Finding Text
2023-103 – Allowable Costs/Cost Principles /Reporting (Material Weakness, Compliance
Finding) Repeat Finding
Federal program information:
Funding agency: U.S. Department of Health and Human
Services
Title: Head Start
CFDA number: 93.600
Award number and years: 72609; July 1, 2022 through June 30, 2023
Pass-through grantor: City of Phoenix
Compliance Requirements: Reporting
Questioned Costs: N/A
Criteria: The Organization is required to establish internal controls that help ensure that total
administrative costs incurred by program expenses do not exceed 15% of total costs. The
quarterly reports submitted to the City of Phoenix which indicate total contract expenditures and the portion of administrative costs should agree to the expenditures charged and billed during the reporting period.
Condition: The 4th Quarter report of expenditures submitted to the City of Phoenix indicated total federal share of Head Start expenditures of $$5,960,860. Total costs charged to the Head Start base contract for which reimbursement requests were made during fiscal year 2023 was $6,125,045. Although the administrative expense share indicated on this 4th Quarter report was less than the maximum 15%, the Organization did not fully track the administrative costs as a percentage of the total costs because this report did not fully agree to the total expensesreimbursed during fiscal year 2023.
Cause and Effect: The quarterly reports submitted to the City of Phoenix are City provided work
sheets that are difficult to modify to correct for adjustments during the year. As a result, the sum of the quarterly reports included in the 4th quarter report did not agree to the final billed
expenditures. In addition, the Organization has not established alternative reports to track
administrative costs so that the Organization can prove that they did not exceed the 15%
administrative costs limit..
Auditors’ Recommendations: Greater Phoenix Urban League should establish procedures to
fully track expenditures requested for reimbursement and to fully monitor and track
administrative costs charged to the program.
This finding is similar to prior year finding 2022-103