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A local Workforce Development Board (WDB) or subrecipient1 organization that expends $750,000 or more in federal funds during its fiscal year to operate one or more programs must have a single or program-specific audit conducted. Any local WDB or subrecipient organization that expend less than $750,000 of federal funds in a year is exempt from the audit requirements for that year, but records must be available for review or audit by appropriate officials of the federal agency or pass-through entity.2
Subrecipients that are units of government or nonprofit organizations that expends $750,000 or more in federal funds during its fiscal year to operate one or more programs must have a single or program-specific audit that:3
The responsibilities of a local WDB or a subrecipient organization as an auditee are as follows:
Audit reports are to be submitted via email to: email@example.com
If there are no findings in the audit reports and no further action is required, DWD-DET will issue a closeout letter.
If there are findings in the audit report related to WIOA, DWD-DET will follow the Audit Resolution process stated below.
The submission of a local WDBs final Audit Report which contains findings initiates DWD-DET's audit resolution process. Upon receipt of the audit report, DWD-DET will issue a letter to the subrecipient indicating the corrective action18 needed. The subrecipient will have 30 days to respond to this letter. Based on the subrecipient's response to the corrective action letter, DWD-DET will issue a Statement of Findings and Determinations. Any debts due to audit disallowance are established at this point.
During the audit resolution process, the auditee may propose the use of stand-in costs to substitute for the disallowed costs19. The use of stand-in costs is an audit resolution activity. Stand-in costs are usable as substitutes for unallowable costs identified in an audit report. Stand-in costs result when an Operators and Service Providers expend non-federal funds on WIOA programs. To be considered, stand-in costs must be incurred for allowable WIOA costs that were reported as uncharged WIOA program costs, included within the scope of the audit, and accounted for in the auditee's financial system. The stand-in cost must have been expended in support of the same title and program year as the costs they propose to replace, and the costs must not cause a violation of the cost limitations and requirements.20 Stand-in costs must be actual expenses paid with nonfederal funds. Cash match in excess of the required match may also be considered for use as stand-in costs.
Federal awards expended as a recipient or subrecipient are subject to audit requirements.21
All local WDBs must obtain and review the audit report of their subrecipients to ensure compliance with the requirements of the Uniform Guidance. The local WDB must have an audit resolution process in place for its subrecipients.22 The audit and audit resolution process for subgrantees is independent of the process between DWD-DET and subrecipients.
Local WDBs must:
In addition to the required annual audits, DWD-DET subrecipients shall be subject to preliminary fiscal reviews, financial and compliance audits. DWD-DET reserves the right to conduct other audits and investigations in accordance with applicable federal and state laws or regulations.
The DWD-DET subrecipient shall be responsible for the cost of the audit.
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