EIN: 362749858
UEI: URN1NKWFCDK5
Data as of August 23, 2026
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on October 8, 2024. Under 2 CFR 200.521(d), a pass-through entity that provided federal funds to this organization for this audit period must issue a management decision on these findings by April 8, 2025 (502 days ago).
What is a management decision? →The Organization provided time records that account for the number of hours worked by the selected employees and the departments employees are charged. The Organization is using projected salaries including vacant positions in order to calculate their full-time equivalent rate to be used for administrative allocations and not using actual time. We noted that the expenses are not being properly tracked by federal grant within the general ledger properly to show expenses are not being allocated to multiple grants. Questioned Costs: None Context: This condition occurred in all 49 payroll transactions selected for testing and represented 38 different employees. Cause: Unknown Effect: Inaccurate payroll costs may be charged to federal programs if the Agency does not have procedures in place to monitor and record employee time devoted to federal programs. Repeat Finding: The finding is a repeat finding in the immediately prior year. Prior year finding number was 2022-002. Section III – Findings and Questioned Costs – Major Federal Programs (Continued) 2023 – 003 Allowable Costs / Cost Principles (Continued) Recommendation: Management should develop a process whereby payroll costs allocated to federal grants; are supported by a system of internal controls which provides reasonable assurance that the charges are accurate, allowable and properly allocated, reasonably reflect the total activity for which the employee is compensated, and support the distribution of the employee’s wages among specific activities or cost objectives if the employee woks on more than one federally funded program. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with this finding.
Show full finding ▾Hide full finding ▴2023 – 003 Allowable Costs / Cost Principles Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Head Start Assistance Listing Number: 93.600 Federal Award Identification Number and Year: N/A Pass-Through Agency: City of Chicago Department of Family and Support Services & Start Early Pass-Through Number(s): 1130806/181206/189365/190275; 05CH011953-ELH23-03 Award Period: Start Early: 1/1/22-12/31/22; 1/1/23-12/31/23; City of Chicago: 113806: 12/1/2019-11/30/22; 181206/189365/190275: 4/1/22-11/30/22 Type of Finding: Material Noncompliance (Modified Opinion) Material Weakness in Internal Control over Compliance Criteria or Specific Requirement: Reports reflecting the distribution of activity of each employee must be maintained for all staff members whose compensation is charged, in whole or in part, directly to awards, in accordance with Cost Principles for Non-Profit Organizations (2 CFR Part 230.8). Charges to Federal awards must also be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. These records must also support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition: The Organization provided time records that account for the number of hours worked by the selected employees and the departments employees are charged. The Organization is using projected salaries including vacant positions in order to calculate their full-time equivalent rate to be used for administrative allocations and not using actual time. We noted that the expenses are not being properly tracked by federal grant within the general ledger properly to show expenses are not being allocated to multiple grants. Questioned Costs: None Context: This condition occurred in all 49 payroll transactions selected for testing and represented 38 different employees. Cause: Unknown Effect: Inaccurate payroll costs may be charged to federal programs if the Agency does not have procedures in place to monitor and record employee time devoted to federal programs. Repeat Finding: The finding is a repeat finding in the immediately prior year. Prior year finding number was 2022-002. Section III – Findings and Questioned Costs – Major Federal Programs (Continued) 2023 – 003 Allowable Costs / Cost Principles (Continued) Recommendation: Management should develop a process whereby payroll costs allocated to federal grants; are supported by a system of internal controls which provides reasonable assurance that the charges are accurate, allowable and properly allocated, reasonably reflect the total activity for which the employee is compensated, and support the distribution of the employee’s wages among specific activities or cost objectives if the employee woks on more than one federally funded program. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with this finding.
MATERIAL NONCOMPLIANCE (MODIFIED OPINION) MATERIAL WEAKNESS IN INTERNAL CONTROL OVER COMPLIANCE 2023 – 003 Allowable Costs / Cost Principles Recommendation: Management should develop a process whereby payroll costs allocated to federal grants; are supported by a system of internal controls which provides reasonable assurance that the charges are accurate, allowable and properly allocated, reasonably reflect the total activity for which the employee is compensated, and support the distribution of the employee’s wages among specific activities or cost objectives if the employee woks on more than one federally funded program. Explanation of disagreement with audit finding: There is no disagreement with this finding. Action taken in response to finding: As of July 1, 2023, the Organization was acquired by Brightpoint, a social service organization with complimentary operations. The finance leadership of the acquiring organization has robust internal controls is experienced to resolve this finding in the subsequent year. Name of the contact person responsible for corrective action: Ed Balogh, Controller Planned completion date for corrective action plan: June 30, 2024.
