Heartland Head Start Inc

EIN: 370963726

UEI: E7HZJAFL5NX9

Data as of August 22, 2026

Heartland Head Start Inc10 audit years16 findings12 repeat
10
Audit Years
16
Total Findings
12
Repeat Findings

FY 2020-06-30

Management decision deadline — for entities that funded this organization

The FAC accepted this audit on January 31, 2023. 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 July 31, 2023 (1118 days ago).

What is a management decision? →
2020-002
Cost Allowability
REPEAT

The accounting system does contain a cost allocation plan but does not sufficiently identify administrative costs and provide for an allocation system that allows for the complete separation and recording of costs by grant or program. In addition, during our payroll testing, we noted 21 instances out of a sample of 40 (53%) where employee time was not allocated between Early Head Start and Head Start based on actual time worked. We consider this to be a significant deficiency in internal controls over compliance with allowable costs/cost principles. Statistical sampling was not used in making sample selections. This is a repeat finding shown in Section IV of this report as prior finding 2019-002. Criteria: In accordance with the requirements in 2 CFR part 230 establishes cost principles for determining costs of grants, contracts, and other agreements with non-profit organizations. The principles are designed to provide that the Federal Government bear its fair share of costs except where restricted or prohibited by law. Administrative expenses are described as: ?The expenses under this category are those that have been incurred for the overall general executive, and administration of the organization and other expenses of a general nature that do not relate solely to any major function of the organization." Questioned Costs: N/A Cause and Effect: Although a cost allocation plan was created, the plan has not been fully implemented to sufficiently identify administrative costs and the plan is not being followed. As the Agency has more than one funding source, costs may be inequitably charged to programs. Recommendation: We recommend the Agency review their cost allocation plan and their system of recording administrative expenses and implement procedures and internal controls that separate direct costs from administrative costs and ensure the plan is being followed. Views of Responsible Officials: Management agrees with this finding and response is included in the Corrective Action Plan.

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Full finding narrative

Condition: The accounting system does contain a cost allocation plan but does not sufficiently identify administrative costs and provide for an allocation system that allows for the complete separation and recording of costs by grant or program. In addition, during our payroll testing, we noted 21 instances out of a sample of 40 (53%) where employee time was not allocated between Early Head Start and Head Start based on actual time worked. We consider this to be a significant deficiency in internal controls over compliance with allowable costs/cost principles. Statistical sampling was not used in making sample selections. This is a repeat finding shown in Section IV of this report as prior finding 2019-002. Criteria: In accordance with the requirements in 2 CFR part 230 establishes cost principles for determining costs of grants, contracts, and other agreements with non-profit organizations. The principles are designed to provide that the Federal Government bear its fair share of costs except where restricted or prohibited by law. Administrative expenses are described as: ?The expenses under this category are those that have been incurred for the overall general executive, and administration of the organization and other expenses of a general nature that do not relate solely to any major function of the organization." Questioned Costs: N/A Cause and Effect: Although a cost allocation plan was created, the plan has not been fully implemented to sufficiently identify administrative costs and the plan is not being followed. As the Agency has more than one funding source, costs may be inequitably charged to programs. Recommendation: We recommend the Agency review their cost allocation plan and their system of recording administrative expenses and implement procedures and internal controls that separate direct costs from administrative costs and ensure the plan is being followed. Views of Responsible Officials: Management agrees with this finding and response is included in the Corrective Action Plan.

Corrective Action Plan

Condition: The accounting system does contain a cost allocation plan but does not sufficiently identify administrative costs and provide for an allocation system that allows for the complete separation and recording of costs by grant or program. In addition, during our payroll testing, we noted 21 instances out of a sample of 40 (53%) where employee time was not allocated between Early Head Start and Head Start based on actual time worked. We consider this to be a significant deficiency in internal controls over compliance with allowable costs/cost principles. Statistical sampling was not used in making sample selections. This is a repeat finding shown in Section IV of this report as prior finding 2019-002. Corrective Action Plan: The Agency will review regulations and update its Cost Allocation Plan and system of recording administrative expenses. The Agency will implement procedures and internal controls that separate direct costs from administrative costs. Supervisors will be trained on the regulations and practices several times during the year including quarterly discussions regarding the approval, revisions or returned timesheets that do not meet the correct coding. Staff will also be trained annually but have an option for updated trainings as needed on how to create and submit timesheets. Responsible Person for Corrective Action Plan: Finance Director, Fiscal Staff, HR Staff, and Supervisors and reviewed by the Executive Director Implementation Date for Corrective Action Plan: January I, 2021

