Finding Text
U.S. Department of Health and Human Services:
2024-003 Allowable Costs
Fiscal year finding initially occurred: 2021
Head Start Cluster (93.600) CRITERIA: In accordance with the Uniform Guidance, the Organization should have internal
controls over the compliance requirements for major federal programs.
CONDITION: The Organization's internal controls over compliance for allowable costs were
determined to be ineffective during the performance of internal control over compliance testing for
the major federal program.
CAUSE: The Organization did not adhere to their established controls and procedures over
allowable costs.
EFFECT: The Organization may have included costs that were not allowable in their cost of
assistance. A sample of 99 transactions totaling $121,329 was selected for testing. There was one
disbursement transaction included a payment for an invoice of another entity that was erroneously
submitted by a vendor, which was credited on the subsequent month’s invoice. One disbursement
transaction that was not properly approved and one transaction was for a period subsequent to the
grant year. As a result, the Organization had questioned costs totaling $3,494 for the payment for
services subsequent to the grant year. Our sample was a non-statistical sample.
RECOMMENDATION: The Organization should review their established policies and procedures
for effectiveness and ensure all employees adhere to all established procedures. Additionally,
management should ensure all costs charged to the program are allowable under the grant
guidelines.
MANAGEMENT’S CORRECTIVE ACTION PLAN: United Way of Acadiana hired a new
Finance Director in late 2024 who will develop and ensure internal controls for Federal grant
programs. Internal controls have been addressed and implemented in 2025 to provide better
operational efficiency.