FAC Explorer

Audit 335762

FY End
2024-06-30
Total Expended
$10.69M
Findings
6
Programs
3
Organization: Educare of Washington, Dc (DC)
Year: 2024 Accepted: 2025-01-03
Auditor: Gelman Rosenberg & Freedman

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
517720 2024-002 Significant Deficiency - L
517721 2024-002 Significant Deficiency - L
517722 2024-002 Significant Deficiency - L
1094162 2024-002 Significant Deficiency - L
1094163 2024-002 Significant Deficiency - L
1094164 2024-002 Significant Deficiency - L

Programs

ALN Program Spent Major Findings
93.600 Head Start $3.12M Yes 0
10.558 Child and Adult Care Food Program $276,986 - 1
93.575 Child Care and Development Block Grant $253,457 - 1

Contacts

Name Title Type
JFMCUK15LTF1 Richard Nduma Auditee
2027418570 Susan Colladay Auditor
No contacts on file

Notes to SEFA

Title: Note 1. Basis of Presentation Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. De Minimis Rate Used: N Rate Explanation: Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Educare has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance because Educare has a negotiated provisional indirect rate of 15.40% with the U.S. Department of Health and Human Services. The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes the Federal award activity of Educare under programs of the Federal Government for the year ended June 30, 2024. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of Educare, it is not intended to and does not present the financial position, changes in net assets or cash flows of Educare.
Title: Note 2. Summary of Significant Accounting Policies Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. De Minimis Rate Used: N Rate Explanation: Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Educare has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance because Educare has a negotiated provisional indirect rate of 15.40% with the U.S. Department of Health and Human Services. Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Educare has elected not to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance because Educare has a negotiated provisional indirect rate of 15.40% with the U.S. Department of Health and Human Services.

