FINDING 2025-002 – Reporting; Significant Deficiency in Internal Control over Compliance Head Start Cluster Medicaid Cluster Aging Cluster Assistance Listing Numbers: 93.600, 93.778, 93.044, 93.045, 93.053 Federal Program Names: Head Start, Grants to States for Medicaid, Special Programs for the Aging - Tile III, Part B - Grants for Supportive Services and Senior Centers, Special Programs for the Aging - Tile III, Part C, Nutrition Services, and Nutrition Services Incentive Program Award Years: Various Criteria: In accordance with federal reporting requirements a variety of different types of reports are required for compliance relating to each of the grants, such as SF-425 reports, SF-429, special reports, and performance reports are required to be prepared and submitted on an annual basis. Condition and context: Of the sixty-seven reports filed during the year, we selected eleven reports and noted that seven reports were not submitted timely as required by the grant agreements as a result of the lack of segregation of duties and procedures surrounding deadlines. The following selections were reported late by program: • Head Start Cluster (ALN 93.600) – For one of the one financial report selected, the report was submitted 10 days late. • Medicaid Cluster (ALN 93.778) – For two of the four reports selected, one report was one day late, and the other was four days late. • Aging Cluster (ALN 93.044, 93.045, 93.053) – For four of the six monthly and quarterly performance reports selected, reports was submitted 3 to 15 days late. Questioned costs: None. Effect: The Organization was not timely with reporting requirements of the grants. Cause: Controls were not operating as designed to ensure the timely submission of the reports required were filed by the due dates as a result of the lack of segregation of duties and procedures surrounding deadlines. Repeat finding: Yes 2024-003. Recommendation: We recommend the Organization implement controls to ensure timely submission of required reports. We recommend the Organization improve existing review controls in the reporting process to ensure timely submission. Views of responsible officials and planned corrective actions: Management agrees with the assessment. To address this repeat finding, management has revised its approach to reporting oversight by implementing full department-level responsibility for report preparation, review, and submission. Each department is responsible for maintaining its own reporting timeline in accordance with grant and contract requirements. Departments have clarified internal roles and responsibilities for report preparation, review, and submission. All reports required by contract must be submitted timely and must include two levels of documented review. Reports will be reviewed by the preparer’s Director (or their designee); if the Director is the preparer, the review will be conducted by the Chief Operating Officer or in their absence, the Chief Executive Officer. All financial reports required by contract must have documented review by a member of the fiscal department. Report backup documentation and proof of timely submission must be retained by the department.
FINDING 2025‐003 – Reporting; Material Weakness in Internal Control over Compliance and Instance of Material Noncompliance WIOA Cluster Assistance Listing Numbers: 17.258, 17.259, 17.278 Federal Program Names: WIOA Adult Program, WIOA Youth Activities, and WIOA Dislocated Worker Formula Grants Award Years: Various Criteria: Federal regulations and grant and contract conditions require that applicable reports be properly supported by accounting records and submitted. Financial and performance information should be reviewed by a different person than the preparer, supporting documentation should be maintained, and reports filed timely. Condition and context: Of ten report submissions filed during the year, we selected four reports and noted that supporting documentation was maintained but could not be traced back to the four reports submitted. Additionally, for two of four reports selected, the closeout report was submitted twenty-seven days late and a quarterly report submitted one day late. Questioned costs: None. Effect: Without centralized controls that include retention of documentation supporting the amounts in the reports, reports submitted were not properly supported or filed timely. Cause: This occurred because controls in place were not consistently adhered to ensuring reports are reconciled to supporting documentation prior to submission. Documentation of the preparer and reviewer of reconciled support should be maintained to ensure the control is being performed on a timely basis. Controls were not operating as designed to ensure the timely submission of the reports required were filed by the due dates as a result of the lack of segregation of duties and procedures surrounding deadlines. Repeat finding: Yes 2024-004. Recommendation: We recommend management reinforce and formalize the reconciliation control by requiring that all reports be reconciled to supporting documentation prior to submission. A standardized reconciliation checklist or template should be implemented to evidence completion, including clear documentation of the preparer and reviewer, along with dates of preparation and review. Additionally, management should provide periodic training to ensure awareness of control requirements and perform periodic monitoring or quality reviews to confirm the control is operating consistently and in a timely manner. Views of responsible officials and planned corrective actions: Management agrees with the assessment. To address this issue, management has reinforced and formalized its reporting reconciliation controls. All financial and performance reports submitted for WIOA programs will be reconciled to supporting documentation prior to submission. Management has clarified roles and responsibilities to ensure that report preparation and review are performed by separate individuals. All reports required by contract must be submitted timely and must include two levels of documented review. Reports will be reviewed by the preparer’s Director (or their designee); if the Director is the preparer, the review will be conducted by the Chief Operating Officer or in their absence, the Chief Executive Officer. All financial reports required by contract must have documented review by a member of the fiscal department. Supporting documentation related to report reconciliations will be retained to ensure traceability and availability for review. During the year, the department experienced a leadership transition, and the new Director is receiving additional training on reporting requirements and internal control expectations. Management will also provide periodic training to staff involved in report preparation and review to reinforce control requirements and expectations. Management expects significant improvement for the fiscal year ending in 2026.