Finding Text
Internal Control Findings - Material Weakness U.S. Department of Health and Human Services: 2022-003 Controls Over Activities Allowed/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 some or all of the compliance requirements for major federal programs. CONDITION: The Organization's internal controls over activities allowed/allowable costs were determined to be ineffective during the performance of internal control testing over the major federal program. CAUSE: The Organization did not adhere to their established controls and procedures over activities allowed/allowable costs. EFFECT: The Organization may include costs that are not allowable in their cost of assistance. A sample of 93 transactions totaling $128,271 was selected for testing from a population of 1,641 transactions. There were 7 disbursement transactions that were not approved by two employees in accordance with the organization?s policy and 1 payroll timesheet did not have evidence of the employee or supervisor approval. There were 8 payroll transactions that did not have documentation to support the organization?s policy that salaried employees work a minimum of 40 hours a week. There were two disbursement transactions charged to the program that were not related to the Head Start activities. One of these unallowable transactions was charged to the COVID 19 funding allocation. 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 has welcomed a new Finance Director with experience in establishing internal controls. We are committed to implementing comprehensive internal controls that encompass enhancing financial reporting processes to ensure accuracy, transparency, and compliance with regulatory standards; budget oversight, risk management and expenditure and cash flow management.