Audit 389901

.S Department of Health and Human Services - Head Start Cluster - AL #93.600Grant Number: 10CH01165001/10CH01165002/10CH01165001C5/10CH01165001C6 Grant Period: July 1, 2021 to June 30, 2022 Questioned Costs: Costs were estimated to the approximately $645,000 How the questioned costs were computed: Recreation of allocation comparing actual allocations versus allocations that should have been made based on cost allocation plan. Condition – During the audit fieldwork, Wipfli, LLP. noted that Head Start of Lane County had a documented cost allocation plan that described how costs were to allocated between grant programs. During our testing, we noted that Head Start of Lane County was unable to provide supporting documentation that costs were allocated based on the documented plan. Criteria – Section 200.400 (d) of Uniform Guidance states the accounting practices of the recipient must be consistent with these cost principles and support the accumulation of costs as required by these cost principles, including maintaining adequate documentation to support costs charged to the Federal award. Schedule of Findings and Questioned Costs Year Ended June 30, 2022 Section III - Financial Award Findings and Questioned Costs: (Continued) 2022-002 - Application of Cost Allocation Plan - (Continued) Cause – During the audit year, there was turnover in Head Start of Lane County’s business office which contributed to the lack of support available for the allocation. Head Start of Lane County is working on streamlining and implementing processes to address the deficiency noted in the condition paragraph. Effect - As a result of having documentation to support the application of the cost allocation plan, a material weakness exists in internal controls over allocation of costs. Recommendation - We recommend management and those charged with governance evaluate the operation of the finance department and implement procedures to ensure that costs are allocated in accordance with the documented cost allocation plan. View of Responsible Officials - Management agrees with the assessment and has committed to a corrective action plan.

U.S Department of Health and Human Services - Head Start Cluster - AL #93.600 Grant Number: 10CH01165001/10CH01165002/10CH01165001C5/10CH01165001C6 Grant Period: July 1, 2021 to June 30, 2022 Questioned Costs: None How the questioned costs were computed: N/A Condition – During the audit fieldwork, Wipfli, LLP. observed that Form SF 425 Federal Financial Report and SF-429 Notice of Federal Interest for real property were not filed timely. Criteria – Section 200.237 of Uniform Guidance states that financial reports must be submitted with the frequency required by the terms and conditions of the Federal Award Cause – Head Start of Lane County did not file the required financial and real property reports for the above grants in a timely manner. Effect - As a result of not filing Form SF-425 Federal Financial Report and Form SF-429 Notice of Federal Interest for real property in a timely manner, a significant deficiency exists in internal control of reporting. Recommendation - We recommend management and those charged with governance evaluate the operation of the finance department and implement procedures to ensure that required reports are filed in a timely manner. View of Responsible Officials - Management agrees with the assessment and has committed to a corrective action plan.

U.S Department of Health and Human Services - Head Start Cluster - AL #93.600 Grant Number: 10CH01165001/10CH01165002/10CH01165001C5/10CH01165001C6 Grant Period: July 1, 2021 to June 30, 2022 Questioned Costs: None How the questioned costs were computed: N/A Condition – Under Uniform Guidance, Head Start of Lane County's audited financial statements for the year ended June 30, 2022 were due to the federal single audit clearinghouse by March 31, 2023. Head Start of Lane County's June 30, 2022 audited financial statements were not completed for submission to the federal audit clearinghouse until after March 31, 2023. This is a repeat finding from the prior year. Criteria – Uniform Guidance requires audited financial statements to be submitted to the federal audit clearinghouse within nine-months after an entity’s year-end. Cause – During the audit year, there was turnover in Head Start of Lane County’s business office which contributed to the lack of timely submission. In addition, the circumstances surrounding the COVID-19 pandemic continued to affect the timeliness of the submission process. Head Start of Lane County is working on streamlining and implementing processes to address the deficiency noted in the condition paragraph. Effect – A significant deficiency in internal control over compliance and an instance of noncompliance exists due to failure to provide financial statements in a timely manner in order to meet audit submission deadlines. Recommendation - We recommend management and those charged with governance evaluate the operation of the finance department and implement procedures to ensure that required reports are filed in a timely manner. View of Responsible Officials - Management agrees with the assessment and has committed to a corrective action plan.