2022-002
The Organization provided time records that account for the number of hours worked by the selected employees and the departments employees are charged. The Organization's control procedures call for dual signatures of the employee and supervisor as a control over hours worked. We noted for 13 timecards tested, one of these signoffs was not present. Questioned Costs: None Context: This condition occurred in 13 of the 49 payroll transactions selected for testing and represented 13 different employees. Cause: Internal controls over compliance with the Uniform Guidance were not followed. Section III – Findings and Questioned Costs – Major Federal Programs (Continued) 2023 – 004 Internal Control over Payroll Tracking (Continued) Effect: Inaccurate payroll costs may be charged to federal programs if the Agency does not have procedures in place to monitor and record employee time devoted to federal programs. Repeat Finding: The finding is not a repeat finding. Recommendation: Management should follow established controls requiring signatures on time cards of the employee and their supervisor to ensure the completeness and accuracy of hours allocated to the federally funded grant. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with this finding.
Show full finding ▾Hide full finding ▴2023 – 004 Internal Control over Payroll Tracking Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Head Start Assistance Listing Number: 93.600 Federal Award Identification Number and Year: N/A Pass-Through Agency: City of Chicago Department of Family and Support Services & Start Early Pass-Through Number(s): 1130806/181206/189365/190275; 05CH011953-ELH23-03 Award Period: Start Early: 1/1/22-12/31/22; 1/1/23-12/31/23; City of Chicago: 113806: 12/1/2019-11/30/22; 181206/189365/190275: 4/1/22-11/30/22 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: Reports reflecting the distribution of activity of each employee must be maintained for all staff members whose compensation is charged, in whole or in part, directly to awards, in accordance with Cost Principles for Non-Profit Organizations (2 CFR Part 230.8). Charges to Federal awards must also be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. These records must also support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition: The Organization provided time records that account for the number of hours worked by the selected employees and the departments employees are charged. The Organization's control procedures call for dual signatures of the employee and supervisor as a control over hours worked. We noted for 13 timecards tested, one of these signoffs was not present. Questioned Costs: None Context: This condition occurred in 13 of the 49 payroll transactions selected for testing and represented 13 different employees. Cause: Internal controls over compliance with the Uniform Guidance were not followed. Section III – Findings and Questioned Costs – Major Federal Programs (Continued) 2023 – 004 Internal Control over Payroll Tracking (Continued) Effect: Inaccurate payroll costs may be charged to federal programs if the Agency does not have procedures in place to monitor and record employee time devoted to federal programs. Repeat Finding: The finding is not a repeat finding. Recommendation: Management should follow established controls requiring signatures on time cards of the employee and their supervisor to ensure the completeness and accuracy of hours allocated to the federally funded grant. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with this finding.
SIGNIFICANT DEFICIENCY IN INTERNAL CONTROL OVER COMPLIANCE 2023 – 004 Internal Control over Payroll Tracking Recommendation: Management should follow established controls requiring signatures on time cards of the employee and their supervisor to ensure the completeness and accuracy of hours allocated to the federally funded grant. Explanation of disagreement with audit finding: There is no disagreement with this finding. Action taken in response to finding: As of July 1, 2023, the Organization was acquired by Brightpoint, a social service organization with complimentary operations. The finance leadership of the acquiring organization has robust internal controls is experienced to resolve this finding in the subsequent year. Name of the contact person responsible for corrective action: Ed Balogh, Controller Planned completion date for corrective action plan: June 30, 2024.
We noted that three employees had variances between actual compensation and what was expected according to the documentation of their approved salary or wage rate. Questioned Costs: ALN 93.600: $197 Context: For the 49 payroll disbursements tested, we observed documentation of the employee's approved wage rate. We performed a recalculation of the disbursements to those employees per the payroll register for that period using the approved rate and the hours per the employee's timesheet. For three disbursements, the recalculation varied from the disbursement. Cause: Internal controls over compliance with the Uniform Guidance were not followed. Section III – Findings and Questioned Costs – Major Federal Programs (Continued) 2023 – 005 Payroll Disbursements (Continued) Effect: Inaccurate payroll costs may be charged to federal programs if the Agency does not have procedures in place to monitor and record employee time devoted to federal programs. Repeat Finding: The finding is not a repeat finding. Recommendation: Management should continue to follow established controls to ensure the appropriate compensation of its employees at approved rates. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with this finding.
