Finding Text
FINDING 2022-002 - LATE FINANCIAL REPORTING AND LIMITED CONTROLS OVER TIMELY REPORTING (REPEAT) - HEAD START CLUSTER, FEDERAL ASSISTANCE LISTING NUMBER 93.600 Criteria: The 2022 OMB Compliance Supplement specifies for Federal Assistance Listing Number 93.600 that SF- 425, Federal Financial Report (FFR) and SF-429, Real Property Status, are required to be filed. According to the FFR instructions, the submission of interim FFRs is required on a quarterly basis, or as directed by the Federal Agency. The Federal Agency requires for the submission of the following reports as it applies to the Organization; a semiannual FFR due April 30, an annual FFR due October 30, and a final FFR due January 30. The SF-429 is required to be submitted on the same date the Organization's annual FFR is due. Condition: For project years ended August 31, 2021 and August 31, 2022, the semi-annual, annual, and final reporting requirements for the SF-425 and SF-429 reports due during the year ended June 30, 2022 were not met. Questioned Costs: None. Effect: Delayed reporting affects the grantor?s ability to exercise effective grantee oversight and could result in grantor's withholding of payments and other adverse actions. Cause: Lack of proper management oversight and other controls over compliance with the reporting requirements. Recommendation: Management should communicate periodically with the federal agency and design and implement effective controls to ensure timely submission of future reports. Also, all past due reports should be submitted to the grantor as soon as possible. Management's Response: The Organization terminated our professional relationship with our financial services provider in FY23, Quatrro BSS. We established a financial services contract with Metropolitan Family Services (MFS) that began July 1, 2022. MFS has not had any late submission findings in the past ten years of audits. We have created a calendar with all necessary reporting deadlines for all funding agencies. The calendar is reviewed by the finance team, the executive team, and a government contracts and grants manager to ensure accurately recorded deadlines are reflected. The Director of Budgets reviews monthly deadlines and ensures timely submission of reports.