IMPERIAL COUNTY

Finding 2024-003 Internal Control and Compliance over Subrecipient Monitoring (Material Weakness) Information on the Federal Program: Assistance Listing Number(s): 17.258, 17.259, 17.278 Federal Program Name: Workforce Innovation and Opportunity Act (WIOA) Federal Agency: U.S. Department of Labor Pass-Through Entity: California Employment Development Department Federal Award Number and Award Year: AA211008/AA311008/AA411008/AA411009/AA411010 Criteria: Title 2 - Grants and Agreements. Subtitle A - Office of Management and Budget Guidance for Grants and Agreements. Chapter II - Office of Management and Budget Guidance. Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Subpart D - Post Federal Award Requirements. Standards for Financial and Program Management. §200.303 Internal controls (2 CFR 200.303): The non-Federal entity must: (a) 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 the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Title 2: Grants and Agreements, Subtitle A - Office of Management and Budget Guidance for Grants and Agreements, Chapter II - Office of Management and Budget Guidance, Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards Subpart D - Post Federal Award Requirements, Subrecipient Monitoring and Management, §200.331 Requirements for pass-through entities (2 CFR 200.331): All pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes: (1) Federal award identification i. Subrecipient name (which must match the name associated with its unique entity identifier); ii. Subrecipient's unique entity identifier; iii. Federal Award Identification Number (FAIN); iv. Federal Award Date (see the definition of Federal award date in § 200.1 of this part) of award to the recipient by the Federal agency; v. Subaward Period of Performance Start and End Date; vi. Subaward Budget Period Start and End Date; vii. Amount of Federal Funds Obligated by this action by the pass-through entity to the subrecipient; viii. Total Amount of Federal Funds Obligated to the subrecipient by the pass-through entity including the current financial obligation; ix. Total Amount of the Federal Award committed to the subrecipient by the pass-through entity; x. Federal award project description, as required to be responsive to the Federal Funding Accountability and Transparency Act (FFATA); xi. Name of Federal awarding agency, pass-through entity, and contact information for awarding official of the Pass-through entity; xii. Assistance Listings number and Title; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listings Number at time of disbursement; xiii. Identification of whether the award is R&D; and xiv. Indirect cost rate for the Federal award (including if the de minimis rate is charged) per § 200.414.; (1) All requirements imposed by the pass-through entity on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations and the terms and conditions of the Federal award; (2) Any additional requirements that the pass-through entity imposes on the subrecipient in order for the pass-through entity to meet its own responsibility to the Federal awarding agency including identification of any required financial and performance reports; Title 2: Grants and Agreements, Subtitle A - Office of Management and Budget Guidance for Grants and Agreements, Chapter II - Office of Management and Budget Guidance, Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards Subpart D - Post Federal Award Requirements, Subrecipient Monitoring and Management, §200.332 Requirements for pass-through entities (2 CFR 200.332): All pass-through entities must: (a) Evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraphs (d) and (e) of this section, which may include consideration of such factors as: (1) The subrecipient's prior experience with the same or similar subawards; (2) The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F of this part, and the extent to which the same or similar subaward has been audited as a major program; (3) Whether the subrecipient has new personnel or new or substantially changed systems; and (4) The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency). Condition: During our testing of the Imperial County Workforce Development Office’s (ICWDO) provisions for subrecipient monitoring under the WIOA Cluster, we noted two (2) of the two (2) subrecipient selected for testing, there was no review or approval over the monitoring procedures performed by ICWDO monitoring staff. The entire population consisted of two (2) subrecipients. Also, the County did not document their evaluation of the subrecipient’s risk of noncompliance. The following information was not provided at the time of the subaward for two (2) of the two (2) subawards selected for testing: o Federal award identification number o Federal award date of award to recipient by the Federal agency o Name of federal awarding agency o Federal Financial Assistance Listing/CFDA Number o Identification of whether the award is research and development Cause: The County’s ICWDO department does not have a formal procedure in place for the department’s review and approval over the monitoring procedures performed by the department over its subrecipients. The ICWDO department did not ensure that the required award information and applicable requirements were communicated to the subrecipients and did not maintain documentation of their evaluation of each subrecipient’s risk of noncompliance. Effect: The County’s ICWDO department did not review and approve monitoring procedures performed over its subrecipients. Additionally, the ICWDO department did not maintain policies and procedures to align with the Subrecipient Monitoring requirements in 2 CFR 200.332 (a) and 200.332(b). Identification as a Repeat Finding, If Applicable: Yes. See Finding 2023-004. Questioned Costs: No questioned costs were identified. Recommendation: We recommend ICWDO implement policies and procedures in accordance with 2 CFR 200.331(a) 200.332(b) to ensure compliance with subrecipient monitoring requirements and that require the review and approval of the monitoring procedures performed over its subrecipients by a separate individual. View of Responsible Officials and Planned Corrective Action: See separate Corrective Action Plan.

