Finding Text
Fiscal year finding initially occurred: 2021
Head Start Cluster (93.600)
CRITERIA: In accordance with the Uniform Guidance, the Organization should have internal controls over some or all of the compliance requirements for major federal programs.
CONDITION: The Organization's internal controls over activities allowed/allowable costs were determined to be ineffective during the performance of internal control testing over the major federal program.
CAUSE: The Organization did not adhere to their established controls and procedures over activities allowed/allowable costs.
EFFECT: The Organization may have included costs that were not allowable in their cost of assistance. A sample of 63 transactions totaling $126,316 was selected for testing. There was one disbursement transaction that was not approved by two employees and three transactions were not properly allocated between federal grant employees and nonfederal grant employees in accordance with the Organization’s policy. As a result, the Organization had questioned costs totaling $7,660. Our sample was a non-statistical sample.
RECOMMENDATION: The Organization should review their established policies and procedures for effectiveness and ensure all employees adhere to all established procedures. Additionally, management should ensure all costs charged to the program are allowable under the grant guidelines.
MANAGEMENT’S CORRECTIVE ACTION PLAN: United Way onboarded a new Finance Director with expertise in developing internal controls for Federal grant programs as of August 2023. We have successfully implemented robust internal controls that have significantly enhanced our operational efficiency. We are confident that as of 2024, this issue has been effectively addressed.