DEVELOPMENTAL OPPORTUNITIESNon-Profit

2023-003 Material Audit Adjustments Finding Number 2023-003 represent a material weakness in internal controls over compliance with Starpoint's major program's reporting compliance requirement. Federal Program Information: Funding agency: Department of Health and Human Services Title: Head Start Cluster AL number: 93.600 Questioned Costs: None Criteria – Management is responsible for designing and maintaining internal controls that provide reasonable assurance that material misstatements in the financial statements are prevented or detected and corrected in a timely manner. Such controls include timely account reconciliations, review procedures, and identification and recording of necessary journal entries. Condition – During the audit, we identified and proposed material adjustments to the financial statements that were not identified through Starpoint's internal financial reporting processes which impacted the Organization's ability to accurately prepare their financial statements and schedule of expenditures of federal awards. Cause – The deficiency resulted from limited financial reporting resources, personnel turnover during the yearend close process, and the absence of consistently performed reconciliation and review procedures to identify and correct errors timely. Effect – As a result, material misstatements in the financial statements were not prevented, or detected and corrected, by management on a timely basis. Personnel turnover subsequent to year-end further limited management's ability to complete reconciliations and record necessary adjustments before the audit began. Recommendation – We recommend that management strengthen its month-end and year-end closing processes by implementing and documenting timely account reconciliations, review procedures, and financial statement preparation controls to ensure material adjustments are identified and recorded prior to the audit. Views of Responsible Officials – Management agrees with the finding and has developed a corrective action plan.

2023-004 Head Start Reporting Federal Program Information: Funding agency: Department of Health and Human Services Title: Head Start Cluster AL number: 93.600 Questioned Costs: None Criteria – Recipients are required to submit Quarterly and Annual Federal Financial Reports (SF-425) and Real Property Status Reports (SF-429), when applicable, by the deadlines established by the grant agreement and federal reporting requirements. In addition, the single audit package was due to the Federal Audit Clearinghouse within 9 months of fiscal year end, or by March 31, 2024. Condition – During our testing of reporting requirements, we noted that certain required reports and the audit package were not submitted by the required due dates. Cause – Management had not established adequate controls, including monitoring and review procedures, to ensure all required reports were prepared and submitted by their applicable deadlines. Effect – Noncompliance with federal reporting requirements occurred. Specifically: -The fourth-quarter SF-425, due November 30, 2022, was submitted on April 24, 2023. -The SF-429, due November 30, 2023, was submitted on December 18, 2023. - The single audit package was submitted after the due date of March 31, 2024. Recommendation – We recommend management implement and monitor formal reporting controls, including maintaining a reporting calendar, assigning responsibility for report preparation and submission, and performing supervisory review of filing deadlines to ensure all required reports are submitted timely. Views of Responsible Officials – Management agrees with the finding and has developed a corrective action plan.

2023-005 Head Start Equipment Management Federal Program Information: Funding agency: Department of Health and Human Services Title: Head Start Cluster AL number: 93.600 Questioned Costs: None Criteria – Uniform Guidance (2 CFR §200.313(d)) requires recipients and subrecipients to maintain property records for federally funded equipment that include, at a minimum, a description of the property, serial number or other identifying number, funding source, acquisition date and cost, percentage of federal participation, location, use and condition, and disposition information. The Uniform Guidance also requires a physical inventory of equipment to be conducted and reconciled to property records at least once every two years. Condition – The Organization did not maintain complete and accurate equipment records for equipment purchased with federal funds. In addition, the Organization did not perform a documented physical inventory of grant-funded equipment during the audit period, nor were inventory results reconciled to the equipment listing. As a result, management could not demonstrate compliance with Uniform Guidance equipment management requirements. Cause – Management did not establish or consistently implement adequate internal control procedures to ensure: -Equipment records contained all information required by Uniform Guidance. -Periodic physical inventories of grant-funded equipment were performed and documented. -Inventory results were reconciled to equipment records and investigated for discrepancies. -Responsibility for monitoring compliance with equipment management requirements was assigned and reviewed. Effect – The Organization is at increased risk that equipment purchased with federal funds may be lost, stolen, disposed of improperly, or omitted from inventory records without timely detection. Additionally, incomplete records and the lack of periodic inventories may result in noncompliance with federal award requirements and impair management's ability to account for federally funded assets.

Criteria or Specific Requirement – Management is required to submit Quarterly and Annual Financial Status Reports (SF-425) and Quarterly Real Property Status (SF-429) in a timely manner. Condition – Some reports were not submitted by the date they were due. Context – During our testing of reporting, we noted that there were no controls in place to ensure reports are submitted on time Cause – Procedures were not in place to ensure the timely submission of the Quarterly and Annual Financial Status Reports. Effect – In certain instances reports were not received by Federal officials in a timely manner. We found that the Q4 SF-425, due on October 30, 2022, was submitted untimely on April 24, 2023. We found the Q4 SF-429 was due October 30, 2022, was submitted on January 1, 2023. Recommendation – We recommend that management ensure that controls are in place to ensure that reports are submitted on time. Views of Responsible Officials and Planned Corrective Actions – A calendar reminder has been set up in Outlook to begin 10 days prior to the submission deadline of each quarterly SF-425 report.

Criteria or Specific Requirement ? Management is responsible for properly approving employee time cards. Condition ? Evidence of approval of employee timecards or invoice was not maintained by management. Cause ? Evidence of approval was not maintained due to internal procedures not being followed where supporting documentation did not have indication of approval. Recommendation ? We recommend that management review procedures and change as necessary to ensure all expenditures are approved and evidence is maintained to support the approvals. Views of Responsible Officials and Planned Corrective Actions ? Management understands and agrees with this finding. Policies are being reviewed and new procedures put in place, as needed, to ensure documentation of proper authorization and compliance.

Criteria or Specific Requirement ? Management is responsible for maintaining supporting documentation for expenses. Condition ? Supporting documentation for expenses was not maintained. Cause ? Supporting documentation was not maintained due to internal procedures not being followed. Recommendation ? We recommend that management review procedures and change as necessary to ensure all supporting documentation is maintained to support the expenses. Views of Responsible Officials and Planned Corrective Actions ? Management understands and agrees with this finding. Policies are being reviewed and new procedures put in place as needed to ensure documentation is maintained.

Criteria or Specific Requirement ? Management is required to submit Quarterly and Annual Financial Status Reports (SF-425) and Quarterly Real Property Status (SF-429) in a timely manner. Conditions ? Some reports were not submitted by the date they were due. Context ? During our testing of reporting, we noted that there were no controls in place to ensure reports are submitted on time. Cause ? Procedures were not in place to ensure the timely submission of the Quarterly and Annual Financial Status Reports. Effect ? In certain instances, reports were not received by Federal officials in a timely manner. We found that Q4 SF-429, due on October 30, 2021, was submitted, untimely, on December 15, 2022. We also found that Q4 SF-429, due on October 30, 2021, was submitted, untimely, on February 29, 2022. Recommendation ? We recommend that management ensure that controls are in place to ensure that reports are submitted on time. Views of Responsible Officials and Planned Corrective Actions ? A calendar reminder has been set up in Outlook to begin 10 days prior to the submission deadline of each quarterly SF-425 report.