Finding Text
Finding No. 2022-007
Federal Agency: U.S. Department of Health and Human Services
Assistance Listing No. and Title: 93.356/93.600 Head Start Cluster
Federal Award No.: 09ND000031, 09CH011167
Area: Special Tests and Provisions – Program Governance
Questioned Costs: $0
Criteria:
The 2022 OMB Compliance Supplement page 4-93.600-12 through 13 provides that a Head Start Agency (HSA) must share accurate and regular financial information with the governing body and the policy council, including monthly financial statements, including credit card expenditures and the financial audit (42 USC 9837(d)(2)(A) and (E)).
The governing body’s responsibilities include approving financial management, accounting, and reporting policies, and compliance with laws and regulations related to financial statements, including the: (a) approval of all major financial expenditures of the agency; (b) annual approval of the operating budget of the agency; (c) selection (except when a financial auditor is assigned by the state under state law or is assigned under local law) of independent financial auditors; and (d) monitoring of the agency’s actions to correct any audit findings and of other action necessary to comply with applicable laws (including regulations) governing financial statement and accounting practices (42 USC 9837(c)(1)(E)(iv)(VII)(aa) through (dd)).
The HSA or the auditee has provided training and technical assistance to the governing body and policy council to support understanding of financial information provided to them and support effective oversight of the Head Start award (42 USC 9837(d)(3)).
Condition:
1. Instead of the monthly requirement, PSS’ Director of Finance meets quarterly with the Board of Education’s (BOE’s) Fiscal, Personnel and Administration (FPA) Committee to discuss financial statements and expenditures.
2. No evidence was provided of the BOE’s monitoring of PSS’ actions to correct any audit findings.
3. No evidence was provided that training and technical assistance related to fiscal responsibilities was received by members of the FPA Committee of the BOE.
Cause:
PSS failed to ensure compliance with applicable special tests and provisions for program governance requirements.
Effect:
PSS is in noncompliance with special tests and provisions requirements. No questioned costs are reported as we are unable to quantify the extent of noncompliance.
Recommendation:
PSS should improve its coordination with members of the BOE with regard to the BOE’s oversight over financial statements and the related Single Audits. PSS should proactively communicate with the BOE with regard to the status of corrective actions for audit findings.
Views of responsible officials:
PSS agrees with the finding and describes corrective actions in the PSS Corrective Action Plan.