The Montessori Network

Condition : Cost allocations for salaries and related expenses allocated across program activities, including federal award programs were improperly submitted for reimbursement under the Head Start program. The allocation issue affected only 3 of the timesheets examined and were isolated to the first quarter of the fiscal year. The identified errors represented underallocation of hours compared to the approved personnel activity reports and timecards. Criteria : Internal controls should be in place and consistently applied that provide reasonable assurance that cost allocations accurately represent the correct allocation of employee-related costs based on the time spent by the applicable employees. Cause : Personnel activity reports submitted by employees are not consistently reconciled to the vouchers submitted for federal and other programs. Effect : Because the reconciliation process in place was not consistently followed to agree to personnel activity reports to costs allocations, it is possible that an employee's time may be inappropriately allocated amongst functional activities, including federal award programs. Recomendation : Procedures should be consistently applied requiring the reconciliation of submitted personnel activity reports to the employees' actual costs allocated and charged to federal and other programs. Views of Responsible Officials and Planned Corrective Actions : This finding was initially identified during fiscal year 2020, and corrective actions were taken by the School in 2021. To address the issue, the School implemented new procedures that require a monthly review by management, which includes a detailed reconciliation of submitted personnel activity reports to vouchers prepared for federal and other programs. This reconciliation process helps to ensure that payroll cost allocation accurately reflects the submitted personnel activity reports. In addition, the School has made changes to its payroll system to ensure accurate time tracking for its various programs. This includes changing the service provider responsible for voucher submissions. These changes will help to prevent similar issues from occurring in the future and ensure that employee-related costs are accurately allocated to the appropriate programs. As of June 30, 2022, the School has successfully implemented these changes and continues to review and monitor its procedures to maintain compliance with federal and other program regulations. Finding was repeated during FY23 and FY24, as the School was in the process of transitioning accountants during the period of exceptions noted. As noted in the Condition above, no further issues were found for periods following the first quarter of FY24.

Audit Recommendation: Procedures should be consistently applied requiring the reconciliation of submitted personnel activity reports to the employees' actual costs allocated and charged to federal and other programs. Planned Corrective Actions: This finding was initially identified during fiscal year 2020, and corrective actions were taken by the School in 2021. To address the issue, the School implemented new procedures that require a monthly review by management, which includes a detailed reconciliation of submitted personnel activity reports to vouchers prepared for federal and other programs. This reconciliation process helps to ensure that payroll cost allocation accurately reflects the submitted personnel activity reports. In addition, the School has made changes to its payroll system to ensure accurate time tracking for its various programs. This includes changing the service provider responsible for voucher submissions. These changes will help to prevent similar issues from occurring in the future and ensure that employee-related costs are accurately allocated to the appropriate programs. As of 2022, the School has successfully implemented these changes and continues to review and monitor its procedures to maintain compliance with federal and other program regulations. Finding was repeated during FY23 and FY24, as the School was in the process of transitioning accountants and implementing control procedures during the period of exceptions noted. Anticipated Completion Date: June 30, 2024 Contact Person: Rita Nolan, Executive Director

2023-001

Condition : Cost allocations for salaries and related expenses allocated across program activities, including federal award programs were improperly submitted for reimbursement under the Head Start program. The identified errors represented underallocation of hours compared to the approved personnel activity reports and timecards. Criteria : Internal controls should be in place and consistently applied that provide reasonable assurance that cost allocations accurately represent the correct allocation of employee-related costs based on the time spent by the applicable employees. Cause : Personnel activity reports submitted by employees are not consistently reconciled to the vouchers submitted for federal and other programs. Effect : Because the reconciliation process in place was not consistently followed to agree to personnel activity reports to costs allocations, it is possible that an employee's time may be inappropriately allocated amongst functional activities, including federal award programs. Recomendation : Procedures should be consistently applied requiring the reconciliation of submitted personnel activity reports to the employees' actual costs allocated and charged to federal and other programs. Views of Responsible Officials and Planned Corrective Actions : This finding was initially identified during fiscal year 2020, and corrective actions were taken by the School in 2021. To address the issue, the School implemented new procedures that require a monthly review by management, which includes a detailed reconciliation of submitted personnel activity reports to vouchers prepared for federal and other programs. This reconciliation process helps to ensure that payroll cost allocation accurately reflects the submitted personnel activity reports. In addition, the School has made changes to its payroll system to ensure accurate time tracking for its various programs. This includes changing the service provider responsible for voucher submissions. These changes will help to prevent similar issues from occurring in the future and ensure that employee-related costs are accurately allocated to the appropriate programs. As of June 30, 2022, the School has successfully implemented these changes and continues to review and monitor its procedures to maintain compliance with federal and other program regulations. Finding was repeated during FY23, as the School was in the process of transitioning accountants during the period of exceptions noted.

