Finding Text
Allowable Cost/ Cost Principles U.S. Department of Health and Human Services ? Administration for Children and Families ? Head Start Program (CFDA #93.600) Conditions: During our audit, it came to our attention that the Organization submitted claims for reimbursement for expenses that included health insurance costs, however, claims were not reduced or credited by employee contributions received by the Organization towards such costs. Criteria: Credits and reimbursement received by the Organization that relate to allowable costs, should be credited to the Federal award as a cost reduction. (45 CFR 75.406(a)(b)). Cause: Internal controls were not in place to reconcile expenses, net of credits, claimed for reimbursement (drawdowns) to that recorded in the Organization?s records. Effect: The portion of costs that were claimed for reimbursement under the Head Start Program and also reimbursed by employees through payroll deductions are disallowed and are required to be returned to the U.S. Department of Health and Human Services. Questioned Costs: $81,909. Auditor?s Recommendation: On a monthly basis, expenses recorded within the Organization?s general ledger system should be reconciled with expenses claimed for reimbursement through Head Start drawdowns. The reconciliation should consider reimbursements and credits received by the Organization. This reconciliation should be reviewed by someone independent of the preparer. Organization?s Response: Head Start agrees with the recommendation and will continue to prepare grant reconciliations to ensure draw down requests are matched by expenditures. Reconciliation will be approved by the Financial Manager and CEO. Monthly reconciliation will be included in the Board of Directors reports.