Audit Report

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Employment Services Cluster Grants

Our objective was to determine whether all activities and costs for Employment Services Cluster grants received by Denver Economic Development & Opportunity were consistent with grant requirements and whether all required reports were complete and submitted on time in compliance with grant requirements.

Federal Employment Services Cluster grants pay for workforce development activities. This includes employment services funded through the Wagner- Peyser Act, as well as two other federal programs: the Disabled Veterans’ Outreach Program and the Local Veterans’ Employment Representative program.

In Colorado, the state Department of Labor and Employment disburses federal workforce development funds to local municipalities and monitors employment programs and services to ensure they meet federal requirements. For the City and County of Denver, Denver Economic Development & Opportunity’s Division of Workforce Development implements these programs.

Denver Economic Development & Opportunity Submitted Some Reports Late to the State

Of seven reports we tested for timeliness from fiscal year 2019, Denver Economic Development & Opportunity submitted five late — ranging from one day late to 14 days late.

Staff said the reports being late was because of technology issues. However, if reports are late, it could affect the state’s ability to track grant expenditures in a timely manner and complete federal reporting.

Denver Economic Development & Opportunity Did Not Properly Document the Need for Travel Costs for a Conference

While all expenditures auditors tested were allowable, we found the transaction documentation for one conference did not justify the cost of the travel being charged to the Wagner-Peyser grant for workforce development programming and services.

If a cost is not documented as necessary to provide employment programs and services under Wagner-Peyser, it could call into question whether the cost was allowable.

1.1 Work with the State to Address Technology Issues – Denver Economic Development & Opportunity should work with the Colorado Department of Labor and Employment to address technology issues to improve the timely upload of reports. In case of system issues, an alternate method of submission should be arranged — such as sending the report directly to Colorado Department of Labor and Employment staff for them to upload, when feasible — to ensure on-time delivery.

Agency Response: Agree, Implementation Date Sept. 30, 2020

2.1 Document Specific Evidence Tying Spending to Grant – For all expenditures funded by the Wagner- Peyser program, Denver Economic Development & Opportunity should include within its documentation specific evidence tying the expenditure to employment services and workforce development activities under the grant.

Agency Response: Agree, Implementation Date Aug. 31, 2020

The objective of our audit of federal Employment Services Cluster grants awarded to Denver Economic Development & Opportunity was to determine the agency’s compliance with grant requirements. I am pleased to present the results of this audit.

We found some reports required by the state were late. Additionally, while the audit found all tested expenditures were allowable, we identified two transactions associated with one conference where Denver Economic Development & Opportunity did not properly document its need to use employment services grant funds to pay for those costs.

By implementing recommendations for stronger adherence to reporting and expenditure requirements, Denver Economic Development & Opportunity will be better equipped to ensure the city follows grant requirements.

This performance audit is authorized pursuant to the City and County of Denver Charter, Article V, Part 2, Section 1, “General Powers and Duties of Auditor.” We conducted this performance audit in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives.

We extend our appreciation to the personnel at Denver Economic Development & Opportunity who assisted and cooperated with us during the audit. For any questions, please feel free to contact me at 720-913-5000.

Follow-up report

A follow-up report is forthcoming. 

Audit Team: Dawn Wiseman, Cody Schulte, Anna Hansen, Megan O’Brien, Marc Hoffman
Methodological Support: Sam Gallaher, William Morales