EIN: 364118035
UEI: H4JAXF1KZZY2
Audited by: CARVER FLOREK & JAMES, CPA'S
Oversight agency: 93 [Department of Health and Human Services]
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Data as of August 28, 2026
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on March 11, 2026. 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 September 11, 2026 (13 days from today).
What is a management decision? →During our testing, we found that the report tested was filed a month and a half after the due date and found that elements included in the report should have been excluded. Cause: Undetermined. Effect: The Organization did not follow the program requirements for reporting, which creates noncompliance with federal awards. This may lead to inaccuracy with reporting the required items to Head Start. Recommendation: We recommend that the Organization develops a more comprehensive system to ensure that all reporting requirements are properly met.
Show full finding ▾Hide full finding ▴2025-001 Filing and Accuracy of the SF-425 – Significant Deficiency Criteria: The Organization should file the SF-425 within the required time period and reports should reconcile to the underlying accounting records. Condition: During our testing, we found that the report tested was filed a month and a half after the due date and found that elements included in the report should have been excluded. Cause: Undetermined. Effect: The Organization did not follow the program requirements for reporting, which creates noncompliance with federal awards. This may lead to inaccuracy with reporting the required items to Head Start. Recommendation: We recommend that the Organization develops a more comprehensive system to ensure that all reporting requirements are properly met.
Re: 2025-001 Filing and Accuracy of the SF-425 & 2025-002 Transaction Approvals The senior management team including the Executive Director Michele Craig, CFO Jill Hansen, and the Finance Committee of the Governing Board have reviewed and agree with the audit findings. Regarding the 2025-001 Filing and Accuracy of the SF 425, in order to file the semi-annual SF 425 that was due on 1/30/25 for the period of 7/1/24-12/31/24 we needed to have closed accounting periods with accurate financial statements. When our CFO Jill Hansen began in early December 2024, the last month that had been closed was September 2024 due to the resignation of both the accounting tech and the CFO. It took several months to accurately close and update financial records. We now have a checklist of month-end tasks that ensures the generation of accurate and on time financial statements. These tasks and deadlines are incorporated in the fiscal calendar that will be reviewed with the Finance Committee each month. We successfully submitted the most recent semiannual SF 425 on time and will meet the next SF 425 deadline, October, 2026. The above corrective actions have been incorporated and this issue has been corrected.
During our testing, we found 2 instances of credit card expenditures that were selfapproved from the card holder, 8 instances when expenditures were approved at least five months past being incurred, and 2 journal entries that were not approved timely. These were out of 40 transactions tested. Cause: Undetermined. Effect: The Organization did not follow their policy for approval of transactions, which allows for the possibility of having purchased items that don’t conform with the various grant requirements. The transactions were only improved upon an internal audit of the system months after the transactions. Recommendation: We recommend that the Organization develops a more comprehensive system to ensure that all transactions are properly reviewed and approved in a timely manner.
Show full finding ▾Hide full finding ▴2025-002 Transaction Approvals – Significant Deficiency Criteria: Expenditures and journal entries should be approved by a responsible official of the Organization who is aware of the various compliance requirements under the respective grant, within an appropriate amount of time that the transaction is incurred. Condition: During our testing, we found 2 instances of credit card expenditures that were selfapproved from the card holder, 8 instances when expenditures were approved at least five months past being incurred, and 2 journal entries that were not approved timely. These were out of 40 transactions tested. Cause: Undetermined. Effect: The Organization did not follow their policy for approval of transactions, which allows for the possibility of having purchased items that don’t conform with the various grant requirements. The transactions were only improved upon an internal audit of the system months after the transactions. Recommendation: We recommend that the Organization develops a more comprehensive system to ensure that all transactions are properly reviewed and approved in a timely manner.
