2024-001: Reconciliations and Material Adjustments
Questioned Costs: None
How the questioned costs were computed: N/A
Grant Funding Source Grant Period
Head Start U.S. Department of Health 06/01/2023 - 05/31/2024
10CH010945-05 and Human Services
Early Head Start U.S. Department of Health 07/01/2023 - 06/30/2024
Child Care Partnerships and Human Services
10HP000422-04
Condition: At the time of audit fieldwork, Umatilla-Morrow Head Start, Inc. had not reconciled all account balances. As a result, Wipfli, LLP proposed and management posted adjusting journal entries to contributions receivable, grants receivable, refundable advance, accrued liabilities, operating right of use assets and lease obligations, property and equipment, grant revenue, in-kind, and net assets with donor restrictions. As Umatilla-Morrow Head Start, Inc.’s internal controls did not discover these adjustments prior to our audit, a material weakness exists in Umatilla-Morrow Head Start, Inc.’s internal controls over financial reporting.
Criteria: Federal Regulation 2 CFR 200.302(4) requires that an organization have…Effective control over, and accountability for, all funds, property, and other assets.
Cause: During the audit year, Umatilla-Morrow Head Start, Inc. experienced turnover in its business office which contributed to the lack of timely reconciliations, review of reconciliations performed, and subsequent adjustments to account balances.
Repeat: Yes - Years as repeat finding: Five 2023-001
Effect: As a result of the lack of segregation of duties surrounding bank reconciliations and not reconciling all account balances resulting in subsequent adjustments to accounts, a material weakness exists in internal controls over financial reporting.
Recommendation: Accounts should be reconciled monthly with the adjustments posted timely so that management is relying on accurate financial information to make decisions. We recommend management and those charged with governance evaluate the operation of the business office and implement adequate and timely closing procedures to ensure that financial statement amounts are being reconciled, reviewed, and adjusted in a timely manner.
View of Responsible Officials: Management agrees with the assessment and subsequent to year end, steps were taken to correct the matter.
2024-002: Schedule of Expenditures of Federal Awards (SEFA) Preparation
Questioned Costs: None
How the questioned costs were computed: N/A
Grant Funding Source Grant Period
Maternal, Infant, and U.S. Department of Health Oregon Health 10/01/2022-09/30/23
Early Childhood Home and Human Services Care Authority 10/01/2023-09/30/24
Visiting Program
Condition: The SEFA provided for the audit contained significant errors that were identified and corrected during the audit.
Criteria: In accordance with the Uniform Guidance (2 CFR Section 200.510(b)), the auditee should identify all federal awards received and prepare a SEFA for the period under audit. The information contained in the SEFA shall be derived from, and relate directly to, the underlying accounting and other records used to prepare the financial statements.
Cause: Umatilla-Morrow Head Start, Inc. had a third-party prepare the SEFA as of May 31, 2024. However, the report was not reviewed by management of Umatilla-Morrow Head Start, Inc. before it was provided for the audit.
Effect: Errors in the preparation of the SEFA schedule could lead funding agencies to misinterpret the level of spending for a particular program for the period under audit. Additionally, the identification of major federal award programs chosen for specific compliance testing could be erroneous, depending on the misstatement in the total amount of federal expenditures for the year.
Recommendation: Umatilla-Morrow Head Start, Inc. should perform a timely review of the SEFA to help ensure accurate reporting of federal expenditures in the SEFA report.
View of Responsible Officials: Management agrees with the assessment and subsequent to year end, steps were taken to correct the matter.
2024-001: Reconciliations and Material Adjustments
Questioned Costs: None
How the questioned costs were computed: N/A
Grant Funding Source Grant Period
Head Start U.S. Department of Health 06/01/2023 - 05/31/2024
10CH010945-05 and Human Services
Early Head Start U.S. Department of Health 07/01/2023 - 06/30/2024
Child Care Partnerships and Human Services
10HP000422-04
Condition: At the time of audit fieldwork, Umatilla-Morrow Head Start, Inc. had not reconciled all account balances. As a result, Wipfli, LLP proposed and management posted adjusting journal entries to contributions receivable, grants receivable, refundable advance, accrued liabilities, operating right of use assets and lease obligations, property and equipment, grant revenue, in-kind, and net assets with donor restrictions. As Umatilla-Morrow Head Start, Inc.’s internal controls did not discover these adjustments prior to our audit, a material weakness exists in Umatilla-Morrow Head Start, Inc.’s internal controls over financial reporting.
Criteria: Federal Regulation 2 CFR 200.302(4) requires that an organization have…Effective control over, and accountability for, all funds, property, and other assets.
Cause: During the audit year, Umatilla-Morrow Head Start, Inc. experienced turnover in its business office which contributed to the lack of timely reconciliations, review of reconciliations performed, and subsequent adjustments to account balances.
Repeat: Yes - Years as repeat finding: Five 2023-001
Effect: As a result of the lack of segregation of duties surrounding bank reconciliations and not reconciling all account balances resulting in subsequent adjustments to accounts, a material weakness exists in internal controls over financial reporting.
Recommendation: Accounts should be reconciled monthly with the adjustments posted timely so that management is relying on accurate financial information to make decisions. We recommend management and those charged with governance evaluate the operation of the business office and implement adequate and timely closing procedures to ensure that financial statement amounts are being reconciled, reviewed, and adjusted in a timely manner.
View of Responsible Officials: Management agrees with the assessment and subsequent to year end, steps were taken to correct the matter.
2024-002: Schedule of Expenditures of Federal Awards (SEFA) Preparation
Questioned Costs: None
How the questioned costs were computed: N/A
Grant Funding Source Grant Period
Maternal, Infant, and U.S. Department of Health Oregon Health 10/01/2022-09/30/23
Early Childhood Home and Human Services Care Authority 10/01/2023-09/30/24
Visiting Program
Condition: The SEFA provided for the audit contained significant errors that were identified and corrected during the audit.
Criteria: In accordance with the Uniform Guidance (2 CFR Section 200.510(b)), the auditee should identify all federal awards received and prepare a SEFA for the period under audit. The information contained in the SEFA shall be derived from, and relate directly to, the underlying accounting and other records used to prepare the financial statements.
Cause: Umatilla-Morrow Head Start, Inc. had a third-party prepare the SEFA as of May 31, 2024. However, the report was not reviewed by management of Umatilla-Morrow Head Start, Inc. before it was provided for the audit.
Effect: Errors in the preparation of the SEFA schedule could lead funding agencies to misinterpret the level of spending for a particular program for the period under audit. Additionally, the identification of major federal award programs chosen for specific compliance testing could be erroneous, depending on the misstatement in the total amount of federal expenditures for the year.
Recommendation: Umatilla-Morrow Head Start, Inc. should perform a timely review of the SEFA to help ensure accurate reporting of federal expenditures in the SEFA report.
View of Responsible Officials: Management agrees with the assessment and subsequent to year end, steps were taken to correct the matter.