Costs Charged To Head Start Program Administered By Rockingham Community Action, Inc.

EXECUTIVE SUMMARY:

The objective of this review was to evaluate the financial system and internal control structure for tracking and reporting Head Start activity at Rockingham Community Action, Inc. (the Agency) for the three fiscal years (FY) ending July 31, 2002.  Our analysis showed that (1) indirect costs recorded to the general ledger included errors and unsupported transactions, and did not reflect offsets to the base (direct costs) for calculating indirect costs, (2) Federal cash drawdowns for one of three fiscal years tested exceeded the approved budget, and (3) supporting documentation could not be located for in-kind contributions.  The errors we identified were most attributed to high turnover and a poorly executed accounting software conversion in FY 2000.  The Agency agreed with our findings.

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