Finding Text
Compliance Requirement - Costs Allowed or Allowable
Finding Type - Material Weakness
Federal Agency - U.S. Department of Health and Human Services
Federal Program Title - Administration for Children & Families - Head Start
Assistance Listing Number - 93.600
Criteria: The Organization receives federal assistance from the Department of Health and Human Services and from the state of Pennsylvania. The Organization requests draw down of grant funds based on actual expenditures incurred. The Organization is required to maintain adequate internal controls over financial reporting in order to ensure expenditures are properly supported, reported under the correct funding source, and within the correct grant period.
Condition: During audit procedures, we noted expenditures were charged to the program via adjusting journal entry for which adequate supporting documentation could not be provided. We consider this to be a material weakness.
Questioned Costs: $159,598
Cause: An adjustment to reclassify expenditures from another funding source was recorded on the Organization's accounts. As a result, the reports used in supporting draw down of federal funds were not accurately stated.
Effect: Inaccurate financial reporting of expenditures resulted in the Organization's reimbursement requests exceeding total program expenditures.
Recommendations: We recommend the Organization implement procedures to review and approve all adjusting journal entries before they are posted to the Organization's accounts to ensure they are being charged to the correct funding source and supported by appropriate documentation.
View of Responsible Officials: There is no disagreement with the audit finding. There were various journal entries that were not timely reviewed and approved before they were posted. New staff have been hired to help with this. Community Action Partnership of Mercer County does not foresee this happening again in the future.