Finding 2024-004 Internal Control and Compliance over Reporting (Significant Deficiency) Information on the Federal Program: Assistance Listing Number: 17.258, 17.259, 17.278 Federal Program Name: Workforce Innovation and Opportunity Act (WIOA) Federal Agency: U.S. Department of Labor Pass-Through Entity: California Employment Development Department Federal Award Number and Award Year: AA211008/AA311008/AA411008/AA411009/AA411010 Criteria: Title 2 - Grants and Agreements. Subtitle A - Office of Management and Budget Guidance for Grants and Agreements. Chapter II - Office of Management and Budget Guidance. Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Subpart D - Post Federal Award Requirements. Standards for Financial and Program Management. §200.303 Internal controls (2 CFR 200.303): The non-Federal entity must: (a) 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 the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). OMB No. 1205-0461 states that all Employment and Training Administration (ETA) grantees are required to submit quarterly financial reports for each grant award they receive. Financial data is required to be reported cumulatively from grant inception through the end of each reporting period. Condition: During our testing of Imperial County Workforce Development Office’s (ICWDO) provisions for reporting requirements, we noted the following instances: • For two (2) of the two (2) quarterly reports from a nonstatistical sample, the amounts reported did not agree to the amounts recorded in the County’s general ledger and SEFA; • For four (4) of the four (4) monthly reports from a nonstatistical sample, the amounts reported did not agree to the amounts recorded in the County’s general ledger and SEFA; • For four (4) of the four (4) monthly reports from a nonstatistical sample, the reports were prepared, reviewed, and approved by the same individual • For one (1) of the one (1) closeout report consisting of the entire population, the amounts reported did not agree to the amounts recorded in the County’s general ledger and SEFA; Cause: ICWDO did not ensure the amounts reported on the quarterly financial reports agreed to the amounts recorded in the County’s general ledger and SEFA and did not ensure there was segregation of duties over the preparation and review and approval of the monthly reports. Effect: The ICWDO department’s procedures were not consistently followed, which requires reports to agree to the amounts recorded in the general ledger and SEFA and requires reports to be reviewed and approved by a separate individual. Identification as a Repeat Finding, If Applicable: Yes. See Finding 2023-005. Questioned Costs: No questioned costs were identified. Recommendation: We recommend ICWDO adhere to their policies and procedures and ensure amounts reported on the quarterly financial reports agree to the County’s general ledger and SEFA and ensure segregation of duties over the preparation and approval of monthly reports. View of Responsible Officials and Planned Corrective Action: See separate Corrective Action Plan.

2023-004 Program: WIOA Cluster Federal Financial Assistance Listing Number: 17.258, 17.259, 17.277, 17.278 Federal Grantor: U.S. Department of Labor Pass-Through: California Department of Employment Development Award No. and Year: AA211008/AA111008 - FY22-23 Compliance Requirements: Subrecipient Monitoring Type of Finding: Material Weakness Management’s or Department’s Response: Imperial County Workforce Development Office (ICWDO) agrees with the finding. Views of Responsible Officials and Corrective Action Plan: The questions from finding 2023-004 relate to a formalization of the fiscal processes and protocols. ICWDO operates under WIOA guidelines and follows Imperial County’s fiscal policies. Internal policy will be formally updated to reflect compliance with WIOA regulations, as well as Imperial County policies. These policies will include formal controls and procedures to evaluate each subrecipient’s risk of noncompliance. Once the formal procedure is drafted, it will go through the ICWDO Policy Committee for comment and direction, and then finally reviewed and approved for implementation by the full Workforce Development Board. Additionally, for any future Memorandums of Understanding (MOUs) between this Imperial County department and any outside agency, there will be an additional step to include review by Imperial County Counsel to reflect that recital around the funding source will specify the following required information: • Federal Award Identification Number • Federal award date of award to recipient by the Federal agency • Name of Federal awarding agency • CFDA Number • Specific identification of whether the award is research and development ICWDO will develop internal policies for formalizing all subrecipient monitoring process. ICWDO operates under WIOA guidelines for monitoring; therefore a formal internal policy for future contracts will be developed and implemented using the usual review and approval procedures followed by the department. ICWDO will develop a formal internal documentation system, with appropriate checks and signatures, for the evaluation and assessment of each subrecipient’s risk of noncompliance. ICWDO will utilize this formal process to properly document the risk assessment of all subrecipients. ICWDO anticipates to implement the corrective action by December 31, 2023. Name of Responsible Person: Priscilla A Lopez, ICWDB Director Implementation Date: December 31, 2023

