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Lessons Learned from Audits and Attestation Engagements. Marie Ledan International Relations Officer Cara Vileno International Relations Officer May 31, 2011. Session Objectives. Purpose of audits and attestation engagements Most common compliance challenges for Grantees

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lessons learned from audits and attestation engagements

Lessons Learned from Audits and Attestation Engagements

Marie Ledan

International Relations Officer

Cara Vileno

International Relations Officer

May 31, 2011

session objectives
Session Objectives
  • Purpose of audits and attestation engagements
  • Most common compliance challenges for Grantees
  • - Gathered from over 50 audits conducted to date

U.S. Department of Labor, Office of Child Labor, Forced Labor, and Human Trafficking

purpose of audits and attestation engagements
Purpose of Audits and Attestation Engagements
  • Determine whether the Grantee is complying with laws, Department of Labor’s regulations for grants (29 CFR part 95), the terms of their OCFT cooperative agreement, and applicable OMB circulars (A-110, A-50, A-133, A-122);
  • Assess the accuracy and reliability of financial reports; and
  • Assess the accuracy and reliability of the performance data from Grantees’ progress reports that support OCFT’s performance goals and measures

U.S. Department of Labor, Office of Child Labor, Forced Labor, and Human Trafficking

areas reviewed during examinations
Areas Reviewed During Examinations
  • Administrative Procedures
  • Fraud Risk Assessment
  • Cash Management
  • Budgets
  • Performance Data, Measures & Goals
  • Disbursements & Financial Reporting
  • Inventory Management & Procurement

U.S. Department of Labor, Office of Child Labor, Forced Labor, and Human Trafficking

compliance challenges
Compliance Challenges
  • Performance Measures & Reporting
  • Monitoring Procedures
  • Budget Monitoring
  • Disbursement Controls
  • Matching Funds
  • Inherently Religious Activities
  • Safe and Healthy School Environments
  • Construction

U.S. Department of Labor, Office of Child Labor, Forced Labor, and Human Trafficking

performance measures reporting
Performance Measures & Reporting
  • Children counted as withdrawn or prevented who did not meet the eligibility requirements (Pre-2010 indicators)
  • Working definitions for reporting to USDOL as withdrawn/prevented do not comply with USDOL definitions (Pre-2010 indicators)
  • Attendance logs not matching enrollment or retention figures
monitoring procedures
Monitoring Procedures
  • Performance monitoring in some cases did not include:
  • Continuous monitoring and documentation of work status
  • Documentation of attendance and reasons for absences and dropouts
  • Monitoring during vacations and other risk periods (harvest seasons)
  • Child labor law nuances in forms and procedures
budget monitoring
Budget Monitoring
  • Grantee over-spending or under-utilizing funds as a result of:
  • Using budgets from original proposal or unapproved revisions
  • Lack of routine budget to actual analysis during the project
disbursement controls
Disbursement Controls
  • Majority of questioned costs occur in this area
  • Primarily observed in the following areas:
    • Payroll review and approval (OMB Circular A-122)
    • Invoice review and approval (29 CFR 95.53)
    • Verification of allowable costs (OMB Circular A-122)
    • Errors in Financial Status Reports (29 CFR 95.53)
    • Cost allocation of shared resources (OMB Circular A-122)

U.S. Department of Labor, Office of Child Labor, Forced Labor, and Human Trafficking

matching funds
Matching Funds
  • Unreported matching funds
    • Inadequate tracking mechanisms
    • Failure to assign monetary value to in-kind labor
  • Ineligible cost sharing
    • Matching contributions are controlled by the same regulatory and programmatic requirements as federal funds
inherently religious activities
Inherently Religious Activities
  • Grantees may not use funds for religious instruction, worship, prayer, proselytizing, other inherently religious activities, or the purchase of religious materials.
  • Prayer or devotions led by teachers have been observed.
  • Occurs most frequently in countries where religious education is required by the national curriculum.
  • Inherently religious activities conducted by grantees must be clearly separated in time or physical space from DOL-funded activities.
safe and healthy learning environments
Safe and Healthy Learning Environments
  • USDOL supports the provision of safe and healthy learning environments for children.
  • Areas of concern include:
    • Absence of latrines / lack of separate latrines
    • Absence of potable drinking water
    • Infrastructure degradation
    • Overcrowded classrooms
    • Lack of furniture
  • Grantees are required to conduct a needs assessment of school and other learning facilities.
  • DOL does not support sending beneficiaries to schools assessed to be unsafe or hazardous.
construction
Construction
  • Construction is subject to USDOL approval and ordinarily should not exceed 10 percent of the project budget’s direct costs.
  • If, after conducting the required needs assessment on learning environments, additional funding for construction beyond the initially approved amount may be needed, the Grantee should notify USDOL of this as soon as possible.
  • Construction costs must be clearly specified in the budget and cannot be categorized in expense reporting.
supporting documentation
Supporting Documentation
  • Grantees should have mechanisms in place for maintaining documentation to support their procedures and actions.
  • The regulations generally require retention of documentation and records pertinent to an award for at least 3 years from the date of submission of the final expenditure report or until any litigation, claim, or audit started before the expiration of the 3-year period has been resolved and final action taken.
  • Documentation! Documentation! Documentation!
conclusion
Conclusion
  • Keep adequate supporting documentation.
  • Awareness of the common compliance issues will save time and effort down the road and help you have a successful project.
  • Should you be audited, you will spend less time like this:
thank you

And more time like this:

THANK YOU!

Questions? Contact us at:

Ledan.marie@dol.gov

Vileno.cara@dol.gov

Audit summary reports: http://www.dol.gov/ilab/programs/ocft/paae.htm