Prior Finding References

2019-002

About Allowable Costs / Cost Principles →
2020-003
Activities Allowed or Unallowed / Cost Allowability
REPEAT

The Agency did not maintain records of the approved rate of pay in agreement with the check register for 4 out of a sample of 40 (10%). We consider this to be a significant deficiency in internal control over compliance relating to activities allowed and unallowed and allowable costs/cost principles requirements. This is a repeat finding shown in Section IV of this report as prior finding 2019-004. Criteria: 2 CFR 200.430 states ?Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities.? Questioned Costs: $0 Cause and Effect: The Agency did not maintain time records in accordance with Uniform Guidance requirements. Failure to retain adequate time records could result in an employee being incorrectly paid for time worked. Recommendation: We recommend the Agency maintain records of hours worked in either clock sequence or by total per day for each employee and ensure all pay rates are approved by an appropriate individual. Views of Responsible Officials: Management agrees with this finding and response is included in the Corrective Action Plan.

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Full finding narrative

Condition: The Agency did not maintain records of the approved rate of pay in agreement with the check register for 4 out of a sample of 40 (10%). We consider this to be a significant deficiency in internal control over compliance relating to activities allowed and unallowed and allowable costs/cost principles requirements. This is a repeat finding shown in Section IV of this report as prior finding 2019-004. Criteria: 2 CFR 200.430 states ?Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities.? Questioned Costs: $0 Cause and Effect: The Agency did not maintain time records in accordance with Uniform Guidance requirements. Failure to retain adequate time records could result in an employee being incorrectly paid for time worked. Recommendation: We recommend the Agency maintain records of hours worked in either clock sequence or by total per day for each employee and ensure all pay rates are approved by an appropriate individual. Views of Responsible Officials: Management agrees with this finding and response is included in the Corrective Action Plan.

Corrective Action Plan

Condition: The Agency did not maintain records of the approved rate of pay in agreement with the check register for 4 out of a sample of 40 ( I 0%). We consider this to be a significant deficiency in internal control over compliance relating to activities allowed and unallowed and allowable costs/cost principles requirements. This is a repeat finding shown in Section IV of this report as prior finding 2019-004. Corrective Action Plan: The Accounting and Human Resource Department will ensure all necessary documentation are kept and filed correctly in order to maintain an accurate portrayal of time records and rate approvals. Additionally, electronic files of payroll and accounts payable will be created and maintained in order to keep a more organized file system. An HR software module is also being purchased to decrease errors and increase efficiency. Appropriate staff recently hired will be trained to use this system and update processes to ensure accuracy of file. Responsible Person for Corrective Action Plan: Finance Director, Human Resources Manager, and Fiscal Stan: with review of the Executive Director and Governance Board Implementation Date for Corrective Action Plan: January 1, 2021

Prior Finding References

2019-004

About Activities Allowed or Unallowed, Allowable Costs / Cost Principles →

FY 2019-06-30

FAC accepted this audit on October 5, 2020 — management decision was due April 5, 2021.

2019-002
Cost Allowability
REPEAT

The accounting system does contain a cost allocation plan but does not sufficiently identify administrative costs and provide for an allocation system that allows for the complete separation and recording of costs by grant or program. In addition, during our payroll testing, we noted 20 instances out of a sample of 40 (50%) where employee time was not allocated between Early Head Start and Head Start based on actual time worked. We consider this to be a significant deficiency in internal controls over compliance with allowable costs/cost principles. Statistical sampling was not used in making sample selections. This is a repeat finding shown in Section IV of this report as prior finding 2018-002. Criteria: In accordance with the requirements in 2 CFR part 230 establishes cost principles for determining costs of grants, contracts, and other agreements with non-profit organizations. The principles are designed to provide that the Federal Government bear its fair share of costs except where restricted or prohibited by law. Administrative expenses are described as: ?The expenses under this category are those that have been incurred for the overall general executive, and administration of the organization and other expenses of a general nature that do not relate solely to any major function of the organization." Questioned Costs: N/A Cause and Effect: Although a cost allocation plan was created, the plan has not been fully implemented to sufficiently identify administrative costs and the plan is not being followed. As the Agency has more than one funding source, costs may be inequitably charged to programs. Recommendation: We recommend the Agency review their cost allocation plan and their system of recording administrative expenses and implement procedures and internal controls that separate direct costs from administrative costs and ensure the plan is being followed. Views of Responsible Officials: Management agrees with this finding and response is included in the Corrective Action Plan.

