Family Guidance Center of Alabama, Inc.Non-Profit

United States Department of Health and Human Services Direct funding Program: Head Start CFDA: 93.600 Grant Number: 04CH011788-05-01 and 04CH012862-01-00 Noncompliance / Significant Deficiency Reporting Criteria The grant requires semi-annual and annual reporting expenditures incurred for awards. Semi-annual SF-425 report were due March 1, 2025 and October 31, 2025. The annual SF-425 report was due October 31, 2025. Condition The Center failed to submit timely semi-annual and annual reports for the grant periods ending January 31, 2025, and July 31, 2025. They were all submitted late. Cause Reporting deadlines are not being appropriately tracked and monitored. Effect The Center was required to file the reports late to rectify the matter. Recommendation We recommend management review current controls over reporting to ensure timeliness of report submissions. Management's Response Management agrees with our recommendation and finding. The delinquent reports have been prepared and submitted as of audit issuance. As such, a different individual will be monitoring and tracking the reporting requirements.

All Funding Sources Significant Deficiency Procurement Criteria An entity must have and use documented procurement policies consistent with Federal, State, and local laws, regulations, and standards for the acquisition of property or services required under a Federal award or subaward. The procedures must conform to the procurement standards identified in CFR § 200.317 through 200.327. Condition The Center maintains specific grant manuals and guidelines as its written policies; however, previous audit identified errors in misapplying grant guidelines among funding sources. A recommendation was made in previous audit to develop a policy that would cover all procurements using Federally sourced funds. A draft policy was developed, but was not approved during the year ended September 30, 2025. Cause The entity has continued to reference specific grant manuals and guidelines as its written procurement policy. Effect Failure to follow appropriate procurement procedures could result in excess procurement costs being disallowed and subject the entity to possible claims. Recommendation We recommend management present the draft to the board, so it can be voted on and put into place. Management's Response Management agrees with our recommendation and the policy was voted on subsequent to year end and put into place.

All Funding Sources Noncompliance Improper Charges to Federal Funded Reimbursable Grants Criteria Under CFR § 200 (Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards) and the respective federal grant agreements, only allowable, reasonable, and allocable costs actually incurred and supported by adequate documentation may be charged to a federal award. Reimbursement requests must be based on actual, recorded expenditures. Condition During our testing of expenditures charged to multiple federally funded reimbursable grants subject to the Uniform Guidance, we noted instances where the Organization billed and received reimbursement for costs that were not supported by actual underlying expenses. Specifically, reimbursement requests included amounts in excess of actual costs incurred, resulting in estimated over-reimbursements of approximately $15,000 during the period under audit. Cause The condition resulted from a breakdown in internal controls over the grant billing process, including inadequate reconciliation of reimbursement requests to the general ledger and supporting documentation, and insufficient oversight. Existing policies and procedures were not effectively implemented to prevent or detect improper charges to federal awards on a timely basis. Effect The Organization received excess federal grant reimbursements of approximately $15,000 to which it was not entitled and may be required to repay these amounts to the respective federal grantor agencies or pass-through entities. The risk was mitigated by management’s identification of the issue, prompt reporting to governance and the auditors, and immediate personnel and control actions. Recommendation We recommend that the Organization reconcile all affected federal grant reimbursement requests to underlying expenditures to determine the exact over-reimbursement amount and work with the applicable grantor(s) to return any unallowable costs. The Organization should strengthen controls over grant billings by requiring documented reconciliations to the general ledger and formal review and approval of all reimbursement requests, ensure appropriate segregation of duties, and provide training to relevant staff on Uniform Guidance cost principles and the Organization’s grant billing procedures. Management's Response Management concurs with the finding. Management is performing a comprehensive reconciliation of all affected federal grant reimbursements to actual expenditures and will work with the applicable federal agencies/pass-through entities to return unallowable amounts.

United States Department of Health and Human Services Direct funding Program: Head Start CFDA: 93.600 Grant Number: 04CH011788-04-00 Noncompliance / Significant Deficiency Reporting Criteria Condition Cause Effect Recommendation Management's Response The grant requires semi-annual and annual reporting expenditures incurred for awards. Semi-annual SF-425 report for grant award 04CH011788-04-00 were due March 1, 2024 and October 31, 2024. The annual SF-425 report was due October 31, 2024. Management agrees with our recommendation and finding. The delinquent reports have been prepared and submitted as of audit issuance. In addition, the role of Assistant Executive Director has changed as of date of this report. As such, a different individual will be monitoring and tracking the reporting requirements. The Center failed to submit timely semi-annual and annual reports for the grant periods ending January 31, 2024, and July 31, 2024. The semi-annual report for the period ending January 31, 2024 which was due March 1, 2024, was submitted in October 2024. The semi-annual and annual reports for the periods ending July 31, 2024, were submitted in February 2025. Reporting deadlines are not being appropriately tracked and monitored. We recommend management review current controls over reporting to ensure timeliness of report submissions. The Center was required to file the reports late to rectify the matter

All Funding Sources Significant Deficiency Procurement Criteria Condition Cause Effect Recommendation Management's Response An entity must have and use documented procurement policies consistent with Federal, State, and local laws, regulations, and standards for the acquisition of property or services required under a Federal award or subaward. The procedures must conform to the procurement standards identified in CFR § 200.317 through 200.327. Management agrees with our recommendation and finding and will work to implement a policy. The entity has continued to reference specific grant manuals and guidelines as its written procurement policy. We recommend management develop and adhere to an internally developed policy for all procurements using Federally sourced funds. The Center maintains specific grant manuals and guidelines as its written policies; however, previous audit identified errors in misapplying grant guidelines among funding sources. A recommendation was made in previous audit to develop a policy that would cover all procurements using Federally sourced funds. Such policy was not developed. Failure to follow appropriate procurement procedures could result in excess procurement costs being disallowed and subject the entity to possible claims.

