Wright County Community Action, Inc.

Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Head Start Cluster Federal Assistance Listing Number: 93.600 Federal Award Identification Number(s) and Year(s): 05CH010838-2023, 05CH010838-2024 Award Period: March, 1 2023 to February 29, 2024; and March 1, 2024 to February 28, 2025 Type of Finding: Material Weakness in Internal Control over Major Federal Programs Criteria or Specific Requirement: Under 2 CFR section 200.303, a nonfederal entity must establish and maintain effective internal controls over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Timely review and approval should be maintained to ensure accurate reports are submitted. Condition: The Organization does not have adequate internal controls in place to ensure required reports are approved by the appropriate personnel before being submitted. Questioned Costs: N/A Context: The two financial status reports selected for testing both did not contain a formal documented review and approval. Cause: While management does have a separate individual assigned to review the required reports prepared by the Fiscal Director, that review is not formally documented. Effect: Potential for inaccurate information reported. Repeat Finding: This is a repeat finding. Recommendation: We recommend that the assigned individual to review formally documents their review and approval of the reports with a signature before the required date to be submitted. Views of responsible officials and planned corrective actions: There is no disagreement with the finding. WCCA has already implemented a process to ensure all reports are reviewed and approved with documentation before submission.

Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Head Start Cluster Federal Assistance Listing Number: 93.600 Federal Award Identification Number(s) and Year(s): 05CH010838-2023, 05CH010838-2024 Award Period: March, 1 2023 to February 29, 2024; and March 1, 2024 to February 28, 2025 Type of Finding: Material Weakness in Internal Control over Major Federal Programs Criteria or Specific Requirement: The Organization must have a process in place to review and approve the indirect costs that are being appropriately allocated to the grant. Condition: While performing audit procedures, it was noted that for seven of the seven indirect cost allocations tested, management does not have a review and approval process related to the indirect costs that are allocated by the preparer to ensure they are being appropriately allocated. Questioned Costs: N/A Context: There were no signs of review or approval related to the indirect costs that are allocated by the preparer. Cause: The Organization has not adequately implemented a policy related to the indirect costs that are allocated by the preparer. Effect: Potential for errors in the indirect costs allocated to the grants. Repeat Finding: This is a repeat finding. Recommendation: We recommend that the Organization should review and approve the indirect costs that are allocated by the preparer and retain support of this review and approval. Views of responsible officials and planned corrective actions: There is no disagreement with the finding. WCCA has already implemented a process to ensure indirect cost allocations are reviewed and approved with proper documentation.

Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Head Start Cluster Federal Assistance Listing Number: 93.600 Federal Award Identification Number(s) and Year(s): 05CH010838-2022, 05HE001017-2021, 05CH010838-2023 Award Period: March 1, 2022 to February 28, 2023; April 1, 2021 to March 31, 2023; and March 1, 2023 to February 29, 2024 Type of Finding: Material Weakness in Internal Control over Major Federal Programs and Other Matters Criteria or Specific Requirement: Under 2 CFR section 200.303, a non-federal entity must establish and maintain effective internal controls over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Timely review and approval should be maintained to ensure accurate reports are submitted and that reports are also being submitted on time. Condition: The Organization does not have adequate internal controls in place to ensure required reports are approved by the appropriate personnel before being submitted and that reports are being timely submitted. Questioned Costs: N/A Context: For the three financial status reports and one special report selected for testing, all did not contain a formal documented review and approval. Also, the one special report selected for testing did not have timely submission. Cause: While management does have a separate individual assigned to review the required reports prepared by the Fiscal Director, that review is not formally documented. Effect: Potential for inaccurate information reported and untimely submission. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the assigned individual to review formally documents their review and approval of the reports with a signature before the required date to be submitted. We recommend implementing a process to ensure timely submission of all reports. Views of responsible officials and planned corrective actions: There is no disagreement with the finding. WCCA will implement a control policy for a documented review and approval of reports prior to submission as well as ensuring reports are filed timely.

Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Head Start Cluster Federal Assistance Listing Number: 93.600 Federal Award Identification Number(s) and Year(s): 05CH010838-2022, 05HE001017-2021, 05CH010838-2023 Award Period: March 1, 2022 to February 28, 2023; April 1, 2021 to March 31, 2023; and March 1, 2023 to February 29, 2024 Type of Finding: Material Weakness in Internal Control over Major Federal Programs Criteria or Specific Requirement: The Organization must have a process in place to review and approve the indirect costs that are being appropriately allocated to the grant. Condition: While performing audit procedures, it was noted that for seven of the seven indirect cost allocations tested, management does not have a review and approval process related to the indirect costs that are allocated by the preparer to ensure they are being appropriately allocated. Questioned Costs: N/A Context: There were no signs of review or approval related to the indirect costs that are allocated by the preparer. Cause: The Organization has not adequately implemented a policy related to the indirect costs that are allocated by the preparer. Effect: Potential for errors in the indirect costs allocated to the grants. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Organization should review and approve the indirect costs that are allocated by the preparer and retain support of this review and approval. Views of responsible officials and planned corrective actions: There is no disagreement with the finding. WCCA will implement a policy to ensure a documented review and approval of indirect cost allocations.