Results of Limited Scope Review at the Mid-Kansas Community Action Program

We reviewed the financial conditions at Mid-Kansas Community Action Program (Mid-CAP) 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 American Recovery and Reinvestment Act of 2009 (Recovery Act).

We found that based on its current financial condition, Mid-CAP cannot ensure the continuing fiscal viability of the organization. Mid-CAP's liquidity ratios for fiscal years ending June 30, 2007, and June 30, 2008, indicate that the organization may not have sufficient cash to pay its current liabilities. Although Mid-CAP is actively working to improve its financial viability, it does not appear as though the liquidity ratios will improve to a satisfactory level for the fiscal year ending June 30, 2009. Ongoing fundraising efforts have fallen well short of goals established by the Board of Directors.

In addition, Mid-CAP's financial management system did not always adequately manage and account for Federal funds.

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

In written comments on our draft report, Mid-CAP neither agreed nor disagreed with our findings regarding its fiscal viability, management oversight, and financial management system. However, Mid-CAP provided information as to corrective actions and improvements that it has implemented or is undertaking, as well as additional information related to some of our findings.