Show full finding ▾Hide full finding ▴2023 – 005 Payroll Disbursements Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Head Start Assistance Listing Number: 93.600 Federal Award Identification Number and Year: N/A Pass-Through Agency: City of Chicago Department of Family and Support Services & Start Early Pass-Through Number(s): 1130806/181206/189365/190275; 05CH011953-ELH23-03 Award Period: Start Early: 1/1/22-12/31/22; 1/1/23-12/31/23; City of Chicago: 113806: 12/1/2019-11/30/22; 181206/189365/190275: 4/1/22-11/30/22 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: The Organization is required to established controls so that employees compensated with grant funds have their wages reflect actual time and effort performed. Condition: We noted that three employees had variances between actual compensation and what was expected according to the documentation of their approved salary or wage rate. Questioned Costs: ALN 93.600: $197 Context: For the 49 payroll disbursements tested, we observed documentation of the employee's approved wage rate. We performed a recalculation of the disbursements to those employees per the payroll register for that period using the approved rate and the hours per the employee's timesheet. For three disbursements, the recalculation varied from the disbursement. Cause: Internal controls over compliance with the Uniform Guidance were not followed. Section III – Findings and Questioned Costs – Major Federal Programs (Continued) 2023 – 005 Payroll Disbursements (Continued) Effect: Inaccurate payroll costs may be charged to federal programs if the Agency does not have procedures in place to monitor and record employee time devoted to federal programs. Repeat Finding: The finding is not a repeat finding. Recommendation: Management should continue to follow established controls to ensure the appropriate compensation of its employees at approved rates. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with this finding.
SIGNIFICANT DEFICIENCY IN INTERNAL CONTROL OVER COMPLIANCE 2023 – 005 Payroll Disbursements Recommendation: Management should continue to follow established controls to ensure the appropriate compensation of its employees at approved rates. Explanation of disagreement with audit finding: There is no disagreement with this finding. Action taken in response to finding: As of July 1, 2023, the Organization was acquired by Brightpoint, a social service organization with complimentary operations. The finance leadership of the acquiring organization has robust internal controls is experienced to resolve this finding in the subsequent year. Name of the contact person responsible for corrective action: Ed Balogh, Controller Planned completion date for corrective action plan: June 30, 2024. If the U.S. Department of Health and Human Services has questions regarding this plan, please call Ed Balogh, Controller, at 312-424-0200.
FAC accepted this audit on February 27, 2023 — management decision was due August 27, 2023.
The Organization provided time records that account for the number of hours worked by the selected employees and the departments employees are charged. The Organization is using projected salaries including vacant positions in order to calculate their full-time equivalent rate to be used for administrative allocations and not using actual time. We noted that the expenses are not being properly tracked by federal grant within the general ledger properly to show expenses are not being allocated to multiple grants. Cause: The Organization asserts that time records are consistently maintained to support the allocation of staff time to different functions however, budget estimates are used to support for charges to Federal awards. Effect: Budget estimates (i.e., estimates determined before the services are performed) alone, do not qualify as support for charges to Federal awards. Questioned Costs: None. Recommendation: We again recommend that quarterly recaps of the time sheets be done and that the time analysis be compared to the actual percent being allocated. If necessary, the projected allocation percentages, including full time equivalents, should be changed to reflect the actual time spent as required under 2 CFR 230. Also, the previous quarter should also be adjusted if the revised percentages would cause the financials to be materially misstated. We further again recommend that all employees receive additional training on filling out time sheets and that supervisors receive written procedures on reviewing the time sheets before approving to ensure that they are properly completed. With regards to allocations to awards, we recommend that the Organization properly allocate expenses within the general ledger to reflect the actual expenditures submitted for reimbursement and to ensure no expenses are being reimbursed from multiple grants. Grantee Response: El Hogar del Ni?o will strengthen its internal controls. An expense allocation method will be developed that will more closely reflect the benefit each funding source receives from the expense and is supportable either by an amendable allocation method such as, real time tracking of time, number of students served or square footage to name a few possible examples. Where estimates are used in budgeting, quarterly after-the-fact adjustments will be made when there is a material variance from budget.