2023-005 Program: WIOA Cluster Federal Financial Assistance Listing Number: 17.258, 17.259, 17.277, 17.278 Federal Grantor: U.S. Department of Labor Pass-Through: California Department of Employment Development Award No. and Year: AA211008/AA111008 - FY22-23 Compliance Requirements: Reporting Type of Finding: Significant Deficiency Management’s or Department’s Response: Imperial County Workforce Development Office (ICWDO) agrees with the finding. Views of Responsible Officials and Corrective Action Plan: ICWDO acknowledges the recommendation and is actively working on a remedy and on the development of formal policies as recommended, which will assist ICWDO’s fiscal team in ensuring that all reports are appropriately reconciled. ICWDO acknowledges the recommendations from finding 2023-005 related to a formalization of the Administrative/fiscal processes and protocols to ensure that procedures are consistently followed to guarantee that reports agree to the amounts recorded in the general ledger and SEFA. Additionally, the recommendation specifics that protocols to ensure the separation of duties are featured in the policy. ICWDO operates under WIOA guidelines and follows County fiscal/administrative policies. Internal policies that include formal controls and procedures to ensure that monthly reports and general ledgers are consistent, with clear segregation of duties will be formally adopted. Aspects of these policies will include: • Protocol for preparation of monthly reports by the fiscal manager, and approval and signature by ICWDO Director • Protocol for preparation of closeouts that will provide the hierarchy of development, review, and approval for future reference. • Schedule monthly closeout meetings with the fiscal department and administration to ensure that documents are reviewed separately, and issues are addressed promptly. • Protocol for Policy Committee review, comment and direction, and approval for implementation by vote of the full workforce development board. ICWDO anticipates to implement the corrective action by December 31, 2023. Name of Responsible Person: Priscilla A Lopez, ICWDB Director Implementation Date: December 31, 2023

Finding 2022-005 Internal Control and Compliance over Eligibility Information on the Federal Program: Assistance Listing Number: 93.558 Federal Program Name: Temporary Aid for Needy Families (TANF) Federal Agency: Health and Human Services Administration Pass-Through Entity: California Department of Social Services Federal Award Number and Award Year: 1946001347-A7 - FY21-22 Criteria: Title 2 - Grants and Agreements. Subtitle A - Office of Management and Budget Guidance for Grants and Agreements. Chapter II - Office of Management and Budget Guidance. Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Subpart D - Post Federal Award Requirements. Standards for Financial and Program Management. §200.303 Internal controls (2 CFR 200.303): The non-Federal entity must: (a) 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 the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Title 45 – Public Welfare, Subtitle B—Regulations Relating to Public Welfare, Chapter II – Office of Family Assistance (Assistance Programs), Administration for Children and Families, Department of Health and Human Services, Part 233 – Coverage and Conditions of Eligibility in Financial Assistance Programs, Subchapter XXIV - HIV Health Care Services Program, § 233.20 Need and amount of assistance (45 CFR 233.20): (a) Requirements for State Plans. A State Plan for OAA, AFDC, AB, APTD or AABD must, as specified below: (1) General. (i) Provide that the determination of need and amount of assistance for all applicants and recipients will be made on an objective and equitable basis and all types of income will be taken into consideration in the same way except where otherwise specifically authorized by Federal statute and; Condition: Out of 60 program recipients reviewed, the determination of need and amount of assistance for one (1) program recipient was incorrectly calculated due to the recipient casefile not being updated for the annual statutory cost-of-living-adjustment (COLA). The recipients casefile required the caseworker to run the Eligibility Determination Budget Calculation (EDBC) module to include the manual adjustment for the annual COLA. This procedure was not completed by the recipients caseworker. The Assistance payments totaling $8,170,992 were disbursed to a population of over 250 program participants during the fiscal year ended June 30, 2022. A non-statistically valid sample of 60 program participants were selected for testing of the eligibility compliance requirement. Cause: Existing internal controls did not prevent, or detect and correct, the occurrence of benefits being miscalculated. Effect: The Imperial County Department of Social Service’s established internal oversight controls did not properly ensure that the applicant’s benefits calculation was appropriately reviewed and approved. Accordingly, there is an increased risk for benefits being miscalculated, which may not be prevented or detected in a timely manner. Identification as a Repeat Finding, If Applicable: No. Questioned Costs: No questioned costs were identified. Recommendation: Social Services should continue to monitor compliance with its policies to ensure case workers follow the established guidelines for redetermination of the recipients of need and amount of assistance and retain acceptable documentation to support the determinations. View of Responsible Officials and Planned Corrective Action: See separate Corrective Action Plan.

