Managed Career Solutions, SPC

Criteria: Pursuant to Contract No. C-200956 Section 601.B, Grant Requirements, Reporting Requirements, between MCS and the City of Los Angeles EWDD, “Contractor shall submit to the City all required documents in accordance with all City procedures and Directives, which are incorporated herein by reference. 1. Monthly Fiscal Report and Closeout Report: a. Expenditure Report - Due on or before the 15th day of each month, Contractor shall submit the Expenditure Report to the City, which reflects accrued expenditures as of the previous month on forms provided by the City. b. Cash Request - Due on or before the 15th day of the month, a cash request shall be submitted on forms provided.” Condition: During our review of the submission of monthly expenditure and cash request reports, we noted one monthly fiscal report was not submitted to EWDD in a timely manner. Cause: Due to the late execution of the contract, the total contract amount was not finalized, making it impossible for MCS to establish an accurate, binding budget which led to the late submission of the monthly fiscal report. Furthermore, there were changes made to the contract amount which caused the delay in the submission of the reports. Effect: Failure to submit timely the required monthly fiscal reports results in noncompliance with the reporting requirement of the grant agreement. Questioned Costs: None. Context: Of the seven (7) monthly fiscal reports selected for testing, one (1) monthly fiscal report was not submitted to City of Los Angeles EWDD within the required due date. The samples tested were not statistically valid samples. Recommendation: We recommend that MCS strengthens its internal controls by establishing procedures to ensure that the monthly expenditure and cash request reports are properly prepared and submitted by the due date required by City of Los Angeles EWDD in accordance with the grant agreement. Also, we recommend MCS to do the following when there is a late execution of the contract and change in the funding amount: 1) to document in writing (i.e., email, formal amendment, etc.); and 2) to formally request time extensions for the submission of the monthly fiscal reports. Management Response and Corrective Action Plan: Management’s response is included in the “Management Response and Corrective Action Plan” found at the end of this report after the Summary Schedule of Prior Year Audit Findings.

Criteria: Pursuant to Contract No. C-145793 Section 301.A, Payment, Compensation and Method of Payment - Expenditure Reporting, between MCS and the City of Los Angeles EWDD, “Contractor shall comply with the expenditure and reporting requirements as follows: 1. Expenditure Reporting: a. Expenditure Report - Contractor shall submit the Expenditure Report to the City, which reflects accrued expenditures on City approved forms. b. Cash Request - Due as cash is necessary, a Cash Request shall be submitted on standard City forms by the 15th of the following month.” Condition: During our review of the submission of monthly expenditure and cash request reports, we noted one monthly fiscal report was not submitted to EWDD in a timely manner. Cause: There was a late contract provision on the final required budget allocation for participant-related training cost. As a result, the budget submission was delayed causing the late submission of the monthly fiscal report. Effect: Failure to submit timely the required monthly fiscal reports results in noncompliance with the reporting requirement of the grant agreement. Questioned Costs: None. Context: Of the five (5) monthly fiscal reports selected for testing, one (1) monthly fiscal report was not submitted to City of Los Angeles EWDD within the required due date. The samples tested were not statistically valid samples. Recommendation: We recommend that MCS strengthens its internal controls by establishing procedures to ensure that the monthly expenditure and cash request reports are properly prepared and submitted by the due date required by City of Los Angeles EWDD in accordance with the grant agreement. Also, we recommend MCS to do the following when there is a delay in receiving the budget cost allocation: 1) to document in writing (i.e., email, formal amendment, etc.); and 2) to formally request time extensions for the submission of the monthly fiscal reports. Management Response and Corrective Action Plan: Management’s response is included in the “Management Response and Corrective Action Plan” found at the end of this report after the Summary Schedule of Prior Year Audit Findings.

Management’s response is included in “Management Response and Corrective Action Plan” included at the end of this report after the Summary Schedule of Prior Year Audit Findings.

Management’s response is included in “Management Response and Corrective Action Plan” included at the end of this report after the Summary Schedule of Prior Year Audit Findings.

Reference Number: 2022-001 Federal Program Title: Senior Community Services Employment Program Federal Catalog Number: 17.235 Federal Agency: U.S. Department of Labor, Employment and Training Administration Pass-Through Entity: County of Los Angeles, Workforce Development, Aging and Community Services Federal Award Number and Year: 1820-TV105-SG; 2022 Category of Finding: Reporting Criteria Pursuant to Contract No. 1820-TV105-SG Section 5.5.4.1, Submission of Invoices, between MCS and the County of Los Angeles (County), ?Subrecipient shall submit all invoices to County in the form and manner as directed by County by the 10th calendar day of the month following the month of Service...? Condition During our review of the submission of monthly invoices, we noted two (2) cash request reports were submitted after the due dates. Contract Number Period Covered Due Date Date Submitted Number of Days Late 1820-TV105-SG August 2021 9/10/2021 9/13/2021 3 1820-TV105-SG December 2021 1/10/2022 1/11/2022 1 Cause Due to oversight, the cash request reports were not submitted on time. Effect Failure to submit timely the required monthly inoices results in noncompliance with the reporting requirements of the grant agreement. Questioned Costs None Context Of the nineteen (19) monthly invoices selected for testing, two (2) invoices were submitted after the due dates. The samples tested were not statistically valid samples. Recommendation We recommend MCS to strengthen its report submission process to ensure all monthly cash request invoices are submitted timely. Management Response and Corrective Action Plan Management?s response is included in ?Management Response and Corrective Action Plan? included at the end of this report after the Summary Schedule of Prior Year Audit Findings.

