WIOA not equipped to administer CARES ACT AND RESCUE AMERICA PLAN

The Office of Public Auditor has released its performance audit report of the WIOA (Workforce Innovation & Opportunity Act)’s implementation of the US CARES Act, PUA (Pandemic Unemployment Act) and FPUC (Federal Pandemic Unemployment Compensation) covering February 02, 2020 to June 16, 2021.

On June 22, 2021, WIOA Office was abruptly closed, and its employees were placed on administrative leave. An investigation into allegations of improper and fraudulent US Covid relief assistance distribution took place. Allegations and complaints that funds from US COVID relief have not been distributed appropriately led to investigations from the Office of Special Prosecutor and Public Auditor.

The audit cited six findings. First, WIOA did not develop and implement important internal controls and processes to review and approve PUA and FPUC applications and claims.  Second, it did not follow guidelines on program eligibility and other requirements; third, it did not maintain and keep claimants’ proper documents to support calculations and payments to claimants.

Fourth, WIOA issued improper payments to beneficiaries due to miscalculations.  Fifth, it did not have an “adequate financial management information system” to capture, process, record, and report information on PUA and FPUC financial information.  Lastly, it did not maintain records and documents to support actions and expenditures of PUA and FPUC benefits.

Based on the review conducted by OPA (Office of Public Auditor), out of 125 applications, several did not show evidence of review and approval from WIOA officials, some did not sign the PUA applications, and some did not show the period they were claiming for. Some claims were dated and signed for a period that has not occurred.  These problems happened because of a lack of proper processes in place and a lack of consistent review from officials of WIOA.

The report also revealed that many files were incomplete, missing, or not properly closed.  It also showed wrong calculations, overpayment for some, and underpayment for others.  Some were deemed ineligible while they were eligible, and notice of determination was not issued to let applicants know why they were rejected and exercise their right to appeal the decisions. 

It added that WIOA did not comply with PUA and FPUC eligibility requirements.  Claimants did not properly fill out the forms and certify they were eligible to claim.  As a result, WIOA paid out payments totaling $929,107.90 to claimants who did not meet the requirements for the PUA and FPUC benefits.

All of these, says the audit report, stemmed from a lack of proper internal controls and processes in place to document, review and approve claims.

WIOA, in response, said that claims would be reviewed to determine if the overpayment was fraudulent or if it was an error by WIOA.  If shown to be fraud by the claimant, a process to get the funds back will take place but if there is an administrative error, the claimant will be informed, and an overpayment waiver will be signed and submitted to the US Department of Labor.

Despite having a new financial management system, WIOA opted to use Peachtree ledger to keep records that are inadequate for the program’s needs.  

OPA said that “The Ministry of Finance (MOF), as prime recipient of the PUA-FPUC grants, did not work with the WIOA to assess and monitor its capability and capacity to administer the PUA-FPUC grants. In failing to do so, the MOF did not timely discover the problems with the WIOA’s accounting system and take appropriate action to correct the deficiencies in preparation for the implementation of the PUA-FPUC financial assistance program.”

OPA recommended that the Ministry of Finance as prime recipient of the PUA-FPUC grants, exercise more diligence and oversight to ensure the implementing agency is properly equipped to administer the grant programs.

WIOA Director Ngirmeriil responded to OPA outlining the work and timelines with US DOL to review and address the problems.  In response to OPA, the WIOA office said, “During the implementation of PUA and FPUC program in April 2020, WIOA Director and Fiscal Officer were under the assumption that not more than 700 individuals would be affected by Covid -19. WIOA staff of 9 trained once with US DOL and then began receiving applications in May 2020. However, the estimation of 700 was incorrect and the number of affected individuals doubled by the end of June 2020. Since WIOA had opted to utilize paper applications and weekly claims forms, the staff of 9 found themselves overwhelmed. According to Palau WIOA staff, they had nearly 1,600 applications by mid-July 2020 and were beginning to receive over 1000 weekly claims per week. Concurrently, there was political and community pressure for Palau WIOA to disburse benefits immediately.”

The Office of Public Auditor recommended that WIOA “develop and implement administrative controls and hire a sufficient number of qualified staff to support proper review of PUA applications and claims. The review process is a critical part of administrative controls that screens applications and claims to ensure they are complete, accurate, contain the proper supporting documents, and comply with the program rules, regulations, and related guidelines.”

The report does not cite or recommend criminal investigation of any of the previous employees of WIOA but individual cases of overpayment and underpayment are being reviewed by WIOA.  If there’s clear evidence that criminal acts took place with specific cases, such cases can be addressed by proper law enforcement agencies.

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