Finding 2022-006 Internal Control and Compliance over Subrecipient Monitoring Information on the Federal Program: Assistance Listing Number(s): 17.258, 17.259, 17.278 Federal Program Name: Workforce Innovation and Opportunity Act (WIOA) Federal Agency: U.S. Department of Labor Pass-Through Entity: California Employment Development Department Federal Award Number and Award Year: AA311008 - FY21-22 Criteria: Title 2 - Grants and Agreements. Subtitle A - Office of Management and Budget Guidance for Grants and Agreements. Chapter II - Office of Management and Budget Guidance. Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Subpart D - Post Federal Award Requirements. Standards for Financial and Program Management. §200.303 Internal controls (2 CFR 200.303): The non-Federal entity must: (a) 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 the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Title 2: Grants and Agreements, Subtitle A - Office of Management and Budget Guidance for Grants and Agreements, Chapter II - Office of Management and Budget Guidance, Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards Subpart D - Post Federal Award Requirements, Subrecipient Monitoring and Management, §200.331 Requirements for pass-through entities (2 CFR 200.331): All pass-through entities must: (a) Ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. When some of this information is not available, the pass-through entity must provide the best information available to describe the Federal award and subaward. Required information includes: (1) Federal award identification. i. Subrecipient name (which must match the name associated with its unique entity identifier); ii. Subrecipient's unique entity identifier; iii. Federal Award Identification Number (FAIN); iv. Federal Award Date (see the definition of Federal award date in § 200.1 of this part) of award to the recipient by the Federal agency; v. Subaward Period of Performance Start and End Date; vi. Subaward Budget Period Start and End Date; vii. Amount of Federal Funds Obligated by this action by the pass-through entity to the subrecipient; viii. Total Amount of Federal Funds Obligated to the subrecipient by the pass-through entity including the current financial obligation; ix. Total Amount of the Federal Award committed to the subrecipient by the pass-through entity; x. Federal award project description, as required to be responsive to the Federal Funding Accountability and Transparency Act (FFATA); xi. Name of Federal awarding agency, pass-through entity, and contact information for awarding xii. Assistance Listings number and Title; the pass-through entity must identify the dollar amount made available under each Federal award and the Assistance Listings Number at time of disbursement; xiii. Identification of whether the award is R&D; and xiv. Indirect cost rate for the Federal award (including if the de minimis rate is charged) per § 200.414.; (2) All requirements imposed by the pass-through entity on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations and the terms and conditions of the Federal award; (3) Any additional requirements that the pass-through entity imposes on the subrecipient in order for the pass-through entity to meet its own responsibility to the Federal awarding agency including identification of any required financial and performance reports; Title 2: Grants and Agreements, Subtitle A - Office of Management and Budget Guidance for Grants and Agreements, Chapter II - Office of Management and Budget Guidance, Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards Subpart D - Post Federal Award Requirements, Subrecipient Monitoring and Management, §200.332 Requirements for pass-through entities (2 CFR 200.332): All pass-through entities must: (a) Evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraphs (d) and (e) of this section, which may include consideration of such factors as: (1) The subrecipient's prior experience with the same or similar subawards; (2) The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F of this part, and the extent to which the same or similar subaward has been audited as a major program; (3) Whether the subrecipient has new personnel or new or substantially changed systems; and (4) The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency). Condition: During our testing of the Imperial County Workforce Development Office’s (ICWDO) provisions for subrecipient monitoring under the WIOA Cluster, we noted the following instances: For one (1) of the one (1) subrecipient selected for testing, there was no review or approval over the monitoring procedures performed by ICWDO monitoring staff. The entire population of one (1) subrecipient. • The following information was not provided at the time of the subaward for one (1) of the one (1) subaward selected for testing: o Federal award identification number o Federal award date of award to recipient by the Federal agency o Name of federal awarding agency o Federal Financial Assistance Listing/CFDA Number o Identification of whether the award is research and development • The County did not document their evaluation of each subrecipient’s risk of noncompliance Cause: The County’s ICWDO department does not have a formal procedure in place for the department’s review and approval over the monitoring procedures performed by the department over its subrecipients. The ICWDO department did not ensure that the required award information and applicable requirements were communicated to the subrecipients and did not maintain documentation of their evaluation of each subrecipient’s risk of noncompliance. Effect: The County’s ICWDO department did not review and approve monitoring procedures performed over its subrecipients. Additionally, the ICWDO department did not maintain policies and procedures to align with the Subrecipient Monitoring requirements in 2 CFR 200.332 (a) and 200.332(b). Identification as a Repeat Finding, If Applicable: Yes. See Finding 2021-008. Questioned Costs: No questioned costs were identified. Recommendation: Social Services should continue to monitor compliance with its policies to ensure case workers follow the established guidelines for redetermination of the recipients of need and amount of assistance and retain acceptable documentation to support the determinations. View of Responsible Officials and Planned Corrective Action: See separate Corrective Action Plan.

