Finding 393153 (2022-002)

Finding 2022-002 Federal Agency: U.S. Department of Human Services Federal Program: Head Start Cluster CFDA Number: 93.600 Type of Finding: Noncompliance and Significant Deficiency in Internal Control over Compliance - Allowable Costs. Criteria: Costs attributable to common or joint use of facilities or services by Head Start programs and other programs must be fairly allocated among the various programs that utilize such services (42 USC 9839(c)). Condition: Expenditures were not properly charged to programs or allocated in accordance with the cost allocation plan. We identified 8 of the 43 expenditures tested in our statistically valid sample did not agree with the cost allocation plan. Repeat of finding 2021-001. Context: Expenditures should be charged to the proper programs and allocated in accordance with the cost allocation plan. Known Questioned Costs: $6,357 – resulted in likely questioned costs greater than $25,000. Cause: Turnover of accounting personnel and lack of documentation and understanding of the allocation process with the Organization resulted in costs being incorrectly allocated between programs. Effect: Grant expenses were charged to the incorrect programs. Recommendation: We recommend management implement procedures to ensure that costs charged to the grant follow the approved cost allocation plan. Views of responsible official: Management concurs with the audit findings.