Results of Limited-Scope Review of Centro de la Familia de Utah Head Start Program

02-22-2010 | Audit (A-07-09-02768) | Complete Report

Filed under: Center for Medicare and Medicaid Services

We reviewed the financial conditions at Centro de la Familia de Utah (CDLF) as part of a nationwide series of reviews requested by the Administration for Children and Families (ACF), Office of Head Start, for use in its overall assessment of Head Start grantees that have applied for additional funding under the American Recovery and Reinvestment Act of 2009 (Recovery Act). We found that CDLF had improved its financial viability over the past 5 years. However, CDLF's financial flexibility was impaired because of the lack of short-term liquidity and an unrestricted net asset deficit that caused it to rely on a line of credit with its bank. Also, CDLF's financial management system did not adequately manage Federal funds used for administrative costs and indirect costs. Furthermore, CDLF's matching share in-kind costs were not always allowable or reasonable.

CDLF accepted our findings and stated that it had implemented procedures to correct the issues identified in our findings. CDLF disagreed with our inclusion of the U.S. Department of Agriculture (USDA) grant in the cost pool to which indirect costs could be allocated. However, CDLF did not provide evidence that it was authorized to exclude USDA funds from its cost allocation plan.

We recommended that ACF, in determining whether CDLF should be awarded additional Head Start and Recovery Act grant funding, consider the information presented in this report in assessing CDLF's financial condition.