Audit 316325

• Federal Grantor – U.S. Department of Agriculture • Pass-Through Grantor – State of Connecticut Department of Education • Federal Program Name – Child and Adult Food Care Program • CFDA Number – 10.558 • Finding Type – Material Weakness in Internal Control over Major Programs • Compliance Requirement – Activities Allowed or Unallowed and Allowable Costs/Cost Principles • Criteria – Title 2 of the Code of Federal Regulations (CFR) Part 200 establishes cost principles for determining costs applicable to federal awards. These principles include the requirement that cost allocation methodologies be reasonable and documented and that all expenses charged to federal awards are appropriately supported. • Condition – The organization does not have a documented cost allocation plan and there is a lack of a documented approval process for expenses. • Cause – Not enough emphasis is placed on the importance of controls and documentation. • Effect – Costs that were allocated to the federal award were made based on unsupported allocation methodologies that were also not consistently applied. In addition, there was insufficient support for costs charged to federal award programs. As a result, costs may have been incorrectly charged to the federal award. • Questioned Costs – Unknown • Repeat Finding – Yes (first reported as Finding #2022-002) • Recommendation – Management needs to develop a written cost allocation plan and allocations being used must be demonstrated to be reasonable. There should also be a formal review and documented approval process for expenses charged to federal awards, including those that are allocated. • Views of Responsible Officials – Management agrees with the finding. The cost allocation plan will be updated and documented. The approval of invoices will be documented.

• Federal Grantor – U.S. Department of Agriculture • Pass-Through Grantor – State of Connecticut Department of Education • Federal Program Name – Child and Adult Food Care Program • CFDA Number – 10.558 • Finding Type – Material Weakness in Internal Control over Major Programs • Compliance Requirement – Activities Allowed or Unallowed and Allowable Costs/Cost Principles • Criteria – Title 2 of the Code of Federal Regulations (CFR) Part 200 establishes cost principles for determining costs applicable to federal awards. These principles include the requirement that cost allocation methodologies be reasonable and documented and that all expenses charged to federal awards are appropriately supported. • Condition – The organization does not have a documented cost allocation plan and there is a lack of a documented approval process for expenses. • Cause – Not enough emphasis is placed on the importance of controls and documentation. • Effect – Costs that were allocated to the federal award were made based on unsupported allocation methodologies that were also not consistently applied. In addition, there was insufficient support for costs charged to federal award programs. As a result, costs may have been incorrectly charged to the federal award. • Questioned Costs – Unknown • Repeat Finding – Yes (first reported as Finding #2022-002) • Recommendation – Management needs to develop a written cost allocation plan and allocations being used must be demonstrated to be reasonable. There should also be a formal review and documented approval process for expenses charged to federal awards, including those that are allocated. • Views of Responsible Officials – Management agrees with the finding. The cost allocation plan will be updated and documented. The approval of invoices will be documented.

• Federal Grantor – U.S. Department of Agriculture • Pass-Through Grantor – State of Connecticut Department of Education • Federal Program Name – Child and Adult Food Care Program • CFDA Number – 10.558 • Finding Type – Significant Deficiency in Internal Control over Major Programs • Compliance Requirement – Cash Management • Criteria – Per the OMB Compliance Supplement: "A sponsoring organization must disburse advance and meal reimbursement payments to centers and day care homes under its sponsorship within five working days of receiving them from its state agency (7 CFR sections 226.16(g) and (h))." • Condition – Program staff do not prepare a reconciliation of amounts received for a given month with what was actually disbursed on a monthly basis. • Cause – Not enough emphasis is placed on the importance of controls and documentation. • Effect – Some differences existed between what was received from the state and what was paid out during a given month. The reason for these differences was not able to be readily explained. • Questioned Costs – Unknown • Repeat Finding – Yes (first reported as Finding #2022-003) • Recommendation – Management needs to develop a process of formally documenting what was received for a day care center each month versus what was paid out to the day care center and if there is a difference, the reason and how it was resolved needs to be documented. In addition, the activity needs to be reconciled to the bank statement and general ledger accounts monthly. • Views of Responsible Officials – Management agrees with the finding. A spreadsheet with the amount the provider requested and the actual amount paid will be maintained for each month. If there is a difference, it will be noted on the spreadsheet.

• Federal Grantor – U.S. Department of Agriculture • Pass-Through Grantor – State of Connecticut Department of Education • Federal Program Name – Child and Adult Food Care Program • CFDA Number – 10.558 • Finding Type – Significant Deficiency in Internal Control over Major Programs • Compliance Requirement – Cash Management • Criteria – Per the OMB Compliance Supplement: "A sponsoring organization must disburse advance and meal reimbursement payments to centers and day care homes under its sponsorship within five working days of receiving them from its state agency (7 CFR sections 226.16(g) and (h))." • Condition – Program staff do not prepare a reconciliation of amounts received for a given month with what was actually disbursed on a monthly basis. • Cause – Not enough emphasis is placed on the importance of controls and documentation. • Effect – Some differences existed between what was received from the state and what was paid out during a given month. The reason for these differences was not able to be readily explained. • Questioned Costs – Unknown • Repeat Finding – Yes (first reported as Finding #2022-003) • Recommendation – Management needs to develop a process of formally documenting what was received for a day care center each month versus what was paid out to the day care center and if there is a difference, the reason and how it was resolved needs to be documented. In addition, the activity needs to be reconciled to the bank statement and general ledger accounts monthly. • Views of Responsible Officials – Management agrees with the finding. A spreadsheet with the amount the provider requested and the actual amount paid will be maintained for each month. If there is a difference, it will be noted on the spreadsheet.

