted a finding that the Organization used sole source procurement to contract for its accounting services. None of the four tests for sole source procurement were met. The expediency of procurement did not eliminate the requirement for competition. The Organization was not in compliance with the procurement requirements set forth in the Uniform Guidance. Questioned Costs ? None Effect ? None of the four tests for sole source procurement were met, thus the Organization was not in compliance with the procurement requirements set forth in the Uniform Guidance. Cause ? Single sourcing occurred because of accounting staff turnover at the Organization and the belief that expediency was required for continuous operations of the fiscal department. Further, the selected contractor allegedly had specialized expertise in fund accounting. Recommendation ? We recommend that the Organization design and implement internal control procedures to ensure that the Uniform Guidance procurement compliance requirements are followed. In light of the Uniform Guidance update, we recommend that the Organization review their policies and procurement thresholds to be more consistent with those in the Uniform Guidance Views of Responsible Officials ? We agree with the auditors? finding and the accompanying recommendation that the Organization design and implement internal control procedures to ensure that the Uniform Guidance procurement compliance requirements are followed. Significant progress was made on this in 2020.

LATE FINANCIAL REPORTING AND LIMITED CONTROLS OVER TIMELY REPORTING (REPEAT FINDING) Criteria ? The grant agreement with the DOL specifies that financial reports (ETA-9130) and narrative progress reports are due no later than forty-five calendar days after the end of each specified reporting quarter, specifically March 31, June 30, September 30, and December 31. A final financial report is required to be submitted no later than 90 calendar days after the grant period of performance ends. A closeout report will be submitted during the closeout process. Condition ? We inspected three of the four quarterly reports submitted for the major program?s 2019 performance year and found that two financial reports, the first and second quarters of 2019 under payment management system document number YB311068C0 were submitted 2 days and 1 day late, respectively. We also inspected the closeout report submitted for the major program?s federal award identification number YB-2780-15-60-A-17 that was submitted more than 90 calendar days after the grant period of performance ended. Questioned Costs ? None Effect ? Delayed reporting affects the grantor?s ability to exercise effective grantee oversight and could result in grantor's withholding of payments and other adverse actions. Cause ? Management oversight. Recommendation ? We recommend that the Organization design and implement internal control procedures to ensure the timely submission of all future reports. Views of Responsible Officials ? We agree with the auditors? finding and the accompanying recommendation that the Organization design and implement internal control procedures to ensure the timely submission of all future reports. Significant progress was made on this in 2020.

PAYROLL PROCESS INTERNAL CONTROLS OVER COMPLIANCE Condition ? Out of a total of 40 transactions tested related to 20 unique employees, the Organization could not provide proper documentation to support the pay rate for 9 of the 20 employees selected. At least 2 out of 40 timesheets provided for certain employees appeared to have been altered with improper formulas, which caused inaccurate allocations of time between programs and 5 out of 40 timesheets were not signed by both the employee and the employee?s supervisor. Criteria ? The Organization must maintain proper documentation of authorized pay rates in employee personnel files, timesheets must use formulas which remain unaltered and properly allocate time between the Organization?s cost centers and be signed by both the employee and the employee?s supervisor. Effect ? The inability to provide satisfactory evidence to substantiate that payroll internal controls are operating effectively could lead to improper allocation of payroll costs and subsequent action by the DOL or other government agencies. Cause ? Inadequate internal controls over the existence, completeness and accuracy of payroll documentation maintained. Recommendation ? We recommend that the Organization implement policies, procedures and internal controls over payroll to ensure the existence, completeness and accuracy of payroll documentation maintained. Views of Responsible Officials ? We agree with the auditors? finding and the accompanying recommendation that the Organization implemented policies, procedures and internal controls over payroll to ensure the existence, completeness and accuracy of payroll documentation maintained. While policies, procedures and internal controls were in place in 2019, they were not followed by finance staff. Revised internal controls were implemented and followed in 2020.

RESPONSES TO DOL FINDINGS Criteria ? As required by 2 CFR section 200.511(a), the Organization is responsible for follow-up and corrective action on all audit findings. Condition ? The Organization has not provided an adequate formal written response with answers to the DOL agency compliance review findings dated September 3, 2019 or to the initial determination letter from the DOL dated March 9, 2020 regarding the prior year audit findings. Questioned Costs ? None Effect ? Delayed reporting affects the grantor?s ability to exercise effective grantee oversight and could result in grantor's withholding of payments and other adverse actions. Cause ? Inadequate internal control over compliance and high turnover. Recommendation ? We recommend that the Organization respond immediately to all previous DOL grantor correspondence and that the Organization designate a responsible official who will ensure that the Organization prepares thorough, accurate and timely responses to all future DOL grantor correspondence. Views of Responsible Officials ? We agree with the auditors? finding and the accompanying recommendation that the Organization respond immediately to all previous DOL grantor correspondence. Responses were sent to DOL in 2020.

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