Finding Details

Finding 2024-002
Finding 2024-002: Schedule of Expenditures of Federal Awards (Significant Deficiency) Information on the Federal Programs: U.S. Department of Health and Human Services (HHS) ALN 93.575 and U.S. Department of Agriculture (USDA) ALN 10.558 See Finding 2024-001. Finding 2024-002 is a significant deficiency in internal control over compliance in addition to non-compliance related to the Reporting compliance area. There were no questioned costs as a result of the corrections to the SEFA, which are described in Finding 2024-001.Information on the Federal Programs: U.S. Department of Health and Human Services (HHS) ALN 93.575 and U.S. Department of Agriculture (USDA) ALN 10.558 Criteria or Specific Requirement: Management is responsible for the complete and fair presentation of the financial statements, including any supplementary information that is presented in relation to the financial statements, such as the Schedule of Expenditures of Federal Awards (SEFA). Also, in accordance with 2 CFR Section 200.510 (b)(2), Educare is required to include all direct and passthrough Federal awards expended during the fiscal year in the SEFA. Condition: After the start of the audit, management noted that a pass-through Federal award had been excluded from the SEFA. As a result, the SEFA was understated by $253,457 for the year ended June 30, 2024. In addition, after the start of the audit, we noted that the SEFA included both Federal and non-Federal expenditures for one Federal award. Instead of reporting expenditures based on agreed upon units of service as the appropriate measure of expenditure for the award, the SEFA had been prepared using actual costs expended by Educare. As a result, the SEFA was overstated by $100,517 for the year ended June 30, 2024. Management provided a revised SEFA to correct these two items after the major program had been determined and audit testing had already begun. However, the corrections to the SEFA did not change the major program determination and no questioned costs were noted. Cause: The pass-through Federal award was a new source of funding for Educare, which is why the expenditures were not originally included on the SEFA. In the prior year, the expenditures related to the units of service award were included on the SEFA based on the amount of Federal funds received, which was equal to units of service provided. However, in the current year, the amount reported on the SEFA was based on total expenditures including both the Federal and non-Federal portions of the expenditures. Effect or Potential Effect: The SEFA provided at the start of the audit was understated by $152,940 in the aggregate and, as a result, it did not accurately report Educare’s Federal expenditures. When the SEFA is not accurately prepared, this could have an effect on the determination of the major programs. Recommendation: We recommend that Educare enhance its procedures related to the preparation of the SEFA to ensure that all required amounts are either included or excluded, depending upon the terms of the grant award. We also recommend that Educare document the basis for the expenditures related to each award, such as cost reimbursement or units of service. Identification as a Repeat Finding: Not applicable.
Finding 2024-002
Finding 2024-002: Schedule of Expenditures of Federal Awards (Significant Deficiency) Information on the Federal Programs: U.S. Department of Health and Human Services (HHS) ALN 93.575 and U.S. Department of Agriculture (USDA) ALN 10.558 See Finding 2024-001. Finding 2024-002 is a significant deficiency in internal control over compliance in addition to non-compliance related to the Reporting compliance area. There were no questioned costs as a result of the corrections to the SEFA, which are described in Finding 2024-001.Information on the Federal Programs: U.S. Department of Health and Human Services (HHS) ALN 93.575 and U.S. Department of Agriculture (USDA) ALN 10.558 Criteria or Specific Requirement: Management is responsible for the complete and fair presentation of the financial statements, including any supplementary information that is presented in relation to the financial statements, such as the Schedule of Expenditures of Federal Awards (SEFA). Also, in accordance with 2 CFR Section 200.510 (b)(2), Educare is required to include all direct and passthrough Federal awards expended during the fiscal year in the SEFA. Condition: After the start of the audit, management noted that a pass-through Federal award had been excluded from the SEFA. As a result, the SEFA was understated by $253,457 for the year ended June 30, 2024. In addition, after the start of the audit, we noted that the SEFA included both Federal and non-Federal expenditures for one Federal award. Instead of reporting expenditures based on agreed upon units of service as the appropriate measure of expenditure for the award, the SEFA had been prepared using actual costs expended by Educare. As a result, the SEFA was overstated by $100,517 for the year ended June 30, 2024. Management provided a revised SEFA to correct these two items after the major program had been determined and audit testing had already begun. However, the corrections to the SEFA did not change the major program determination and no questioned costs were noted. Cause: The pass-through Federal award was a new source of funding for Educare, which is why the expenditures were not originally included on the SEFA. In the prior year, the expenditures related to the units of service award were included on the SEFA based on the amount of Federal funds received, which was equal to units of service provided. However, in the current year, the amount reported on the SEFA was based on total expenditures including both the Federal and non-Federal portions of the expenditures. Effect or Potential Effect: The SEFA provided at the start of the audit was understated by $152,940 in the aggregate and, as a result, it did not accurately report Educare’s Federal expenditures. When the SEFA is not accurately prepared, this could have an effect on the determination of the major programs. Recommendation: We recommend that Educare enhance its procedures related to the preparation of the SEFA to ensure that all required amounts are either included or excluded, depending upon the terms of the grant award. We also recommend that Educare document the basis for the expenditures related to each award, such as cost reimbursement or units of service. Identification as a Repeat Finding: Not applicable.