Regarding 2025-002 Transaction Approvals, CFO Jill Hansen and Executive Director Michele Craig submitted corrective action in last year’s response to the significant deficiency Expense Approval Documentation 2024-002 on 1/22/25, which included an internal audit of all financial transactions and an evaluation of the reasonableness of the approvals in the current policy. At the time of the audit and proposed corrective action, we were already 5 months into the new fiscal year, and those transactions had already occurred so we were aware of potential findings. The specific 2025 findings include the timeliness of supervisor approval, the lack of supervisor approval, and the timeliness of the executive director approval of journal entries. For the timeliness of supervisor approval these systems are already in place based on last year’s corrective action. Regarding the lack of supervisor approval, managers and fiscal staff will have refresher training on the approvals needed for credit card claims which will be addressed at our next Managers’ Meeting on March 31, 2026. Additionally, the CFO now reconciles the credit card statements and reviews all associated claim forms. Regarding the executive director approval of journal entries, the CFO will obtain executive director approval and signatures on all journal entries before publishing financial statements. This step has been added to the month-end checklist. All corrective action will be implemented by April 30, 2026. The Executive Director, Michele Craig will be responsible for implementing the corrective action.
2024-002
FAC accepted this audit on February 3, 2025 — management decision was due August 3, 2025.
During our testing, we found that the Organization did not follow established policies by splitting a project into two phases to refrain from obtaining sealed bids for the Organization’s HVAC project. Cause: Undetermined. Effect: The Organization did not follow their policy for procurement which then allows for the possibility of overpaying for the goods and services provided. Recommendation: We recommend that the Organization follows their policies related to procurement.
Show full finding ▾Hide full finding ▴Criteria: The Organization should follow their policies related to procurement. Condition: During our testing, we found that the Organization did not follow established policies by splitting a project into two phases to refrain from obtaining sealed bids for the Organization’s HVAC project. Cause: Undetermined. Effect: The Organization did not follow their policy for procurement which then allows for the possibility of overpaying for the goods and services provided. Recommendation: We recommend that the Organization follows their policies related to procurement.
The senior management team including the Executive Director, interim CFO Jill Hansen, and the Finance Committee of the Governing Board have reviewed and agree with the findings. Regarding the 2024-001 Procurement of Capital Projects, Jill Hansen and I are proposing the corrective action of adding additional communication requirements to the existing procedures, starting with a pre-bid internal meeting including the ED, CFO, and other appropriate mangers. We will also be creating a timeline of meetings to prepare and manage our capital budget for facilities, technology, and other needs where all participants will be educated on the appropriate bid procedures and policies. I will be the point person regarding these corrective actions and these changes to our Accounting and Financial Policies and Procedure Manual, which will be effective 3/1/25, pending Policy Council and Board approval. We have updated all Senior and Fiscal Staff. Project Management Staff will be updated on 1/28/25,
During our testing, we tested 44 transactions and found that 3 of these transactions did not contain documentation of approval. Cause: Undetermined. Effect: The Organization did not follow their policy for approval of transactions, which allows for the possibility of having purchased items that don’t conform with the various grant requirements. Recommendation: We recommend that the Organization develops a more comprehensive system to ensure that all transactions are properly reviewed and approved.
Show full finding ▾Hide full finding ▴Criteria: Expenditures should be approved by a responsible official of the Organization who is aware of the various compliance requirements under the respective grant, this approval should be documented. Condition: During our testing, we tested 44 transactions and found that 3 of these transactions did not contain documentation of approval. Cause: Undetermined. Effect: The Organization did not follow their policy for approval of transactions, which allows for the possibility of having purchased items that don’t conform with the various grant requirements. Recommendation: We recommend that the Organization develops a more comprehensive system to ensure that all transactions are properly reviewed and approved.