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Full finding narrative

2019-002 ? Head Start Program ? CFDA No. 93.600, Year Ended June 30, 2019 Condition: The accounting system does contain a cost allocation plan but does not sufficiently identify administrative costs and provide for an allocation system that allows for the complete separation and recording of costs by grant or program. In addition, during our payroll testing, we noted 20 instances out of a sample of 40 (50%) where employee time was not allocated between Early Head Start and Head Start based on actual time worked. We consider this to be a significant deficiency in internal controls over compliance with allowable costs/cost principles. Statistical sampling was not used in making sample selections. This is a repeat finding shown in Section IV of this report as prior finding 2018-002. Criteria: In accordance with the requirements in 2 CFR part 230 establishes cost principles for determining costs of grants, contracts, and other agreements with non-profit organizations. The principles are designed to provide that the Federal Government bear its fair share of costs except where restricted or prohibited by law. Administrative expenses are described as: ?The expenses under this category are those that have been incurred for the overall general executive, and administration of the organization and other expenses of a general nature that do not relate solely to any major function of the organization." Questioned Costs: N/A Cause and Effect: Although a cost allocation plan was created, the plan has not been fully implemented to sufficiently identify administrative costs and the plan is not being followed. As the Agency has more than one funding source, costs may be inequitably charged to programs. Recommendation: We recommend the Agency review their cost allocation plan and their system of recording administrative expenses and implement procedures and internal controls that separate direct costs from administrative costs and ensure the plan is being followed. Views of Responsible Officials: Management agrees with this finding and response is included in the Corrective Action Plan.

Corrective Action Plan

2019-002 ? Head Start Program ? CFDA No. 93.600, Year Ended June 30, 2019 Condition: The accounting system does contain a cost allocation plan but does not sufficiently identify administrative costs and provide for an allocation system that allows for the complete separation and recording of costs by grant or program. In addition, during our payroll testing, we noted 20 instances out of a sample of 40 (50%) where employee time was not allocated between Early Head Start and Head Start based on actual time worked. We consider this to be a significant deficiency in internal controls over compliance with allowable costs/cost principles. Statistical sampling was not used in making sample selections. This is a repeat finding shown in Section IV of this report as prior finding 2018-002. Corrective Action Plan: The Agency will review regulations and update its Cost Allocation Plan and system of recording administrative expenses. The Agency will implement procedures and internal controls that separate direct costs from administrative costs. Supervisors will be trained on the regulations and practices several times during the year including quarterly discussions regarding the approval, revisions or returned timesheets that do not meet the correct coding. Staff will also be trained annually but have an option for updated trainings as needed on how to create and submit timesheets. Responsible Person for Corrective Action Plan: Finance Director, Fiscal Staff, HR Staff, and Supervisors and reviewed by the Executive Director Implementation Date for Corrective Action Plan: January 1,2021

Prior Finding References

2018-002

About Allowable Costs / Cost Principles →
2019-003
Activities Allowed or Unallowed / Cost Allowability / Reporting
MATERIAL WEAKNESSREPEATQUESTIONED COSTS

Three out of a sample of 40 (8%) expenditures tested were missing supporting documentation. In addition, during reporting testing management was unable to provide support for cash disbursements reported for the two (100%) reports selected for testing. Statistical sampling was not used in making sample selections. This is a repeat finding shown in Section IV of this report as prior finding 2018-003. We consider these matters to be a material weakness in internal control over compliance related to the compliance requirements for activities allowed and unallowed, allowable costs/cost principles, and reporting. Criteria: 2 CFR 200.400 notes ?a non-Federal entity must be consistent with these cost principles and support the accumulation of costs as required by the principles, and must provide for adequate documentation to support costs charged to the Federal award.? 2 CFR 200.333 notes ?financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the financial expenditure report.? Questioned Costs: $563 Cause and Effect: The Agency was unable to provide documentation supporting expenditures charged to the program. Failure to retain adequate documentation could result in expenditures being charged to incorrect grants or unallowable expenditures being charged to grants. Recommendation: We recommend the Agency implement procedures to retain appropriate documentation for expenditures. In addition, the Agency should implement procedures to retain supporting documentation for information submitted within program reports. Views of Responsible Officials: Management agrees with this finding and response is included in the Corrective Action Plan.