All Funding Sources Significant Deficiency Reporting Criteria Condition Cause Effect Recommendation Management's Response Management agrees with our recommendation and finding and will work to ensure each grant's financial report is reviewed and approved each month. An entity must have controls in place to ensure that reports for federal awards are supported by applicable accounting records. Grant activity is tracked in the general ledger based on grant codes. Internal processes are designed such that the Assistant Executive Director reviews accuracy of grant reports by comparing to the grant activity within the general ledger. During the year we noted certain grant reports did not match the underlying general ledger data for the same period. Per discussion with Assistant Executive Director, certain allocation adjustments may be determined necessary during the preparation of reports that are not being posted appropriately to the general ledger. In one reporting instance identified, salary allocations were adjusted to reflect grant related costs; however, this reallocation was not updated in the ledger. Inaccurate reporting could result in costs being disallowed and subject the entity to possible claims. We recommend reports be reviewed against the general ledger prior to submission, and any discrepancies should be addressed timely.

Criteria: The grant requires annual reporting on properties held under federal interest. Condition: The center failed to submit timely reports for the grant periods ending July 31, 2023 and 2022. Cause: Property reports were a new requirement resulting from the transfer of land and buildings to the Center during grant period July 31, 2022. Requirement was discovered during the 2022 audit. No follow up with grantor regarding the process for submitting reports occurred until beginning of 2023 audit. The Center was unable to prepare the required report prior to the deadline. Effect: The Center was required to file the reports late to rectify the matter. Recommendation: We recommend management review current controls over reporting to ensure timeliness of report submissions.

Criteria: an entity must have and use documented procurement policies consistent with Federal, State, and local laws, regulations, and standards for the acquisition of property or services required under a Federal award or subaward. The procedures must confirm to the procurement standards identified in CFR § 200.317 through 200.327. Condition: The Center maintans specific grant manuals and guidelines as its written policies; however, they have inconsistently or inadequately been using those manuals and guidelines. The Center made two large purchases under the Head Start grant exceeding micro-purchase thresholds without obtaining price or rate quotations from an adequate number of qualified sources. Cause: Thresholds are often considered based on unit price instead of the aggregate purchase amount based on certain grantor requirements to obtain written approval for purchases based on unit price. In addition, procedures are considered unnecessary by management for purchases falling within the grantor approved budget amounts. Effect: Failure to follow appropriate procurement procedures could result in excess procurement costs being disallowed or subject the entity to possible claims. It was determined that the items procured were reasonable in costs with other vendors. Recommendation: We recommend management assess and adhere to the internally developed policy for all procurements using Federally sourced funds.

Criteria: Entities expending more than $750,000 of Federal funds during a year are required to obtain and submit a Single Audit to the Federal Audit Clearinghouse either 30 days after issuance of audit report or 9 months after the entity's year end. Condition: The Center failed to submit required single Audit reporting package and data collection form through the Federal Audit Clearinghouse for the year ended September 30, 2021. Cause: Significant transitions in grant funding and audit personnel occurred during the years 2021 and 2022. The submission of the report was overlooked. Effect: The Federal Audit Clearinghouse considers the submission requirement complete when it has received the electronic submission of both the data collection form and the reporting package. Recommendation: We recommend the Center ensure the timely submission of both the data collection form and the reporting package in the future. Management's Response: Management agrees with our recommendation and finding. The 2021 data collection form and required reporting package will be submitted as soon as possible.

Criteria: The grant requires semi-annual reporting of financial information and annual reporting on properties. Condition: The Center failed to submit financial report for the grant period ending July 31, 2022, and annual property reports. Cause: Failure to submit financial report appears to have been an oversight. Property reports are a new requirement resulting from the transfer of land and buildings to the Center during the fiscal year. Allison was unaware of the new requirement. Effect: Noncompliance with grant requirements could result in discontinuance of funding. Recommendation: We recommend management review current controls over reporting to ensure timeliness of report submissions. Management's Response: Management agrees with our recommendation and finding. The financial report has been submitted as of date of audit submission. The property reports will be prepared and submitted as soon as possible.

Criteria: The grant requires monthly reporting of expenditures. Condition: The Center failed to submit reports timely for the months July, August, and September 2022. Cause: There are three programs within the grant funding. Each program requires a separate report showing expenditures. A lapse in procedures led to submission of reports for only one of the programs under the total grant Effect: Noncompliance with grant requirements could result in discontinuance of funding. Recommendation: We recommend management review current controls over reporting to ensure timeliness of report submissions. Management's Response: Management agrees with our recommendation and finding. The reports were submitted in December 2022.