Finding 1177932 (2025-002)

Material Weakness Repeat Finding
Requirement
A
Questioned Costs
-
Year
2025
Accepted
2026-03-11
Audit: 391315
Organization: Ravalli Head Start, Inc. (UT)

AI Summary

  • Core Issue: There were multiple instances of improper transaction approvals, including self-approvals and delays exceeding five months.
  • Impacted Requirements: The Organization failed to adhere to its own approval policy, risking non-compliance with grant requirements.
  • Recommended Follow-up: Implement a robust system to ensure timely and proper review and approval of all transactions.

Finding Text

2025-002 Transaction Approvals – Significant Deficiency Criteria: Expenditures and journal entries should be approved by a responsible official of the Organization who is aware of the various compliance requirements under the respective grant, within an appropriate amount of time that the transaction is incurred. Condition: During our testing, we found 2 instances of credit card expenditures that were selfapproved from the card holder, 8 instances when expenditures were approved at least five months past being incurred, and 2 journal entries that were not approved timely. These were out of 40 transactions tested. Cause: Undetermined. Effect: The Organization did not follow their policy for approval of transactions, which allows for the possibility of having purchased items that don’t conform with the various grant requirements. The transactions were only improved upon an internal audit of the system months after the transactions. Recommendation: We recommend that the Organization develops a more comprehensive system to ensure that all transactions are properly reviewed and approved in a timely manner.

Corrective Action Plan

Regarding 2025-002 Transaction Approvals, CFO Jill Hansen and Executive Director Michele Craig submitted corrective action in last year’s response to the significant deficiency Expense Approval Documentation 2024-002 on 1/22/25, which included an internal audit of all financial transactions and an evaluation of the reasonableness of the approvals in the current policy. At the time of the audit and proposed corrective action, we were already 5 months into the new fiscal year, and those transactions had already occurred so we were aware of potential findings. The specific 2025 findings include the timeliness of supervisor approval, the lack of supervisor approval, and the timeliness of the executive director approval of journal entries. For the timeliness of supervisor approval these systems are already in place based on last year’s corrective action. Regarding the lack of supervisor approval, managers and fiscal staff will have refresher training on the approvals needed for credit card claims which will be addressed at our next Managers’ Meeting on March 31, 2026. Additionally, the CFO now reconciles the credit card statements and reviews all associated claim forms. Regarding the executive director approval of journal entries, the CFO will obtain executive director approval and signatures on all journal entries before publishing financial statements. This step has been added to the month-end checklist. All corrective action will be implemented by April 30, 2026. The Executive Director, Michele Craig will be responsible for implementing the corrective action.

Categories

Procurement, Suspension & Debarment Significant Deficiency

Other Findings in this Audit

  • 1177931 2025-001
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
93.600 HEAD START $4.22M
10.558 CHILD AND ADULT CARE FOOD PROGRAM $120,233