Yuma Private Industry Council

Condition and Context: During our audit, we noted that YPIC overdrew on its WIOA Adult Program in 2022, resulting in deferred revenue of $195,123. This error was identified in the 2022 audit but not corrected by management or resolved in the correct grant period. As a result, YPIC retained federal funds beyond the period of availability, which is not in compliance with the Uniform Guidance requirements.

Criteria: Per 20 CFR 683.110, funds allocated by the state to the local area under subpart-A sections 128(b) and 133(b), for any program year are available for expenditure only during that program year and the succeeding program year. Funds not expended by a local area in a two-year period must be returned to the state.

Cause and Effect: The cause was an error made in requesting reimbursement. The effect is that YPIC retained federal funds beyond the period of availability, which may require repayment to the state of Arizona.

Recommendation: We recommend that YPIC implement a monthly reconciliation process to align drawdowns with allowable expenditures within the grant period. We also recommend additional training to finance personnel on federal grant compliance requirements.

Management’s Response: See corrective action plan.

Finding 2023-101 Improve the Timeliness and Accuracy of Financial Reports (Significant Deficiency). The financial report for the month ended July 31, 2022, was issued 12 days after the deadline. The effect of the reporting delays is that funding agencies are receiving untimely information. The cause is insufficient monitoring of reporting deadlines. – Federal regulations (2 CFR §200.327) and the terms of the federal grants and contracts require that financial reports be filed in a timely manner. We recommend that YPIC improve internal controls over grant reporting that includes a process for identifying reporting requirements and monitoring the timely grant reporting.