Show full finding ▾Hide full finding ▴2022-002 Allowable Costs/Cost Principles Criteria: Reports reflecting the distribution of activity of each employee must be maintained for all staff members whose compensation is charged, in whole or in part, directly to awards, in accordance with Cost Principles for Non-Profit Organizations (2 CFR Part 230.8). Charges to Federal awards must also be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. These records must also support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition: The Organization provided time records that account for the number of hours worked by the selected employees and the departments employees are charged. The Organization is using projected salaries including vacant positions in order to calculate their full-time equivalent rate to be used for administrative allocations and not using actual time. We noted that the expenses are not being properly tracked by federal grant within the general ledger properly to show expenses are not being allocated to multiple grants. Cause: The Organization asserts that time records are consistently maintained to support the allocation of staff time to different functions however, budget estimates are used to support for charges to Federal awards. Effect: Budget estimates (i.e., estimates determined before the services are performed) alone, do not qualify as support for charges to Federal awards. Questioned Costs: None. Recommendation: We again recommend that quarterly recaps of the time sheets be done and that the time analysis be compared to the actual percent being allocated. If necessary, the projected allocation percentages, including full time equivalents, should be changed to reflect the actual time spent as required under 2 CFR 230. Also, the previous quarter should also be adjusted if the revised percentages would cause the financials to be materially misstated. We further again recommend that all employees receive additional training on filling out time sheets and that supervisors receive written procedures on reviewing the time sheets before approving to ensure that they are properly completed. With regards to allocations to awards, we recommend that the Organization properly allocate expenses within the general ledger to reflect the actual expenditures submitted for reimbursement and to ensure no expenses are being reimbursed from multiple grants. Grantee Response: El Hogar del Ni?o will strengthen its internal controls. An expense allocation method will be developed that will more closely reflect the benefit each funding source receives from the expense and is supportable either by an amendable allocation method such as, real time tracking of time, number of students served or square footage to name a few possible examples. Where estimates are used in budgeting, quarterly after-the-fact adjustments will be made when there is a material variance from budget.
CORRECTIVE ACTION PLAN February 27, 2023 Federal Audit Clearinghouse 1201 E. 10th Street Jeffersonville, IN 47132 El Hogar del Nino (FEIN 36-2749858) respectfully submits the following corrective action plan for the year ended June 30, 2022. Our independent public accounting firm is: Desmond & Ahern, Ltd 10827 S. Western Avenue Chicago, IL 60643 Phone: 773-779-4720 Audit Period: July 1, 2021 through June 30, 2022 The findings from the June 30, 2022 schedule of findings and questioned costs are discussed below. The findings are numbered consistently with the numbers assigned in the schedule. 2022-002 Allowable Costs/Cost Principles Criteria: Reports reflecting the distribution of activity of each employee must be maintained for all staff members whose compensation is charged, in whole or in part, directly to awards, in accordance with Cost Principles for Non-Profit Organizations (2 CFR Part 230.8). Charges to Federal awards must also be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. These records must also support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition: The Organization provided time records that account for the number of hours worked by the selected employees and the departments employees are charged. The Organization is using projected salaries including vacant positions in order to calculate their full-time equivalent rate to be used for administrative allocations and not using actual time. We noted that the expenses are not being properly tracked by federal grant within the general ledger properly to show expenses are not being allocated to multiple grants. Cause: The Organization asserts that time records are consistently maintained to support the allocation of staff time to different functions however, budget estimates are used to support for charges to Federal awards. Effect: Budget estimates (i.e., estimates determined before the services are performed) alone, do not qualify as support for charges to Federal awards. Questioned Costs: None. Recommendation: We again recommend that quarterly recaps of the time sheets be done and that the time analysis be compared to the actual percent being allocated. If necessary, the projected allocation percentages, including full time equivalents, should be changed to reflect the actual time spent as required under 2 CFR 230. Also, the previous quarter should also be adjusted if the revised percentages would cause the financials to be materially misstated. We further again recommend that all employees receive additional training on filling out time sheets and that supervisors receive written procedures on reviewing the time sheets before approving to ensure that they are properly completed. With regards to allocations to awards, we recommend that the Organization properly allocate expenses within the general ledger to reflect the actual expenditures submitted for reimbursement and to ensure no expenses are being reimbursed from multiple grants. Corrective Action Planned: El Hogar del Nino will strengthen its internal controls. An expense allocation method will be developed that will more closely reflect the benefit each funding source receives from the expense and is supportable either by an amendable allocation method such as, real time tracking of time, number of students served or square footage to name a few possible examples. Where estimates are used in budgeting, quarterly after the fact adjustment will be made when there is a material variance from budget. El Hogar del Nino plans to correct this issue by June 30, 2023. Paul DiCaro (CFO Consultant) is responsible for correcting this issue. Paul can be contacted at (224) 229-8250. Sincerely, Paul DiCaro CFO Consultant
FAC accepted this audit on June 22, 2022 — management decision was due December 22, 2022.
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