Audit 368545

2024-001 Finding – Federal Award Type: Federal Financial Reporting –SF-425 –Significant Deficiency in Internal Control Over Compliance Identification of Federal Program: AL Number: 93.600 Head Start Cluster Criteria / Requirement: The 2 CFR section 200.303 requires that non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Condition / Context: During the audit, one out of two Federal Financial Reports (SF-425) tested did not have sufficient internal controls, as the report was created by one individual and did not have documented oversight from another individual. No non-compliance was noted, as the financial information report was supported with direct reports from the general ledger. Cause: Due to turnover in the accounting department, an individual who is not normally part of the established procedure performed oversight over federal financial reporting, however evidence of this review could not be produced as it was not documented. Effect: Failure to maintain sufficient internal controls over federal reporting may result in non‐compliance and or inaccurate reporting. Questioned Costs: None. Recommendation: The Organization should reevaluate the establish organizational controls regarding financial reporting to ensure that such policies and procedures are being followed. Management’s Response: Management concurs with the audit finding and will work to implement changes to ensure internal controls are in place over federal reporting requirements.