FAMILY SERVICES OF WESTCHESTER, INC.

Section III - Federal Award Findings and Questioned Costs Finding 2025-002 – Reporting – Significant Deficiency Name of Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Head Start Cluster Assistance Listing Number: 93.600 Federal Award Identification Number and Year: 02CH01292101: Budget Period – December 1, 2024 – November 30, 2025 Criteria In accordance with the Head Start Policy and Regulations, Program Instructions for Federal Reporting of Standard Forms 425 and 428, Federal Financial Report SF-425, with a budget period that begins on December 1 is required to be submitted semi-annually by June 30. Condition During our testing of the reporting requirements, we noted that the semi-annual report for the budget period December 1, 2024 to November 30, 2025 was submitted untimely on July 2, 2025. Cause There was no process in place to track the due dates of the Federal Financial Reports. Effect or Potential Effect This condition resulted in the untimely filing of one of the semi-annual Federal Financial Reports. Questioned Costs None Context One exception from the two semi-annual Federal Financial Reports filed. Identification as a Repeat Finding This finding is not a repeat finding. Recommendation We recommend that management put in place a tracking mechanism as part of its policies and procedures that identifies the due dates of all Federal Financial Reports, and the dates by which they should be finalized and presented for review to ensure filings are done by the pertinent due dates. Views of Responsible Officials To ensure timely submission of these forms, the Organization has designated a finance staff member to handle all Head Start required financial reporting forms. Additionally, under the organization’s new enterprise resources planning (ERP) system, specific milestones will be set around these submission requirements and due dates, to further enforce deadline compliance.

Finding 2023-001, Reporting - U.S. Department of Health and Human Services, Head Start Cluster: ALN 93.600 Criteria or Specific Requirement: Under the requirements of the Federal Funding Accountability and Transparency Act ("Transparency Act") that are codified in 2 CFR Part 170, recipients (i.e. direct recipients) of grants or cooperative agreements who make a first tier subaward of $30,000 or more are required to register in the Federal Funding Accountability and Transparency Act Subaward Reporting System ("FSRS") and report subaward data through FSRS. Reporting to FSRS should be no later than the last day of the month following the month in which the subaward/subaward amendment obligation was made. Condition: During our testing of the reporting compliance requirement, it was noted that the Organization has a subaward that will meet the requirements for FFATA reporting and has to be reported to the FSRS. The Organization did not report the subaward information timely. Cause: Management was not aware that they have to register and report subaward information in the FSRS related to the first tier subaward given to another entity that was over $30,000. Effect: The Organization did not comply with the reporting compliance requirement as required by the Transparency Act. Context: During our testing, it was noted that the Organization has one first tier subaward that was not reported timely into the FSRS. Questioned Costs: None. Identification of Repeat Finding: Yes. See 2022-002. Recommendation: We recommend that the Organization register in the FSRS and timely report the required subaward information as required by the Transparency Act. Views of Responsible Official: There is a specific compliance requirement that all direct subawards with an obligated amount over $30,000 threshold must be reported as such by no later than the end of the following month of the agreement to FSRS. There was an oversight on the specifics on this requirement resulting in a late report. Going forward, workflow has been amended to take this requirement into account and to submit the report on a timely basis, no later than the end of the following month of the agreement.

Finding 2022-001, Inaccurate SEFA, Reporting - U.S. Department of Health and Human Services, Head Start Cluster: ALN 93.600 Criteria: The Uniform Guidance requires that the auditee prepare a SEFA for the period covered by the auditee's financial statements. At a minimum, the schedule shall: ? List all individual Federal programs by Federal agency. ? Include the name of the pass-through entity and the identifying number assigned by the passthrough entity for all Federal funds expended as a subrecipient. ? Include the amount of Federal funds passed through to subrecipients. ? Provide the total Federal awards expended for each individual Federal program and the Assistance Listing Number or other identifying number when the Assistance Listing Number information is not available. Condition and Context: The Organization's current policies and procedures on the preparation of the SEFA were not detailed enough to ensure that all pass-through federal funds are included, which resulted in the SEFA provided to the auditors to not accurately reflect the pass-through federal funds given to subrecipients. Cause: Internal controls over the accurate preparation and completeness of the SEFA were not operating effectively. Effect: An improper SEFA and delays in identifying pass-through federal funds given to subrecipients could result in errors in accounting, revenue recognition, disallowed costs, and noncompliance with Uniform Guidance requirements. Identification as a repeat finding: Yes. Questioned costs: None. Recommendation: We recommend that the Organization strengthen its policies and procedures for the identification of Federal awards, including pass-through federal funds to subrecipients, to ensure a complete and accurate SEFA is prepared in a timely manner and in accordance with the requirements of the Uniform Guidance. Views of responsible official: There was an oversight in the completion of the SEFA resulting in not including passthrough federal funds given to subrecipients. Going forward, workflow has been amended to take into account any subawards given to subrecipients of federal funds, to ensure inclusion of the information in the SEFA.

