Finding Text
Federal Agency: U.S. Department of Health and Human Services (HHS)
Pass-through Agency: N/A
Federal Programs Title: Head Start and Early Head Start 02CH01049105
CFDA Number: 93.600
Compliance Requirement: Matching Non-Federal Share
Type of Finding: Material Noncompliance and Material Weakness
Responsible Official: Federal Program Director
Criteria Section 75.306 Cost sharing or matching
Federal regulations require to the Municipality, any shared costs or matching funds
and all contributions, including cash and third-party in-kind contributions, must be
accepted as part of the non-Federal entity’s cost sharing, or matching when such
contributions meet all the following criteria:
(1) Are verifiable from the non-Federal entity’s records.
Federal regulations require award recipients’ financial management systems to be
able to provide accurate, current, and complete disclosure of the financial results of
each Federal award (45 CFR § 75.302 (b)(2)) and to be adequately documented.
Condition
The Municipality entities must record in the electronic accounting system (Monet),
supporting documents must comply with Non-Federal shares required. The
documents presented by the Municipality from March 2021 to February 2023 as
Non-Federal Share for $2,897,167 do not agree with the recipient share presented in
the Federal Financial Report sent to the Finance Management System on May 3,
2022, 0, required amount $4,909,078 as recipient share of expenditures.
Cause
The municipality does not record in the electronic accounting system “Monet” the
In-Kind contribution to be reported in the Payment System for the year ended June
30, 2022, and the monthly reports presented to board of directors do not included.
Effect:
The Municipality did not comply with the requirement of Non-Federal share required
by US Department of Health & Human Services for the Head Start and Early Head
Start programs; this could affect the continuance and new approvals of federal
program funds.
Questioned cost:
Not determined
Identification of a repeated finding:
None repeating findings were found.
Recommendations:
We recommend the Municipality maintain adequate accounting records related to the
federal funds to properly prepare the financial statements accurately and in a timely
manner. In addition, the Municipality needs to implement adequate internal controls
procedures to assure that the supporting documentation is available on the Monet
system in a timely manner. Also, proper training in the accounting system should be
obtained by the personnel in charge of preparing the Federal Financial Reports
required by Head Start.
Management Response:
Agreed with the Finding: The accounting team has been instructed to consistently
record the monthly in-kind contributions in the Monet System, ensuring their
inclusion in the Federal Financial Report. Contrary to the assertion that the reported
contribution is inaccurate, we stand by the correctness of our records.
To address any concerns, we invite you to request the amended Federal Financial
Report, which will include a comprehensive reconciliation of the in-kind contribution
with our meticulously maintained accounting books. We are committed to providing
you with this information promptly and transparently.