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2019-003 ? Head Start Program ? CFDA No. 93.600, Year Ended June 30, 2019 Condition: Three out of a sample of 40 (8%) expenditures tested were missing supporting documentation. In addition, during reporting testing management was unable to provide support for cash disbursements reported for the two (100%) reports selected for testing. Statistical sampling was not used in making sample selections. This is a repeat finding shown in Section IV of this report as prior finding 2018-003. We consider these matters to be a material weakness in internal control over compliance related to the compliance requirements for activities allowed and unallowed, allowable costs/cost principles, and reporting. Criteria: 2 CFR 200.400 notes ?a non-Federal entity must be consistent with these cost principles and support the accumulation of costs as required by the principles, and must provide for adequate documentation to support costs charged to the Federal award.? 2 CFR 200.333 notes ?financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the financial expenditure report.? Questioned Costs: $563 Cause and Effect: The Agency was unable to provide documentation supporting expenditures charged to the program. Failure to retain adequate documentation could result in expenditures being charged to incorrect grants or unallowable expenditures being charged to grants. Recommendation: We recommend the Agency implement procedures to retain appropriate documentation for expenditures. In addition, the Agency should implement procedures to retain supporting documentation for information submitted within program reports. Views of Responsible Officials: Management agrees with this finding and response is included in the Corrective Action Plan.

Corrective Action Plan

2019-003 ? Head Start Program ? CFDA No. 93.600, Year Ended June 30, 2019 Condition: Three out of a sample of 40 (8%) expenditures tested were missing supporting documentation. In addition, during reporting testing management was unable to provide support for cash disbursements reported for the two (100%) reports selected for testing. Statistical sampling was not used in making sample selections. This is a repeat finding shown in Section IV of this report as prior finding 2018-003. Corrective Action Plan: The Accounting Department will review expenditures when incurred and ensure that they are being accurately recorded in the correct program year. The Agency has purchased and is in the process of installing and implementing an electronic purchase order system to reduce the possibility of errors and to organize this information electronically. Currently the process is handled by paper. Responsible Person for Corrective Action Plan: Finance Director, Fiscal Staff and Supervisors and reviewed by the Executive Director Implementation Date for Corrective Action Plan: January 1,2021

Prior Finding References

2018-003

About Activities Allowed or Unallowed, Allowable Costs / Cost Principles, Reporting →
2019-004
Activities Allowed or Unallowed / Cost Allowability
REPEATQUESTIONED COSTS

The Agency did not maintain records of the approved rate of pay in agreement with the check register for 25 out of a sample of 40 (63%). In addition, we also noted one instance out of a sample of 40 (3%) where the Agency did not maintain records of rate approval, job description or a contract. We also noted 3 instances out of a sample of 40 (8%) where the Agency did not have an approved pay rate form in the personnel file. We consider these to be a significant deficiency in internal control over compliance relating to activities allowed and unallowed and allowable costs/cost principles requirements. This is a repeat finding shown in Section IV of this report as prior finding 2018-005. Criteria: 2 CFR 200.430 states ?Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities.? Questioned Costs: $3,803 Cause and Effect: The Agency did not maintain time records in accordance with Uniform Guidance requirements. Failure to retain adequate time records could result in an employee being incorrectly paid for time worked. Recommendation: We recommend the Agency maintain records of hours worked in either clock sequence or by total per day for each employee and ensure all pay rates are approved by an appropriate individual. Views of Responsible Officials: Management agrees with this finding and response is included in the Corrective Action Plan.

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2019-004 ? Head Start Program ? CFDA No. 93.600, Year Ended June 30, 2019 Condition: The Agency did not maintain records of the approved rate of pay in agreement with the check register for 25 out of a sample of 40 (63%). In addition, we also noted one instance out of a sample of 40 (3%) where the Agency did not maintain records of rate approval, job description or a contract. We also noted 3 instances out of a sample of 40 (8%) where the Agency did not have an approved pay rate form in the personnel file. We consider these to be a significant deficiency in internal control over compliance relating to activities allowed and unallowed and allowable costs/cost principles requirements. This is a repeat finding shown in Section IV of this report as prior finding 2018-005. Criteria: 2 CFR 200.430 states ?Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities.? Questioned Costs: $3,803 Cause and Effect: The Agency did not maintain time records in accordance with Uniform Guidance requirements. Failure to retain adequate time records could result in an employee being incorrectly paid for time worked. Recommendation: We recommend the Agency maintain records of hours worked in either clock sequence or by total per day for each employee and ensure all pay rates are approved by an appropriate individual. Views of Responsible Officials: Management agrees with this finding and response is included in the Corrective Action Plan.

