Employment Development: Recurring Material Internal Control Deficiencies
||First Year Reported
||EDD's financial management systems did not allow it to separately identify and report on American Recovery and Reinvestment Act of 2009 (Recovery Act) funds. Specifically, the Unemployment Insurance(UI)program expended $24.8 billion, which included both Recovery Act and non-Recovery Act funds. However, EDD was not able to identify what portion of the total expenditures was paid with Recovery Act funds.
|Partially corrected. EDD has partially completed programming changes to revise the 58 different financial reports needed to correct this finding. EDD can and has been reporting all the benefits paid by each federal extension. This finding only pertains to the current inability to identify which federal extension payments should be charged to the different federal accounts.
Because of the complexity of the reports and the other extension-related work, the programming is not yet complete. In addition, the federal Department of Labor’s clarification of the reporting requirements for Federal Additional Compensation (FAC) funds required additional programming to separate Recovery Act funds and “post- Recovery Act” funds. The FAC funds were initially identified as 100 percent Recovery Act funds.
Half of the reports went into production in December 2010 with plans to complete the remainder by mid-2012. The completion date for all programming was changed due to the additional programming required to accurately report on FAC funds/expenditures, the need to share Information Technology Branch resources with other priority UI automation projects, and project schedules that require a “code freeze” to ensure the proper deployment of EDD’s new systems.
After release, the remaining financial reports will be rerun beginning with State fiscal year 2008-09 and reviewed to identify proper adjusting entries to the accounting records. EDD expects this effort will take an additional few months to complete.