Recipient Capability Audit of Child Care Association of Brevard County, Inc.

We reviewed the financial conditions at Child Care Association of Brevard County, Inc. (CCA), as part of a nationwide series of reviews requested by the Administration for Children and Families (ACF), Office of Head Start, as part of its overall assessment of Head Start grantees that have applied for additional funding under the Recovery Act.

We found that CCA cannot effectively manage and account for Federal funds or operate its Head Start program in accordance with Federal regulations. Specifically, CCA (1) lacked sufficient cash to meet its operating expenses and debt obligations, (2) lacked an effective financial management system to adequately manage and account for Federal funds, (3) did not always value or account for the non-Federal matching portion of its budget in accordance with Federal regulations, and (4) did not obtain HHS approval before securing a bank loan with property in which the Federal government has an interest. Also, other State and non-Federal agencies cited multiple issues concerning CCA's financial management and viability. Based on its current financial position and future debt obligations, CCA may not be able to continue functioning as a 'going concern' unless it receives additional funding.