Corrective Action Plan

2018-004 ? Head Start Program ? CFDA No. 93.600, Year Ended June 30, 2019 Condition: The Agency did not maintain records of the approved rate of pay in agreement with the check register for 25 out of a sample of 40 (63%). In addition, we also noted one instance out of a sample of 40 (3%) where the Agency did not maintain records of rate approval, job description or a contract. We also noted 3 instances out of a sample of 40 (8%) where the Agency did not have an approved pay rate form in the personnel file. We consider these to be a significant deficiency in internal control over compliance relating to activities allowed and unallowed and allowable costs/cost principles requirements. This is a repeat finding shown in Section IV of this report as prior finding 2018-005. Corrective Action Plan: The Accounting and Human Resource Department will ensure all necessary documentation are kept and filed correctly in order to maintain an accurate portrayal of time records and rate approvals. Additionally, electronic files of payroll and accounts payable will be created and maintained in order to keep a more organized file system. An HR software module is also being purchased to decrease errors and increase efficiency. Appropriate staff recently hired will be trained to use this system and update processes to ensure accuracy of file. Responsible Person for Corrective Action Plan: Finance Director, Human Resources Manager, and Fiscal Staff, with review of the Executive Director and Governance Board Implementation Date for Corrective Action Plan: January 1,2021

Prior Finding References

2018-005

About Activities Allowed or Unallowed, Allowable Costs / Cost Principles →

FY 2018-06-30

FAC accepted this audit on February 23, 2020 — management decision was due August 23, 2020.

2018-002
Cost Allowability
REPEAT

GSA_MIGRATION

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GSA_MIGRATION

Corrective Action Plan

GSA_MIGRATION

Prior Finding References

2017-002

About Allowable Costs / Cost Principles →
2018-003
Activities Allowed or Unallowed / Cost Allowability / Period of Performance / Reporting
MATERIAL WEAKNESSQUESTIONED COSTS

GSA_MIGRATION

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2018-004
Reporting
REPEAT

GSA_MIGRATION

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GSA_MIGRATION

Corrective Action Plan

GSA_MIGRATION

Prior Finding References

2017-004

About Reporting →
2018-005
Activities Allowed or Unallowed / Cost Allowability
QUESTIONED COSTS

GSA_MIGRATION

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GSA_MIGRATION

Corrective Action Plan

GSA_MIGRATION

About Activities Allowed or Unallowed, Allowable Costs / Cost Principles →

FY 2017-06-30

FAC accepted this audit on March 27, 2019 — management decision was due September 27, 2019.

2017-002
Cost Allowability
REPEAT

GSA_MIGRATION

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GSA_MIGRATION

Corrective Action Plan

GSA_MIGRATION

Prior Finding References

2016-002, 2016-003

About Allowable Costs / Cost Principles →
2017-003
Period of Performance
QUESTIONED COSTS

GSA_MIGRATION

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GSA_MIGRATION

Corrective Action Plan

GSA_MIGRATION

About Period of Performance →
2017-004
Reporting

GSA_MIGRATION

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GSA_MIGRATION

Corrective Action Plan

GSA_MIGRATION

About Reporting →

FY 2016-06-30

FAC accepted this audit on September 11, 2017 — management decision was due March 11, 2018.

2016-001
Cash Management
REPEAT

GSA_MIGRATION

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GSA_MIGRATION

Corrective Action Plan

GSA_MIGRATION

Prior Finding References

2015-001

About Cash Management →
2016-002
Cost Allowability
REPEAT

GSA_MIGRATION

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GSA_MIGRATION

Corrective Action Plan

GSA_MIGRATION

Prior Finding References

2015-002

About Allowable Costs / Cost Principles →
2016-003
Cost Allowability
REPEAT

GSA_MIGRATION

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GSA_MIGRATION

Corrective Action Plan

GSA_MIGRATION

Prior Finding References

2014-001

About Allowable Costs / Cost Principles →
2016-004
Reporting
REPEAT

GSA_MIGRATION

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GSA_MIGRATION

Corrective Action Plan

GSA_MIGRATION

Prior Finding References

2014-002

About Reporting →

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