Audit 293973

2023-002 Head Start Program – Assistance Listing No. 93.600; Grant No. 03CH012094; Grant period: Year ended July 31, 2023 Criteria: A Head Start Agency must share accurate and regular financial information with the governing body and the policy council, including monthly financial statements, including credit card expenditures, monthly program information, and the financial audit. Condition: Financial and program information was not being provided on a monthly basis to the Board of Directors and the policy council. Cause: The Board of Directors and the Board’s finance committee received program information, financial statements and enrollment reports quarterly instead of monthly. Effect: The absence of monthly financial reports being provided to the Board of Directors resulted in STEPS not being in compliance with the special tests and provisions requirements of the Head Start grant. There are no questioned costs as a result of failing to meet this requirement. Recommendation: Management should record and review financial activity in a timely manner to allow for the reports and other information to be provided to the governing bodies on a monthly basis as required by the grant. Views of Responsible Officials and Planned Corrective Action: Management agrees with the auditor’s recommendation, and the following action was taken to improve the situation. Starting in August 2023, the Board of Directors receives a monthly packet approved by the STEPS Head Start Policy Council that contains all necessary monthly financial and program requirements.

Criteria: Internal controls should be in place that provide reasonable assurance that grant billings are reconciled accurately and timely to the accounting system. Condition: Some grants were being billed to the granting agency based on spreadsheets that were outside of the accounting system and not being reconciled to the accounting records. Cause: Documents used to prepare grant billings for one grant were not reconciled accurately and timely to the accounting system. Effect: Due to the failure to reconcile grant billings accurately and timely to the accounting system, amounts could be billed to a grant for expenditures that do not exist or were already billed to another grant. Recommendation: Procedures should be implemented and followed requiring grant billings to be reconciled timely and accurately to data recorded in the accounting system. Management should review financial activity by grant in a timely manner to allow for timely research of any discrepancies. Views of Responsible Officials and Planned Corrective Actions: STEPS agrees with the finding and the recommended procedures will be implemented.

2023-002 Head Start Program – Assistance Listing No. 93.600; Grant No. 03CH012094; Grant period: Year ended July 31, 2023 Criteria: A Head Start Agency must share accurate and regular financial information with the governing body and the policy council, including monthly financial statements, including credit card expenditures, monthly program information, and the financial audit. Condition: Financial and program information was not being provided on a monthly basis to the Board of Directors and the policy council. Cause: The Board of Directors and the Board’s finance committee received program information, financial statements and enrollment reports quarterly instead of monthly. Effect: The absence of monthly financial reports being provided to the Board of Directors resulted in STEPS not being in compliance with the special tests and provisions requirements of the Head Start grant. There are no questioned costs as a result of failing to meet this requirement. Recommendation: Management should record and review financial activity in a timely manner to allow for the reports and other information to be provided to the governing bodies on a monthly basis as required by the grant. Views of Responsible Officials and Planned Corrective Action: Management agrees with the auditor’s recommendation, and the following action was taken to improve the situation. Starting in August 2023, the Board of Directors receives a monthly packet approved by the STEPS Head Start Policy Council that contains all necessary monthly financial and program requirements.

Criteria: Internal controls should be in place that provide reasonable assurance that grant billings are reconciled accurately and timely to the accounting system. Condition: Some grants were being billed to the granting agency based on spreadsheets that were outside of the accounting system and not being reconciled to the accounting records. Cause: Documents used to prepare grant billings for one grant were not reconciled accurately and timely to the accounting system. Effect: Due to the failure to reconcile grant billings accurately and timely to the accounting system, amounts could be billed to a grant for expenditures that do not exist or were already billed to another grant. Recommendation: Procedures should be implemented and followed requiring grant billings to be reconciled timely and accurately to data recorded in the accounting system. Management should review financial activity by grant in a timely manner to allow for timely research of any discrepancies. Views of Responsible Officials and Planned Corrective Actions: STEPS agrees with the finding and the recommended procedures will be implemented.