Audit of Head Start Costs for Fiscal Year Ending June 30, 2005 for Arlington Community Action Program Inc.

EXECUTIVE SUMMARY:

The objective of the audit was to determine whether the costs Arlington Community Action Program, Inc. (ACAP) claimed for the Head Start program were allowable under the terms of the grant, applicable Federal regulations, and Office of Management and Budget guidance.  We determined that ACAP claimed costs that were either unallowable, unsupported, or lack sufficient documentation.  We did not accept $342,004 and set aside $178,032 for ACF's adjudication.  Further, we noted that ACAP did not have adequate financial management practices to support Head Start costs as required by Federal regulations.  We recommended that the Administration for Children and Families (1) request that ACAP refund $342,004 in costs that were either unallowable or unsupported and (2) make a determination on the acceptance of $178,032 of set aside costs that did not have sufficient supporting records for us to determine allowability.  At ACF's request, we issued the final report directly to ACF's Region III Regional Administrator.