Regarding 2024-002 Expense Approval Documentation, the senior team, including Jill Hansen and I, have reviewed the Procurement Policies in our Accounting and Financial Policies and Procedure Manual and we will continue to require multiple levels of approval as explained in the existing policy. The proposed corrective action is first, to perform an internal audit to confirm that every expenditure in the current fiscal year has the appropriate written approvals. Second, the senior team will evaluate the reasonableness of the exact approvals in the current policy, with the goal of reducing the administrative burden on employees if possible and taking into consideration budget responsibility and materiality thresholds. I will be the point person regarding these corrective actions and these changes to our Accounting and Financial Policies and Procedure Manual, which will be effective 3/1/25, pending Policy Council and Board approval. We have updated all Senior and Fiscal Staff. Project Management Staff will be updated on 1/28/25,
FAC accepted this audit on December 20, 2023 — management decision was due June 20, 2024.
During our testing, we found that in the Organization's process of attempting to reconcile unemployment insurance the grant was overcharged by $8,094. Cause: The Organization's procedure to reconcile unemployment insurance did not sufficiently focus on the associated liability recorded. Effect: Federal program was charged for unallowable cost. Recommendation: We recommend that the Organization develops a more comprehensive process to ensure accounts are properly reconciled prior to preparing grant billings.
Show full finding ▾Hide full finding ▴Internal Control over Allowable Costs Criteria: Control procedures should be adequate to ensure charges to federal program are allowable. Condition: During our testing, we found that in the Organization's process of attempting to reconcile unemployment insurance the grant was overcharged by $8,094. Cause: The Organization's procedure to reconcile unemployment insurance did not sufficiently focus on the associated liability recorded. Effect: Federal program was charged for unallowable cost. Recommendation: We recommend that the Organization develops a more comprehensive process to ensure accounts are properly reconciled prior to preparing grant billings.
RE: Audit Finding 2023-00 I Internal Control over Allowable Costs The Chief Fiscal Officer, Executive Director, and Finance Committee Chair of the Governing Board have reviewed and agree with the auditor's comments on 2023-00 I. A corrective action plan has been put in pla e by the Fiscal Officer, Melodee Giacomino, immediately regarding the reconciliation of payroll liabilities. Any future adjustments will be posted and checked to ensure an unallowable cost is not inadvertently recorded. Only adjustments deemed necessary will be performed. Prior to submitting final financials to be audited, another check will be run on the Balance Sheet to ensure such adjustments have not been made. All staff in the fiscal office have been notified to date.
FAC accepted this audit on February 13, 2023 — management decision was due August 13, 2023.
FAC accepted this audit on February 2, 2022 — management decision was due August 2, 2022.
We found that grant funds from the Head Start were recognized as revenue on the grant basis which was not in accordance with GAAP. Cause: The Organization?s procedure for evaluating when revenue should be recognized was insufficient as there wasn?t a focus on proper cut off and grant vs GAAP basis differences with regards to when the revenue was earned in accordance with GAAP. Effects: The financial statements contained an overstatement of grant revenues. Recommendation: We recommend that the Organization implement procedures to ensure proper cut off and ensure that the associated revenue is recognized when earned.
Show full finding ▾Hide full finding ▴2021-001 INTERNAL CONTROL OVER REVENUE RECOGNITION Criteria: Accounting principles general accepted in the United States of America (U.S. GAAP) impose rules surrounding the recognition of revenues. Condition: We found that grant funds from the Head Start were recognized as revenue on the grant basis which was not in accordance with GAAP. Cause: The Organization?s procedure for evaluating when revenue should be recognized was insufficient as there wasn?t a focus on proper cut off and grant vs GAAP basis differences with regards to when the revenue was earned in accordance with GAAP. Effects: The financial statements contained an overstatement of grant revenues. Recommendation: We recommend that the Organization implement procedures to ensure proper cut off and ensure that the associated revenue is recognized when earned.
With regards to the findings in the audit report for the Ravalli Head Start Inc. for the year ended June 30, 2021 , we offer the following responses. 2021-001 Internal Control Over Revenue Recognition When the financial information was presented to the auditors, it included the amounts that were obligated under contract for the completion of parking lot renovation as accounts payable and the related asset and grant revenue was accrued for the contractual obligation. When the auditors felt that the contractual obligation did not meet the criteria for financial statement recognition in the period, the adjusting entry was given to the auditors to remove the asset and the payable. While the grant revenue is deemed earned at the granter level upon obligation, the auditors believe the income should also be removed for financial statement purposes. While we understand their position, we do not believe that an internal control issue exists due to different interpretation. We will take their interpretation into consideration for future obligations.
