Finding Text
Inaccurate and Late Reporting Material Weakness U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES ALN #: 93.600 Head Start Cluster Federal Award Identification #: 02HP000535, 02CH012111, 02CH012104 Condition: During the audit of the Head Start Cluster major program, we tested CAO’s federal financial reporting (SF-425). During this testing and our testing of internal control over compliance for allowable activities, we had determined CAO had drawn funds in excess of expenditures by a material amount. This resulted in the SF-425 reports having material differences to the underlying support for cash receipts and disbursements and other differences including the recipient share of expenditures. Additionally, the SF-425 reports were submitted late. Criteria: 45 CFR Part 75.302(b) Questioned Costs: $0 Context: During the audit, the SF-425 reporting was tested for three grant agreements. For the agreements, we noted that the reported amount for cash disbursements was incorrect based on the support provided for the expenditures. These incorrect disbursements were due to CAO drawing funds that were listed as available to draw without corresponding expenses having been incurred, and because the funds were drawn CAO had reported them as disbursements. The three SF-425 reports were also submitted untimely, between 31-33 days late. Cause: Staff turnover Effect: Noncompliance with reporting requirements Identification as repeat finding, if applicable: Not applicable Recommendation: We recommend reporting be prepared based on incurred expenditures and the related draws be made only after the incurred expenses have been reviewed for accuracy. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. See corrective action plan.