Finding 52526 (2022-003)

Material Weakness
Requirement
L
Questioned Costs
-
Year
2022
Accepted
2023-05-30
Audit: 43752
Organization: Two Rivers Head Start Agency (IL)

AI Summary

  • Core Issue: The agency failed to submit the SF-425 and SF-429 forms on time, leading to discrepancies with the general ledger.
  • Impacted Requirements: Compliance with 2 CFR 200.512(a) for timely reporting is at risk, which could confuse funding entities about actual expenditures.
  • Recommended Follow-Up: Hire temporary staff during significant vacancies in the accounting department to ensure accurate and timely reporting.

Finding Text

DEPARTMENT OF HEALTH AND HUMAN SERVICES HeadStart, CFDA # 93.600 2022 - 03: Criteria: 2 CFR 200.512(a) requires that (SF) 425 form must be submitted on a quarterly and semi-annual basis no later than 30 days after the end of each reporting period. Annual report shall be submitted no later than 90 days after the end of each report period. (SF) 429 form must be submitted on an annual basis no later than 90 days after the project or grant period end date. Condition: In gaining our understanding of control over (SF) 425 and (SF) 429 forms, we noted the following controls: (SF) 425 form must be submitted quarterly basis and (SF) 429 form must be submitted annually. We reviewed (SF) 425 forms for the 2nd quarter and 4th quarter noted that amounts did not agreed to the general ledger and quarterly reports were submitted late. Form (SF) 429 was not submitted in a timely manner at all. Cause: The Agency had significant turnover for the whole year of 2021 and 2022. This resulted in significant delays in getting ready or providing information and submitted the required forms to the funder agency. Effect: This delay and in accuracy in reporting to the governmental entity could cause some confusion by the governmental entity in exactly how much funds were spent during the quarter and prevents the Agency in tracking their grant funds spent and how much is remaining. This could result in overspending on the grant. Auditor?s Recommendation: We recommend that when there is a significant vacancy in the accounting department, the Agency finds some temporary help to keep the accounting records accurate and up to date. This will enable the Agency to have adequate and complete accounting records to meet reporting requirements. Management response: Due to significant employee turnover in the accounting department, SF-425 and SF-429 reports were not submitted in a timely manner or with information matching the general ledger. The new accounting team is in place and is in the process of correcting and resubmitting or submitting the reports. The accounting team will submit accurate SF-425 and SF-429 reports in a timely manner moving forward.

Corrective Action Plan

Two Rivers Head Start Agency respectfully submits the following corrective action plans for the year ended August 31, 2022. Auditor: Audit Period: Dugan & Lopatka, CPA's 4320 Winfield Road Suite 450 Warrenville, IL 60555 For the year ended August 31, 2022 The findings from the schedule of findings and questioned costs is discussed below. The findings are numbered consistently with the number assigned in the schedule. Findings - Financial Statements 2022-01: Auditor's Recommendation: We recommendthe Agency implement procedures to ensure timely reconciliation of general ledger accounts. Action Taken: The Agency experienced significant employee turnover in the Accounting Department. New staff have been hired. The Fiscal Officer will reconcile the general ledger balances no later than 30 days after the end of the previous month. The Executive Director will review and sign the reconciliations. 2022-02: Auditor's Recommendation: We recommend that the timesheets be reviewed by the accounting department to verify all timesheets have a supervisor approval before processing payroll. If the approval is missing, the accounting department should e-mail the timesheets to the supervisor and ask for a reply verifying that the hours are correct. We also recommend that the Agency implement fully electronic timesheets that provide the ability for the supervisor to approve a timesheets remotely. Action Taken: The Agency experienced significant employee turnover in the centers. All Supervisors will receive an email reminder, with their direct reports listed, to review and approve timesheets prior to payroll being processed. The Accounting Department will review a Timecard Approval Report prior to payroll being processed. Supervisors will be notified of any missing timecards or approvals. Payroll will not be processed until the report shows all timecards have been completed and approved. Finding - Single Audit Statement 2022-03: Auditor's Recommendation: We recommend that when there is a significant vacancy in the accounting department, the Agency finds some temporary help to keep the accounting records accurate and up to date. This will enable the Agency to have adequate and complete accounting records to meet reporting requirements. Action Taken: Due to significant employee turnover in the Accounting Departmentt SF-425 and SF- 429 reports were not submitted in a timely manner or with information matching the general ledger. The new accounting team is in place and is in the process of correcting and resubmitting or submitting the reports. The accounting team will submit accurate SF-425 and SF-429 reports in a timely manner moving forward. If the funding agency has questions regarding this plan, please call me at 630-264-1444, Ext. 234.

Categories

Reporting Matching / Level of Effort / Earmarking

Other Findings in this Audit

  • 628968 2022-003
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
93.600 Head Start $3.47M
93.569 Community Services Block Grant $333,149
10.558 Child and Adult Care Food Program $258,059
93.588 Temporary Assistance for Needy Families $112,500