Finding 2022-007 Internal Control and Compliance over Payroll Expenditures Information on the Federal Program: Assistance Listing Number(s): 17.258, 17.259, 17.278 Federal Program Name: Workforce Innovation and Opportunity Act (WIOA) Federal Agency: U.S. Department of Labor Pass-Through Entity: California Employment Development Department Federal Award Number and Award Year: AA311008 - FY21-22 Criteria: Title 2 - Grants and Agreements. Subtitle A - Office of Management and Budget Guidance for Grants and Agreements. Chapter II - Office of Management and Budget Guidance. Part 200 - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Subpart D - Post Federal Award Requirements. Standards for Financial and Program Management. §200.303 Internal controls (2 CFR 200.303): The non-Federal entity must: (a) 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 the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). OMB No. 1205-0461 states that all Employment and Training Administration (ETA) grantees are required to submit quarterly financial reports for each grant award they receive. Financial data is required to be reported cumulatively from grant inception through the end of each reporting period. Condition: During our testing of Imperial County Workforce Development Office’s (ICWDO) provisions for reporting requirements, we noted the following instances: • For two (2) of the two (2) quarterly reports from a nonstatistical sample, the amounts reported did not agree to the amounts recorded in the County’s general ledger and SEFA; • For four (4) of the four (4) monthly reports from a nonstatistical sample, the amounts reported did not agree to the amounts recorded in the County’s general ledger and SEFA; • For four (4) of the four (4) monthly reports from a nonstatistical sample, the reports were prepared, reviewed, and approved by the same individual • For one (1) of the one (1) closeout report consisting of the entire population, the amounts reported did not agree to the amounts recorded in the County’s general ledger and SEFA; Cause: ICWDO did not ensure the amounts reported on the quarterly financial reports agreed to the amounts recorded in the County’s general ledger and SEFA and did not ensure there was segregation of duties over the preparation and review and approval of the monthly reports. Effect: The ICWDO department’s procedures were not consistently followed, which requires reports to agree to the amounts recorded in the general ledger and SEFA and requires reports to be reviewed and approved by a separate individual. Identification as a Repeat Finding, If Applicable: Yes. See Finding 2021-010. Questioned Costs: No questioned costs were identified. Recommendation: We recommend ICWDO adhere to their policies and procedures and ensure amounts reported on the quarterly financial reports agree to the County’s general ledger and SEFA and ensure segregation of duties over the preparation and approval of monthly reports. View of Responsible Officials and Planned Corrective Action: See separate Corrective Action Plan.

Program: COVID-19 Coronavirus Relief Fund Federal Financial Assistance Listing Number: 21.019 Federal Grantor: U.S. Department of Treasury Pass-Through: California Department of Treasury Award No. and Year: 2021 Compliance Requirements: Subrecipient Monitoring Type of Finding: Significant Deficiency in Internal Control and Instance of Noncompliance Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200.331(a), Requirements for Pass-Through Entities, states that all pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes certain information as well as all the requirements imposed by the pass-through entity on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations, and the terms and conditions of the award In accordance with 2 CFR 200.332, pass-through entities must comply with the following: ? 2 CFR section 200.332(b) - Evaluate each subrecipient?s risk of noncompliance with Federal statues, regulations and the terms and conditions of the subaward for purpose of determining the appropriate subrecipient monitoring. ? 2 CFR 200.332(d)- Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include the information at 2 CFR 200.332(d)(1) through (4). ? 2 CFR 200.332(f) ? Verify that every subrecipient is audited as required by Subpart F of this part when it is expected that the subrecipient?s Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in 200.501. Condition: During our testing of the County?s County Executive Office (CEO) provisions for subrecipient monitoring over the Coronavirus Relief Fund (CRF), we noted the following instances: ? The following information was not provided at the time of the subaward for four (4) of four (4) subawards selected for testing: o Subrecipient?s unique entity identifier o Federal award identification number o Federal award date of award to recipient by the Federal agency o Subaward period of performance o Amount of federal funds obligated to the subrecipient o Amount of federal funds committed to the subrecipient o Federal award project description o Name of federal awarding agency o Federal Financial Assistance Listing/CFDA Number o Identification of whether the award is research and development o Indirect cost rate ? The County did not have any formal controls or procedures in place for evaluating each subrecipient?s risk of noncompliance. ? The County did not have any formal controls or procedures in place for subrecipient monitoring. Context: A nonstatistical sample of four (4) of thirteen (13) subrecipients were sampled. The condition above was identified during our procedures related to subrecipient monitoring and was pervasive to the program. Effect: The County?s CEO department did not identify the required key elements of subawards to the subrecipients at the time of the subaward, increasing the risk of noncompliance. Additionally, the County?s CEO department did not maintain policies and procedures to align with the Subrecipient Monitoring requirements in 2 CFR 200.332 and did not comply with subrecipient monitoring requirements related to the program. Cause: The County?s CEO department did not consistently ensure that the required award information and applicable requirements were communicated to the subrecipients. Additionally, the County?s CEO department did not maintain policies and procedures to align with the Subrecipient Monitoring requirements in 2 CFR 200.332. Questioned Costs: No questioned costs were identified as a result of our procedures. Recommendation: We recommend that the County implement policies and procedures in accordance with 2 CFR 200.331 and 200.332 to ensure compliance with subrecipient monitoring requirements. View of Responsible Officials and Planned Corrective Action: See separate Corrective Action Plan.

