Finding Text
U.S Department of Health and Human Services - Head Start Cluster - AL #93.600Grant Number: 10CH01165003 Grant Period: July 1, 2022 to June 30, 2023 Questioned Costs: Costs were estimated to the approximately None How the questioned costs were computed: Our analysis determined that costs were estimated to be underallocated during the program period. Condition – During the audit fieldwork, Wipfli, LLP. noted that Head Start of Lane County had a documented cost allocation plan that described how costs were to allocated between grant programs, specifically allocation of costs based on slots and square footage. During our testing, we noted that Head Start of Lane County was unable to provide supporting documentation that costs were allocated based on the documented plan. This is a repeat finding from prior year. Criteria – Per 2 CFR 200.405, costs charged to federal awards must be allocable based on the relative benefits received and assigned using a reasonable methodology. In addition, Section 200.400 (d) of Uniform Guidance states the accounting practices of the recipient must be consistent with these cost principles and support the accumulation of costs as required by these cost principles, including maintaining adequate documentation to support costs charged to the Federal award. Cause – During the audit year, there was turnover in Head Start of Lane County’s business office which contributed to the lack of support available for the allocation. Head Start of Lane County is working on streamlining and implementing processes to address the deficiency noted in the condition paragraph. Effect - As a result of not having documentation to support the application of the cost allocation plan, a material weakness exists in internal controls over allocation of costs. Recommendation - We recommend management and those charged with governance evaluate the operation of the finance department and implement procedures to ensure that costs are allocated in accordance with the documented cost allocation plan. View of Responsible Officials - Management agrees with the assessment and has committed to a corrective action plan.