EIN: 411344671
UEI: KNJKT6X7S5B5
Audited by: RSM US LLP
Oversight agency: 17 [Department of Labor]
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Data as of September 2, 2026
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on March 31, 2026. Under 2 CFR 200.521(d), a pass-through entity that provided federal funds to this organization for this audit period must issue a management decision on these findings by October 1, 2026 (28 days from today).
What is a management decision? →The Finance Department did not maintain adequate segregation of duties over significant financial processes. Specifically, certain finance personnel have the ability to initiate, process, record, and/or review transactions, including: • Access to the general ledger, including recording transactions and posting journal entries • Access to payroll processing and payroll recordkeeping • Access to checks and the ability to disburse funds • Ability to initiate and transfer funds • Ability to prepare and post journal entries without independent review As a result, there is a lack of effective segregation between authorization, recordkeeping, custody of assets, and review functions. Cause: The lack of segregation of duties is primarily due to limited staffing and insufficient compensating controls to mitigate the risks associated with individuals having access to multiple critical financial functions. Effect: Due to the absence of effective segregation of duties, management override of controls could occur, and errors or fraud—whether intentional or unintentional—could occur and not be prevented or detected in a timely manner. This deficiency represents a material risk to the reliability of the Office’s financial reporting and the safeguarding of assets. Questioned costs: None Context: Costs charged to the federal program are processed through the same financial systems and processes as those used for nonfederal activity. Because federal awards are subject to heightened compliance requirements under the Uniform Guidance, including activities allowed, allowable costs, and period of performance, effective internal controls and appropriate segregation of duties are critical to ensure federal funds are used only for authorized purposes and reported accurately. The concentration of incompatible access within the finance team increases the risk of undetected errors or noncompliance affecting the major federal program. Repeat finding: No Recommendation: We recommend management design and implement controls to ensure adequate segregation of duties over financial reporting. This may include: • Restricting system access so that no individual can both initiate and record transactions or both record transactions and have custody of assets • Establishing independent review and approval of journal entries, payroll processing, and disbursements by an individual without recordkeeping responsibilities • Implementing compensating controls, such as periodic independent reviews, where full segregation is not feasible due to staffing limitations Views of responsible officials of the auditee: The Office concurs with this finding.
Show full finding ▾Hide full finding ▴FINDING 2025-005—Lack of Segregation of Duties Federal program: WIOA Cluster – ALN 17.258, 17.259, and 17.278 Federal award grant numbers: 2033101, 3033100, 4033100, 2033600, 3033600, 4033600, 5033600, 2038001, 3038000, 4038000 – Fiscal Year 2025 Federal agency: U.S. Department of Labor Pass-through entity: Minnesota Department of Employment and Economic Development Criteria: A fundamental principle of internal control is adequate segregation of duties. Proper segregation requires that no individual has responsibility for more than one of the following functions related to financial reporting and asset management: (1) authorization, (2) recordkeeping, (3) custody of assets, and (4) reconciliation and review. Effective internal control over financial reporting requires segregation of these duties to prevent and detect errors or fraud on a timely basis. Condition: The Finance Department did not maintain adequate segregation of duties over significant financial processes. Specifically, certain finance personnel have the ability to initiate, process, record, and/or review transactions, including: • Access to the general ledger, including recording transactions and posting journal entries • Access to payroll processing and payroll recordkeeping • Access to checks and the ability to disburse funds • Ability to initiate and transfer funds • Ability to prepare and post journal entries without independent review As a result, there is a lack of effective segregation between authorization, recordkeeping, custody of assets, and review functions. Cause: The lack of segregation of duties is primarily due to limited staffing and insufficient compensating controls to mitigate the risks associated with individuals having access to multiple critical financial functions. Effect: Due to the absence of effective segregation of duties, management override of controls could occur, and errors or fraud—whether intentional or unintentional—could occur and not be prevented or detected in a timely manner. This deficiency represents a material risk to the reliability of the Office’s financial reporting and the safeguarding of assets. Questioned costs: None Context: Costs charged to the federal program are processed through the same financial systems and processes as those used for nonfederal activity. Because federal awards are subject to heightened compliance requirements under the Uniform Guidance, including activities allowed, allowable costs, and period of performance, effective internal controls and appropriate segregation of duties are critical to ensure federal funds are used only for authorized purposes and reported accurately. The concentration of incompatible access within the finance team increases the risk of undetected errors or noncompliance affecting the major federal program. Repeat finding: No Recommendation: We recommend management design and implement controls to ensure adequate segregation of duties over financial reporting. This may include: • Restricting system access so that no individual can both initiate and record transactions or both record transactions and have custody of assets • Establishing independent review and approval of journal entries, payroll processing, and disbursements by an individual without recordkeeping responsibilities • Implementing compensating controls, such as periodic independent reviews, where full segregation is not feasible due to staffing limitations Views of responsible officials of the auditee: The Office concurs with this finding.
Identifying Number: 2025-005 Finding: Segregation of Duties Corrective Actions Taken or Planned: Due to a reduction of more than 0.75 FTE within the Fiscal Department, compensating controls are being implemented to strengthen oversight and maintain appropriate segregation of duties. These controls include: • Daily financial activity reports reviewed and signed by the Financial Director • Secondary review and approval by the Executive Director when the Financial Director performs or is unable to review the transaction • Periodic independent review of bank reconciliations by the Financial Director on a rotating basis Additionally, the implementation of GovSense (NetSuite) with CBIZ will significantly enhance internal controls by: • Establishing role-based access and system-enforced approval workflows • Providing real-time visibility into financial transactions for management oversight • Maintaining detailed audit trails for all transactions and approvals • Enabling separation of key functions within the system even with limited staffing These system-based controls will serve as critical compensating controls to mitigate risk associated with staffing limitations. Contact Person(s): Randy Lampton – Financial Director Marie Domiano – Executive Director Anticipated Completion Date: July 1, 2026
FAC accepted this audit on March 11, 2025 — management decision was due September 11, 2025.
FAC accepted this audit on March 27, 2024 — management decision was due September 27, 2024.
FAC accepted this audit on February 21, 2023 — management decision was due August 21, 2023.
FAC accepted this audit on February 28, 2022 — management decision was due August 28, 2022.
FAC accepted this audit on November 8, 2020 — management decision was due May 8, 2021.
FAC accepted this audit on January 26, 2020 — management decision was due July 26, 2020.
FAC accepted this audit on January 21, 2019 — management decision was due July 21, 2019.
FAC accepted this audit on March 29, 2018 — management decision was due September 29, 2018.
FAC accepted this audit on November 15, 2016 — management decision was due May 15, 2017.
Data source: This information comes from the Federal Audit Clearinghouse, the official repository of Single Audit data. All data is public domain. Verify this organization's audit history at fac.gov.
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