Audit 407315

Statement of condition: The Organization has been challenged in recent years to provide for the timely reporting of financial activities to its Board of Directors and management. More recently, as a result of the increases to the workload, staffing challenges, and illness of key management, the timeliness of the financial reporting has further deteriorated. Criteria: Timely financial reporting is a critical internal control feature for the Board and management to provide for proper oversight of program operations. Further, many of the Organization’s grants and contracts have accountability to an approved budget from the funding source. As management’s ability to monitor actual expenditures to date related to particular funding sources is limited, there is significant risk of over expenditure and disallowance of expense. Cause of condition: Financial and program staff medical leaves and staffing challenges. Effect of condition and context: This may allow for misstatement of operating results and possible disallowance of expenditures under certain grants and contracts because of an inability to substantiate the appropriateness and allowability of the expenditure. The inability to provide timely financial reporting may also unfavorably impact the funding agency’s performance metrics when assessing the Organization’s capacity to deliver competitive grants. Recommendation: We strongly suggest the Organization provide for more timely financial reporting.

Statement of condition: The Organization’s Child Care Resource and Referral program, “Child Care Works”, is responsible for approving center-based, home-based and independent family child care providers for participation in the Commonwealth of Massachusetts Department of Early Education and Care (hereinafter “EEC”) subsidized child care voucher program. As part of our audit procedures over federal major program compliance for this program under the Child Care and Development Fund Cluster (CCDF) we noted, of the sixty-eight (68) providers selected for testing, fourteen (14) of the provider files were misfiled and an alternative was needing to be selected. Of the providers tested, seventeen (17) provider files where certain required EEC provider documents were either not current, an outdated EEC standard form was used currently or the provider file was incomplete. Criteria: EEC mandates that certain documents be obtained and properly completed as part of the contract provider authorization process based on the type of child care program operated (i.e., center-based, home-based, independent family child care, etc.). Cause of condition: Limited EEC funding to devote additional staff resources to less critical program functions. See management’s response following. Effect of condition and context: Non-compliance with the EEC regulations relating to the voucher contract provider authorization.