Finding 1227303 (2025-002)

U.S. Department of Health and Human Services Federal Financial Assistance Listing #93.600 Head Start Cluster Applicable Federal Award Number and Year – 07HP000640-02-00 9/1/2025 – 8/31/2026 Preparation of Schedule of Expenditures of Federal Awards Material Weakness in Internal Control Over Compliance Criteria: Proper controls over financial reporting include the ability to prepare the schedule of expenditures of federal awards (Schedule) and accompanying notes to the Schedule in accordance with requirements of the Uniform Guidance. Condition: The Organization’s internal controls over the preparation of the Schedule were not operating effectively. As a result of our audit procedures, misstatements in the Schedule were identified and adjustments to the Schedule were proposed and recorded by management. Cause: The Organization’s internal controls over the preparation of the Schedule were not operating effectively and certain federal expenditures were excluded from the Schedule. Effect: Expenditures in the Schedule were understated and adjustments to the Schedule were required to properly report all federal expenditures incurred during the reporting period. Questioned Costs: None reported. Context: Sampling was not used. Repeat Finding From Prior Years: No Recommendation: We recommend that management continue to evaluate its processes and controls to ensure that reimbursement requests for expenditures are properly reconciled to supporting documentation. Views of Responsible Officials: Management is aware of the deficiency in internal control over compliance related to the preparation of the Schedule. Management is in the process of reviewing its existing controls over the tracking and submitting of its expenditures included in its reimbursement requests.