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Audit (A-01-10-02501)

Review of 83 Early Head Start Applicants Under the American Recovery and Reinvestment Act

Executive Summary

We tested whether applicants for Early Head Start Recovery Act expansion funding had (1) the financial resources necessary to meet operational costs and pay liabilities; (2) accounting systems to track all cash drawdowns separately and provide accurate, current, and complete reports of grant expenditures; and (3) written procedures for financial management, including budget and cost-accounting practices. Of the 83 applicants that we assessed, 8 had no reported audit deficiencies. For the remaining 75, our reviews identified (1) problems with financial stability, (2) inadequate systems to manage and account for Federal funds, (3) inadequate organizational structures, (4) inadequate procurement and property management procedures, and (5) inadequate personnel policies and procedures.

Using our findings, ACF awarded $15 million in Recovery Act funds to 8 applicants; did not award $31 million requested by 15 applicants; and awarded $126 million to 60 applicants on the condition that they receive increased ACF oversight, training, and technical assistance.

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