Finding Text
Federal Program: Head Start Cluster (CFDA 93.600) Federal Agency: U.S. Department of Health and Human Services Federal Award Number(s): 08CH012021-02-01 Compliance Requirement: Allowable Costs/Cost Principles Questioned Costs: $125 Condition – During testing of expenditures charged to the Head Start program several transactions were identified for which adequate supporting documentation such as invoices, receipts, or other evidence demonstrating the nature and purpose of the expenditures could not be provided. Criteria – Under 2 CFR 200.403(g) costs charged to federal awards must be adequately documented to be allowable. Additionally, 2 CFR 200.302(b)(3) requires non-federal entities to maintain records that “identify adequately the source and application of funds” for federally funded activities. Cause – Internal control procedures were not consistently followed related to retaining supporting documentation for federal program expenditures. Control over documentation retention was not sufficiently designed or monitored to ensure that all required records were maintained and readily available. Effect – Inadequate documentation increases the risk that unallowable costs may be charged to the federal program and may result in disallowed costs or repayment to the federal awarding agency. Recommendation – We recommend that the government strengthen its internal controls over documentation retention for federal program expenditures and ensure staff is knowledgeable regarding Uniform Guidance documentation requirements. Client Response – Management acknowledges this finding. We no longer service this program. In the future if we take a grant of this size on, training will be held for any employees involved with the grant. Status of Finding – This is not a repeat finding from the prior year.