FAC Explorer

Audit 372650

FY End
2025-02-28
Total Expended
$13.86M
Findings
1
Programs
4
Organization: Head Start of Rockland, Inc. (NY)
Year: 2025 Accepted: 2025-11-26
Auditor: CERINI & ASSOCIATES LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
1163078 2025-001 Material Weakness Yes A

Programs

ALN Program Spent Major Findings
93.600 HEAD START $12.81M Yes 1
10.558 CHILD AND ADULT CARE FOOD PROGRAM $528,962 Yes 0
94.011 AMERICORPS SENIORS FOSTER GRANDPARENT PROGRAM (FGP) 94.011 $426,956 Yes 0
14.248 COMMUNITY DEVELOPMENT BLOCK GRANTS SECTION 108 LOAN GUARANTEES $90,000 Yes 0

Contacts

Name Title Type
MJ5MRD7KXK67 Vernex Harding Auditee
8454294122 Kenneth Cerini Auditor
No contacts on file

Notes to SEFA

the accompanying schedule of expenditures of federal awards, which includes the federal grant activity of HSOR, is presented on the accrual basis of accounting. 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”). Therefore, some of the amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the accrual basis financial statements.
HSOR has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. In accordance with the Federal Requirement for the Head Start program, HSOR is in compliance with the 15% maximum administrative costs.
HSOR has a contract with the United States Department of Health and Human Services (“DOHHS”) to provide a Head Start program. The entire amount of funding HSOR receives in connection with this program is from the federal government. HSOR also has a Child and Adult Care Food Program (“CACFP”) contract with the New York State Department of Health, which acts as a pass-through entity for the United States Department of Agriculture. The entire amount of funding HSOR receives in connection with this program is from the federal government. In addition, HSOR has a contract with the Corporation for National and Community Service to provide a Foster Grandparent program. The entire amount of funding HSOR receives in connection with this program is from the federal government.
The loan guarantee program outstanding at the end of the year is included in the federal expenditures presented in the schedule of expenditures of federal awards. The loans included in the schedule of expenditure of federal awards consisted of the following: See the Notes to the SEFA for chart/table
During the year ended February 28, 2025, HSOR passed through federal funds to sub-recipients for the Head Start and Early Head Start grants, which are funded through the DOHHS. The total amount passed through to sub-recipients for the year ended February 28, 2025 was $2,662,324.
As a condition of the Head Start grant, HSOR is required to provide a non-federal share (match) equal to 20% of total approved program costs for the grant period, which may be satisfied with allowable revenue from other funding sources or in‑kind contributions (including donated services, supplies, facilities, and volunteer time) that are necessary, reasonable, and properly documented for Head Start purposes. HSOR met its matching requirements for the year ended February 28, 2025, as follows: See the Notes to the SEFA for chart/table

Finding Details

Finding 2025-001
Criteria:In accordance with the grant agreement between Head Start of Rockland, Inc. (“HSOR”) and the United States Department of Health and Human Services (“DOHHS”), HSOR must ensure actual expenditures closely align with the approved budget in their Notice of Award, following federal regulations under 45 CFR Parts 75 and 1303. Any significant rebudgeting, which is defined as a variance of 25% or more in a budget category or the total award, requires prior written approval from the Office of Head Start. Requests for such changes must include a revised budget, justification, and confirmation that the program’s scope remains unchanged. All costs, whether within or outside the variance threshold, must be allowable, allocable, reasonable, and consistent with federal cost principles and program goals.Condition/context:During the review of fiscal year expenditures, it was noted that HSOR reallocated funds between major budget categories in excess of the 25% threshold established in the Notice of Award without obtaining prior written approval from the Office of Head Start. Specifically, there were actual expenditures in excess of budget over 25% for the supplies category. This deviation indicates that HSOR did not follow required federal grant management protocols for significant budget revisions.Cause: Existing procedures did not include automated alerts or periodic variance checks to identify when budget adjustments approached the 25% threshold. Questioned Costs:None.Effect: Failure to obtain prior approval for significant budget changes constitutes noncompliance with federal grant requirements and the conditions of the award. This noncompliance exposes HSOR to potential financial risk, including disallowance of costs associated with unauthorized expenditures, mandatory corrective actions, and possible restrictions or conditions on future funding. It also raises concerns about HSOR’s ability to maintain fiscal accountability and adhere to federal regulations, which could negatively impact its standing with the funding agency.Auditors’ Recommendation:We recommend HSOR implement enhanced fiscal monitoring procedures, including automated variance alerts and periodic compliance reviews, and establish a formal escalation process for budget changes nearing the 25% threshold. Prior approval requests must be submitted before reallocating funds beyond the allowable threshold.Management’s Response:HSOR acknowledges and agrees with the finding and is in the process of developing procedures to ensure compliance with the grant/contract provisions and will start implementing this recommendation during the year ended February 28, 2026.