Finding Text
Section III – Federal Award Findings and Questioned Costs
Finding #2023-001:
Program Title: Early Head Start Childcare Partnership
Assistance Listing: 93.600
Contract Grant Number:06-HP000201-03
Federal Award Years: July 1, 2022 to June 30, 2023
Federal Agency: U.S. Department of Health and Human Services
Allowable Costs and Reporting
Type of Finding: Questioned Cost and Other Noncompliance
Criteria: The 2 CFR part 200 establishes costs principles for determining costs applicable to Federal Award and
requires costs be adequately documented. In addition, 2 CFR section 200.328 establishes financial information
be reported in accordance with terms and conditions of the federal award. This award is subject to the
requirements set forth in 45 CFR Part 75, which defines unliquidated obligations as obligations incurred for direct
and indirect expenses incurred but not yet paid or charged to the award and does not include a future
commitment of funds for which an obligation or expense has not been incurred.
Condition: Based on procedures performed, we identified expenditures recorded for future program expenses
totaling $160,597 not yet obligated or incurred. As a result, amounts unspent were improperly reported as
unliquidated obligations on the federal financial report for the budget period ended June 30, 2023.
Questioned Costs: Based on review of accounting records and reconciliation of unused federal funds prepared
by Family Service, we identified questioned costs totaling $160,597 for the Early Head Start program.
Cause: Lack of documentation to support costs were obligated or incurred for direct or indirect program expense
for Early Head Start prior to the end of the budget period. In addition, Family Service did not request an extension
for additional time to use unspent funds on future program expenses.
Effect: Noncompliance with Allowable Costs and Reporting compliance requirements of the Uniform Guidance
and terms and conditions of the federal award.
Repeat Finding: No
Recommendation: We recommend Family Service improve procedures for tracking, reporting, and use of
obligated and/or unspent funds to ensure compliance with the compliance requirements and terms and
conditions of the federal award.
Views of responsible officials: Management agrees with the recommendations to improve tracking and
reporting of obligated and/or use of unspent funds to conform with the compliance requirements and terms and
conditions of the federal award. Unfortunately, the advanced funds drawn for building remodeling and
maintenance were unspent because of serious delays due to systemic problems with obtaining certificates of
occupancy and permits in a timely manner.