Finding Text
Federal Agency: U.S. Department of Health and Human Services
Federal Program Title: Head Start
Federal Assistance Listing Number: 93.600
Award Period: June 1, 2023 to May 31, 2024, June 1, 2024 to May 31, 2025
Type of Finding:
Significant Deficiency in Internal Control over Major Federal Programs and Other Matters
Criteria or Specific Requirement: A physical inventory of the property must be taken and the results
reconciled with the property records at least once every two years.
Under 2 CFR section 200.303 a non-federal entity must establish and maintain effective internal
controls over the federal awards that provides reasonable assurance that the non-federal entity is
managing the federal award in compliance with federal statutes, regulations, and the terms and
conditions of the federal award. These internal controls should be in compliance with guidance in
“Standards for Internal Control in the Federal Government” issued by the Comptroller General of the
United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO).
Condition: During our testing, we noted the no reconciliation of the inventory count to the asset listing.
Questioned Costs: N/A
Context: There was no documented reconciliation of inventory count.
Cause: The Organization performed an inventory count during the fiscal year, however, there were no
policies in place to formally document the count, reconcile the count to the asset listing, or review such
reconciliation.
Effect: Potential for missing, old, or out of use property
Repeat Finding: Yes
Recommendation: The Organization should perform an inventory count with proper reconciliations to
the asset listing, along with having a different individual review and document such review of the count
and the reconciliation.
Views of responsible officials and planned corrective actions: There is no disagreement with the
audit finding.