Recurring Findings

Employment Development: Recurring Less severe Noncompliance
Federal Program Issue First Year Reported
Department's Assertion Page Number
WIA Youth Activities During our audit for fiscal year 2011–12, we reported that EDD did not have a process in place to comply with reporting requirements of the Federal Funding Accountability Transparency Act (FFATA) for the WIA Cluster. In fiscal year 2012-13, EDD made a good faith effort to report information for one subrecipient in the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). However, the subrecipient was not yet listed in FSRS. EDD was not aware that it could report information for other subrecipients who were listed within FSRS, and as a result, did not report required information for 39 of 40 subgrants tested. Failure to implement adequate processes and controls over FFATA reporting increases when the subaward information is not reported in accordance with federal requirements. 2011-12
The EDD concurs with the recommendation. The EDD had taken immediate action to correct the original deficiency from the audit for State Fiscal Year 2011-12. The EDD issued Workforce Services Directive 12-11, “FFATA Compensation Data Reporting Requirements,” in January 2013 that provided guidance to federally funded sub-awardees and subcontractors on FFATA reporting requirements. The EDD received confirmation of successful submission of the Program Year (PY) 2011-12 FFATA on September 26, 2013, and of the PY 2012-13 FFATA report on September 30, 2013. The EDD is currently inputting FFATA information for PY 2013-14. The EDD has effectively addressed this finding. 57
WIA Youth Activities During our audit for fiscal year 2011–12, we reported that EDD did not have adequate controls to issue management decisions on findings reported in subrecipient OMB Circular A-133 reports within six months after receipt of the audit report. In fiscal year 2012–13, we tested four of 11 audit reports with WIA Cluster findings and found one in which the management decision was not issued within six months of receipt of the subrecipient’s OMB Circular A-133 report. Failure to issue management decisions in a timely manner may result in delays in recovery of questioned costs and proper corrective action. 2011-12
The EDD concurs with the recommendation. The EDD implemented its corrective action plan stated in the auditor’s report issued in March 2013. The incident involving the one management decision letter noted in the current year audit that was issued subsequent to the six-month requirement occurred prior to EDD implementing corrective actions in March 2013. The EDD continues using online automated tools to track the status of management decision letters and send automated alerts to keep the decision process on schedule. 55
WIA Youth Activities During our audit for fiscal year 2011–12, we reported that EDD did not properly obtain DUNS numbers from its subrecipients prior to awarding WIA Cluster funds. In response to our finding, EDD implemented policies to obtain DUNS numbers prior to issuing new subgrants. However, in fiscal year 2012–13, our testwork found that EDD did not obtain DUNS numbers prior to issuing 32 of 40 subgrants tested. Failure to obtain the DUNS numbers prior to awarding funds increases the risk that EDD may not properly report subaward information to the federal government. 2011-12
The EDD concurs with the recommendation. The EDD took action to correct the deficiency on February 4, 2013, by revising the Subgrantee Tax Identification form which is sent out for completion with all bilateral (new) subgrant packages to include a request for the DUNS number. The EDD determined that the 32 subgrant awards found to be non-compliant with the DUNS number requirement were funded prior to the February 4, 2013 corrective action implementation date. The EDD also determined that those subgrant awards found compliant were funded after the corrective actions were implemented and the DUNS numbers were obtained from the subrecipients prior to awarding WIA funds. The EDD maintains a complete list of DUNS numbers in the Financial Management Unit share drive and has placed a hard copy of the DUNS numbers list in each funding binder since February 4, 2013. The EDD has effectively addressed this finding. 56
Workforce Investment Act Adult Program During our audit for fiscal year 2011–12, we reported that EDD did not have a process in place to comply with reporting requirements of the Federal Funding Accountability Transparency Act (FFATA) for the WIA Cluster. In fiscal year 2012-13, EDD made a good faith effort to report information for one subrecipient in the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). However, the subrecipient was not yet listed in FSRS. EDD was not aware that it could report information for other subrecipients who were listed within FSRS, and as a result, did not report required information for 39 of 40 subgrants tested. Failure to implement adequate processes and controls over FFATA reporting increases when the subaward information is not reported in accordance with federal requirements. 2011-12
The EDD concurs with the recommendation. The EDD had taken immediate action to correct the original deficiency from the audit for State Fiscal Year 2011-12. The EDD issued Workforce Services Directive 12-11, “FFATA Compensation Data Reporting Requirements,” in January 2013 that provided guidance to federally funded sub-awardees and subcontractors on FFATA reporting requirements. The EDD received confirmation of successful submission of the Program Year (PY) 2011-12 FFATA on September 26, 2013, and of the PY 2012-13 FFATA report on September 30, 2013. The EDD is currently inputting FFATA information for PY 2013-14. The EDD has effectively addressed this finding. 57
Workforce Investment Act Adult Program During our audit for fiscal year 2011–12, we reported that EDD did not have adequate controls to issue management decisions on findings reported in subrecipient OMB Circular A-133 reports within six months after receipt of the audit report. In fiscal year 2012–13, we tested four of 11 audit reports with WIA Cluster findings and found one in which the management decision was not issued within six months of receipt of the subrecipient’s OMB Circular A-133 report. Failure to issue management decisions in a timely manner may result in delays in recovery of questioned costs and proper corrective action. 2011-12
