Eastern Area Workforce Development Board

2023-003 (2021-003) LATE FILING OF THE SINGLE AUDIT REPORTING PACKAGE WITH THE FEDERAL AUDIT CLEARINGHOUSE (Significant Deficiency and Non-compliance) Funding agency: U.S. Department of Labor Federal Program Title and Assistance Listing Number: WIA/WIOA Adult Program 17.258 WIA/WIOA Youth Activities 17.259 WIA/WIOA Dislocated Worker Formula Grant 17.278 Type of Finding: Significant Deficiency and Non-compliance) Compliance Area: Reporting Question Costs: None Condition EAWDB did not submit their Single Audit reporting package (financial statements, data collectionform, and corrective action plan) within the required time period. Management's Progress in 2023: The Board did not make progress towards resolving this prior year finding. Criteria 2 CFR 200.512 stipulates the requirement that the Single Audit reporting package must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. Effect Late reporting could cause additional oversight or restriction by certain State entities, including the Board's direct oversight entity (New Mexico Department of Workforce Solutions). Cause Due to turnover, internal controls were not properly designed, executed, and monitored to ensure a timely preparation of reports and records for audit purposes. As a result, management did not comply with the submission requirements of 2 CFR 200.512.

2022-003 (2021-003) LATE FILING OF THE SINGLE AUDIT REPORTING PACKAGE WITH THE FEDERAL AUDIT CLEARINGHOUSE (Significant Deficiency and Non-compliance) - Repeated Federal Program Information Title: WIA/WIOA Cluster Agency: U.S. Department of Labor Pass Through: New Mexico Department of Workforce Solutions Assistance Listings Number: 17.258, 17.259, 17.277, and 17.278 Condition EAWDB did not submit their Single Audit reporting package (financial statements, data collection form, and corrective action plan) within the required time period. Management’s Progress in 2022: The Board did not make progress towards resolving this prior year finding. Criteria 2 CFR 200.512 stipulates the requirement that the Single Audit reporting package must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. Effect Late reporting could cause additional oversight or restriction by certain State entities, including the Board’s direct oversight entity (New Mexico Department of Workforce Solutions). Cause Due to turnover, internal controls were not properly designed, executed, and monitored to ensure a timely preparation of reports and records for audit purposes. As a result, management did not comply with the submission requirements of 2 CFR 200.512.

LATE FILING OF THE SINGLE AUDIT REPORTING PACKAGE WITH THE FEDERAL AUDIT CLEARNINGHOUSE (Significant Deficiency and Non-compliance) Federal Program Information Title: WIA/WIOA Cluster Agency: U.S. Department of Labor Pass Through: New Mexico Department of Workforce Solutions Assistance Listings Number: 17.258, 17.259, 17,278 Condition EAWDB did not submit their Single Audit reporting package (financial statements, data collection form, and corrective action plan) within the required time period. Criteria 2 CFR 200.512 stipulates the requirement that the Single Audit reporting package must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. Effect Late reporting could cause additional oversight or restriction by certain State entities, including the Board?s direct oversight entity (New Mexico Department of Workforce Solutions). Cause Due to turnover, internal controls were not properly designed, executed, and monitored to ensure a timely preparation of reports and records for audit purposes. As a result, management did not comply with the submission requirements of 2 CFR 200.512. Recommendation We recommend that management enhance its internal control structure, including financial close and reporting, to ensure timely filing of future Single Audit reporting packages. Management Response Corrective Action: The EAWDB agrees that the single audit reporting package has not been submitted in a timely manner. The EAWDB has engaged a third-party accounting firm and made staff duty changes to address the timely submission of accounting information. The following corrective action plan will be implemented: We will submit the June 30, 2021 reporting package within one week of release of the financial statements by the New Mexico Office of the State Auditor. For the June 30, 2022 audit, we will ensure that we have appropriate resources to complete the data collection form by March 31, 2023. Due Date of Completion: December 31, 2022 Responsible Party(ies): Operations Manager

2019-004 PROCUREMENT AND PURCHASING TYPE OF FINDING: Significant Deficiency and Non-compliance Federal Program Information: Title: WIA/WIOA Cluster Funding Agency: U.S. Department of Labor Pass-Through Entity: New Mexico Department of Workforce Solutions CFDA Numbers: 17.258, 17.259, 17.278 Award Year: Federal Program Year 2017 and 2018 Questioned Costs: None CONDITION We selected forty-five expenditures to test for both controls and compliance under Uniform Grant Guidance; forty items with a value under $10,000 and five items above $10,000. We noted the following deficiencies: Purchase orders did not exist for most purchases reviewed. In three instances, purchases were made with a vendor-provided professional services contract where an internally-generated professional services contract should have been used in order to ensure compliance with federal and state compliance requirements. In each case, the vendor?s contract was the only contract executed. The vendor?s contract did not include federal and state compliance requirements. In two instances, management failed to obtain quotes for services, and did not have written documentation in order to support the assertion that the Board received the most advantageous pricing. These two purchases amounted to $37,393. CRITERIA Per the Board Financial Policy and Procedures for Payments and Disbursements, a purchase order must be completed to procure goods and or services. Preparing a Board initiated contract for professional services could ensure compliance with federal and state statutes. According to the NMSA 1978, Section 13-1-30, expenditures of federal funds must be done in accordance with federal laws and regulations. Per 2 CFR 200.218, the Board must maintain oversight in accordance with terms, conditions, and specifications of their contracts or purchase orders. In addition, the Board must maintain records to detail the history of procurement. These documents include the rationale for the method of procurement and the basis for the contract price. Per 2 CFR 200.213 suspension and debarment needs to be reviewed and documented. EFFECT The Board is not in compliance with the federal guidance for purchasing. The Board may have not obtained the best price for the goods and services received during the year. CAUSE The Board does not use purchase orders unless requested by the vendor. The Board did not always document the written determinations as to how the vendors were selected. The Board does not use an internally created professional service contract for purchases of services to ensure compliance with state and federal statutes. RECOMMENDATION The EAWDB should ensure that purchasing is done in compliance with Board Policy and federal and state statutes. The Board should update the policies related to current federal procurement requirements as certain language and procurement thresholds have recently been revised. MANAGEMENT?S RESPONSE Corrective Action: The EAWDB has been working to implement a new Purchase Order procedure, including updated policies and procedures to ensure the policy is met and will continue to work toward full implementation by April 1, 2020. The two procurements totaling $37,393 include an invoice for rooms, facility rental, and banquet services for a week-long training for the entire area staff averaging 60 people per day. While best pricing was an important factor, the location, availability and ability to provide the required services was the primary determination for selecting the vendor. The second invoice was for professional training services and the necessary education and skills were the primary determination along with the comparison to prior paid training services to determine if charges were appropriate. Neither procurement was awarded based upon best pricing. The basis for determining the award was provided. The EAWDB will provide Award Determination letters in the future and will maintain documentation supporting the award. The EAWDB will develop an internal professional services contract for future professional service awards. Due Date of Completion: April 2020 Responsible Party: Finance Manager and Operations Manager