Corrective Action Goal #1: Compliance with HS 642© (1)(E)(iv)(V)(bb)

Objective 1

Objective 2

Objective 3

Board of Trustees will attend a mandatory training to review their governance responsibilities to ensure that members adopt practices that they adopt are active, independent, and informed governance of Head Start agency 642(c) (1) (E) (ii); 1301.2(b)(2);

642(c)(1)(E)(iv)(V)(bb)

Expected Outcome(s)

Description of Deficiency

The governing body members did not oversee the agency ‘s progress in carrying out programmatic provisions of the agency’s grant application. 642(c)(I)(E)(iv)(V)(bb)

Sec. 642 Powers and Functions of Head Start Agencies (c) Program Governance- Upon receiving designation as a Head Start agency, the agency shall establish and maintain a formal structure for program governance, for the oversight of quality services for Head Start children and families and for making decisions related to program design and implementation. Such structure shall include the following: ( I) GOVERNING BODY-

(E) RESPONSIBILITIES- The governing body shall (iv) be responsible for other activities, including– (V) reviewing and approving all major policies of the agency, including–(bb) such agency’s progress in carrying out the programmatic and fiscal provisions in such agency’s grant application, including implementation of corrective actions.

Corrective Action Goal #2: Compliance with 45 CFR 75.303(a)

Ongoing Fiscal Capacity: BCAP will establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.

Ensure these internal controls shall be in compliance with guidance in “Standards for Internal Control in the Federal Government,” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

The root causes that resulted in the non-compliance findings were as follows:

1.                       Weak Internal Controls

2.                       Outdated Fiscal policies

3.                       Lack of staff training and skill set

Objective 1

Objective 2

Objective 3

Expected Outcome(s)

Responsible Persons Abbreviations

Objective 1

Objective 2

Objective 3

BCAP will set up a system for determining whether individual expenses are necessary, reasonable, allocable, and adequately documented. 75.302(b)(7); 75.328(a)(4)(5)(7);

75.328(b); 75.329(a)-(b); 75.403(a)-

(g); 75.329(a)-(b); 75.332;75.327(h)

Expected Outcome(s)

Description of Deficiency

QIP Action 1

Roles and responsibilities will be clarified through on-going comprehensive trainings using the Head Start Act (2007) and Head Start Performance Standards (2016). There is a Training & Technical Assistance (T/TA) scheduled on November 12, 2019. T/TA Training will help us prepare for and conduct the initial trainings, which afterward, will be provided at the beginning of each year after the new Policy Council is seated. Refresher follow-ups throughout the year will also be conducted. In addition, there will be a one-day retreat (to be scheduled by the end of December 2019) that will incorporate other training components with the goal of familiarizing the Board with their roles and responsibilities, including but not limited to, reviewing/revising policies & procedures, assessment of sub-committees, a quarterly review of program impact, annual review of quality assurance and program planning, annual review of community needs assessments, etc., and the importance of shared governance. This will increase better outcomes and success for the Head Start programs. Board Members will also be given the Governance Readiness Assessment tool to review and complete for additional feedback and to include in our strategic efforts.

Sec 2 Act 1 – Gov Training Sign in sheets

Sec 2 Act 1 – Training materials

QIP Action 2

QIP Action 3

QIP Action 4

The Board of Trustees will assign a Board representative to serve as a non-voting member to the Policy Council for the purpose of sharing Board decisions on matters that directly affect the policy and procedures (changes, revisions/updates). The Board of Trustees will share its minutes with the Policy Council to ensure that all actions are noted and whether they directly affect the Head Start and Early Head Start programs. Clarification will come from the appointed Board representative. 1302.102(a)

Please click here to refer to Appendix I, Article VI, Section K

QIP Action 5

The Policy Council will assign a Policy Council representative to serve as a non-voting member to the BCAP Board of Trustees for the purpose of sharing Policy Council decisions and actions of the Council and sharing all Policy Council minutes through the Policy Council representative and, in some cases, decisions that need board review and approval.  The Policy Council representative will provide a report to the Board of Trustees at all scheduled Board meetings and will be added to the agenda to update the Board on matters they would like to address. 1302.102(a)

Please click here to refer to Appendix I, Article VI, Section L.

QIP Action 6

The BCAP Board of Trustees and Policy will jointly draft and adopt an “internal dispute resolution”. This process will be followed by both the governing bodies to resolve, in the event that a potential or existing conflict occurs. 1301.6

Please click here to refer to Appendix I, Article VII.