Audit Recommendation: Procedures should be consistently applied requiring the reconciliation of submitted personnel activity reports to the employees' actual costs allocated and charged to federal and other programs. Planned Corrective Actions: This finding was initially identified during fiscal year 2020, and corrective actions were taken by the School in 2021. To address the issue, the School implemented new procedures that require a monthly review by management, which includes a detailed reconciliation of submitted personnel activity reports to vouchers prepared for federal and other programs. This reconciliation process helps to ensure that payroll cost allocation accurately reflects the submitted personnel activity reports. In addition, the School has made changes to its payroll system to ensure accurate time tracking for its various programs. This includes changing the service provider responsible for voucher submissions. These changes will help to prevent similar issues from occurring in the future and ensure that employee-related costs are accurately allocated to the appropriate programs. As of 2022, the School has successfully implemented these changes and continues to review and monitor its procedures to maintain compliance with federal and other program regulations. Finding was repeated during FY23, as the School was in the process of transitioning accounts during the period of exceptions noted. Anticipated Completion Date: June 30, 2023 Contact Person: Rita Nolan, Executive Director

2022-001

Condition : Cost allocations for salaries and related expenses allocated across program activities, including federal award programs were improperly submitted for reimbursement under the Head Start and Education Stabilization Fund programs. The identified errors represented underallocation of hours compared to the approved personnel activity reports and timecards. Criteria : Internal controls should be in place and consistently applied that provide reasonable assurance that cost allocations accurately represent the correct allocation of employee-related costs based on the time spent by the applicable employees. Cause : Personnel activity reports submitted by employees are not consisently reconciled to the vouchers submitted for federal and other programs. Effect : Because the reconciliation process in place was not consistently followed to agree to personnel activity reports to costs allocations, it is possible that an employee's time may be inappropriately allocated amongst functional activities, including federal award programs. Recomendation : Procedures should be consistently applied requiring the reconciliation of submitted personnel activity reports to the employees' actual costs allocated and charged to federal and other programs.Views of Responsible Officials and Planned Corrective Actions : This finding was initially identified during fiscal year 2020, and corrective actions were taken by the School in 2021. To address the issue, the School implemented new procedures that require a monthly review by management, which includes a detailed reconciliation of submitted personnel activity reports to vouchers prepared for federal and other programs. This reconciliation process helps to ensure that payroll cost allocation accurately reflects the submitted personnel activity reports. In addition, the School has made changes to its payroll system to ensure accurate time tracking for its various programs. This includes changing the service provider responsible for voucher submissions. These changes will help to prevent similar issues from occurring in the future and ensure that employee-related costs are accurately allocated to the appropriate programs. As of 2022, the School has successfully implemented these changes and continues to review and monitor its procedures to maintain compliance with federal and other program regulations.

Corrective Action Plan Finding 2022-001 Audit Recommendation: Procedures should be consistently applied requiring the reconciliation of submitted personnel activity reports to the employees' actual costs allocated and charged to federal and other programs. Planned Corrective Actions: This finding was initially identified during fiscal year 2020, and corrective actions were taken by the School in 2021. To address the issue, the School implemented new procedures that require a monthly review by management, which includes a detailed reconciliation of submitted personnel activity reports to vouchers prepared for federal and other programs. This reconciliation process helps to ensure that payroll cost allocation accurately reflects the submitted personnel activity reports. In addition, the School has made changes to its payroll system to ensure accurate time tracking for its various programs. This includes changing the service provider responsible for voucher submissions. These changes will help to prevent similar issues from occurring in the future and ensure that employee-related costs are accurately allocated to the appropriate programs. As of 2022, the School has successfully implemented these changes and continues to review and monitor its procedures to maintain compliance with federal and other program regulations. Anticipated Completion Date: June 30, 2022 Contact Person: Rita Nolan, Executive Director

