Holy Cross Head Start, Inc.

Cohen noted the audited financial statements were not submitted by the ninemonth filing requirement. Systems and procedures should be in place to ensure financial records are available to be audited in a timely manner.

Cohen noted the data collection form was not submitted by the nine-month filing requirement. Systems and procedures should be in place to ensure financial records are available to be submitted in a timely manner.

During the year ended February 29, 2024, controls were not designed effectively to ensure expenses were properly accounted for in the correct period. Controls should be put in place to ensure that proper cut-off is achieved.

During the year ended February 29, 2024, monitoring controls were not designed effectively to ensure that sufficient donated goods and services were identified in order the meet the matching requirements of the HHS grant.

CONDITION AND CRITERIA: Cohen noted the audited financial statements were not submitted by the nine-month filing requirement. Systems and procedures should be in place to ensure financial records are available to be audited in a timely manner. CAUSE: Systems and procedures were not followed to ensure financial records were available to be audited in a timely manner. EFFECT: By not having the financial records available timely, the audit was not completed by the filing requirement. RECOMMENDATION: Controls and staffing should be put in place to ensure financial records are submitted timely and accurately. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS: The Organization has implemented new controls and staffing recently that are intended to remediate this matter.

CONDITION AND CRITERIA: Cohen noted the data collection form was not submitted by the nine-month filing requirement. Systems and procedures should be in place to ensure financial records are available to be submitted in a timely manner. CAUSE: Systems and procedures were not followed to ensure financial records were available to be audited and submitted in a timely manner. EFFECT: By not having the financial records available timely, the audit was not completed by the filing requirement. RECOMMENDATION: Controls and staffing should be put in place to ensure financial records are submitted timely and accurately. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS: The Organization has implemented new controls and staffing recently that are intended to remediate this matter.

CONDITION AND CRITERIA: During the year ended February 28, 2023, controls were not designed effectively to ensure expenses were properly accounted for in the correct period. Controls should be put in place to ensure that proper expense cut-off is achieved. CAUSE: Systems and procedures were not followed to ensure proper expense cut-off was achieved EFFECT: By not having proper controls in place, it resulted in a $112,179 reduction in expenses charged to the award. RECOMMENDATION: Controls should be followed to ensure proper expense cut-off is achieved. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS: The Organization has implemented new controls and staffing recently that are intended to remediate this matter.

U.S. Department of Health and Human Services 2021-001 Federal Program - CFDA 93.600 (Head Start Program) pass-through program Criteria - Under 45 CFR 75.309 Organizations must liquidate all obligations incurred under the award not later than 90 days after the end of the funding period to coincide with the submission of the final Federal Financial Report (FFR). Condition - The Organization recognized computer equipment purchases as of February 28, 2021 that had not been liquidated as of May 31, 2021. Questioned Costs - $57,177 Cause / Effect of Condition - The Organization failed to implement sufficient controls to ensure that all obligations are liquidated prior to the end of the funding period. As a result, the Organization did not meet the rules under 45 CFR 75.309. Recommendations - We recommend that the Organization institute procedures to monitor the liquidation of all of its obligations within the 90 day period or obtain a waiver by the awarding agency. Views of Responsible Officials and Planned Corrective Actions - Refer to the separate corrective action plan.

U.S. Department of Health and Human Services 2021-002 Federal Program - CFDA 93.600 (Head Start Program) pass-through program Criteria ? Under the Head Start Program agreement between the Community Action Organization of Western New York, Inc. and the Organization, the Organization is required to contribute at least of 20% of the total expenditures from non-federal funds. Condition - The Organization was not able to meet the 20% requirement for the year ended February 28, 2021, and did not obtain a waiver from the Community Action Organization of Western New York, Inc to be exempt from the requirement. Questioned Costs ? N/A

Section I - Summary of Auditor?s Results Financial Statements Type of auditor?s report issued on whether the financial statements were prepared in accordance with GAAP: Unmodified Internal control over financial reporting: ? Material weaknesses identified? No ? Significant deficiencies identified? Yes Noncompliance material to financial statements noted? No Federal Awards Internal control over major federal programs: ? Material weaknesses identified? No ? Significant deficiencies identified? Yes 2019-001 Type of auditor?s report issued on compliance for major federal programs: Unmodified Any audit findings disclosed that are required to be reported in accordance with Title 2 U.S. Code of Federal Regulations section 200.516(a)? Yes Identification of major federal programs: Name of Federal Program or Cluster CFDA Number Head Start and Early Head Start Program 93.600 Dollar threshold used to distinguish between Type A and Type B Programs: $ 750,000 Auditee qualified as low-risk auditee? Yes Section II ? Financial Statement Findings No matters were reported. Section III ? Federal Award Findings and Questioned Costs U.S. Department of Health and Human Services 2019-001 Federal Program ? CFDA 93.600 (Head Start Program) pass-through program Criteria ? Under the E-Rate Program, the Organization received reimbursements of 90% of the cost of telephone, cable and internet services. Condition ? The Organization recognized telephone, cable and internet expenditures as Head Start expenses during the year ended February 28, 2019 despite the fact that E-Rate reimbursed 90% of these costs. Questioned Costs ? $39,128 Cause / Effect of Condition ? The Organization failed to implement sufficient controls to ensure that telephone, cable and internet expenditures reimbursed by E-Rate were recorded as a reduction of Head Start expenses. As a result, the Organization recorded 100% of telephone, cable and internet expenditures as Head Start expenses rather than the net amount after E-Rate reimbursement during the year ended February 28, 2019. Recommendations ? We recommend that the Organization institute procedures to monitor the processing of E-Rate reimbursements to ensure that they are recorded as reductions of Head Start telephone, cable and internet expenses. Views of Responsible Officials and Planned Corrective Actions ? Refer to the separate corrective action plan.