Audit 374996

CONDITION: During testing of disbursements charged to the Head Start program, two instances were identified where duplicate payments were made to the same vendor for the same invoice. The payments were charged to the Head Start program. CONTEXT: A sample of 40 disbursements totaling $124,950 was selected from a population of 1,385 disbursements totaling $811,622. The test found two disbursements that were not in compliance with questioned costs totaling $2,824. CRITERIA: 2 CFR § 200.303(a) requires that the School Board must “Establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes. Additionally 2 CFR§200.403(a) states that costs must “be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles.” CAUSE: The School Board relies on its accounting software’s automated controls to prevent the processing of duplicate invoices. However, the duplicate payments occurred because slightly different invoice numbers were entered into the system, allowing the software to recognize the transactions as unique and process both payments. EFFECT: The federal program may have been overcharged. RECOMMENDATION: The School Board should evaluate their internal controls and review expenses being charged to the Head Start program to ensure they are allowable.

CONDITION: The School Board submitted its annual SF-425 late. CRITERIA: According to 2 CFR Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), recipients must submit financial reports to the federal awarding agency in a timely manner. The Specific reporting deadlines are outlined in the award terms and conditions. CAUSE: The submission delay occurred due to the staff member responsible for submitting SF-425 being unavailable to submit the required report. Other staff members were not aware of the reporting requirement. EFFECT: Untimely submission limits the federal agency in its ability to monitor the programs financial performance and could result in delays in funding or other administrative action. RECOMMENDATION: School Board should update their internal controls so that more than one employee is made aware of the program’s reporting requirements to prevent future submission delays when key personnel are unavailable.