We found that the SEFA prepared by the Organization was prepared using source data for the incorrect period. Cause: The Organization?s procedure for evaluating the proper period of SEFA reporting did not detect this error on the SEFA. Effects: The preliminary SEFA reported the incorrect period for expenditures of federal awards. Recommendation: We recommend that the Organization implement procedures to verify proper period for all expenditure of federal funds.
Show full finding ▾Hide full finding ▴2021-002 INTERNAL CONTROLS OVER SCHEDULE OF EXPENDITURE OF FEDERAL AWARD Criteria: The Organization should have proper controls in place over the preparation of the SEFA to ensure accurate reporting of federal awards. Condition: We found that the SEFA prepared by the Organization was prepared using source data for the incorrect period. Cause: The Organization?s procedure for evaluating the proper period of SEFA reporting did not detect this error on the SEFA. Effects: The preliminary SEFA reported the incorrect period for expenditures of federal awards. Recommendation: We recommend that the Organization implement procedures to verify proper period for all expenditure of federal funds.
2021-002 Internal Controls over Schedule of Expenditures of Federal Awards The preliminary expenditures of federal funds were presented to the auditors with grant to date expenditures rather than fiscal year expenditures inadvertently. When it was questioned, the information was updated to correct the time period for the expenditures. While we agree that the initial information was presented for the incorrect time period, the correct period information was readily available and produced in a timely manner. In the future, we will take into consideration that any schedules given to the auditors must be final in order to avoid such a finding.
FAC accepted this audit on January 26, 2021 — management decision was due July 26, 2021.
FAC accepted this audit on February 19, 2020 — management decision was due August 19, 2020.
Criteria: The Organization must prepare financial statements that reflect its financial position, change in net assets, and cash flows for the fiscal year audited in accordance with accounting principles generally accepted in the United States of America. Condition and Context: The financial statements as of June 30, 2019 had an improper amount for notes payable. Cause: The Organization accounts for items on the grant basis of accounting and then records year-end adjustments converting to GAAP. The financial statements were not reviewed after the adjustments were made. Effect or Potential Effect: Notes payable was overstated by $50,000 and interest expense was overstated by $50,000 as of June 30, 2019. Recommendation: We recommend a senior member of management or a board member with financial expertise reviews comparative financial information after all adjustments are made to analytically review for reasonableness before the trial balance is deemed ready for the audit.
Show full finding ▾Hide full finding ▴Criteria: The Organization must prepare financial statements that reflect its financial position, change in net assets, and cash flows for the fiscal year audited in accordance with accounting principles generally accepted in the United States of America. Condition and Context: The financial statements as of June 30, 2019 had an improper amount for notes payable. Cause: The Organization accounts for items on the grant basis of accounting and then records year-end adjustments converting to GAAP. The financial statements were not reviewed after the adjustments were made. Effect or Potential Effect: Notes payable was overstated by $50,000 and interest expense was overstated by $50,000 as of June 30, 2019. Recommendation: We recommend a senior member of management or a board member with financial expertise reviews comparative financial information after all adjustments are made to analytically review for reasonableness before the trial balance is deemed ready for the audit.
Senior management staff and the Finance Committee Chair of the Governing Board have reviewed the above comment. We have revised our procedures and assigned responsibility to ensure that: All adjustments are made to the comparative financial information before deeming the trial balance ready for audit. We will incorporate these added and revised responsibilities into all appropriate professional development plans and governance training and monitoring procedures.
FAC accepted this audit on January 9, 2019 — management decision was due July 9, 2019.
FAC accepted this audit on January 3, 2018 — management decision was due July 3, 2018.
FAC accepted this audit on February 14, 2017 — management decision was due August 14, 2017.
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