Ulster County Community Action Committee, Inc.Non-Profit

Finding: 2022-009 (Significant Deficiency) Agency: All Federal Agencies ALN # and Title: All Assistance Listing Numbers Federal Award Identification # and Year: All Federal Awards Criteria: Per 2 CFR 200.510(b), the auditee must prepare a Schedule of Expenditures of Federal Awards (“SEFA”) that includes all federal expenditures, organized by assistance listing number and must be accurate and complete. Additionally, 2 CFR 200.508(b) requires the auditee – not the auditor – to prepare the SEFA. Condition: UCCAC did not maintain an accurate Schedule of Expenditures of Federal Awards (“SEFA”). The original SEFA omitted some federal programs and misstated expenditures for others. Adjustments were required to reconcile the SEFA to the general ledger and supporting documentation. Effect: The inaccurate SEFA could result in improper identification of major programs and insufficient audit coverage, potentially leading to noncompliance with federal audit requirements. Cause: UCCAC lacked adequate internal controls over the preparation and review of the SEFA. There was no formal reconciliation process between the SEFA and the general ledger. Recommendation: We recommend that UCCAC implement formal procedures to ensure the SEFA is complete, accurate, and reconciled to the general ledger. This should include a documented review process and training for staff involved in SEFA preparation. In addition, we recommend that additional general ledger tracking codes be entered into Fund-EZ (general ledger) to track grant expenditures and that grant programs be monitored for inclusion in the SEFA. Management’s Corrective Action Plan: Management has indicated that they have put certain procedures into place as detailed in the Corrective Action Plan located in Appendix A.

Finding: 2022-010 (Significant Deficiency) Agency: US Department of Health and Human Services ALN # and Title: 93.600 Head Start Federal Award Identification # and Year: 02CH010735/04 Criteria: Per 2 CFR 200, Appendix XI, the auditee must submit the Federal Financial Report SF-425 three times for a twelve-month budget period, with annual reports being due ninety days after the year end of the budget period. Condition: UCCAC did not submit the annual SFR-425 for the period December 1, 2021 through November 30, 2022 within 90 days after the November 30, 2022 budget end period. Effect: UCCAC was not in compliance with its compliance reporting deadline. Cause: UCCAC lacked adequate internal controls over the preparation, review and monitoring over the SFR-425 reporting. UCCAC did not maintain a formal policy for monitoring the reporting requirements under the federal award nor were there procedures in place to ensure reports were submitted timely. Recommendation: We recommend that UCCAC implement a formal process to ensure that the reporting requirements under the Head Start grants are understood and followed in accordance with the compliance requirements so that reporting deadlines are met by the due date. Management’s Corrective Action Plan: Management has indicated that they have put certain procedures into place as detailed in the Corrective Action Plan located in Appendix A.

Finding: 2022-011 (Material Weakness) Agency: US Department of Health and Human Services ALN # and Title: 93.600 Head Start Federal Award Identification # and Year: 02CH010735/04 Criteria: Per 2 CFR 200, Appendix XI, the auditee must submit the Real Property Status Report SF-429 annually in alignment with the first due date for the Federla Financial Report SF-425 in a budget period. Condition: UCCAC did not submit the annual SFR-429 Real Property Status Report for the period December 1, 2021 through November 30, 2022. Effect: UCCAC was not in compliance with its compliance reporting deadlines. Cause: UCCAC lacked adequate internal controls over the preparation, review and monitoring over the SFR-429 reporting. UCCAC did not maintain a formal policy for monitoring the reporting requirements under the federal award nor were there procedures in place to ensure reports were submitted. Recommendation: We recommend that UCCAC implement a formal process to ensure that the reporting requirements under the Head Start grants are understood and followed in accordance with the compliance requirements. Management’s Corrective Action Plan: Management has indicated that they have put certain procedures into place as detailed in the Corrective Action Plan located in Appendix A.

Finding: 2022-012 (Material Weakness) Agency: US Department of Health and Human Services ALN # and Title: 93.600 Head Start Federal Award Identification # and Year: 02CH010735/04 Criteria: Per 2 CFR 200.14 recipients of federal awards are to maintain procurement policies in accordance with grant requirements and are subject to the nonprocurement debarment and suspension regulations which restrict making contracts with certain parties that are debarred, suspended, or otherwise excluded from receiving or participating in Federal awards. Condition: The procurement policy maintained by UCCAC contained inconsistencies regarding when a purchase order was needed verse a check request or purchase order contract and did not include any procedures for verifying whether vendors were not debarred, suspended, or otherwise excluded from receiving or participating in federal awards. UCCAC did not verify whether vendors were debarred, suspended or otherwise excluded from receiving or participating in federal awards for the Head Start program. Effect: UCCAC is not in compliance with federal procurements requirements. Without proper verification, there is a risk that federal funds may be disbursed to ineligible vendors, potentially resulting in noncompliance with federal regulations, questioned costs, and reputational damage. Inconsistencies in whether a purchase order is required verse a check request could result in unauthorized purchases. Cause: UCCAC lacked adequate internal controls over the verification of whether vendors were included on the debarred, suspended or exclusion listing and had inconsistencies within the procurement policy when preparing purchase orders. Recommendation: We recommend that UCCAC review their procurement policy and make necessary updates to remove inconsistencies and to include a procedure for verification of whether vendors have been debarred, suspended or excluded from receiving or participating in Federal awards against the SAM.gov exclusion list prior to contract execution. Verification of vendors should be updated annually. Management’s Corrective Action Plan: Management has indicated that they have put certain procedures into place as detailed in the Corrective Action Plan located in Appendix A.