2025-001: Reconciliations and Material Adjustments Questioned Costs: None How the questioned costs were computed: N/A Grant Funding Source Grant Period Head Start U.S. Department of Health 06/01/2024 05/31/2025 10CH012611 01 and Human Services Head Start U.S. Department of Health 06/01/2024 04/30/2025 10CH010945 05 and Human Services Head Start U.S. Department of Health 07/01/2022 06/30/2025 10HP000422 03 and Human Services Condition: At the time of audit fieldwork, Umatilla Morrow Head Start, Inc. had not reconciled and closed its grant and contract revenue and accrued payroll. Umatilla Morrow Head Start, Inc.'s cash reconciliation also included a deposit in transit that was never deposited. As a result, Wipfli, LLP proposed and management posted adjusting journal entries to grants receivable, refundable advance, accrued liabilities, and grant revenue. A passed adjustment was reported for the misstatement on the cash reconciliation. As Umatilla Morrow Head Start, Inc.’s internal controls did not discover these adjustments prior to our audit, a material weakness exists in Umatilla Morrow Head Start, Inc.’s internal controls over financial reporting. Criteria: Federal Regulation 2 CFR 200.302(4) requires that an organization have…Effective control over, and accountability for, all funds, property, and other assets. Cause: During the audit year, Umatilla Morrow Head Start, Inc. experienced turnover in its business office while preparing for the audit which contributed to the lack of adequate and timely closing procedures, account reconciliations, and review processes. Repeat: Yes - Years as repeat finding: Six Effect: As a result of the lack of segregation of duties surrounding bank reconciliations and not reconciling all account balances resulting in subsequent adjustments to accounts, a material weakness exists in internal controls over financial reporting. Recommendation: Accounts should be reconciled monthly with the adjustments posted timely so that management is relying on accurate financial information to make decisions. We recommend management and those charged with governance evaluate the operation of the business office and implement adequate and timely closing procedures to ensure that financial statement amounts are being reconciled, reviewed, and adjusted in a timely manner. View of Responsible Officials: Management agrees with the assessment and subsequent to year end, steps were taken to correct the matter.
2025-003: Late Submission of SF-425 Questioned Costs: None How the questioned costs were computed: N/A Grant Funding Source Grant Period Head Start U.S. Department of Health 06/01/2024 05/31/2025 10CH012611 01 and Human Services Head Start U.S. Department of Health 06/01/2024 04/30/2025 10CH010945 05 and Human Services Condition: Umatilla Morrow Head Start, Inc.'s final SF 425 Federal Financial Reports for the grants ended May 31, 2025 and April 30, 2025 were submitted after the required due date. Criteria: 2 CFR Part 200 subsection 238 requires an organization to submit financial reports as required by the Federal Award. The Head Start award requires a final cumulative SF 425 Federal Financial Report be submitted no later than 120 days after the close of the project period. Cause: During Umatilla Morrow Head Start, Inc.'s transition from a third party fiscal service provider, management at the time was not aware the final reports had not been submitted. Effect: Grant reporting requirements for Umatilla Morrow Head Start, Inc. were not met within the required timeline. Recommendation: Umatilla Morrow Head Start, Inc. should have a method to track required filings to ensure that reports are filed within due dates imposed by funding sources. View of Responsible Officials: Management agrees with the assessment and subsequent to year end, steps were taken to correct the matter.