Finding 1221242 (2025-001)

Material Weakness Repeat Finding
Requirement
L
Questioned Costs
-
Year
2025
Accepted
2026-06-30

AI Summary

  • Core Issue: The Association failed to submit one annual and one semiannual financial report on time, violating federal requirements.
  • Impacted Requirements: Reports must be submitted within 90 days for annual and 30 days for semiannual submissions as per 2 CFR 200.328(c).
  • Recommended Follow-up: Implement a robust internal control policy to ensure timely and accurate submission of financial reports.

Finding Text

Finding 2025-001 – Reporting Federal Agency: U.S. Department of Health and Human Services Federal Program: Head Start Cluster AL Number: 93.600 Pass-through: Not applicable Award Number: 05CH012552-01 & 05CH012552-02 Award Year: 2024/2025 & 2025/2026 Type of Finding: Significant Deficiency and Noncompliance Criteria: 2 CFR 200.328(c) requires a recipient of a Federal award to submit financial reports as required by the Federal award. Reports submitted annually by the recipient must be due no later than 90 calendar days after the reporting period. Reports submitted semiannually must be due no later than 30 calendar days after the reporting period. As a recipient of Federal funding, the Association is responsible for ensuring financial reports are complete, accurate, and submitted timely in accordance with these requirements. Management is also responsible for establishing and maintaining internal controls to ensure compliance with applicable laws and regulations. Condition: During the audit period, one annual and one semiannual financial report were due as required under the Federal awards referenced above. Neither reports were submitted within the required time period as stated in the Criteria. Cause: The Association lacked adequate internal controls over the preparation, review, and submission of the Federal financial reports, resulting in untimely submissions. Effect: Failure to adhere to the reporting requirements could result in disciplinary action from the Federal agency. Questioned costs: None Identification of how questioned costs were computed: Not applicable Repeat finding: Not applicable Recommendation: We recommend the Association establish, implement, and consistently follow an internal control policy to ensure financial reports are submitted timely and accurately. Views of responsible officials: See Corrective Action Plan.

Corrective Action Plan

Finding Number: 2025-001 Anticipated Completion Date: 6/30/26 Responsible Contact Person: Bradley L McCain, CFO Planned Corrective Action: Management agrees with the finding. The Association's annual Federal Financial Report (FFR) was submitted 22 days after the required due date, and the semi-annual FFR was submitted 65 days after the required due date. The delays resulted from staffing disruptions, including employee turnover and an extended employee leave under the Family and Medical Leave Act (FMLA), which impacted the Association's ability to complete and submit required reports within the prescribed deadlines. To address this issue, the Association has strengthened its internal controls over Federal reporting by establishing a formal reporting calendar that identifies all required Federal reports, due dates, responsible individuals, and internal review deadlines. The Director of Grant Compliance is responsible for preparing and submitting Federal financial reports, while the Executive Director of Data and Grants Administration performs a final review to ensure completeness, accuracy, and timely submission. Management has also implemented cross-training and documented reporting procedures to reduce the risk of future delays caused by staff absences or turnover. Internal due dates have been established in advance of Federal deadlines to allow sufficient time for review and submission. The effectiveness of these corrective actions has already been demonstrated, as the subsequent semi-annual Federal Financial Report was submitted by the required deadline. Compliance with Federal reporting deadlines will be monitored on an ongoing basis.

Categories

Reporting

Other Findings in this Audit

  • 1221241 2025-001
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
93.600 HEAD START $4.96M
84.181 SPECIAL EDUCATION-GRANTS FOR INFANTS AND FAMILIES $559,087
93.558 TEMPORARY ASSISTANCE FOR NEEDY FAMILIES $505,754
21.027 CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS $264,263
14.267 CONTINUUM OF CARE PROGRAM $250,613
14.239 HOME INVESTMENT PARTNERSHIPS PROGRAM $115,704
14.251 ECONOMIC DEVELOPMENT INITIATIVE, COMMUNITY PROJECT FUNDING, AND MISCELLANEOUS GRANTS $63,868
14.218 COMMUNITY DEVELOPMENT BLOCK GRANTS/ENTITLEMENT GRANTS $12,422
14.231 EMERGENCY SOLUTIONS GRANT PROGRAM $617