Finding Text
Program Information:
See the audit finding for chart/table
Criteria or specific requirement:
AL # 15.021
Investment and Deposit of Advance Funds - A tribe, tribal organization, or consortia receiving advance payments under the ISDEAA or the Tribally Controlled Schools Act may invest advance payments (some recipients refer to these advance payments as “deferred revenue”) before such funds are expended for the purposes of the grant, contract, or funding agreement, so long as such funds are (1) invested only in obligations of the United States or in obligations or securities that are guaranteed or insured by the United States, or mutual (or other) funds registered with the Securities and Exchange Commission and which only invest in obligations of the United States or securities that are guaranteed or insured by the United States; or (2) deposited only in accounts that are insured by an agency or instrumentality of the United States, or are fully collateralized to ensure protection of the advance funds, even in the event of a bank failure (25 USC 450e-3).
AL # 93.600
Head Start uses specific terms related to real property and facilities, which are defined at 45 CFR section 1305.2, including construction, facility, Federal interest, major renovation, and modular unit. Facilities activities (purchase, construction, major renovation, subordination of a Federal interest, refinancing, and disposition) are initiated through the submission of Form SF-429 (cover sheet) and applicable Attachments B (Request to Acquire, Improve or Furnish) or C (Disposition or Encumbrance Request).
Condition/Context:
AL # 15.021
During testing of Investment and Deposit of Advance funds, it was noted that advanced funds are not fully collateralized or insured.
AL # 93.600
The Department was unable to provide documentation of SF-429 reporting to verify it was completed and submitted on time.
[X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness
Cause:
AL # 15.021
The Tribe did not have an effective control system in place to ensure that federal funds were fully protected and insured.
AL # 93.600
The Department did not have an effective control system in place to ensure that documentation was retained to support amounts originally reported or that the SF-429 was submitted.
Effect:
Without obtaining all information required by the grant, the Department is not following the grant guidelines and is operating the grant out of compliance.
Questioned Costs:
Due to lack of sufficient documentation, we were unable to determine questioned costs.
Repeat Finding:
Yes – 2020-009.
Recommendation:
We recommend the necessary resources be allocated to develop, implement, and monitor policies and procedures to achieve its objectives related to operations, reporting, and compliance.
Views of Responsible Officials and Planned Corrective Action:
Management agrees with the finding and has prepared corrective action as detailed in its Corrective Action Plan.