Audit 380595

Federal Agency: Department of Health and Human Services Federal Program Name: Head Start Assistance Listing Number: 93.600 Federal Award Identification Number and Year: 01HP000635 Award Period: 9/1/2024 – 8/31/2025 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Compensation for personal services must be supported by records that accurately reflect the work performed and be supported by a system of internal controls. These controls must provide reasonable assurance that charges are accurate, allowable, and properly allocated. Specifically, time and effort documentation must include the employee’s signature and the supervisor’s approval to ensure proper oversight and accountability for payroll charges to federal awards. Condition: During our payroll testing, CLA identified two instances where the key control requiring supervisor review and approval of employee timecards was not followed. In both cases, employees were paid without documented supervisor approval of their timecards. Questioned costs: N/A Context: This finding was identified during testing of payroll transactions related to federal awards. Out of the sample selected, two exceptions were noted where timecards lacked supervisor approval prior to payroll processing. Cause: The organization did not consistently enforce its internal control requiring supervisor approval of timecards prior to payroll processing. Effect: Failure to obtain supervisor approval of timecards compromises the integrity of payroll charges to federal awards and increases the risk of inaccurate or unallowable costs being charged. It also violates federal requirements for time and effort documentation, which could result in audit findings or questioned costs in future periods. Repeat Finding: N/A Recommendation: CLA recommends that management reinforce the requirement for supervisor approval of all timecards prior to payroll processing. This should include training for supervisors and payroll staff on federal timekeeping requirements and implementation of system controls or checklists to ensure approvals are documented. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: Department of Health and Human Services Federal Program Name: Head Start Assistance Listing Number: 93.600 Federal Award Identification Number and Year: 01HP000635 Award Period: 9/1/2024 – 8/31/2025 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Head Start requires recipients to submit SF-429A (Real Property Status Report) and the SF-425 by the specified deadline to ensure compliance. Condition: During our reporting compliance testing, CLA identified two instances where the report was submitted subsequent to the required due date. Questioned costs: N/A Context: The SF-425 report and SF-429A report is a mandatory submission for organizations who receive Head Start funding. Cause: The organization did not consistently enforce its internal controls over reporting requirements. Effect: Failure to submit the SF-429A report and SF-425 report timely. Repeat Finding: N/A Recommendation: CLA recommends that management review and update internal controls over reporting requirements to prevent untimely submissions. Views of responsible officials: There is no disagreement with the audit finding.