YOUTH AND FAMILY SERVICE, INC.

Federal Program Affected: Child and Adult Care Food Program (ALN 10.558) Compliance Requirement: Eligibility Questioned Costs: None known or likely over $25,000 Condition and Cause: A reimbursement request included 89 snacks, but the actual snacks per supporting documentation was 69. The total value of the error was $24.20 out of a sample of $2,705. The total population for the center food program was $441,778. The error was not identified by review processes in place. Criteria and Effect: Funding is provided based on the number of meals and snacks served to eligible children or day care providers. Requesting the incorrect number of meals or snacks could result in questioned costs. Repeat Finding from Prior Year: No Recommendation: Management and program directors should continue reviewing reimbursement requests and watch for errors in meal and snack quantities. Response/Corrective Action Plan: The Organization agrees with the above Finding. See Corrective Action Plan.

#2023-003 FINDING: Equipment and Real Property Management Federal Programs Affected: Head Start/ALN #93.600 Compliance Requirement: Equipment and Real Property Management Questioned Costs: No known or likely questioned costs exceeding $25,000. Condition and Cause: The Organization did not have a process to ensure all federal equipment purchases were on the depreciation schedule. Criteria and Effect: Property records must be maintained for equipment acquired under a federal award. Repeat Finding from Prior Year: N/A Recommendation: Purchases of property and equipment exceeding $5,000 with a useful life greater than one year should be capitalized and added to the deprecation schedule. Projects not yet completed at year-end should be added into construction in progress. For proper controls surrounding equipment and real property management, processes should be developed to ensure all federal property purchases are included in the depreciation schedule. Views of Responsible Officials: See Organization’s Corrective Action Plan

#2022-002 FINDING: Audit and SEFA Adjustments Federal Programs Affected: Head Start/ALN #93.600; Child and Adult Care Food Program (CACFP)/ALN #10.558 Compliance Requirement: Allowable Costs Questioned Costs: $55,615 known questioned costs. Condition and Cause: During the course of our engagement, we proposed material audit and SEFA adjustments. Criteria and Effect: These adjustments were not identified as a result of the Organization?s existing internal controls, and therefore, could have resulted in a material misstatement of the Organization?s consolidated financial statements or noncompliance with federal programs. One adjustment related to a Head Start expenditure for a cloud-based teaching curriculum subscription covering a 5-year period. Curriculum expenditures are allowable costs for Head Start, but Head Start agencies cannot charge 5 years of cost to one grant period. An audit adjustment was made to properly record the expenditure as a prepaid expense, and Head Start expenditures reported in the SEFA were also reduced by the $55,615 of prepaid costs. Repeat Finding from Prior Year: Yes, revision of prior year finding #2021-002. Recommendation: We recommend the following: ? Investments be adjusted to actual. ? Prepaid contracts be recorded as an asset upon payment and expensed over the life of the service contract. ? Record deferred revenue for unspent conditional funding ? The Organization work with Head Start representatives to return the funds drawn down for the prepaid costs or reduce future draw requests. Views of Responsible Officials: See Organization?s Corrective Action Plan

2022-003 FINDING: Eligibility Federal Program Affected: Child and Adult Care Food Program/ALN #10.558 Compliance Requirement: Eligibility Questioned Costs: No known or likely questioned costs exceeding $25,000. Condition and Cause: One child tested for eligibility was being charged for reimbursement at a free rate of $3.92, however the Organization was only eligible to receive reimbursement for this child at a paid rate of $0.62. The cause of this error was a result of the child being formerly enrolled in the Head Start program and upon disenrollment, the Organization failed to update the child?s status to a paid rate. Criteria and Effect: The CACFP requires the Organization to appropriately track eligibility for students enrolled in the program. The Organization currently does not have a control to switch students CACFP status if Head Start eligibility changes. Repeat Finding from Prior Year: N/A Recommendation: We recommend the Organization develop an internal control to track eligibility for Head Start students who become ineligible for Head Start. Response/Corrective Action Plan: See Organization?s Corrective Action Plan

#2021-003 FINDING: Written Approval for Major Renovations Federal Program Affected: Head Start/CFDA #93.600 Compliance Requirement: Allowable Costs and Special Tests and Provisions - Protection of Federal Interest in Real Property and Facilities Questioned Costs: None Condition and Cause: A renovation project originally budgeted for total expenditures of less than $250,000 was charged to Head Start. The final total cost of the renovation project (including design and engineering costs) exceeded $250,000 due to increased costs related to supply chain limitations. The Organization did not receive prior written approval from an authorized HHS official before funding major renovations with Head Start funds, and a Notice of Federal Interest was not filed. Criteria and Effect: Head Start requires organizations to receive prior written approval from an authorized HHS official before conducting major renovations. Head Start defines major renovation as any individual or collection renovation that has a cost equal to or exceeding $250,000. Not receiving written approval may result in noncompliance. When Head Start funds are used to purchase real property or complete a major renovation, a Notice of Federal Interest must be recorded. The Organization did not file such notice. Head Start was contacted after June 30, 2021, regarding this renovation project, and the required Notice of Federal Interest is in the process of being filed. Repeat Finding from Prior Year: N/A Recommendation: We recommend the Organization receive prior written approval from an authorized HHS official for all Head Start funded major renovations (including design and engineering costs) expected to exceed $250,000. If a project is originally expected to be under $250,000 but eventually is determined to exceed $250,000, we recommend the Organization seek approval as soon as possible and/or elect to charge a portion of the project to another funding source. Response/Corrective Action Plan: See Organization?s Corrective Action Plan