BRAZOS VALLEY COMMUNITY ACTION PROGRAMS

Criteria As a condition of receiving Federal awards, non-federal entities agree to comply with laws, regulations and the provisions of grant agreements and contracts, and to maintain internal control to provide reasonable assurance of compliance with these requirements. The U.S. Department of Health and Human Services has established reporting compliance requirements applicable to the Head Start Cluster which stipulate that recipients submit financial reporting forms of programs revenues and expenditures (SF-425) and real property (SF-429) subject to the terms and conditions of the contract. Condition The Agency was delinquent in submitting its semi-annual, annual, and its Real Property Status Report (SF-429) to the granting Agency for Head Start during fiscal year 2024. Cause The Agency’s internal control over compliance with the reporting requirement for the Head Start program is inadequate to ensure timely submission of the required financial information. Effect or Potential Effect As a result of the deficiency in internal control over compliance over reporting, the Agency is not in compliance with the financial reporting due dates of the Housing Voucher Cluster program. Recommendation We recommend that Agency’s management evaluate and improve its controls over the reporting requirements of the Head Start program to help ensure compliance with the requirements. Views of Responsible Officials and Planned Corrective Action Plan See corrective action plan.

Assistance Listing Numbers: 93.356, 93.600 – Head Start Cluster U.S. Department of Health and Human Services Type of Finding: Material Weakness in Internal Control over Compliance and Noncompliance Compliance Requirement: Reporting Criteria As a condition of receiving Federal awards, non-Federal entities agree to comply with laws, regulations and the provisions of grant agreements and contracts, and to maintain internal control to provide reasonable assurance of compliance with these requirements. The U.S. Department of Health and Human Services has established “reporting” compliance requirements applicable to the Head Start Cluster which stipulate that recipients submit financial reporting forms of program revenues and expenditures (SF-425) and real property (SF-429) subject to the terms and conditions of the contract.Condition The Agency was delinquent in submitting its semi-annual, annual, and final Federal Financial Reports (SF- 425) and its Real Property Status Report (SF-429) to the granting agency for Head Start during fiscal year 2023 due to the need for strengthened written procedures and staff training. Cause The Agency’s internal control over compliance for the reporting requirement of the Head Start program is inadequate to ensure timely submission of the required information. Effect or Potential Effect As a result of the deficiency in internal control over compliance over reporting, the Agency is not in compliance with the financial reporting due dates of the Head Start program. Recommendation We recommend that Agency’s management evaluate and improve its controls over the reporting requirements of the Head Start program to help ensure compliance with the requirements.

Finding 2023-002 Assistance Listing Numbers: 93.356, 93.600 – Head Start Cluster U.S. Department of Health and Human Services Type of Finding: Material Weakness in Internal Control over Compliance and Noncompliance Compliance Requirement: Allowable Costs/Cost Principles Criteria As a condition of receiving Federal awards, non-Federal entities agree to comply with laws, regulations and the provisions of grant agreements and contracts, and to maintain internal control to provide reasonable assurance of compliance with these requirements. The U.S. Department of Health and Human Services has established “allowable costs/cost principles” compliance requirements applicable to the Head Start Cluster which stipulate that compensation charged for personal services satisfy specific requirements of the Uniform Guidance including that the charges be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable and properly allocated. Condition During our testing of payroll charged to the Head Start program, the Agency was unable to provide sufficient documentation to show that the pay rates for 28 of the 40 employees tested were properly authorized by the Agency. The difference between the amounts paid/charged and amounts supported by Agency records for the test selections was $2,391. Based on the error rate noted, there is a reasonable possibility that material noncompliance could occur and not be prevented, or detected and corrected, on a timely basis. Cause The Agency’s internal control over compliance for the allowable cost/cost principles requirement of the Head Start program is inadequate to ensure that personnel expenses meet the specific requirements of the Uniform Guidance. Effect or Potential Effect As a result of the deficiency in internal control over compliance over allowable costs/cost principles, the Agency is not in compliance with the allowable costs/cost principles requirement of the Head Start program. Recommendation We recommend that Agency’s management evaluate and improve its controls over the allowable costs/cost principles requirements of the Head Start program to help ensure compliance with the requirements.