Finding Text
Federal Agency: U.S. Department of Health and Human Services (HHS)
Pass-through Agency: N/A
Federal Programs Title: Head Start
CFDA Number: 93.600
Compliance Requirement: Reporting
Type of Finding: Material Noncompliance and Material Weakness
Responsible Official: Executive Director
Criteria
Form 990 Return of Organization Exempt from Income Tax under section
501(c) 3 of the Internal Revenue Code.
Condition
Form 990 is an annual information return required to be filed with the IRS by
most organizations exempt from income tax under section 501(c)(3). The form
must be completed by all filing organizations and requires reporting on the
organization’s exempt and other activities, finances, governance, compliance
with certain federal tax filing and requirements, and compensation paid to
certain persons.
Questioned Cost:
Not determined
Cause
Finance personnel do not establish internal control procedures to provide
financial information on time to prepare federal form 990 on time.
Effect
The Center does not file form 990 under section 6652 (c)(1)(A), a penalty of
$20 day, not to exceed the lesser of $10,500 or 5% of the gross receipts of the
organization for the year, can be charged when a return is filed late, unless the
organization shows that the late filing was due to reasonable cause.
Identification of repeated findings:
Repeating findings
Recommendation:
To prepare a calendar responsibilities of Federal funds due dates financial
statements to be prepared on time. Adequate training must be provided to
finance personnel. The governing body must create an Audit and Finance
Committee to revise monthly financial statements to file the return of
organization exempt from Income Tax on time.
Management Response:
Our new Administrative Accountant was trained to perform the accounting at the
Center, review the entries in the new mechanized accounting system and submit a
financial statement to the Executive Director that will be discussed and approved
by the Board of Directors, CPN and any Another component that requires the
form 990 return to be file during the period required.