Single Audit Report Fiscal Year Ended June 30, 2012 - State ...

State of GeorgiaFederal Awards Findings and Questioned CostsFor the Fiscal Year Ended June 30, 2012Recommendation:The Department of Labor should review their current internal controls in relation to the recording ofexpenses to the proper grants and implement additional internal controls as needed to ensure thatFederal funds are recorded in accordance with period of availability requirements.Finding Control Number: FA-440-12-05PERIOD OF AVAILABILITY OF FEDERAL FUNDSExpenses Recorded Outside of Grant Period of AvailabilityWIA Adult Program (CFDA 17.258)WIA Youth Activities (CFDA 17.259)WIA Dislocated Workers (CFDA 17.260)U.S. Department of LaborGrant Award: Year 2008 - AA-17116-08-55-A-13Condition:Criteria:Our examination included a review of expenses charged by the Department of Labor (Department) forthe Workforce Investment Act (WIA) cluster program. We noted 3,178 expenditure transactionstotaling $3,222,212.49 that were recorded outside of the grant period. Expenditures recorded outsidethe period of availability included both American Recovery and Reinvestment Act (ARRA) programfunds and non-ARRA program funds.The WIA cluster program funding is generated through two different periods; Program Year (PY) andFiscal Year (FY). Program Year begins on July 1 for the Adult and Dislocated Worker programs, andApril 1 for the Youth program. Fiscal Year grants begin on October 1, and are based on the FederalFiscal Year. All grants expire on June 30, three years after the grant was initiated.According to 20 CFR 667.107 (a), funds "are available for expenditure by the State receiving the fundsonly during that program year and the two succeeding program years."Additionally, ARRA funding for the WIA program expired on June 30, 2011. According to TrainingEmployment Notice (TEN) 30-08, issued by the Employment and Training Administration, "WIAfunds may be obligated through the entire period of availability and must be expended by June 30,2011."Both ARRA and non-ARRA WIA cluster funds have a liquidation period. Federal regulations at 29CFR 97.23(b) states: "A grantee must liquidate all obligations incurred under the award not later than90 days after the end of the funding period...The Federal agency may extend this deadline at therequest of the grantee."While WIA is entitled to a liquidation period, all expenditures must have been booked to the generalledger by the end of the period of obligation.Information:Cause:Effect:During our review of expenses recorded on the general ledger for the WIA cluster grants, we noted thatthere were expenditures recorded outside of the PY08 and FY09 grant period availability as well as theARRA grant period of availability. Based on our review of grant awards provided by the Department,expenses for the PY08, FY09, and the ARRA grants should not have been recorded after June 30,2011. Upon further review, we noted that the majority of expenditures recorded to the PY08, FY09,and ARRA grants after the period of availability were for subrecipient drawdown requests. Thesedrawdown requests should have been received and recorded prior to the grant closing on June 30,2011. While the Department maintains that the expenditures were for allowable activities and wereincurred within the period of availability, the Department did not actually record the transactions untilafter the close of the grant period of availability.The Department's policies and procedures for recording WIA cluster expenses within the appropriateperiod of availability were inadequate.Apparent noncompliance with Federal laws, regulations, and other compliance requirements regardingperiod of availability.106