QIP Action 7

QIP Action 8

The Board of Trustees and Head Start Policy Council will attend trainings to review their governance responsibilities, Financial Management, and Fiduciary responsibilities to ensure that members adopt practices that adopt active, independent, and informed governance of the Head Start agency. If someone is unable to attend, materials and minutes from the meeting will be provided. There will also be “make-up” trainings made available quarterly for those who may not be able to attend.

Please refer to Action Item 1.

Click here to see the Head Start and Early Head Start Governance Manual.

QIP Action 9

Head Start and Early Head Start established an annual training calendar that will be utilized and distributed to members of the Board of Trustees and Policy Council to include training on Financial Management, ERSEA, CACFP, Community Needs Assessment, Policies & Procedures annual review and updates, and semi-annual Governance Readiness Assessment Tool review/completion. Fiduciary responsibilities for Administration, Board of Trustees, and Policy Council to ensure continuity, transparency, adherence to written financial policies and effectiveness of training objectives. Work with T/TA on Head Start program planning calendar.

Click here to view the Program Governance Planning Calendar

Corrective Action Goal #2 – Action 1

The Agency will develop and revise its Cost Allocation Plan to correctly allocate expenses across all funding sources and ensure costs are only charged to Head Start according to the actual benefits received.

Please click here to refer to Appendix III.

Corrective Action Goal #2 – Action 2

Update/Revise FP&Ps in Cost Allocation to ensure compliance with the Uniform Guidance.

Please click here to refer to Appendix II.

Corrective Action Goal #2 – Action 3

Establish cost methodology in allocating costs (consultants, contracted labor, and professional services, supplies, etc.).

Please click here to refer to Appendix III.

Corrective Action Goal #2 – Action 4

Set up a separate general ledger account for administrative costs and ensure tracking is regularly done to assure that this will not exceed 15% of the total budget. Will update Chart of Accounts. BCAP will ensure compliance with HSPPS 1303.5.

BCAP will establish a system in place to identify, allocate, and accurately report the administrative and development portion of costs, both Federal and non-Federal, charged to Head Start.

Calculate the administrative costs to ascertain if the 15% limitation was exceeded.  If so, BCAP will pay back the Office of Head Start for such unallowable expenses.

Administrative costs for the periods in question did not exceed 15% of total Head Start / Early Head Start Expense. Fiscal Year 2017 to 2019 are 13.2%, 9.0% and 11.3% respectively.

Refer to the following attachments for each year in the following order HS Admin Cost Calculation, Head Start FY Reconciliation, Schedule of M-G Expense (per audit) and Head Start General Ledger. Appendix V-Z to V-AK.

Appendix V-Z – HS Admin Cost Calculation FY2017

Appendix V-AA – Headstart FY 2017 Reconciliation

Appendix V-AB – Schedule of M-G Expense – 2017

Appendix V-AC – Headstart General Ledger FY 17

Appendix V-AD – HS Admin Cost Calculation FY2018

Appendix V-AE – Headstart FY 2018 Reconciliation

Appendix V-AF – Schedule of M-G Expense – 2018

Appendix V-AG – Headstart General Ledger FY 18

Appendix V-AH – HS Admin Cost Calculation FY2019

Appendix V-AI Headstart FY 2019 Reconciliation

Appendix V-AK – Headstart General Ledger FY 19

Fiscal year 2020 audit is currently in progress, so general ledger support and administrative cost calculation will not be available until audit is finalized.

Corrective Action Goal #2 – Action 5

Establish Personal Activity Reports (PAR) for administrative staff that will support the allocations of salaries and benefits and will ensure compensation for personal services satisfy the standards of documentation of personnel expenses. The percentage allocated of staff time to a grant program is based on time and effort analysis and historical efforts used to budget allocated staffing to each grant program. Per Accounting Policies and Procedures, Section 15. Cost Allocation, as of the inception date of the policies and procedures, 2/25/2020, payroll expense for employees assigned to more than one program are allocated based on percentage reported on after-the-fact determination reports, Personnel Activity Report, or “PARs”. This report is reconciled semi-annually to charges in the general ledger and are restated to reflect actual time worked by grant based on the Personnel Activity Report. In prior fiscal years the PARs were also created by employees to track employee activity, but some percentages were based on budgeted allocation percentages derived from time studies performed. Employee and supervisor signatures are requested at time of completion on the PARs forms, although not all forms submitted for review are signed copies. Due to the changes in finance department staffing not all signed copies were able to be located, but we are working to become 100% compliant going forward.
Per request, the PARs and administrative salary summary by employee for the following positions are provided on the attachments for Chief Operating Officer, Executive Director, Human Resource Director, and Accountant. Note: Documentation for Chief Operating Officer is provided as part of Action 9.

