Audit 414557

Finding 2024-002: Activities Allowed or Unallowed and Allowable Costs/Cost Principles, Head Start Cluster AL# 93.600 Criteria: Pursuant to 45 CFR part 200, the Organization is required to properly allocate awards between programs is documented and accurately reported. Condition: Based on our testing, 29 of 40 of the invoices tested did not apply the proper allocation procedures. Cause: The Organization did not follow the documented allocation procedures and the allocations were inconsistently reported throughout the year. Effect or Potential Effect: The internal controls over activities allowed and unallowed and allowable costs/cost principles were not operating effectively. The Organization is not in compliance with activities allowed or unallowed and allowable costs/cost principles. Questioned Costs: Unknown Recommendations: Prior to recording expenses, reference the documented allocation procedures for that were approved for the year. Record the expenses based on the documented allocation. Management Response: Management agrees with this finding, and in the future will ensure to consistently report expenses in accordance with the documented allocation process.

Finding 2024-003: Reporting, Head Start Cluster AL# 93.600 Criteria: Pursuant to 45 CFR part 75 section 302, the Organization is required to ensure all reports display accurate information. Condition: As a result of testing, receipts and expenses were overstated for the year. Cause: The Organization did not accurately record receipts and expenses. Effect or Potential Effect: The internal controls over reporting are not operating effectively. The Organization is not in compliance with reporting requirements. Questioned Costs: Unknown Recommendations: The Organization should implement procedures to ensure all filed reports are reconciled to the Organization’s general ledger. Management Response: Management agrees with this finding, and in the future will implement reconciliation procedures.