The McIntosh Trail Early Childhood Development Council, Inc.

2019-002 ? Control Procedures over the Expenditure of Federal Awards ? Allowable Costs INFORMATION ON THE FEDERAL PROGRAM CFDA: 93.600 Head Start Grant: Head Start Federal Agency: Department of Health and Human Services CRITERIA The Council is responsible for being compliant with the requirements for Activities Allowed or Unallowed per the Compliance Supplement for the Head Start CFDA 93.600. Effective systems of internal control should be designed to provide reasonable assurance regarding the achievement of objectives in the reliability of financial reporting and insure compliance with the requirements for expenditure of federal funds. CONDITION During 2019, established internal control procedures in the area of cash disbursements did not detect noncompliance with Uniform Guidance allowable cost requirements. CONTEXT Proper supporting documentation was not being submitted for management approval, prior to payment to vendors. EFFECT The failure to require the submission and approval of credit card statements, invoices and check requests allowed the payment of credit card charges and expense reimbursements for unallowable costs. CAUSE Management did not require submission of appropriate supporting documentation, as required by policy, prior to payment of invoices. QUESTIONED COSTS $56,934 RECOMMENDATION Management should adhere to policies regarding the approval of invoices for payment to insure compliance with Uniform Guidance. This includes requiring the submission of the proper appropriate supporting documentation for review. We also recommend the discontinuance of the use of stamped signatures for documenting approval.