Finding Text
Criteria: All Head Start recipients are required to submit financial reports that track the status of real property acquired or improved with federal funding. Additionally, any real property acquired or improved with federal funding must record a Notice of Federal Interest.
Condition: In 2020, the previous administration appeared to use Head Start and other federal funds toward the purchase of a building without prior approval from Head Start and without recording a Notice of Federal Interest. This issue was voluntarily self-disclosed by the current administration.
Cause: The previous administration disregarded compliance requirements of Head Start regarding purchasing real property
Effect: The annual SF-429 filed was inaccurate and no Notice of Federal Interest was recorded. While the process has been hampered with the restructuring of the Head Start regional offices, current management is attempting to rectify with Head Start.
Recommendation: It is recognized that this occurred under prior administration. There have been significant changes in staff and Board leadership as well as financial controls. Current management has should continue their pursuit to rectify this issue with Head Start.
Management’s Response: The Agency acknowledges this error and agrees with the recommendations. The Agency provides the additional context that the referenced actions took place in 2020, more than four years before the current audit period. This issue is not reflective of CASI's current internal control environment and does not represent an active or ongoing failure. This was an isolated instance resulting from the actions of a previous administration, whose financial and compliance oversight practices have since been fully overhauled. Since then, CASI has undergone significant changes in staff and Board leadership, financial controls, and Head Start compliance procedures, which directly mitigate any recurrence of this issue. The current leadership has self-disclosed the issue and is actively working to resolve it. This matter was voluntarily identified and disclosed by current leadership to both the auditors and the Head Start Regional Office. Efforts are ongoing to correct the SF-429 and properly record a Notice of Federal Interest in collaboration with OHS, despite delays resulting from the broader federal restructuring of the Head Start regional offices.