The EDD concurs with the recommendation. The EDD implemented its corrective action plan stated in the auditor’s report issued in March 2013. The incident involving the one management decision letter noted in the current year audit that was issued subsequent to the six-month requirement occurred prior to EDD implementing corrective actions in March 2013. The EDD continues using online automated tools to track the status of management decision letters and send automated alerts to keep the decision process on schedule. 55
Workforce Investment Act Adult Program During our audit for fiscal year 2011–12, we reported that EDD did not properly obtain DUNS numbers from its subrecipients prior to awarding WIA Cluster funds. In response to our finding, EDD implemented policies to obtain DUNS numbers prior to issuing new subgrants. However, in fiscal year 2012–13, our testwork found that EDD did not obtain DUNS numbers prior to issuing 32 of 40 subgrants tested. Failure to obtain the DUNS numbers prior to awarding funds increases the risk that EDD may not properly report subaward information to the federal government. 2011-12
The EDD concurs with the recommendation. The EDD took action to correct the deficiency on February 4, 2013, by revising the Subgrantee Tax Identification form which is sent out for completion with all bilateral (new) subgrant packages to include a request for the DUNS number. The EDD determined that the 32 subgrant awards found to be non-compliant with the DUNS number requirement were funded prior to the February 4, 2013 corrective action implementation date. The EDD also determined that those subgrant awards found compliant were funded after the corrective actions were implemented and the DUNS numbers were obtained from the subrecipients prior to awarding WIA funds. The EDD maintains a complete list of DUNS numbers in the Financial Management Unit share drive and has placed a hard copy of the DUNS numbers list in each funding binder since February 4, 2013. The EDD has effectively addressed this finding. 56
Workforce Investment Act Cluster During our audit for fiscal year 2011–12, we reported that EDD did not have a process in place to comply with reporting requirements of the Federal Funding Accountability Transparency Act (FFATA) for the WIA Cluster. In fiscal year 2012-13, EDD made a good faith effort to report information for one subrecipient in the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS). However, the subrecipient was not yet listed in FSRS. EDD was not aware that it could report information for other subrecipients who were listed within FSRS, and as a result, did not report required information for 39 of 40 subgrants tested. Failure to implement adequate processes and controls over FFATA reporting increases when the subaward information is not reported in accordance with federal requirements. 2011-12
The EDD concurs with the recommendation. The EDD had taken immediate action to correct the original deficiency from the audit for State Fiscal Year 2011-12. The EDD issued Workforce Services Directive 12-11, “FFATA Compensation Data Reporting Requirements,” in January 2013 that provided guidance to federally funded sub-awardees and subcontractors on FFATA reporting requirements. The EDD received confirmation of successful submission of the Program Year (PY) 2011-12 FFATA on September 26, 2013, and of the PY 2012-13 FFATA report on September 30, 2013. The EDD is currently inputting FFATA information for PY 2013-14. The EDD has effectively addressed this finding. 57
Workforce Investment Act Cluster During our audit for fiscal year 2011–12, we reported that EDD did not have adequate controls to issue management decisions on findings reported in subrecipient OMB Circular A-133 reports within six months after receipt of the audit report. In fiscal year 2012–13, we tested four of 11 audit reports with WIA Cluster findings and found one in which the management decision was not issued within six months of receipt of the subrecipient’s OMB Circular A-133 report. Failure to issue management decisions in a timely manner may result in delays in recovery of questioned costs and proper corrective action. 2011-12
The EDD concurs with the recommendation. The EDD implemented its corrective action plan stated in the auditor’s report issued in March 2013. The incident involving the one management decision letter noted in the current year audit that was issued subsequent to the six-month requirement occurred prior to EDD implementing corrective actions in March 2013. The EDD continues using online automated tools to track the status of management decision letters and send automated alerts to keep the decision process on schedule. 55
Workforce Investment Act Cluster During our audit for fiscal year 2011–12, we reported that EDD did not properly obtain DUNS numbers from its subrecipients prior to awarding WIA Cluster funds. In response to our finding, EDD implemented policies to obtain DUNS numbers prior to issuing new subgrants. However, in fiscal year 2012–13, our testwork found that EDD did not obtain DUNS numbers prior to issuing 32 of 40 subgrants tested. Failure to obtain the DUNS numbers prior to awarding funds increases the risk that EDD may not properly report subaward information to the federal government. 2011-12
The EDD concurs with the recommendation. The EDD took action to correct the deficiency on February 4, 2013, by revising the Subgrantee Tax Identification form which is sent out for completion with all bilateral (new) subgrant packages to include a request for the DUNS number. The EDD determined that the 32 subgrant awards found to be non-compliant with the DUNS number requirement were funded prior to the February 4, 2013 corrective action implementation date. The EDD also determined that those subgrant awards found compliant were funded after the corrective actions were implemented and the DUNS numbers were obtained from the subrecipients prior to awarding WIA funds. The EDD maintains a complete list of DUNS numbers in the Financial Management Unit share drive and has placed a hard copy of the DUNS numbers list in each funding binder since February 4, 2013. The EDD has effectively addressed this finding. 56
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