Finding Text
Finding 2024-002 Journal Entry Approval - Significant Deficiency in Internal Control over Compliance Identification of the Federal Program Department of Health and Human Services ALN 93.600 Head Start Cluster Year – 2024/2025 | FAIN: 90CI010156/90BF000005 Criteria or Specific Requirement The Uniform Guidance in 2 CFR Section 200.303, Internal Controls requires that non-federal entities receiving federal awards establish and maintain internal control designed to reasonably ensure compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition During our testing of disbursements, we noted the following exceptions: • 3 out of 3 journal entries that were selected did not have adequate supporting documentation. Cause Internal control process for retention of the source documentation was not followed. Effect or potential effect Unallowable costs may have been recorded as grant expenses. Questioned Costs None noted. Context For the testwork for allowable activities over the Head Start Cluster we requested source documentation detailing appropriate review and approval of journal entries. The Organization was unable to provide this documentation. Identification as a Repeat Finding Not a repeat finding. Recommendation We recommend that the Organization comply with the requirements of CFR section 200.303 and establish a documentation retention policy and maintain records of the review and approval process in accordance with the Uniform Guidance. Views of responsible officials Management agrees with the finding. Steps will be taken to correct the retention of source documentation process and enhance internal controls to prevent similar occurrences in the future.