Audit 400545

Finding Number: 2025-001 Program: Child Care and Development Fund Cluster ALN #: 93.575 and 93.596 Pass through Entity: Commonwealth of Massachusetts Department of Early Education and Care Federal Agency: U.S. Department of Health and Human Services Federal Award Year: January 1, 2025 – December 31, 2025 Compliance Requirement: Eligibility Type of finding: Significant Deficiency Criteria According to 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition The Young Men’s Christan Association (YMCA) has multiple processes to ensure that children are determined to be eligible for childcare prior to their authorization date. However, the YMCA’s control that was tested over the eligibility process, as documented in the YMCA’s narrative, did not operate as designed. It is the YMCA’s control to review and sign the Fee Agreement and Child Care Subsidy form prior to the child’s start date. Cause In certain cases, authorizations are processed after the family has already had their scheduled meeting with the YMCA staff. The parent/guardian then needs to come back in to sign the forms in person or print, sign and scan back the forms. In these cases, there is a delay and the forms get signed by the YMCA staff after the authorization date. Proper perspective During the audit, we noted that for ten of the forty samples selected, the Fee Agreement and Child Care Subsidy form did not contain the signature of the YMCA prior to the Child’s start date. However, through our compliance procedures we noted all children were eligible, and the proper rate was calculated by the YMCA. Possible asserted effect If fee agreements are not reviewed and agreed upon prior to receiving services, then controls will not operate effectively. Questioned costs None Statistical sampling The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding Not a repeat finding. Recommendation We recommend the YMCA implement additional procedures to ensure that all forms are reviewed and signed prior to the child’s placement start date. Views of responsible officials and corrective actions Management acknowledges that, in certain cases, the Fee Agreement and Child Care Subsidy forms were not signed by YMCA staff prior to the child’s start date, as required by YGB’s outlined procedures. We recognize the importance of timely and complete documentation and will reinforce expectations with staff to ensure adherence to this control. At the same time, management respectfully notes that multiple mitigating controls are in place within the eligibility determination and authorization process. These include verification of eligibility criteria, review of supporting documentation, and system-based authorization controls, all of which must be completed before services are approved. Based on these layered controls, management does not believe that this timing issue could reasonably result in federal funds being awarded to ineligible children.

Finding Number: 2025-002 Program: Coronavirus State and Local Fiscal Recovery Funds ALN #: 21.027 Pass-through Entity: City of Boston Federal Agency: U.S. Department of Treasury Federal Award Year: January 1, 2025 –December 31, 2025 Compliance Requirement: Suspension and Debarment Type of finding: Significant Deficiency and noncompliance Criteria Non-federal entities are prohibited from contracting with or making subawards under covered transactions to parties that are suspended or debarred. “Covered transactions” include contracts for goods and services awarded under a non-procurement transaction (e.g., grant or cooperative agreement) that are expected to equal or exceed $25,000 or meet certain other criteria as specified in 2 CFR 180.220. All non-procurement transactions entered into by a pass-through entity (i.e., subawards to subrecipients), irrespective of award amount, are considered covered transactions, unless they are exempt as provided in 2 CFR 180.215. Additionally, according to 2 CFR 200.303, the nonfederal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition It is the YMCA’s control to check for suspension and debarment of vendors as part of the procurement process prior to entering into a contract. Checks of suspension and debarment of vendors on SAM.GOV are retained as part of the procurement documentation. Cause The YMCA did not properly document evidence of the control operating effectively. Proper perspective During our testing, we noted that for 1 of 1 selection, the YMCA provided screenshots of the SAM.GOV website showing the vendor was not suspended or debarred. The YMCA communicated to us that they checked the SAM.GOV website prior to entering into the contract with the vendor. However, there was no evidence that the control operated prior to entering into the contract. Therefore, we were unable to determine if the vendor was checked for suspension and debarment prior to entering into the contract. Upon our review of SAM.GOV the vendor is not suspended or debarred. Possible asserted effect The YMCA could enter into contracts with vendors who are suspended or debarred from working under covered transactions. This would then result in noncompliance and unallowable costs. Questioned costs None Statistical sampling That sample was not intended to be, and was not, a statistically valid sample. Repeat finding Not a repeat finding. Recommendation We recommend the YMCA to sign/initial and date the review on the SAM.GOV website before retaining the documentation to evidence the control. Views of responsible officials and corrective actions Management acknowledges the finding of insufficient documentation evidencing that suspension and debarment checks were performed prior to contract execution. While procedures were in place to review vendors against the SAM.gov exclusion list, documentation did not consistently demonstrate the timing of the review. Management confirms that the tested vendor was verified prior to work beginning and was not suspended or debarred at the time of review.