Program: WIOA Cluster Federal Financial Assistance Listing Number: 17.258, 17.259, 17.277, 17.278 Federal Grantor: U.S. Department of Labor Pass-Through: California Department of Employment Development Award No. and Year: AA011008 and 2019 Compliance Requirements: Subrecipient Monitoring Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 CFR Section 200.303(a), Internal Controls, states that the non-Federal entity must 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 the terms and conditions of the Federal award. 2 CFR Part 200.331(a), Requirements for Pass-Through Entities, states that all pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes certain information as well as all the requirements imposed by the pass-through entity on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations, and the terms and conditions of the award. 2 CFR section 200.332(b), Requirements for Pass-Through Entities, states that all pass-through entities must evaluate each subrecipient?s risk of noncompliance with Federal statues, regulations and the terms and conditions of the subaward for purpose of determining the appropriate subrecipient monitoring. Condition: During our testing of the Imperial County Workforce Development Office?s (ICWDO) provisions for subrecipient monitoring under the WIOA Cluster, we noted the following instances: ? For one (1) of the one (1) subrecipient selected for testing, there was no review or approval over the monitoring procedures performed by ICWDO monitoring staff. ? The following information was not provided at the time of the subaward for one (1) of the one (1) subaward selected for testing: o Federal award identification number o Federal award date of award to recipient by the Federal agency o Name of federal awarding agency o Federal Financial Assistance Listing/CFDA Number o Identification of whether the award is research and development ? The County did not document their evaluation of each subrecipient?s risk of noncompliance. Context: The entire population of one (1) subrecipient was selected for the WIOA Cluster with ICWDO. The condition above was identified during our procedures related to subrecipient monitoring and was pervasive to the program. Effect: The County?s ICWDO department did not review and approve monitoring procedures performed over its subrecipients. Additionally, the ICWDO department did not maintain policies and procedures to align with the Subrecipient Monitoring requirements in 2 CFR 200.331(a) and 200.332(b). Cause: The County?s ICWDO department does not have a formal procedure in place for the department?s review and approval over the monitoring procedures performed by the department over its subrecipients. The ICWDO department did not ensure that the required award information and applicable requirements were communicated to the subrecipients and did not maintain documentation of their evaluation of each subrecipient?s risk of noncompliance. Questioned Costs: No questioned costs were identified as a result of our procedures. Recommendation: We recommend that the County implement policies and procedures in accordance with 2 CFR 200.331(a) 200.332(b) to ensure compliance with subrecipient monitoring requirements and that require the review and approval of the monitoring procedures performed over its subrecipients by a separate individual. View of Responsible Officials and Planned Corrective Action: See separate Corrective Action Plan.

Program: COVID-19 Coronavirus State and Local Fiscal Recovery Funds (ARPA) Federal Financial Assistance Listing Number: 21.027 Federal Grantor: U.S. Department of Treasury Award No. and Year: 2021 Compliance Requirements: Allowable Activities, Allowable Costs and Cost Principles and Period of Performance Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: Per section 602(g)(1) of the Social Security Act as added by section 9901 of the American Rescue Plan Act of 2021, recipients may only use funds to cover costs incurred during the period beginning on March 3, 2021 and ending on December 31, 2024. 2 CFR Section 200.303(a), Internal Controls, states that the non-Federal entity must 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 the terms and conditions of the Federal award. Condition: During our testing the County?s County Executive Office?s (CEO) provisions for allowable activities, allowable costs and cost principles, and period of performance, we noted the following instance: ? The County?s ARPA payroll allocation contained $2.6M of safety payroll expenditures from the period of March 2020 through December 2020. ? The County?s ARPA payroll allocation did not have any evidence of the CEO department?s review and approval. Context: The entire population of one ARPA payroll allocation was tested. The condition noted above was identified during our procedures related to allowable activities, allowable costs and cost principles and period of performance. Effect: The County did not ensure the expenditures included in their ARPA payroll allocation were within the program?s period of performance and included $2.6M of expenditures that occurred outside the program?s period of performance. Additionally, the County?s process was not consistently followed, which requires specific levels of review and approval over transactions. Cause: The County did not ensure the expenditures included in their ARPA payroll allocation were within the program?s period of performance. Additionally, the County did not ensure their process was followed accordingly relating to the review and approval over transactions. Questioned Costs: The March-December 2020 payroll expenditures included in the payroll allocation for ARPA totaled to $2,600,000. Recommendation: We recommend the County comply with section 602(g)(1) of the Social Security Act as added by section 9901 of the American Rescue Plan Act of 2021, and ensure expenditures claimed under the ARPA program fall within the grant?s period of performance. Additionally, we recommend the County adhere to their policies and ensure the required level of review and approval is completed and documented. View of Responsible Officials and Planned Corrective Action: See separate Corrective Action Plan.

