POLK COUNTY WORKFORCE DEVELOPMENT, INC.Non-Profit

UG 2021-01: Cash Management Information on the Federal Program: United States Department of Labor passed through the State of Florida Department of Economic Opportunity (?DEO?): CFDA Number Program Name NFA ID 17.278 WIOA - Dislocated Worker 037481 United States Department of Treasury passed through United Way of Central Florida (?UWCF?): CFDA Number Program Name 21.019 Coronavirus Relief Fund Compliance Requirement: Cash Management Type of Finding: Material Noncompliance and Material Weakness in Internal Control Over Compliance Criteria: ?200.305(b)(1), states ?Advance payments to a non-Federal entity must be limited to the minimum amounts needed and be timed to be in accordance with the actual, immediate cash requirements of the non-Federal entity in carrying out the purpose of the approved program or project.? WIOA Dislocated Worker: For funds passed through the DEO, the financial policies and procedures of DEO require that discrepancies or variances in the reconciliation of amounts reported in the Subrecipient Enterprise Resource Application (?SERA?) to CareerSource Polk?s financial records be timely resolved. Coronavirus Relief Fund: For funds passed through (?UWCF?), the memorandum of understanding between UWCF and CareerSource Polk (?MOU?) requires that funds distributed must comply with the agreement between UWCF and Polk County (?County Agreement?). The MOU and County Agreement also states that funds not distributed by the end of the agreement must be returned to the grantors. The MOU and County agreement are clear that funds for administrative costs are reimbursements for actual substantiated costs. Condition: WIOA Dislocated Worker: At June 30, 2021, CareerSource Polk has an excess drawdown from DEO of $797,249 from the closed NFA ID # 037481 with a contract period from July 1, 2018 to June 30, 2020 that it did not correctly report to the DEO. CareerSource Polk reported $797,249 of expenditures on SERA under NFA ID # 037481 that are not accounted for in its accounting records as of June 30, 2021. Coronavirus Relief Fund: At June 30, 2021, CareerSource Polk has an excess $125,126 of Coronavirus Relief Funds passed through from UWCF under the MOU and County agreement that ended by December 2020 that it has not correctly reported to UWCF or Polk County. CareerSource Polk requested and was granted reimbursement for administrative expenditures under the MOU and County agreement that are reimbursed and accounted for under other grants. Cause: WIOA Dislocated Worker: The $797,249 of expenditures were added to reporting in SERA on this NFA after June 30, 2020 with no decrease in expenditures in any other NFA in SERA and not as a result of an increase in expenses in CareerSource Polk?s accounting records. CareerSource Polk did not consider this $797,249 difference between expenditures reported on SERA and expenses on its financial records as a discrepancy to be resolved. Coronavirus Relief Fund: CareerSource Polk did not allocate administrative expenses in its accounting system to the fund that it uses to account for the MOU and County agreement. When requesting reimbursement for expenses under this grant, CareerSource Polk did not reconcile the request with expenses allocated to this fund. Effect: CareerSource Polk owes DEO and UWCF, respectively, the amounts below under questioned costs for advances that do not have qualifying expenditures. Also CareerSource Polk reporting of expenditures to DEO and the UWCF, respectively is incorrect as the following questioned costs are not substantiated in its accounting system. Questioned Costs: WIOA Dislocated Worker: $797,249 Coronavirus Relief Fund: $125,126 Context: WIOA Dislocated Worker: CareerSource Polk reconciliation of expenditures in SERA to related expenses in its financial records for the period July 1, 2020 to June 30, 2021 does not show any other material discrepancies. Coronavirus Relief Fund: CareerSource Polk typically receives insubstantial amounts of federal funding that is not provided through DEO?s SERA system. Recommendation: WIOA Dislocated Worker: CareerSource Polk should return funds that have been overdrawn on NFA ID # 037481 to DEO. CareerSource Polk should correct reporting that has been made to DEO regarding unsubstantiated expenditures. CareerSource Polk should review its cash management policies and procedures to ensure that cash advances are limited to the minimum amounts needed and are timed to be in accordance with actual, immediate cash requirements. CareerSource Polk should resolve all discrepancies and variances noted in its reconciliation of SERA expenditures to the expenses in its financial records in a timely manner. Once CareerSource Polk reconciles expenditures reported in SERA to expenses in its financial records, if CareerSource Polk makes a change in either system to amounts already reconciled, they should perform a new reconciliation. Coronavirus Relief Fund: CareerSource Polk should return funds that have been overdrawn related to the MOU and County agreement to UWCF. CareerSource Polk should correct reporting that has been made to UWCF regarding unsubstantiated expenditures. CareerSource Polk should review invoicing and reconciliation policies, procedures and practices for expense reimbursement grants outside of DEO?s SERA system. These policies, procedures, and practices should include steps that ensure that reimbursement for a grant will not be requested for an expense that is not allocated to that grant in CareerSource Polk?s accounting system.

UG 2020-01: Indirect costs charged over the approved rate Information on the Federal Program: United States Department of Labor passed through the State of Florida Department of Economic Opportunity: WIOA Cluster: CFDA Number Program Name FAIN Program Year 17.259 WIOA - Youth AA322101855A12 2018 17.278 WIOA - Dislocated Worker AA322101855A12 2018 17.259 WIOA - Youth AA332231955A12 2019 17.258 WIOA - Adult AA332231955A12 2019 17.278 WIOA - Dislocated Worker AA332231955A12 2019 17.278 WIOA - State Level AA322101855A12 2018 Welfare Transition: CFDA Number Program Name FAIN Program Year 93.558 Welfare Transition Program G1901FLTANF 2018 93.558 Welfare Transition Program G1901FLTANF 2019 93.558 Welfare Transition Program G2001FLTANF 2019 Compliance Requirement: Allowable Costs/Cost Principles Type of Finding: Material Noncompliance and Material Weakness in Internal Control Over Compliance Criteria: ?200.332(a)(4), requires that every subaward of federal funds from a pass-through entity to a sub-recipient must include an indirect cost rate. On March 11, 2020, CareerSource Polk entered into a negotiated indirect cost rate agreement with the Florida Department of Economic Opportunity which provided for a provisional indirect cost rate for the period from July 1, 2019 to June 30, 2021 of 14.69%. Florida Department of Economic Opportunity administrative policy number 86 states ?indirect costs can only be charged to an award based on an approved indirect cost rate? and ?Any amounts drawn above those authorized by the indirect rate methodology are unallowable?. Condition: For the year ended June 30, 2020, CareerSource Polk charged indirect costs above the negotiated provisional indirect cost rate of 14.69% to certain subawards of federal funds. Cause: CareerSource Polk charged indirect costs based on its actual indirect cost rate for the fiscal year ended June 30, 2020. A decrease in the actual modified total direct costs for several programs for the April 1, 2020 to June 30, 2020 period due to limitations on program services during the COVID pandemic without a corresponding decrease to indirect costs during the same period caused the actual rate to be higher than the provisional rate. Effect: As a result, CareerSource Polk over charged federal awards by the amount of questioned costs below. Questioned Costs: WIOA Cluster: $69,261 Welfare Transition: $45,171 Context: CareerSource Polk?s total actual indirect costs for the year ended June 30, 2020 were approximately, $989,900. Recommendation: CareerSource Polk should ensure that it only charges federal awards up to the negotiated rate and should do a fiscal year to date analysis of indirect costs monthly. If the analysis shows that the provisional rate will not be sufficient to cover actual indirect costs an increase in the provisional rate should be negotiated with the Florida Department of Economic Opportunity.