Audit 409310

Condition: During our testing of federal reporting compliance for the Head Start program, we found that OVEC did not submit the required Standard Form 425 (SF-425) Federal Financial Reports on time. We reviewed five SF-425 reports for Head Start grants and found that two were submitted after their due dates. One was filed 57 days late and the other was filed 77 days late. Criteria: In accordance with 45 CFR Part 75 (Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HHS Awards) and specific Office of Head Start Program Instructions (ACF-PI-OHS-24-01), recipients must submit financial reports detailing the expenditures incurred for their awards. Semi-Annual reports are due 30 days after the end of the applicable budget period, annual reports are due 90 days after the end of the applicable budget period, and final reports for the project are due no later than 120 calendar days after the end of the project period. Cause: Management turnover in prior years caused OVEC to accumulate a backlog of SF-425 reports that needed to be filed. Effect: OVEC’s failure to submit SF-425 reports on time resulted in noncompliance with the terms and conditions of its federal Head Start awards. Delayed reporting limits the Administration for Children and Families’ ability to monitor grant expenditures. Late submissions may also result in a financial hold, restricting or freezing the Cooperative's ability to draw down federal funds through the Payment Management System for daily operations. Recommendation: We recommend that the Cooperative develop and implement written policies and procedures to ensure all SF-425 reports are submitted on time. We also recommend training backup personnel to prepare and submit SF-425 reports, so deadlines are met during staff transitions. Management's Response: See the Corrective Action Plan on page 50 for the Cooperative's response to this finding.