EIN: 841548541
UEI: E9ZSCXRLCMX7
Finding 2019-001 ? Board Independence Condition: The Board of Directors of CDI-HS is not independent of management. Criteria: Section 200.303 Internal Controls ? The non-federal entity must 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 Federal Government? issued by the Comptroller of Sponsoring Organizations of the Treadway Commission (?COSO?). The COSO Internal Control Integrated Framework states that the Board of Directors should be independent of management and exercise oversight of the development and performance of internal control. Cause: The Board of Directors of CDI-HS is comprised of the same Directors as the Board of Directors of CD. CDI?s Board of Directors is comprised entirely of members of the senior management team of CDI. CDI controls the Board of Directors of CDI-HS and has an economic interest in CDI-HS. Accordingly, CDI has effective control over the day to day operations of CDI-HS and there is a lack of independence between management and the Board of Directors. Effect: The governance structure of CDI-HS is inconsistent with the COSO Internal Control Integrated Framework and, accordingly, is not optimized to provide reasonable assurance that CDI HS is managing its Federal awards in compliance with federal statutes, regulations, and the terms and conditions of its federal awards. Recommendations: We recommend that CDI and CDI-HS ensure that the majority of voting board members are independent of CDI and CDI-HS. Views of Responsible Officials: CDI-HS has made a change to the structure of the Board of Directors, with the majority of members being outside individuals, independent of CDI-HS. In addition, the CDI-HS Board members are different than the members of the CDI Board. As of October 2019, there is no longer complete commonality of membership between the boards. CDI-HS believes that with the implementation of this change, there is independence between management and the board.
Recommendations: We recommend that CDI and CDI-HS ensure that the majority of voting board members are independent of CDI and CDI-HS. Views of Responsible Officials: CDI-HS has made a change to the structure of the Board of Directors, with the majority of members being outside individuals, independent of CDI-HS. In addition, the CDI-HS Board members are different than the members of the CDI Board. As of October 2019, there is no longer complete commonality of membership between the boards. CDI-HS believes that with the implementation of this change, there is independence between management and the board.
Material Weakness 2019-001: Board Independence Criteria: ?200.303 Internal Controls - The non-federal entity must 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). The COSO Internal Control Integrated Framework states that the Board of Directors should be independent of management and exercise oversight of the development and performance of internal control. Condition: The Board of Directors of Community Development Institute Head Start (CDI HS) is not independent of management. Context and Effect: The governance structure of CDI HS is inconsistent with the COSO Internal Control Integrated Framework and, accordingly, is not optimized to provide reasonable assurance that CDI HS is managing its Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of its Federal awards. Cause: The Board of Directors of CDI HS is comprised of the same Directors as the Board of Directors of Community Development Institute (CDI). CDI?s Board of Directors is comprised entirely of members of the senior management team of CDI. CDI controls the Board of Directors of CDI HS and has an economic interest in CDI HS. Accordingly, CDI has effective control over the day to day operations of CDI HS and there is a lack of independence between management and the Board of Directors. Recommendation: We recommend that CDI and CDI HS ensure that the majority of voting board members are independent of CDI and CDI HS. Views of Responsible Officials and Planned Corrective Actions: CDI HS has made a change to the structure of the Board of Directors, with the majority of members being outside individuals, independent of CDI HS. In addition, the CDI HS Board members are different than the members of the CDI Board. There is no longer complete commonality of membership between the boards. CDI HS believes that with the implementation of this change, there is independence between management and the board.
Views of Responsible Officials and Planned Corrective Actions: CDI HS has made a change to the structure of the Board of Directors, with the majority of members being outside individuals, independent of CDI HS. In addition, the CDI HS Board members are different than the members of the CDI Board. There is no longer complete commonality of membership between the boards. CDI HS believes that with the implementation of this change, there is independence between management and the board.
Material Weakness 2019-001: Board Independence Criteria: ?200.303 Internal Controls - The non-federal entity must 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). The COSO Internal Control Integrated Framework states that the Board of Directors should be independent of management and exercise oversight of the development and performance of internal control. Condition: The Board of Directors of Community Development Institute Head Start (CDI HS) is not independent of management. Context and Effect: The governance structure of CDI HS is inconsistent with the COSO Internal Control Integrated Framework and, accordingly, is not optimized to provide reasonable assurance that CDI HS is managing its Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of its Federal awards. Cause: The Board of Directors of CDI HS is comprised of the same Directors as the Board of Directors of Community Development Institute (CDI). CDI?s Board of Directors is comprised entirely of members of the senior management team of CDI. CDI controls the Board of Directors of CDI HS and has an economic interest in CDI HS. Accordingly, CDI has effective control over the day to day operations of CDI HS and there is a lack of independence between management and the Board of Directors. Recommendation: We recommend that CDI and CDI HS ensure that the majority of voting board members are independent of CDI and CDI HS.Views of Responsible Officials and Planned Corrective Actions: CDI HS has made a change to the structure of the Board of Directors, with the majority of members being outside individuals, independent of CDI HS. In addition, the CDI HS Board members are different than the members of the CDI Board. There is no longer complete commonality of membership between the boards. CDI HS believes that with the implementation of this change, there is independence between management and the board.
Planned Corrective Actions: CDI HS has made a change to the structure of the Board of Directors, with the majority of members being outside individuals, independent of CDI HS. In addition, the CDI HS Board members are different than the members of the CDI Board. There is no longer complete commonality of membership between the boards. CDI HS believes that with the implementation of this change, there is independence between management and the board.
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