The administration of Texas Association for the Education of Young Children acknowledges receipt of the following audit findings for the fiscal year 2023. While in agreement with the findings, management provides the following response:
Commencing in July 2023, an executive team was assembled, comp...
The administration of Texas Association for the Education of Young Children acknowledges receipt of the following audit findings for the fiscal year 2023. While in agreement with the findings, management provides the following response:
Commencing in July 2023, an executive team was assembled, comprising the appointment of a Chief Financial Officer and a Director of Operations. Before this, the Executive Director managed all operations and finances, assisted by a Finance Manager and Administrative Assistant. The inclusion of over 25 years of professional
leadership and Master level education of the CFO and DOO was crucial to accommodate the growth experienced
by TXAEYC in preceding months and anticipated in FY23. Additionally, it led to an additional level of check and balances on operational and financial responsibilities.
Upon the arrival of CFO Casey Cole, effective August 1, 2022, TXAEYC updated its accounting policies and procedures to align with GAAP and general best practices. This update guaranteed the provision of timely reports and documentation for all financial transactions, encompassing accounts payable, vendor profiles, contracts, and procurement, overseen by the DOO.
The CFO collaborates with an external accounting firm tasked with managing data entry and monthly reconciliations, offering support and guidance as necessary. The involvement of the accounting firm enhances the review process and provides additional expertise to ensure the accuracy of financial records.
Finding 2023-001: Internal Control Over Compliance: Federal Award Findings and Questioned Costs Management Response:
The finding for not obtaining an open request for proposal was dated to fiscal year 2022 – not 2023. The request for proposal process was not followed as it was not posted to the public as policy states. Multiple vendors were sought out for quotes/RFI (request for information) due to the limited availability of qualified contractors.
1. Board Training:
o Since fiscal year 2022, comprehensive board trainings have been conducted at the onset of each fiscal year. These sessions encompass a review of policies and procedures that TXAEYC must abide that include but are not limited to those that fall under the purview of the board and its committees. Both new and existing board members participate in these training to ensure alignment with organizational policies and best practices.
2. Updated Accounting Manual:
o In fiscal year 2023, an updated Accounting Manual was developed. This revised manual contains clearer policies and delineates the responsibilities of staff and board members including procurement processes and adherence to established policies.
o The manual was revised by the CFO, reviewed by the Finance Committee multiple times, and underwent executive staff leadership review. After extensive review, it was then sent to the board for final review and vote for unanimous approval, then implemented.
3. Enhanced Oversight with the Hiring of the CFO and DOO:
o The recruitment of a Chief Financial Officer (CFO) and a Director of Operations (DOO) has strengthened oversight over procurement practices. The CFO and DOO are tasked with reviewing contracts and spearheading procurement activities, ensuring strict adherence to organizational policies and regulations.
4. Re-establishment of Finance Committee:
o Recognizing the absence of a Finance Committee in fiscal year 2022, steps have been taken to re- establish this vital oversight body. The Finance Committee will play a pivotal role in monitoring procurement activities, reviewing financial processes, and providing guidance to ensure compliance with organizational policies and regulatory requirements.
Additionally, further corrective measures will be implemented, including:
• Conducting regular audits of procurement processes to identify and address any deviations from established policies.
• Implementing a centralized procurement system to streamline and standardize procurement practices across the organization.
• Providing ongoing training and guidance to staff involved in procurement to enhance their understanding of policies and procedures.
• Establishing clear protocols for vendor selection and evaluation to ensure transparency and fairness in the procurement process.
Parties Responsible:
Oversight of Procurement: Director of Operations Board Training: Executive Director
Maintaining a Finance Committee: Board of Directors
Oversight of financial policies and procedures being followed: Chief Financial Officer
Date of expected completion of corrective actions:
The items outlined in the management response have already been put in place as of Fiscal Year 2023 and will continue to be fulfilled and monitored by responsible parties.