Community Services Agency

Item 2023‐002 Property and Equipment Management Assistance Listing Number 93.600 Head Start Cluster U.S. Department of Health and Hum an Services Pass‐through Grant No. 09CH011437-03-04; 09CH011437-03-C3; 09HP000160-04-04 09HP000160-05-02; 09HE000035-01-C5; 09HE000035-01-C6 Condition – The Inventory tracking sheet did not contain all required asset information. Criteria – 2 CFR Part 200.313(d)(1) of the Uniform Guidance requires that property records must be maintained for equipment acquired under a federal award that include a description of the property, a serial number or other identification number, the source of funding for the property (including the FAIN), who holds title, the acquisition date, and cost of the property, percentage of federal participation in the project costs for the federal award under which the property was acquired, the location, use and condition of the property, and any ultimate disposition data including the date of disposal and sale price of the property. A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. Cause – The Agency did not include all required property information in its property records due to staff turnover. Questioned Costs – Not determinable. Effect – Failure to comply with equipment management requirements could result in noncompliance with the grant agreements. Recommendation – We recommend the Agency follow the requirements of 2 CFR Part 200.313 to ensure all assets are adequately accounted for. CRI also recommends that the Agency include all of the information required by the granting Agency and Uniform Guidance in one central tracking spreadsheet and include the following fields in addition to the items previously being tracked and that that spreadsheet is used to conduct a physical observation at least once every two years. • the source of funding for the property (including the Federal award identification number), • who holds title, • the acquisition date, • cost of the property, • percentage of Federal participation in the project costs for the Federal award under which the property was acquired, • use and • condition of the property, • and any ultimate disposition data including the date of disposal and sales price of the property (2 CFR section 200.313(d)(1)). Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.

CORRECTIVE ACTION PLAN Finding 2023-001 General Ledger Accuracy The due date of the original draft trial balance to begin the audit has limited the staff ability to ensure all entries and adjustments are made prior to submitting. In addition, the finance department underwent significant changes at the end of the fiscal year with transitioning to new leadership and 100% staff turnover throughout the closing period. Going forward, management will ensure an accurate timely year end closing as follows: Monthly Closing Process - Finance will be implementing a formal monthly closing process, managed directly by the Controller, and using deadlines and checklists to make sure all expenses are settled properly and timely. All regular monthly reconciliation processes will be assigned to specific positions and actively managed by the controller and overseen by the finance director. A report on the monthly closeout process will be provided to the CEO by the 20th of each month. Annual Closing Process - CSA management will meet with auditors to develop a closing timeline that will allow more adequate time to complete the final draft trial balance. The finance director and controller will set deadlines and assignments for specific closing tasks and a hard deadline for final closing and time for the finance director to perform a closing review of financials. Renee Olson, CSA Finance Director, will be the individual primarily responsible for implementing this corrective action. Estimated date of completion is January 31, 2024. Finding 2023-002 Equipment and Real Property Management Management intends to add additional measures to identifying capital assets so that there is not an overreliance on the general ledger review. An accounting manager position has been created and filled within the past 3 months with the responsibility of inventory management and updating property records to include all required information. The finance director will maintain a separate folder of all invoices over $5,000 to be considered for capitalization. The general ledger will be further examined each month to ensure all items have been properly identified going forward. The list of assets to be capitalized will be reviewed by the Finance Director and Program Managers quarterly to ensure all assets are properly identified for annual capitalization and depreciation and that all required information is recorded. Renee Olson, CSA Finance Director, will be the individual primarily responsible for implementing this corrective action. Estimated date of completion is February 28, 2024.

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