2021-001

Condition : During the audit, we noted several instances where expense support items were not available for review/unable to be located. Criteria : The organization is required to maintain records to support the amounts requested for reimbursement as a federal award recipient. Cause : Management's internal controls lack a requirement for reconciling submitted reimbursement requests to the related support retained. Effect : As a federal award recipient, there is a possibility that an incorrect amount could be requested for reimbursement from a funding source. Recomendation : To prevent this from happening, it is recommended that procedures be implemented requiring the reconciliation of submitted reimbursement requests to the related support (such as bills, invoices, etc.) retained. Views of Responsible Officials and Planned Corrective Actions : Management will develop written procedures outlining the steps required to reconcile submitted reimbursement requests to related support retained, such as bills, invoices, receipts, etc. The procedures will include a review and approval process to ensure compliance with federal and other program regulations. All staff members and contractors responsible for preparing and submitting reimbursement requests will receive training on the new procedures. This will include instruction on the importance of reconciling reimbursement requests to supporting documentation. Management will assign a responsible staff member to regularly monitor the reimbursement request process to ensure compliance with established procedures. This individual will be responsible for reviewing a sample of reimbursement requests each month to ensure they are accurate and properly supported. Management will regularly review and evaluate the effectiveness of the new procedures and make necessary adjustments as needed.

Corrective Action Plan Finding 2002-002 Audit Recommendation: Procedures should be implemented requiring the reconciliation of submitted reimbursement requests to the related support (such as bills, invoices, etc.) retained. Planned Corrective Actions: Management will develop written procedures outlining the steps required to reconcile submitted reimbursement requests to related support retained, such as bills, invoices, receipts, etc. The procedures will include a review and approval process to ensure compliance with federal and other program regulations. All staff members and contractors responsible for preparing and submitting reimbursement requests will receive training on the new procedures. This will include instruction on the importance of reconciling reimbursement requests to supporting documentation. Management will assign a responsible staff member to regularly monitor the reimbursement request process to ensure compliance with established procedures. This individual will be responsible for reviewing a sample of reimbursement requests each month to ensure they are accurate and properly supported. Management will regularly review and evaluate the effectiveness of the new procedures and make necessary adjustments as needed. Anticipated Completion Date: February 28, 2023 Contact Person: Rita Nolan, Executive Director

Condition : Cost allocations for salaries and related expenses allocated across program activities, including federal award programs, are not consistently supported by employee timesheets or other similar documentation. Criteria : Internal controls should be in place that provide reasonable assurance that cost allocations accurately represent the correct allocation of employee-related costs based on the time spent by applicable employees. Cause : Personnel activity reports submitted by employees are not reconciled to the vouchers submitted for federal and other programs. Effect : Because a reconciliation process is not in place to agree to personnel activity reports to cost allocations , it is possible that an employee?s time may be inappropriately allocated amongst functional activities, including federal award programs. Recommendation : Procedures should be implemented requiring the reconciliation of submitted personnel activity reports to the employees? actual costs allocated and charged to federal and other programs. Views of Responsible Officials and Planned Corrective Actions : This finding was identified in fiscal year 2020 and corrected in 2021. The School implemented procedures that required reconciliation of submitted personnel activity reports to the vouchers prepared for federal and other programs, prior to the submission of the voucher, to ensure that the payroll cost allocation is reflective of the submitted personnel activity reports. Additionally, the School converted payroll systems which ensure that time tracking for its various programs are accurately recorded.

The school has implemented procedures that require reconciiliation of submitted personnel activity reports to the vouchers prepared for federal and other programs prior to the submission of the vocuher, to ensure that the payroll costs allocation is reflective of the submitted personnel activity reports. Additionally, the School has plans to convert payroll systems and will ensure that time tracking for it's various programs is appropriately implemented in the new system.

2020-001

Condition : Cost allocations for salaries and related expenses allocated across program activities, including federal award programs, are not consistently supported by employee timesheets or other similar documentation. Criteria : Internal controls should be in place that provide reasonable assurance that cost allocations accurately represent the correct allocation of employee-related costs based on the time spent by applicable employees. Cause : Personnel activity reports submitted by employees are not reconciled to the vouchers submitted for federal and other programs. Effect : Because a reconciliation process is not in place to agree to personnel activity reports to cost allocations , it is possible that an employee?s time may be inappropriately allocated amongst functional activities, including federal award programs. Recommendation : Procedures should be implemented requiring the reconciliation of submitted personnel activity reports to the employees? actual costs allocated and charged to federal and other programs.

Views of Responsible Officials and Planned Corrective Actions: The School has implemented procedures that require reconciliation of submitted personnel activity reports to the vouchers prepared for federal and other programs, prior to the submission of the voucher, to ensure that the payroll cost allocation is reflective of the submitted personnel activity reports. Additionally, the School has plans to convert payroll systems and will ensure that time tracking for its various programs is appropriately implemented in the new system.