NORTHERN AREA LOCAL WORKFORCE DEVELOPMENT BOARDLocal Government

2019-003 (2018-001) SUB-RECIPIENT MONITORING (Material Weakness, Non-compliance) Statement of Condition During FY19, the NALWDB lacked proper sub-recipient monitoring procedures. It did not appear that any formal sub-recipient monitoring had been completed for the program year PY19. Discussion with current Board personnel during the audit indicated they felt that a former employee had performed program monitoring during the year, however there were no reports issued or available files to support this suggestion. We also confirmed with the Board?s fiscal agent that no fiscal monitoring has been performed at the Board level or regarding program sub-recipients. This is a repeat finding from the prior year. During the year the Board did not make significant improvement on resolving the non-compliance. Criteria 2 CFR ?200.328 (a) provides, the non-Federal entity is responsible for oversight of the operations of the Federal award supported activities. The non-Federal entity must monitor its activities under Federal awards to assure compliance with applicable Federal requirements and performance expectations are being achieved. Monitoring by the non-Federal entity must cover each program, function or activity. 2 CFR ?200.430 (i) provides, in part, that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed and must be supported by a system of internal control which provides reasonable assurance that the charges are accurate. 2 CFR ?200.403 provides, in part, that costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles (g) Be adequately documented Cause Significant transition at the Board hindered its ability to perform necessary monitoring efforts believed that the monitoring provided was adequate under the terms of the grant. Effect Without complete and accurate monitoring of sub-recipients expenditures of federal funds, NALWDB cannot ensure the costs of goods and services charged to federal awards are allowable and charged in accordance with the applicable regulations. Recommendation NALWDB should ensure it properly monitors sub-recipients according to the requirements as required by the terms of the WIOA grant agreements.

2019-004 (2018-002) WIOA POLICIES AND PROCEDURES (Other Non-compliance) Statement of Condition It was observed that the Board did not have certain policies and procedures required by WIOA and the Uniform Guidance. In many cases, the Board was relying on sub-recipients to have the policies in place. These included policies related to: ? Grievance and Complaint procedures: 20 CPR ?683.600(a), (b), and (c) ? Definition of "requires additional assistance" for out of school youth per 20 CPR ?681.300 ? Definition of "requires additional assistance" for ISY per 20 CPR ?681.310( a) ? Level of needs-related payments per 20 CPR ?680.970(a) and State Technical Assistance ? Guide, dated July 2015 ? Supportive services per 20 CPR ?680.900 ? Allowable Costs: 2 CFR ?200.302 (7) ? Financial Management: 2 CFR ?200.302 ? Payments: 2 CFR ??200.302(6), and 305 ? Internal Controls: 2 CFR ?200.303 ? Program Income: 2 CFR ?200.307 ? Equipment: 2 CFR ?200.313 ? Procurement: 2 CFR ? ?200 .317 and 318 ? Competition: 2 CFR ?200.319 ? Methods of Procurement to be followed: 2 CFR ?200.320 ? Requirements for pass-through entities: 2 CFR ?200.331 ? Cost Principles: 2 CFR ?200.400-475 This is a repeat finding from the prior year. During the year ended June 30, 2019, the Board did not make significant progress toward implementing the required policies and procedures. Due to delays related to personnel transition and Board composition, the policies and procedures were not approved by the estimated completion date noted in management?s response from the prior year. Criteria 2 CFR ?200.303 (a) requires the non-Federal entity to 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 related terms and conditions. TEGL No. 15-14, Section 5, Implementation of the Uniform Guidance, requires grantees to review and update all financial and administrative policies and procedures. Cause The Board believed that as long as the grant sub-recipient had all necessary policies in place it was adequate. Effect Without complete and accurate policies and procedures in place, the NALWDB was unable to ensure compliance with the WIOA grant. Recommendation NALWDB should implement all policies and procedures as required by the WIOA grant and Uniform Guidance.

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