Finding Text
Finding 2025-003: Head Start Assistance Listing No. 93.600 U.S. Department of Health and Human Services Compliance Requirement: Allowability Grant No.: 08CH011429-04-00 Type of finding: Internal Control over Financial Reporting (material weakness), Internal Control over Compliance (material weakness), and Other Matters Criteria: Under 45 CFR sections 75.403, 75.404 and 75.405 the costs incurred must meet general criteria for allowability, including being necessary and reasonable for the performance of the federal award, allocable thereto, and adequately documented. Condition: Out of a total of 36 items tested it was determined that six expenditures were either missing documentation or did not contain sufficient documentation in order to determine the nature of the item purchased. Cause: The Organization does not have a process to ensure that expenditures are only paid after sufficient documentation has been received and that the documentation is retained under a records retention policy for a sufficient amount of time. Questioned Costs: $0 Effect: The Organization was unable to provide adequate documentation to support all expenses incurred for the year in a manner that sufficiently documents the expense. Recommendation: The Organization should develop a system of internal control over compliance including a review process to ensure that expenses are properly documented prior to their payment and the support is retained for a sufficient amount of time. Repeat Finding: No Management Response: The Organization will review the financial close process to determine if additional controls can be implemented in the process. New process will be in place for statements to have a detailed report of purchases to accompany the statements.