• Federal Grantor – U.S. Department of Agriculture • Pass-Through Grantor – State of Connecticut Department of Education • Federal Program Name – Child and Adult Food Care Program • CFDA Number – 10.558 • Finding Type – Material Weakness in Internal Control over Major Programs • Compliance Requirement – Activities Allowed or Unallowed and Allowable Costs/Cost Principles • Criteria – Title 2 of the Code of Federal Regulations (CFR) Part 200 establishes cost principles for determining costs applicable to federal awards. These principles include the requirement that cost allocation methodologies be reasonable and documented and that all expenses charged to federal awards are appropriately supported. • Condition – The organization does not have a documented cost allocation plan and there is a lack of a documented approval process for expenses. • Cause – Not enough emphasis is placed on the importance of controls and documentation. • Effect – Costs that were allocated to the federal award were made based on unsupported allocation methodologies that were also not consistently applied. In addition, there was insufficient support for costs charged to federal award programs. As a result, costs may have been incorrectly charged to the federal award. • Questioned Costs – Unknown • Repeat Finding – Yes (first reported as Finding #2022-002) • Recommendation – Management needs to develop a written cost allocation plan and allocations being used must be demonstrated to be reasonable. There should also be a formal review and documented approval process for expenses charged to federal awards, including those that are allocated. • Views of Responsible Officials – Management agrees with the finding. The cost allocation plan will be updated and documented. The approval of invoices will be documented.

• Federal Grantor – U.S. Department of Agriculture • Pass-Through Grantor – State of Connecticut Department of Education • Federal Program Name – Child and Adult Food Care Program • CFDA Number – 10.558 • Finding Type – Material Weakness in Internal Control over Major Programs • Compliance Requirement – Activities Allowed or Unallowed and Allowable Costs/Cost Principles • Criteria – Title 2 of the Code of Federal Regulations (CFR) Part 200 establishes cost principles for determining costs applicable to federal awards. These principles include the requirement that cost allocation methodologies be reasonable and documented and that all expenses charged to federal awards are appropriately supported. • Condition – The organization does not have a documented cost allocation plan and there is a lack of a documented approval process for expenses. • Cause – Not enough emphasis is placed on the importance of controls and documentation. • Effect – Costs that were allocated to the federal award were made based on unsupported allocation methodologies that were also not consistently applied. In addition, there was insufficient support for costs charged to federal award programs. As a result, costs may have been incorrectly charged to the federal award. • Questioned Costs – Unknown • Repeat Finding – Yes (first reported as Finding #2022-002) • Recommendation – Management needs to develop a written cost allocation plan and allocations being used must be demonstrated to be reasonable. There should also be a formal review and documented approval process for expenses charged to federal awards, including those that are allocated. • Views of Responsible Officials – Management agrees with the finding. The cost allocation plan will be updated and documented. The approval of invoices will be documented.

• Federal Grantor – U.S. Department of Agriculture • Pass-Through Grantor – State of Connecticut Department of Education • Federal Program Name – Child and Adult Food Care Program • CFDA Number – 10.558 • Finding Type – Significant Deficiency in Internal Control over Major Programs • Compliance Requirement – Cash Management • Criteria – Per the OMB Compliance Supplement: "A sponsoring organization must disburse advance and meal reimbursement payments to centers and day care homes under its sponsorship within five working days of receiving them from its state agency (7 CFR sections 226.16(g) and (h))." • Condition – Program staff do not prepare a reconciliation of amounts received for a given month with what was actually disbursed on a monthly basis. • Cause – Not enough emphasis is placed on the importance of controls and documentation. • Effect – Some differences existed between what was received from the state and what was paid out during a given month. The reason for these differences was not able to be readily explained. • Questioned Costs – Unknown • Repeat Finding – Yes (first reported as Finding #2022-003) • Recommendation – Management needs to develop a process of formally documenting what was received for a day care center each month versus what was paid out to the day care center and if there is a difference, the reason and how it was resolved needs to be documented. In addition, the activity needs to be reconciled to the bank statement and general ledger accounts monthly. • Views of Responsible Officials – Management agrees with the finding. A spreadsheet with the amount the provider requested and the actual amount paid will be maintained for each month. If there is a difference, it will be noted on the spreadsheet.

• Federal Grantor – U.S. Department of Agriculture • Pass-Through Grantor – State of Connecticut Department of Education • Federal Program Name – Child and Adult Food Care Program • CFDA Number – 10.558 • Finding Type – Significant Deficiency in Internal Control over Major Programs • Compliance Requirement – Cash Management • Criteria – Per the OMB Compliance Supplement: "A sponsoring organization must disburse advance and meal reimbursement payments to centers and day care homes under its sponsorship within five working days of receiving them from its state agency (7 CFR sections 226.16(g) and (h))." • Condition – Program staff do not prepare a reconciliation of amounts received for a given month with what was actually disbursed on a monthly basis. • Cause – Not enough emphasis is placed on the importance of controls and documentation. • Effect – Some differences existed between what was received from the state and what was paid out during a given month. The reason for these differences was not able to be readily explained. • Questioned Costs – Unknown • Repeat Finding – Yes (first reported as Finding #2022-003) • Recommendation – Management needs to develop a process of formally documenting what was received for a day care center each month versus what was paid out to the day care center and if there is a difference, the reason and how it was resolved needs to be documented. In addition, the activity needs to be reconciled to the bank statement and general ledger accounts monthly. • Views of Responsible Officials – Management agrees with the finding. A spreadsheet with the amount the provider requested and the actual amount paid will be maintained for each month. If there is a difference, it will be noted on the spreadsheet.