Finding Text
Federal Agency: U.S. Department of Health and Human Services (HHS)
Pass-through Agency: N/A
Federal Programs Title: Head Start
CFDA Number: 93.600
Compliance Requirement: Other
Type of Finding: Professional services cost, material weakness
Responsible Official: Federal Program Director
Criteria Section Head Start “Act” 653(b) Comparability of Wages
No federal funds may be used to pay any part of the compensation of an individual
employee by a head start Program, including non-federal funds, exceeds an amount
equal to the rate payable for Level II of the Executive Schedules under section 5313
of Title 5, United States Code.
Condition
The Department of Health and Human Services Appropriations Act 2022 restricts
the amount of salary to Executive Level II of the Federal Executive pay scale for a
full time 12 months total compensation for the grant period from March 2022 to
February 2023.
Cause
The finance department does not establish internal control procedures to verify any
excess of salary limitation, in accordance with section Head Start Act 653(b)
comparability of wages.
Effect
Grant program was limited to use the excess for program needs for children serve
in the programs.
Questioned cost
The Executive Director received $225,671 as salary compensation for the grant
period, less $203,700 for salary limitation.
Excess salary received for Executive Director was …………………… $21,971
Identification of a repeated finding:
None repeating findings were found.
Recommendations:
Establish adequate control procedures to verify employee compensation levels to
determine if staff exceed executive level II threshold. Review and update annually
as per revised executive level II salary scale.
Management Response:
Do not Agreed with the Finding: The salary of our executive director has
consistently adhered to established limits, and our Programs and Finance Director,
underscoring the effectiveness of our internal controls, swiftly identified any
anomaly.
Prior to the conclusion of the program year, a communication to the Finance
Director of the municipality on February 28, 2022, initiated the process of
refunding the erroneously processed funds and prompted the necessary
adjustments. The funds were returned through check #705, payment receipt
#146762, and wage adjustments were seamlessly executed on March 15, 2022.
It is important to stress that the auditor’s claim of a questionable cost lacks merit.
The report is presented in November 2023, whereas the funds were returned in
March 2022. Furthermore, comprehensive evidence of this return was readily
available to the auditor at the time of their assessment.