Finding 1169112 (2025-002)

Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Head Start Assistance Listing Number: 93.600 Federal Award Identification Number and Year: 05CH012653-2024 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: 7/1/2024 – 6/30/2025 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Reports filed by the District to the various granting agencies must be accurate and reconcile to the District’s general ledger system. Internal controls should be designed and implemented to prevent and detect errors in the data reported on the grant claims. Segregation of duties is an internal control intended to prevent or decrease the occurrence of errors or intentional fraud. Segregation of duties ensures that no single employee has control over all phases of a transaction. Condition: There was no review of the SF-425 Federal Financial Report by someone other than the preparer. Accordingly, this does not allow for a proper segregation of duties for internal control purposes over reporting compliance requirements. Questioned costs: None Context: The reporting used by the federal government to determine the reimbursement received by the District did not contain documentation that the report was reviewed and approved by an individual other than the preparer. Cause: The District has not recently completed an internal control assessment in relation to the reporting requirements of the grant to ensure that adequate review procedures existed. Effect: Errors in the annual reporting could be made and not detected prior to submission resulting in an incorrect reimbursement amount. Repeat Finding: No Recommendation: We recommend that the District review its internal controls and implement a procedure to ensure all reports required under the grant have a designated reviewer that is distinct from the individual responsible for preparing. Views of responsible officials: There is no disagreement with the audit finding.