Program: WIOA Cluster Federal Financial Assistance Listing Number: 17.258, 17.259, 17.277, 17.278 Federal Grantor: U.S. Department of Labor Pass-Through: California Department of Employment Development Award No. and Year: AA011008 and 2019 Compliance Requirements: Reporting Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: OMB No. 1205-0461 states that all Employment and Training Administration (ETA) grantees are required to submit quarterly financial reports for each grant award they receive. Financial data is required to be reported cumulatively from grant inception through the end of each reporting period. 2 CFR Section 200.303(a), Internal Controls, states that the non-Federal entity must 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 the terms and conditions of the Federal award. Condition: During our testing of Imperial County Workforce Development Office?s (ICWDO) provisions for reporting requirements, we noted the following instances: ? For two (2) of the two (2) quarterly reports, the amounts reported did not agree to the amounts recorded in the County?s general ledger and SEFA ? For four (4) of the four (4) monthly reports, the amounts reported did not agree to the amounts recorded in the County?s general ledger and SEFA ? For one (1) of the one (1) closeout report, the amounts reported did not agree to the amounts recorded in the County?s general ledger and SEFA ? For four (4) of the four (4) monthly reports, the reports were prepared, reviewed, and approved by the same individual Context: A nonstatistical sample as noted below was selected for testing: ? Two (2) of the four (4) quarterly reports ? Four (4) of the twelve (12) monthly reports The entire population of the closeout report was selected for testing. Effect: The ICWDO department?s procedures were not consistently followed, which requires reports to agree to the amounts recorded in the general ledger and SEFA and requires reports to be reviewed and approved by a separate individual. Cause: ICWDO did not ensure the amounts reported on the quarterly financial reports agreed to the amounts recorded in the County?s general ledger and SEFA and did not ensure there was segregation of duties over the preparation and review and approval of the monthly reports. Questioned Costs: No questioned costs were identified as a result of our procedures. Recommendation: We recommend ICWDO adhere to their policies and procedures and ensure amounts reported on the quarterly financial reports agree to the County?s general ledger and SEFA and ensure segregation of duties over the preparation and approval of monthly reports. View of Responsible Officials and Planned Corrective Action: See separate Corrective Action Plan.

Program: Child Support Enforcement Federal Financial Assistance Listing Number: 93.563 Federal Grantor: U.S. Department of Health and Human Services Pass-Through: California Department of Social Services Award No. and Year: 2021 Program: Supplemental Nutrition Assistance Program Cluster Federal Financial Assistance Listing Number: 10.561 Federal Grantor: U.S. Department of Food and Agriculture Pass-Through: California Department of Food and Nutrition Service Award No. and Year: 19-10356 and 2020, and 2021 Program: Social Services Block Grant Federal Financial Assistance Listing Number: 93.667 Federal Grantor: U.S. Department of Health and Human Services Pass-Through: Administration for Children and Families Award No. and Year: 2021 Program: WIOA Cluster Federal Financial Assistance Listing Number: 17.258, 17.259, 17.277, 17.278 Federal Grantor: U.S. Department of Labor Pass-Through: California Department of Employment Development Award No. and Year: AA011008 and 2019 Compliance Requirements: Allowable Activities and Allowable Costs and Cost Principles Type of Finding: Significant Deficiency in Internal Control Criteria: 2 CFR Section 200.303(a), Internal Controls, states that the non-Federal entity must 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 the terms and conditions of the Federal award. Condition: During our testing for the Child Support Enforcement program of the Child Support Services department?s (CSS) provisions for allowable activities and allowable costs and cost principles, we noted the following instance: ? For one (1) of sixty (60) transactions selected for testing, the employee did not fill out a time certification and the employee?s supervisor did not ensure the form was completed and submitted when due. During our testing for the Supplemental Nutrition Assistance Program Cluster (SNAP) and the Social Services Block Grant Program of the Department of Social Services? (DSS) provisions for allowable activities and allowable costs and cost principles tested through the County Expense Claim (CEC), we noted the following instance: ? For one (1) of the sixty (60) transactions selected for testing, the employee?s supervisor did not review and approve the employee?s time study. During our testing for the WIOA Cluster of the Imperial County Workforce Development Office`s (ICWDO) provisions for allowable activities and allowable costs and cost principles, we noted the following instances: ? For one (1) of the sixty (60) transactions selected, there was no evidence of review or approval over the journal entry made to record the transaction. ? For three (3) of the sixty (60) transactions selected, there was no evidence of review or approval over the related claim form. Context: As the population was greater than two hundred-fifty (250) transactions, a nonstatistical sample of sixty (60) transactions were sampled for the Child Support Enforcement Program. The condition above was identified during our procedures related to allowable activities and allowable costs and cost principles. As the population was greater than two hundred-fifty (250) transactions, a nonstatistical sample of sixty (60) were sampled for the SNAP and Social Services Block Grant Program tested through CEC. The condition above was identified during our procedures related to allowable activities and allowable costs and cost principles. As the population was greater than two hundred-fifty (250) transactions, a nonstatistical sample of sixty (60) were sampled for the WIOA Cluster. The condition above was identified during our procedures related to allowable activities. Effect: The CSS, DSS and ICWDO departments? processes were not consistently followed, which require specific levels of review and approval over transactions. Cause: The CSS, DSS and ICWDO departments did not ensure their control processes were followed accordingly. Questioned Costs: No questioned costs were identified as a result of our procedures. Recommendation: We recommend the CSS, DSS and ICWDO departments adhere to their policies and ensure the required level of review and approval is completed and documented. View of Responsible Officials and Planned Corrective Action: See separate Corrective Action Plan.

