Audit 392084

Finding Number: Finding 2025-003 Program Name: Head Start and Early Head Start, Coronavirus State and Local Fiscal Recovery Funds Pass Through Agency: Sonoma County (Coronavirus State and Local Fiscal Recovery Funds) Type of Finding: Other Matter a. Criteria or Specific Requirement: Lack of Supporting Documents: Federal requirements under 2 CFR 200 section 303 state that the Organization must establish and maintain effective internal control over compliance, including controls to ensure payroll costs are charged to federal awards are supported by adequate documentation. Effective internal controls require maintaining sufficient personnel and payroll records, including executed offer letters, and written documentation of wage or position changes with appropriate approvals, to support payroll expenses charged to the program. Sonoma Community Action Network Schedule of Findings and Questioned Costs Year Ended February 28, 2025 34 b. Condition: During payroll testing, we noted instances in which supporting documentation was not retained for payroll activity including missing signed offer letters and / or written approvals of wage or position changes. c. Context: 41 out of 50 payroll transactions tested, did not contain adequate personnel documentation. Missing documentation primarily related to missing signed offer letters and lack of written approvals for wage or position changes. d. Questioned Costs: None identified. e. Cause: The Organization does not have standardized procedures for employee onboarding and retaining supporting personnel documentation. f. Effect: Considered to be other matter and area which requires improvement in internal controls. Without adequate supporting documentation for payroll costs charged to federal awards, the Organization is at increased risk of charging unsupported or unallowable costs to the program. g. Repeat: No. h. Recommendation: We recommend that management reinforce procedures requiring retention of complete supporting documentation for personnel records including offer letters and written approvals of all wage and position changes.

Finding Number: Finding 2025-004 Program Name: Head Start and Early Head Start Pass Through Agency: N/A Type of Finding: Other matters, compliance a. Criteria: Failure to comply with the grant agreement’s terms and applicable regulations: The Organization did not comply with grant compliance requirements such as timeliness of submitting reports to funding agencies and meeting matching requirements. b. Condition: The Organization had inconsistent performance on the submission of periodic grant reports in a timely matter. This submission pattern conflicts with grant timelines outlined in the Notice of Awards. Specifically, it was noted for one of Organization’s major programs, Head Start and Early Head Start, that reports were submitted outside of defined due dates. The Form SF-429 was not filed for the 2025 fiscal year. Further, Head Start and Early Head Start experienced 2 delayed reports. Management informed us that the delays in reporting were attributable to submission issues on the federal reporting platform, which temporarily prevented timely filling despite management’s attempts to complete the report. Once access to submission was granted, management promptly submitted the required report. Sonoma Community Action Network Schedule of Findings and Questioned Costs Year Ended February 28, 2025 35 Additionally, JGD noted that the grants under Head Start and Early Head Start program require that the Organization provide matching contributions of service hours. These contributions were not made to target during the 2025 fiscal year because management believes they will be granted a waiver for this requirement. Management was successful in obtaining this waiver in the past due to COVID-19 and government shutdowns. However, we note that if they are not granted a waiver, they will not be in compliance with the grant requirement for the 2025 fiscal year. c. Context: Recipients of Federal grants are required to comply with all terms and applicable regulations of grant agreements. d. Questioned Costs: None identified e. Cause: Change in personnel and staff turnover in a failure of controls over compliance. The federal reporting platform did not grant management the option to submit their report. In terms of matching, the Organization was unable to obtain the required service hours for the grant due to the COVID-19 impact. f. Effect: The delayed reporting if uncorrected, might result in delays in the review and approval process on claim reimbursement and ability to make informed decisions about the future requirements on grant funding. Considered to be an other matter related to internal control over compliance. g. Repeat: No h. Recommendation: Management should take steps to ensure that all grant reports are submitted in a timely manner going forward. This includes adherence to system implemented to track grant report due dates and establish internal deadlines for the preparation of reports that provide adequate time for review and submission. Management should take steps to communicate with Office of Head Start to ensure they are in compliance with this requirement. Going forward, they should manage to provide enough volunteer work.

Finding Number: Finding 2025-005 Program Name: Community Services Block Grant (CSBG) Pass Through Agency: California Department of Community Services and Development Type of Finding: Other Matter, compliance a. Criteria or Specific Requirement: Tri-Partite Board Composition: The CSBG Act at 42 USC 9910(b) requires that public organizations administer the CSBG program through a tri-Partite board. b. Condition: Less than 1/3 of the members of the board of directors of the Organization were representative of the government sector in accordance with CSBG requirements. c. Context: Recipients of Federal grants are required to administer the CSBG program through a tri-Partite board. d. Questioned Costs: None identified. Sonoma Community Action Network Schedule of Findings and Questioned Costs Year Ended February 28, 2025 36 e. Cause: The Organization had board turnover and experienced board recruiting difficulties during the year, causing it to not be in compliance with the tri-partite board requirement. f. Effect: Due to the above noted conditions, the Organization was not in compliance with this particular CSBG compliance requirement. g. Repeat: Yes. h. Recommendation: The Organization should recruit board members to comply with the tri-partite board composition requirement.

Finding Number: Finding 2025-006 Program Name: Head Start and Early Head Start Pass Through Agency: N/A Type of Finding: Other Matter, compliance a. Criteria or Specific Requirement: Physical Inventory Observation: Under 2 CFR 200 200.313(4)(2), a physical inventory of property must be taken at least once every two years. The results should be reconciled with the general ledger. b. Condition: The Organization has not performed a physical inventory in the last two years. c. Context: Recipients of Federal grants are required to perform physical inventory at least once every two years. d. Questioned Costs: None identified. e. Cause: The Organization has experienced turnover and, as a result, did not perform the physical inventory. f. Effect: The capital asset listing and corresponding financial statement balances may be misstated or incomplete. Without taking a physical inventory, the Organization may be overstating or understating capital assets in its financial statements. g. Repeat: Yes. h. Recommendation: The Organization should maintain its documentation of an entitywide physical inventory of its capital assets performed every two years. Once completed, the listing should be reconciled to the general ledger control totals and the control totals adjusted to the balances supported by the physical inventory results. The Organization should also implement procedures to retain adequate supporting documentation and ensure the proper recording of additions, deletions, and depreciation on a timely basis.