Item 2022-002, Reporting, U.S. Department of Health and Human Services, Head Start Cluster: ALN 93.600 Criteria or specific requirement: Under the requirements of the Federal Funding Accountability and Transparency Act ("Transparency Act") that are codified in 2 CFR Part 170, recipients (i.e. direct recipients) of grants or cooperative agreements who make a first tier subaward of $30,000 or more are required to register in the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) and report subaward data through FSRS. Statement of condition and context: During our testing of the reporting compliance requirement, it was noted that the Organization has one first tier subaward that is required to be reported in the FSRS. The Organization did not report the subaward information timely. Statement of cause: Management was not aware that they have to register and report subaward information in the FSRS related to the first tier subaward given to another entity that was over $30,000. Effect: The Organization did not comply with the reporting compliance requirement as required by the Transparency Act. Questioned costs: None. Identification of repeat finding: No. Recommendation: We recommend that the Organization register in the FSRS and timely report the required subaward information as required by the Transparency Act. Views of responsible official: There is a specific Head Start requirement that all direct subawards with an obligated amount over a $30,000 threshold must be reported as such by no later than the end of the following month of the agreement to FSRS. There was an oversight on the specifics of this requirement resulting in a late report. Going forward, workflow has been amended to take this requirement into account and to submit the report on a timely basis, no later than the end of the following month of the agreement.

Finding 2021-001, Inaccurate SEFA, Reporting - U.S. Department of Treasury, COVID-19 Coronavirus State and Local Fiscal Recovery Funds (Assistance Listing Number 21.027) Criteria: The Uniform Guidance requires that the auditee prepare a SEFA for the period covered by the auditee?s financial statements. At a minimum, the schedule shall: ? List all individual Federal programs by Federal agency. ? Include the name of the pass-through entity and the identifying number assigned by the passthrough entity for all Federal funds expended as a subrecipient. ? Provide the total Federal awards expended for each individual Federal program and the Assistance Listing Number or other identifying number when the Assistance Listing Number information is not available. Condition and Context: The Organization?s current policies and procedures on the preparation of the SEFA were not detailed enough to ensure all funds were identified as either non-federal, federal or pass-through federal awards, which resulted in the SEFA provided to the auditors to not accurately reflect certain federal expenditures and Assistance Listing Number information. Cause: Internal controls over the accurate preparation and completeness of the SEFA were not operating effectively. Effect: an improper SEFA and delays in identifying whether an award is federally funded could result in errors in accounting, revenue recognition, disallowed costs, and noncompliance with Uniform Guidance requirements. Identification as a repeat finding: No. Questioned costs: None. Recommendation: We recommend that the Organization strengthen its policies and procedures for the identification of Federal awards to ensure a complete and accurate SEFA is prepared in a timely manner and in accordance with the requirements of the Uniform Guidance. View of responsible officials: The SEFA erroneously excluded a one-time COVID award received from Westchester County. There was confusion around this error/oversight since the award did not clearly specify it was federally funded and the County did not respond to our audit confirmation or phone calls in a timely basis. Currently, the Organization?s Finance staff maintains a list of all grants and contracts received during the year and updates it on a monthly basis. Effective immediately, this list will identify each award as either non-federal, federal, or pass-through federal to ensure that the SEFA provided to the auditors at year end is prepared accurately and completely.

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