Finding Text
Criteria: All Head Start recipients are required to submit financial reports detailing the expenditures incurred for their awards. The federal expenditures reported should be reported based on the basis of accounting selected.
Condition: On the semi-annual SF-425 filing as of March 31, 2025, management denoted the basis of accounting as accrual. The Federal share of expenditures reported did not include all applicable accruals and did not reconcile to the general ledger.
Cause: A combination of material adjustments (2025-001) and inadequate reconciliation of Head Start draws (2025-003).
Effect: The semi-annual SF-425 filed was inaccurate.
Recommendation: The Organization should amend its SF-425 filings to correctly report financial information.
Management’s Response: The Agency acknowledges this error and agrees with the recommendations. It is the Agency's opinion that this finding is a direct outcome of the reconciliation issues outlined in Findings 2025-003. As those deficiencies are addressed systemically, the accuracy of SF-425 reports will be restored and maintained.