Finding Text
Program Information: See the Corrective Action Plan for chart/table Criteria or specific requirement: Per 2 CFR § 200.303 Internal controls, the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Under 45 CFR Part 1303 Subpart E and Compliance Supplement, grantees using Head Start funds for facilities activities—such as the purchase, construction, major renovation, or disposition of property—are required to: • Submit Standard Form SF-429 (cover sheet) and Attachments B (Request to Acquire, Improve or Furnish) or C (Disposition or Encumbrance Request), as applicable. • Obtain prior written approval from the Administration for Children and Families (ACF) for applicable real property actions (e.g., purchase, construct, renovate, principal and interest on approved loans, purpose other than what was approved in application). • Record a Notice of Federal Interest in the official real property records and, for modular units, physically post notices on the unit. Condition/Context: The Department was unable to provide documentation demonstrating that required SF-429 forms were submitted in connection with facilities-related activities. In addition, no documentation of ACF approval, Notice of Federal Interest, or disposition forms was available to support compliance with facilities reporting and property management requirements. [X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness Cause: The Department did not have an effective control system in place to ensure compliance with real property and facilities reporting requirements under the Head Start program. Effect: Failure to document and submit required facilities reports, including SF-429 and related notices, places the federal interest in real property at risk. The Department is not following the grant guidelines and is operating the grant out of compliance. Questioned Costs: Due to lack of sufficient documentation, we were unable to determine questioned costs. Repeat Finding: Yes – 2021-010. Recommendation: We recommend the Head Start program emphasizes all documentation is obtained, properly completed, and retained so it can be easily accessed and presented to ensure full compliance with Head Start facilities requirements. The necessary resources should be allocated to develop, implement, and monitor policies and procedures to achieve its objectives related to operations, reporting, and compliance. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding and has prepared corrective action as detailed in its Corrective Action Plan.