Audit 397281

General Disbursement Allocation Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Head Start Cluster Assistance Listing Number: 93.600 Federal Award Identification Number: 05CH011421 Pass-Through Agency: City of Chicago Department of Family and Support Services Pass-Through Award Number: PO 256022 Award Periods: March 1, 2024 – February 28, 2025 and December 1, 2023 – November 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters Criteria: Under allowable cost/cost principles, an organization in receipt of federal funding is required to have a system of controls in place to safeguard assets and ensure that only allowable costs are charged to federal programs. 2 CFR Part 200 states that charges to awards are to be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: In testing cash disbursements, noted two items out of 15 sampled did not have documentation available to support program allocations. Questioned Costs: None Context: Changes to allocations were verbally discussed, no documentation available to review for audit testing. Cause: The Organization has not fully complied with established policies and procedures related to federal cost principles for cash disbursements. Effect: Appropriate up-to-date supporting documentation was not maintained for all cash disbursements charged to federal programs. Repeat Finding: This is not a repeat finding. Recommendation: We recommend the Organization emphasize compliance with their established policies and procedures related to maintaining appropriate up-to-date supporting documentation for cash disbursements. Views of Responsible Officials: There is no disagreement with this audit finding.

Reporting Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Head Start Cluster Assistance Listing Number: 93.600 Federal Award Identification Number: 05CH011421 Award Periods: March 1, 2024 – February 28, 2025 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters Criteria: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of reporting. The Organization should have internal controls designed to ensure compliance with those provisions. Condition: During our testing, it was noted the organization did not file one of the required SF-425 reports prior to the applicable due date. Questioned Costs: None Context: The required reporting was not filed. Cause: The Organization has not fully complied with reporting requirements due to turnover in the chief financial officer role. Effect: By not completing the required SF-425 reporting, the Organization is not incompliance with the terms of the award. However, this did not result in any disallowed costs as it replated to reporting requirements only. There was no misuse or improper expenditures identified in connection with this level of noncompliance. Repeat Finding: This is not a repeat finding. Recommendation: We recommend the Organization put a process in place to ensure the required reporting is completed in the timeline allowed by the granting agency and to complete any missed or late reporting as required. We also recommend a careful review of all terms and conditions of grant awards to ensure compliance with the grant award. Views of Responsible Officials: There is no disagreement with this audit finding.