LAKEWOOD ECONOMIC ACTION PROGRAM, INC.

Department of Health and Human Services (passed through Ocean Community Economic Action Now, Inc.) Finding 2022-001 ? Failure to Meet Matching Requirement (Material Noncompliance) (Repeat Finding) Head Start Program - CFDA No. 93.600; Award No. 02CH011916-01-02; Grant Period - Year Ended December 31, 2022 and Early Head Start Program ? CFDA No. 93.600; Award No. 02CH011319-02-03; Grant Period - Year Ended December 31, 2022 Statement of Condition: The subrecipient grant document requires that the subrecipient agency provide a non-federal match of 20% of the total costs of the Head Start program, which was calculated at $315,614. The actual match amount provided for the year ended December 31, 2022 was $218,506, which was significantly less than the required match. This is a repeat of a finding in the December 31, 2021 audit, which was reported as Finding 2021-001. The non-federal match requirement for the Early Head Start program was $105,261. The actual match provided for the year ended December 31, 2022 was $13,472. Criteria: The Head Start and Early Head Start programs require recipients to provide a 20% non-federal match of program expenses. Cause: The Organization did not receive sufficient in-kind support to meet the match requirement. The Organization also was unable to generate other sources of revenue to apply to the match requirement. Effect: Failure to meet the non-federal share may result in reduced funding. Recommendation: A waiver or a reduction in the required non-federal match can be requested from the Administration for Children and Families if one of five criteria are met. We recommend that the criteria be reviewed and a waiver requested if one or more of the criteria are applicable. In addition, the Organization should discuss the repercussions of failure to meet the non-federal share with the grantor and come up with a plan to ensure the non-federal match is met in future years. Views of Responsible Officials and Planned Corrective Actions: As of January 1, 2023, LEAP, Inc. is no longer operating the Head Start and Early Head Start Programs.

Finding 2022-002 ? Late Filing of Required Reporting of Federal Awards/Grant (Material Noncompliance) (Significant Deficiency) Head Start Program - CFDA No. 93.600; Award No. 02CH011916-01-02; Grant Period - Year Ended December 31, 2022 and Early Head Start Program ? CFDA No. 93.600; Award No. 02CH011319-02-03; Grant Period - Year Ended December 31, 2022 Statement of Condition: The Organization?s Data Collection Form and Reporting Package was not submitted to the Federal Clearinghouse within nine months after year end as the Organization was unable to provide documentation to be completed timely, resulting in delinquent required reporting to the Federal Clearinghouse. Criteria: A nonfederal entity that expends $750,000 or more during the nonfederal entity's fiscal year in Federal awards must have a single or program specific audit conducted that year in accordance with the provisions of the Uniform Grant Guidance, Part 200, "Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards, Subpart F, Audit Requirements." The federal single audit must be completed and the data collection form and the reporting package (as defined in the Uniform Grant Guidance) be submitted within 30 days after receipt of the auditors' report or nine months after year end, whichever comes earlier. The reporting package includes a copy of the Organization?s audited financial statements and the federal single audit report. Cause: The Organization?s Data Collection Form and Reporting Package was not submitted to the Federal Clearinghouse within the due date of September 30, 2022 as the audit was unable to be completed prior to this date, resulting in delinquent required reporting to the Federal Clearinghouse. Effect: The Organization is not in compliance with the Uniform Grant Requirements. Recommendation: We recommend the Organization establish policies and procedures to ensure the federal single audit reporting package is submitted timely. Views of Responsible Officials and Planned Corrective Actions: The Organization will not be required to file a federal single audit reporting package for 2022 as it will no longer have federal funding over $750,000 in subsequent years.

Findings and Questioned Costs - Major Federal Awards Programs Audit Department of Health and Human Services (passed through Ocean Community Economic Action Now, Inc.) Finding 2020-001 ? Material Noncompliance Head Start Program - CFDA No. 93.600; Grant No. 02CH010295; Grant Period - Year Ended December 31, 2020 Statement of Condition: The subrecipient grant document requires that the subrecipient agency provide a non-federal match of 20% of the total costs of the Head Start program, which was calculated at $274,808. The actual match amount provided for the year ended December 31, 2020 was $193,126, which was significantly less than the required match. This is a repeat of a finding in the December 31, 2019 audit, which was reported as Finding 2019-001. Criteria: The Head Start program requires all recipients to provide a 20% non-federal match of program expenses. Cause: The Organization did not receive sufficient in-kind support to meet the match requirement. The Organization also was unable to generate other sources of revenue to apply to the match requirement. Effect: Failure to meet the non-federal share may result in reduced funding. Recommendation: The Organization should discuss the repercussions of failure to meet the non-federal share with the grantor and come up with a plan to ensure the non-federal match is met in future years. Views of Responsible Officials and Planned Corrective Actions: While LEAP, Inc. did not provide the required match as agreed upon in the delegate contract with grant holder O.C.E.A.N., Inc., O.C.E.A.N., Inc. had a sufficient amount of non-federal match to meet the 20% requirement on the grant. COVID-19 has been tough on Head Start, as widespread job losses and less cash in circulation directly affected donations to the program. As the program had to move to remote services, volunteer activity, a large part of our in-kind donations, has dramatically decreased due to the pandemic. Due to licensing requirements, the children had very limited technology time, limited to one hour per day through a program such as Google Meets for learning; this did not allow for community volunteers to participate in program activities online. To date, the New Jersey Office of Licensing does not permit volunteers to enter the facilities, again limiting the number of community partners whose time and expertise can be donated to the program. LEAP, Inc. recognizes the importance of the non-federal match. First and foremost, LEAP, Inc. needs to keep open the lines of communication with our board, policy council, employees, volunteers, donors, and the families we serve regarding the importance of in-kind donations to support the program and how they can help LEAP, Inc. meet its non-federal match. LEAP, Inc. will provide training to teachers, teacher aides, family workers, and area managers on the importance of the non-federal match during pre-service and on an ongoing basis. LEAP, Inc. is in contact with community members and groups (scout troops, high school honor societies, police departments, vocational schools, local colleges and universities, etc.) to develop creative partnerships that will generate the non-federal match in new and creative ways based on COVID guidelines.

Finding 2019-001 ? Material Noncompliance Head Start Program - CFDA No. 93.600; Grant No. 02CH010295; Grant Period - Year Ended December 31, 2019 Statement of Condition: The subrecipient grant document requires that the subrecipient agency provide a non-federal match of 20% of the total costs of the Head Start program, which was calculated at $529,609. The actual match amount provided for the year ended December 31, 2019 was $118,055, which was significantly less than the required match. This is a repeat of a finding in the December 31, 2018 audit, which was reported as Finding 2018-01. Criteria: The Head Start program requires all recipients to provide a 20% non-federal match of program expenses. Cause: The Organization did not receive sufficient in-kind support to meet the match requirement. The Organization also was unable to generate other sources of revenue to apply to the match requirement. Effect: Failure to meet the non-federal share may result in reduced funding. Recommendation: The Organization should discuss the repercussions of failure to meet the non-federal share with the grantor and come up with a plan to ensure that the non-federal match is met in future years.

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