Finding 2024-002
Finding 2024-002: Schedule of Expenditures of Federal Awards (Significant Deficiency) Information on the Federal Programs: U.S. Department of Health and Human Services (HHS) ALN 93.575 and U.S. Department of Agriculture (USDA) ALN 10.558 See Finding 2024-001. Finding 2024-002 is a significant deficiency in internal control over compliance in addition to non-compliance related to the Reporting compliance area. There were no questioned costs as a result of the corrections to the SEFA, which are described in Finding 2024-001.Information on the Federal Programs: U.S. Department of Health and Human Services (HHS) ALN 93.575 and U.S. Department of Agriculture (USDA) ALN 10.558 Criteria or Specific Requirement: Management is responsible for the complete and fair presentation of the financial statements, including any supplementary information that is presented in relation to the financial statements, such as the Schedule of Expenditures of Federal Awards (SEFA). Also, in accordance with 2 CFR Section 200.510 (b)(2), Educare is required to include all direct and passthrough Federal awards expended during the fiscal year in the SEFA. Condition: After the start of the audit, management noted that a pass-through Federal award had been excluded from the SEFA. As a result, the SEFA was understated by $253,457 for the year ended June 30, 2024. In addition, after the start of the audit, we noted that the SEFA included both Federal and non-Federal expenditures for one Federal award. Instead of reporting expenditures based on agreed upon units of service as the appropriate measure of expenditure for the award, the SEFA had been prepared using actual costs expended by Educare. As a result, the SEFA was overstated by $100,517 for the year ended June 30, 2024. Management provided a revised SEFA to correct these two items after the major program had been determined and audit testing had already begun. However, the corrections to the SEFA did not change the major program determination and no questioned costs were noted. Cause: The pass-through Federal award was a new source of funding for Educare, which is why the expenditures were not originally included on the SEFA. In the prior year, the expenditures related to the units of service award were included on the SEFA based on the amount of Federal funds received, which was equal to units of service provided. However, in the current year, the amount reported on the SEFA was based on total expenditures including both the Federal and non-Federal portions of the expenditures. Effect or Potential Effect: The SEFA provided at the start of the audit was understated by $152,940 in the aggregate and, as a result, it did not accurately report Educare’s Federal expenditures. When the SEFA is not accurately prepared, this could have an effect on the determination of the major programs. Recommendation: We recommend that Educare enhance its procedures related to the preparation of the SEFA to ensure that all required amounts are either included or excluded, depending upon the terms of the grant award. We also recommend that Educare document the basis for the expenditures related to each award, such as cost reimbursement or units of service. Identification as a Repeat Finding: Not applicable.
Finding 2024-002
Finding 2024-002: Schedule of Expenditures of Federal Awards (Significant Deficiency) Information on the Federal Programs: U.S. Department of Health and Human Services (HHS) ALN 93.575 and U.S. Department of Agriculture (USDA) ALN 10.558 See Finding 2024-001. Finding 2024-002 is a significant deficiency in internal control over compliance in addition to non-compliance related to the Reporting compliance area. There were no questioned costs as a result of the corrections to the SEFA, which are described in Finding 2024-001.Information on the Federal Programs: U.S. Department of Health and Human Services (HHS) ALN 93.575 and U.S. Department of Agriculture (USDA) ALN 10.558 Criteria or Specific Requirement: Management is responsible for the complete and fair presentation of the financial statements, including any supplementary information that is presented in relation to the financial statements, such as the Schedule of Expenditures of Federal Awards (SEFA). Also, in accordance with 2 CFR Section 200.510 (b)(2), Educare is required to include all direct and passthrough Federal awards expended during the fiscal year in the SEFA. Condition: After the start of the audit, management noted that a pass-through Federal award had been excluded from the SEFA. As a result, the SEFA was understated by $253,457 for the year ended June 30, 2024. In addition, after the start of the audit, we noted that the SEFA included both Federal and non-Federal expenditures for one Federal award. Instead of reporting expenditures based on agreed upon units of service as the appropriate measure of expenditure for the award, the SEFA had been prepared using actual costs expended by Educare. As a result, the SEFA was overstated by $100,517 for the year ended June 30, 2024. Management provided a revised SEFA to correct these two items after the major program had been determined and audit testing had already begun. However, the corrections to the SEFA did not change the major program determination and no questioned costs were noted. Cause: The pass-through Federal award was a new source of funding for Educare, which is why the expenditures were not originally included on the SEFA. In the prior year, the expenditures related to the units of service award were included on the SEFA based on the amount of Federal funds received, which was equal to units of service provided. However, in the current year, the amount reported on the SEFA was based on total expenditures including both the Federal and non-Federal portions of the expenditures. Effect or Potential Effect: The SEFA provided at the start of the audit was understated by $152,940 in the aggregate and, as a result, it did not accurately report Educare’s Federal expenditures. When the SEFA is not accurately prepared, this could have an effect on the determination of the major programs. Recommendation: We recommend that Educare enhance its procedures related to the preparation of the SEFA to ensure that all required amounts are either included or excluded, depending upon the terms of the grant award. We also recommend that Educare document the basis for the expenditures related to each award, such as cost reimbursement or units of service. Identification as a Repeat Finding: Not applicable.
