Audit 411833

Finding 2025-001: Reporting Federal award agency: U.S. Department of Health and Human Services, Administration for Children and Families Pass-through granting agency: n/a Program name and ALN: Head Start, 93.600 Federal award identification number: 07HP0000560-01 Federal award year: August 1, 2024 to July 31, 2025 Criteria: Pursuant to the reporting requirements for the Head Start Program (Assistance Listing 93.600), Futures First is required to prepare and submit accurate and timely Federal Financial Reports (SF-425) in accordance with the terms and conditions of its federal award and guidance issued by the Office of Head Start and the Administration for Children and Families (ACF). The SF-425 must accurately report cumulative expenditures and other required financial information and be supported by the Agency’s accounting records. Federal reporting requirements are established by 2 CFR Part 200, the Notice of Award, and applicable Head Start program instructions. Failure to submit accurate and timely SF-425 reports constitutes noncompliance with Compliance Requirement L – Reporting. Condition: During testing, we identified that the annual Federal Financial Reporting (SF-425) was not submitted by the reporting deadline prescribed in the grant terms and conditions and Office of Head Start reporting requirements. As a result, the Agency did not comply with federal reporting requirements applicable to the program. Cause: Management did not maintain effective internal controls to ensure compliance with federal reporting requirements. Specifically, controls over the monitoring of reporting deadlines and timely preparation and submission of the SF-425 were not operating effectively. The Agency lacked sufficient procedures to track reporting due dates and verify completion of required filings before the applicable deadline. Additionally, there was a change in upper level management/turnover during the grant period. Effect or potential effect: Failure to comply with requirements would result in return of unallowable costs and a breach in agreement and may be basis to recover grant funds by grantor. Failure to submit required federal reports timely may impede the ability of the federal awarding agency to monitor program expenditures and compliance with award requirements. Additionally, untimely reporting could result in increased oversight by the awarding agency and may affect the Agency’s standing with the federal grantor. Questioned costs: None. The finding relates to timeliness of reporting submission. Context: We identified that of the 4 reports required to be filed annually, we tested 1 report that was not timely. As such, the Agency‘s controls were not operating effectively to ensure timely submission. Repeat finding: No. Recommendation: We recommend management strengthen controls over federal reporting by implementing formal procedures to monitor reporting deadlines, including maintaining a reporting calendar, assigning responsibility for report preparation and review, and documenting management review and approval prior to submission. Management should periodically review upcoming reporting requirements to ensure all federal reports are submitted completely and timely in accordance with grant terms and conditions. Views of responsible officials: Management agrees with this finding. See corrective action plan.

Finding 2025-002: Reporting – Data Collection Form Federal award agency: All federal award agencies Pass-through granting agency: n/a Program name and ALN: Various Federal award identification number: Various Federal award year: January 1, 2024 to December 31, 2024 Criteria: Uniform Guidance requires the auditee to electronically submit the reporting package and Data Collection Form (DCF) to the Federal Audit Clearinghouse (FAC) within the earlier of: 1. Thirty (30) calendar days after receipt of the auditor‘s reports; or 2. Nine (9) months after the end of the audit period. Failure to meet this deadline constitutes noncompliance with federal reporting requirements. Condition: The Agency did not submit its Data Collection Form and reporting package to the Federal Audit Clearinghouse by the required deadline. The submission occurred on October 1, 2025, which was 1 day after the required filing deadline. Cause: Management did not maintain adequate controls to monitor Single Audit reporting deadlines and ensure timely submission of the reporting package and Data Collection Form to the Federal Audit Clearinghouse. Effect or potential effect: Failure to timely submit the Data Collection Form and reporting package resulted in noncompliance with Uniform Guidance reporting requirements. Untimely filing may reduce the availability of compliance information to federal agencies and pass-through entities and could subject the Agency to increased scrutiny by federal oversight agencies. Questioned costs: None. The finding relates to timeliness of reporting submission. Context: The Agency was subject to Single Audit reporting requirements for the fiscal year ended December 31, 2024. The required filing deadline was September 30, 2025; however, the reporting package and DCF were not submitted until October 1, 2025. Repeat finding: No. Recommendation: We recommend management establish formal procedures to monitor Single Audit filing deadlines, assign responsibility for Federal Audit Clearinghouse submission, implement a documented review process to verify that the reporting package and Data Collection Form are submitted timely, and maintain evidence of submission and management review. Views of responsible officials: Management agrees with this finding. See corrective action plan.