SECTION III ? FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Reference Number: 2020-001 Federal Program Title: WIOA Adult/WIOA Dislocated Worker Federal Catalog Number: 17.258; 17.278 Federal Agency: U.S. Department of Labor, Employment and Training Administration Pass-Through Entity: County of Orange/Orange County Community Resources Federal Award Number and Year: C-18-28-0062-OS; 2019 Category of Finding: Reporting Criteria Pursuant to Section 44, Additional Terms and Conditions - Payments, of Contract Number C-18-28-0062-OS between MCS and the County of Orange (County), the Contractor is required to submit to the County the monthly invoices by the 20th day following the month being reported. Condition During our review of the submission of monthly invoices, we noted two (2) cash request reports were submitted after the due dates. Contract Number Period Covered Due Date Date Submitted Number of Days Late 18-28-0062-OS June 2020 7/20/2020 7/22/2020 2 18-28-0062-OS June 2020 7/20/2020 7/22/2020 2 Cause Due to oversight, the cash request reports were not submitted on time. Effect Failure to submit timely the required monthly inoices results in noncompliance with the reporting requirements of the grant agreement. Questioned Costs None Context Of the twenty-one (21) monthly invoices selected for testing, two (2) invoices were submitted after the due dates. The samples tested were not statistically valid samples. Recommendation We recommend MCS to strengthen its report submission process to ensure all monthly cash request invoices are submitted timely.

Reference Number: 2019-001 Federal Program Title: WIOA National Dislocated Worker Grants/ WIA National Emergency Grants Federal Catalog Number: 17.277 Federal Agency: U.S. Department of Labor, Employment & Training Administration Pass-Through Entity: City of Los Angeles, Economic Workforce and Development Department (EWDD) Federal Award Number and Year: C-131584; C-133243; 2018 Category of Finding: Procurement, Suspension and Debarment Criteria The Uniform Guidance ?200.213 - Suspension and debarment states: ?Non-federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities.? Non-Federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. When a non-Federal entity enters into a covered transaction with an entity at a lower tier, the non-Federal entity must verify that the entity, as defined in 2 CFR section 180.995 and agency adopting regulations, is not suspended or debarred or otherwise excluded from participating in the transaction. This verification maybe accomplished by: 1. checking the Excluded Parties List System (EPLS) (i.e. System for Award Management Exclusions) maintained by the General Services Administration (GSA) and available at and available at https://governmentcontractregistration.com/sam-registration-and-renewal/, 2. collecting a certification from the entity, or 3. adding a clause or condition to the covered transaction with that entity Condition During our review of the contract files for three (3) MCS contractors, MCS was not able to provide evidence to demonstrate that they verified the three (3) contractors were not debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities prior to entering into covered transactions. Cause MCS follows the procurement standards of the Uniform Guidance. However, there was an oversight in the proper maintenance of documents to evidence the verification of suspension and debarment. Effect Lack of documentation that the verification of suspension and debarment was performed before entering into a contract with contractors results in noncompliance with 2 CFR ?180.300. Questioned Costs None. Context For three (3) contractors selected from a total of six (6) contractors, which totaled $1,635,790 from a population of $2,519,499, MCS was not able to provide documentation for three (3) contractors to evidence the verification of suspension and debarment was performed. The samples tested were not statistically valid samples. Recommendation We recommend MCS to verify suspension and debarment prior to entering into covered transactions and maintain documentation in the contract files. Management Response and Corrective Action 1. Person responsible: Tito Maturan, Finance Director 2. Corrective action plan: The Accounting Department, in coordination with the Development and Contracts Management Division, will ensure to properly document and maintain in the contract files the verification of the suspension and debarment of its contractors. No subcontractor of MCS was on the debarment list. 3. Anticipated implementation date: January 2, 2020

Reference Number: 2019-002 Federal Program Title: WIOA National Dislocated Worker Grants/ WIA National Emergency Grants Federal Catalog Number: 17.277 Federal Agency: U.S. Department of Labor, Employment & Training Administration Pass-Through Entity: City of Los Angeles, Economic Workforce and Development Department (EWDD) Federal Award Number and Year: C-131584; C-133243; 2018 Category of Finding: Reporting Criteria Pursuant to Section 601, Reporting Requirements of Contract Numbers C-131584 and C-133243 between EWDD and MCS, the Contractor is required to submit to EWDD a Monthly Fiscal Report consisting of Expenditure Report and Cash Request on or before the 15th day of each month. Condition During our review of three (3) monthly fiscal reports, we noted three (3) reports were submitted after the due dates. "See Schedule of Findings and Questioned Costs for chart/table Cause Due to an oversight, reports were not submitted on time. Effect Failure to submit timely the required monthly fiscal reports result in noncompliance with the reporting requirements of the grant agreement. Questioned Costs None Context Of the three (3) fiscal reports selected from a total population of thirteen (13), three (3) fiscal reports were submitted after the due dates. The samples tested were not statistically valid samples. Recommendation We recommend MCS to strengthen its report submission process to ensure all fiscal reports are submitted timely. Management Response and Corrective Action 1. Person responsible: Tito Maturan, Finance Director 2. Corrective action plan: The Accounting Department will strengthen its review process to ensure the fiscal reports are submitted on time. 3. Anticipated implementation date: January 2, 2020

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