HELP USA, Inc. and Affiliates

2025-004: Activities Allowed or Unallowed and Allowable Costs/Cost Principles ALN 93.558 Passed through the City of New York, Human Resources Administration from the U.S. Department of Health and Human Services - CT1-069-20248802635 and CT1-069-20248800455 - Significant Deficiency in Internal Control Criteria: Uniform Guidance requires that charges to federal awards must be based on records that are supported by a system of internal controls that provide reasonable assurance about the accuracy, allowability and proper allocation of the charges. Documentation should be maintained for the distribution of an employee's salary and wages among specific activities or cost objective if the employee works on multiple activities. Condition: Inconsistencies in recordkeeping were noted, leading to management's inability to produce approved wage rate authorizations for 14 of the 40 employees. This was not a statistically valid sample.   Cause: Management did not retain wage rate authorizations nor did they include approvals within certain budget allocation forms. Effect: Unauthorized wage rates were charged to the grant during the fiscal year. Questioned Costs: None. Recommendation: We recommend management standardize their budget allocation forms which show approved wage rates across all employees as well as retain and update records to ensure all employees have up to date forms on file. Views of Responsible Officials: Management acknowledges the finding. For details on actions taken, refer to the Corrective Action Plan.

Management will standardize the budget allocation forms to reflect approved wage rates across all employees and ensure all employees have up-to-date forms on file.

Federal Program: Head Start Federal Agency: Department of Health and Human Services CFDA Number: 93.600 Federal Award Year: June 30, 2020 Criteria: 2 CFR Part 200, Part 3-H of the Uniform Guidance requires that the federal award was only charged for allowable costs incurred during the period of performance. Condition/Context: For 4 out of 40 expenditures selected for testing, the Organization requested reimbursement for expenditures in the incorrect contract period. The sample was selected from a population of 1,182 expenditures submitted for reimbursement and was a statistically valid sample. The out of period expenditures were valid costs for the program in prior contract periods. Questioned Costs: The total costs for the 4 selections is $10,880; however, questioned costs could not be quantified as extrapolation to the whole population would not be representative of the error. Cause: The Organization requested reimbursements in the fiscal period subsequent to the dates of the invoices and the period in which the expenditures occurred. Effect: The Organization has not complied with the specific requirements for expenses to be incurred during the contract period. Recommendation: We recommend that management evaluate the timeliness of its closing process, review vouchers and more closely monitor expenditures being charged to Federal programs in the proper periods. Views of Responsible Officials: Management acknowledges the finding. For details on actions taken, refer to the Corrective Action Plan.

Management will implement control and review procedures to facilitate the timeliness of the closing process that will ensure expenditures are being charged to the programs in the correct contract period.