Finding 2024-002
Finding 2024-002: Schedule of Expenditures of Federal Awards (Significant Deficiency) Information on the Federal Programs: U.S. Department of Health and Human Services (HHS) ALN 93.575 and U.S. Department of Agriculture (USDA) ALN 10.558 See Finding 2024-001. Finding 2024-002 is a significant deficiency in internal control over compliance in addition to non-compliance related to the Reporting compliance area. There were no questioned costs as a result of the corrections to the SEFA, which are described in Finding 2024-001.Information on the Federal Programs: U.S. Department of Health and Human Services (HHS) ALN 93.575 and U.S. Department of Agriculture (USDA) ALN 10.558 Criteria or Specific Requirement: Management is responsible for the complete and fair presentation of the financial statements, including any supplementary information that is presented in relation to the financial statements, such as the Schedule of Expenditures of Federal Awards (SEFA). Also, in accordance with 2 CFR Section 200.510 (b)(2), Educare is required to include all direct and passthrough Federal awards expended during the fiscal year in the SEFA. Condition: After the start of the audit, management noted that a pass-through Federal award had been excluded from the SEFA. As a result, the SEFA was understated by $253,457 for the year ended June 30, 2024. In addition, after the start of the audit, we noted that the SEFA included both Federal and non-Federal expenditures for one Federal award. Instead of reporting expenditures based on agreed upon units of service as the appropriate measure of expenditure for the award, the SEFA had been prepared using actual costs expended by Educare. As a result, the SEFA was overstated by $100,517 for the year ended June 30, 2024. Management provided a revised SEFA to correct these two items after the major program had been determined and audit testing had already begun. However, the corrections to the SEFA did not change the major program determination and no questioned costs were noted. Cause: The pass-through Federal award was a new source of funding for Educare, which is why the expenditures were not originally included on the SEFA. In the prior year, the expenditures related to the units of service award were included on the SEFA based on the amount of Federal funds received, which was equal to units of service provided. However, in the current year, the amount reported on the SEFA was based on total expenditures including both the Federal and non-Federal portions of the expenditures. Effect or Potential Effect: The SEFA provided at the start of the audit was understated by $152,940 in the aggregate and, as a result, it did not accurately report Educare’s Federal expenditures. When the SEFA is not accurately prepared, this could have an effect on the determination of the major programs. Recommendation: We recommend that Educare enhance its procedures related to the preparation of the SEFA to ensure that all required amounts are either included or excluded, depending upon the terms of the grant award. We also recommend that Educare document the basis for the expenditures related to each award, such as cost reimbursement or units of service. Identification as a Repeat Finding: Not applicable.
Finding 2024-002
Finding 2024-002: Schedule of Expenditures of Federal Awards (Significant Deficiency) Information on the Federal Programs: U.S. Department of Health and Human Services (HHS) ALN 93.575 and U.S. Department of Agriculture (USDA) ALN 10.558 See Finding 2024-001. Finding 2024-002 is a significant deficiency in internal control over compliance in addition to non-compliance related to the Reporting compliance area. There were no questioned costs as a result of the corrections to the SEFA, which are described in Finding 2024-001.Information on the Federal Programs: U.S. Department of Health and Human Services (HHS) ALN 93.575 and U.S. Department of Agriculture (USDA) ALN 10.558 Criteria or Specific Requirement: Management is responsible for the complete and fair presentation of the financial statements, including any supplementary information that is presented in relation to the financial statements, such as the Schedule of Expenditures of Federal Awards (SEFA). Also, in accordance with 2 CFR Section 200.510 (b)(2), Educare is required to include all direct and passthrough Federal awards expended during the fiscal year in the SEFA. Condition: After the start of the audit, management noted that a pass-through Federal award had been excluded from the SEFA. As a result, the SEFA was understated by $253,457 for the year ended June 30, 2024. In addition, after the start of the audit, we noted that the SEFA included both Federal and non-Federal expenditures for one Federal award. Instead of reporting expenditures based on agreed upon units of service as the appropriate measure of expenditure for the award, the SEFA had been prepared using actual costs expended by Educare. As a result, the SEFA was overstated by $100,517 for the year ended June 30, 2024. Management provided a revised SEFA to correct these two items after the major program had been determined and audit testing had already begun. However, the corrections to the SEFA did not change the major program determination and no questioned costs were noted. Cause: The pass-through Federal award was a new source of funding for Educare, which is why the expenditures were not originally included on the SEFA. In the prior year, the expenditures related to the units of service award were included on the SEFA based on the amount of Federal funds received, which was equal to units of service provided. However, in the current year, the amount reported on the SEFA was based on total expenditures including both the Federal and non-Federal portions of the expenditures. Effect or Potential Effect: The SEFA provided at the start of the audit was understated by $152,940 in the aggregate and, as a result, it did not accurately report Educare’s Federal expenditures. When the SEFA is not accurately prepared, this could have an effect on the determination of the major programs. Recommendation: We recommend that Educare enhance its procedures related to the preparation of the SEFA to ensure that all required amounts are either included or excluded, depending upon the terms of the grant award. We also recommend that Educare document the basis for the expenditures related to each award, such as cost reimbursement or units of service. Identification as a Repeat Finding: Not applicable.