Program: Temporary Assistance for Needy Families (TANF) Cluster CFDA No.: 93.558 Federal Grantor: U.S. Department of Health and Human Services Passed-through: California Department of Social Services Award No. and Year: Various Compliance Requirements: Eligibility Significant Deficiency in Internal Control over Compliance/Non-Compliance ? Other Matters Criteria: The Uniform Guidance Compliance Supplement requires that eligibility determinations and redeterminations, including obtaining any required documentation and verifications, were performed and the individual was determined to be eligible in accordance with the compliance requirements of the program. For each case, the client must go through an intake process that requires information on the SAWS 1, SAWS 2 Plus and CW 2.1 be obtained to determine eligibility. During the mid-year review, the participant must submit the SAR7 form in order to continue benefits Condition: During our participant case file testing, we noted that for two of 40 case files, support for eligibility determination and benefit continuation, such as SAWS 1, SAWS 2 Plus, CW 2.1 and SAR 7 could not be located. Cause: The condition was caused by the County?s Social Services department?s filing software not maintaining all required forms. Certain forms, including the approval forms, were located and tested without exception. Effect: Case data may not be current or accurate in the case file or the system, which could lead to initial and continued eligibility errors, inaccurate benefit calculations, and benefit overpayments. Questioned Costs: None reported Context: The condition above was identified during our testing of the eligibility requirements of the program. Repeat Finding from Prior Year: Yes Recommendation: We recommend that the County strengthen its established policies and procedures with regard to maintenance of case files. Views of Responsible Officials and Planned Corrective Action: See separate corrective action plan.

Program: Temporary Assistance for Needy Families (TANF) Cluster CFDA No.: 93.558 Federal Grantor: U.S. Department of Health and Human Services Passed-through: California Department of Social Services Award No. and Year: Various Compliance Requirements: Eligibility Significant Deficiency in Internal Control over Compliance/Non-Compliance ? Other Matters Criteria: The Uniform Guidance Compliance Supplement requires that eligibility determinations and redeterminations, including obtaining any required documentation and verifications, were performed and the individual was determined to be eligible in accordance with the compliance requirements of the program. Condition: For each case, the client must go through an intake process that requires information on the SAWS 1, SAWS 2 Plus and CW 2.1 be obtained to determine eligibility. During the mid-year review, the client must submit the SAR7 form in order to continue benefits. As a result of our participant case files testing, we noted that for three of 40 case files, no evidence was retained to support eligibility determination and benefit continuation, such as SAWS 1, SAWS 2 Plus, CW 2.1 and SAR 7. Cause: The condition is primarily caused by the County?s Social Services Department not following policies and procedures to ensure the eligibility case files contain documentation to support eligibility and recertifications. Effect: Case data may not be current or accurate in the case file or the system, which could lead to initial and continued eligibility errors, inaccurate benefit calculations, and benefit overpayments. Questioned Costs: None reported Context: The condition above was identified during our testing of the eligibility requirements of the program. Repeat Findings from Prior Years (s): No Recommendation: We recommend that the County strengthen its established policies and procedures with regard to initial and ongoing eligibility determination, required documentation and verifications, maintenance of case files, and ensure that policies and procedures are strictly adhered to by County personnel. Views of Responsible Officials and Planned Corrective Actions: See separate corrective action plan.

Program: Temporary Assistance for Needy Families (TANF) Cluster CFDA No: 93.558 Federal Grantor: U.S. Department of Health and Human Services Passed-through: California Department of Social Services Award No. and Year: Various Compliance Requirements: Special Tests and Provisions Significant Deficiency in Internal Control over Compliance Criteria: In accordance with 45 CFR section 261.14, the State agency must reduce or terminate the assistance payable to the family if an individual in a family receiving assistance refuses to work, subject to any good cause or other exemptions established by the State. Condition: During the testing of compliance with eligibility requirements, we noted two cases that involved adults who were not working and non-compliant with Welfare to Work, but benefits were not reduced or denied. Cause: The Imperial County Department of Social Services? procedures did not ensure that individuals were sanctioned for refusal to work. Effect: Failure to follow the eligibility requirement results in non-compliance with Federal regulations. Questioned Costs: Benefits paid to beneficiaries who are ineligible totaled $9,409 for the fiscal year ended June 30, 2019. Context: The condition above was identified during our testing of the eligibility requirements of the program. Repeat Findings from Prior Years (s): No Recommendation: We recommend that the Department of Social Services strengthen its current policies and procedures to ensure that individuals are properly sanctioned and benefits are reduced or denied for refusal to work in accordance with 45 CFR section 261.14. Views of Responsible Officials and Planned Corrective Actions: See separate corrective action plan.

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