East Coast Migrant Head Start Project

Item 2020-002 Reporting Head Start and Early Head Start CFDA #93.600 Head Start Grant No. 90CM009839-01-00 (11/1/19 ? 10/31/20) COVID-19 Head Start Grant No. 90CM009839-01-00 (11/1/19 ? 10/31/20) Head Start Grant No. 90CM009839-02-00 (11/1/20 ? 10/31/21) Condition ? The grantee failed to comply with the terms of the grant award related to the Federal Financial Accountability and Transparency Act (FFATA or Transparency Act) of 2006 subaward and executive compensation reporting requirements. Criteria ? Under the requirements of the Federal Funding Accountability and Transparency Act (Pub. L No. 109-282) (Transparency Act) that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements who make first tier subawards of $25,000 or more are required to register in the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) and report subaward data through FSRA. 45 CFR Part 75.303 Internal Controls, the non-federal entity must: (a) Establish and maintain effective internal control over the Federal award 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). (b) Comply with Federal statutes, regulations, and the terms and conditions of the Federal awards. (c) Evaluate and monitor the non-Federal entity's compliance with statutes, regulations and the terms and conditions of Federal awards. Cause - Management was unaware of the reporting requirement. Questioned Costs ? Not applicable. Effect ? Failure to comply with the reporting requirements of the Transparency Act is a violation of the Standard Terms of the grantee?s Head Start award. Recommendation ? We recommend management implement the necessary internal controls to ensure compliance with the reporting requirements of the Transparency Act. Management?s Response ? The Federal Funding Accountability and Transparency Act (FFATA) was amended in 2008 to require prime recipients of federal funds to report details of their first-tier sub-recipients for awards made as of October 1, 2010. Specifically, prime recipients must report certain limited information to USAspending.gov, the official source of spending data for the United States government, and prime recipients must ensure sub-recipients are not paying employees compensation with federal funds that are in excess of established salary caps. An OMB Audit Compliance Supplement issued in December 2020 required external auditors to check for compliance with FFATA by prime recipients. Prior to this time, ECMHSP external auditors and fiscal consultants had not focused their attention on this compliance requirement. In addition, the Office of Head Start had not communicated to Head Start grantees information on this requirement through its official communication tools, such as Program Instructions and Information Memoranda. Because ECMHSP has three sub-recipients (i.e., three delegate agencies), ECMHSP should have been uploading data to USAspending.gov and providing basic information on the delegates and their funding from ECMHSP. Although ECMHSP did not comply with this requirement, we have been performing the work that is the intention of the Act. ECMHSP has been performing delegate agency fiscal reviews for more than twenty years. For the last three years, ECMHSP has contracted with Carr, Riggs and Ingram to perform the reviews. This included ensuring that no employees in the delegate agencies were being paid more than the Federal Executive Level II pay maximum. ECMHSP contends that while the reports were not filed, the work was done. As a result, we do not agree with Carr Riggs and Ingram?s assessment that this is a material weakness. ECMHSP maintains strong internal controls to ensure compliance with its reporting requirements under its Federal Awards. Those strong internal controls start with having two very experienced and dedicated leaders in the positions of Chief Financial Officer and Chief Legal Officer. In addition, ECMHSP contracts with fiscal experts and legal experts to ensure ECMHSP is informed of significant changes to the legal and regulatory compliance requirements. The strong internal controls extend to ECMHSP leadership attending continuing education opportunities, subscribing to updates from the Office of Head Start?s Early Childhood Learning and Knowledge Center, and participating in national conferences sponsored by the National Head Start Association and the National Migrant and Seasonal Head Start Association. Fiscal staff also attend federal grants training through the AICPA and other organizations.

Head Start Grant No. 90CM009839-01-00 (11/1/19 ? 10/31/20) COVID-19 Head Start Grant No. 90CM009839-01-00 (11/1/19 ? 10/31/20) Head Start Grant No. 90CM009839-02-00 (11/1/20 ? 10/31/21) Federal Funding Accountability and Transparency Act (FFATA) reporting Corrective Actions: The management of ECMHSP has reviewed all policies and procedures related to required reporting for all Federal grants including the FFATA. ECMHSP will have the Chief Legal Officer and Chief Financial Officer convene a group of management and staff to review each Notice of Award (NOA) to determine what requirements need to be met. The group will meet quarterly to review any NOA's and ensure all requirements and deadlines are met. The FFATA reporting for Head Start Grant No. 90CM009839-02-00 has been submitted by the Controller during June 2021 and reviewed by the CFO. Responsible party: Steve Mayne, CFO Date of completion: June 2021