Appendix V-G – Personnel Activity Report – M. Gill 2017-18

Appendix V-H – Personnel Activity Report – M. Gill – 2018-19

Appendix V-I – Personnel Activity Report – M. Gill – 2019-20

PARs Fiscal Year 2019 Executive Director, Human Resource Director and Accountant:
Appendix V-J – Personnel Activity Report – R. Johnson – 2018-19

Appendix V-K Personnel Activity Report – K. Edwards 2018-19

Appendix V-L – Personnel Activity Report – A. Sharer 2018-19

Documentation for FY2019 Summary of Salaries Executive Director, Human Resource Director and Accountant:
Appendix V-M General Ledger Transaction Support M Gill Salary Adj

Corrective Action Goal #2 – Action 6

Appendix V – Summary of Head Start Invoices – summarizes the reallocation of expenditures identified during the onsite monitoring.

Appendix V-A – CohnReznick Invoice for $80,000 corrected allocation resulted in a decrease of expense to the Headstart Programs of $43,200.

Appendix V-B – Staples Check Request and Invoices – Supports the amount paid of $19,396 to Staples identified in the Monitoring Response. Note that the actual amount paid to Staples for the purchase in question, PO 55283, was actually $18,060.45.

Appendix V-C – Summary of Head Start Invoices – Staples Detail – summarizes the total of PO 55283 by invoice number, lists computers by user/location, and allocation of expense. Locations of each computer received in March of 2018 as of August 2020 determined 9 computers, not 6, were assigned to staff that were not direct Head Start staff. The original allocation of $18,060.45 was decreased to $14,468.01 to account for the actual use of these 9 computers.

Appendix V-D – 1SEO Technologies Invoices identified in the monitoring report were reviewed and attached for reference. All invoices for the period were also reviewed to determine if correct allocations were utilized. The invoice 61838 for $10,020 allocation to headstart program was revised to $4,029.60 and invoice for $8,212.50 allocation to headstart was revised to $5,037.02. Additional invoices during this period also were incorrectly allocated resulting in invoice #62649 increase of $324.64 and invoice #62090 increase of $770.14. The adjusted total was a decrease of $8,071.10.

Appendix V-E – Selective Insurance invoices are provided for your reference. A review of accounting records determined that the Selective Insurance invoices had not been properly allocated. These invoices have been correct to reflect the proper expenditures by program. Selective insurance invoices review resulted in an increase of $2,052.00, $1,055.81 and $2,110.99 for a total increase of expense of $5,218,80.

Appendix V-F – Posted General Ledger Transactions Invoice Correction – shows the entries recorded in the general ledger to update expenditures

Summary
The adjustments to expenditures resulted in a decrease in Head Start expenditures of $60,082.34.

Corrective Action Goal #2 – Action 7

Ongoing monitoring of fiscal compliance with Head Start Act of Uniform Guidance.

Click here to view the QIP Summary Report – March 19, 2020

Corrective Action Goal #2 – Action 8

The agency will ensure that all the contractors adhere to the Davis Bacon Act by ensuring this provision is included in the construction contracts in excess of $2000. This will be included in our revised FP&Ps.

Please click here refer to Appendix II and click here for V-R.

Corrective Action Goal #2 – Action 9

The Chief Operating Officer, COO, Manvir Gill was promoted to positions he was not hired for initially. It was determined within 2 weeks of his hire that he was needed to perform duties beyond, the accountant position he was hired for. (Appendix V-N – Chief Operating Officer Job Responsibilities)

He met the qualifications in education and personal drive to accomplish the tasks and was performing the duties of each position title prior to being officially assigned the position title. His initial duties quickly expanded over the 11 month period of time resulting in the title changes and acting roles and increases in pay justified by management to awarded retroactively based on his daily performance and accomplishments. The role of Controller was assigned briefly due to a staffing vacancy. BCCAP has subsequently reviewed procedures of posting positions both internally and externally prior to award of positions and will adhere to the revised procedure going forward as stated in Employee Handbook. Likewise, annual evaluations will be performed for all staff and placed in their personnel files.

The following attachments support statements above have been implemented:

Appendix V-S

Appendix V-T

Appendix V-U

Appendix V-W

Per the analysis completed it was determined that COO was not allocated to Head Start at 63% to 96% as stated in the Program Performance Summary Report. COO was allocated to Head Start at 37% during Fiscal Year 2018, 45% Fiscal Year 2019, and 40% Head Start and 5% Early Head Start Fiscal Year 2020 per our analysis of general ledger expense. Also, it should be noted that the PARs for COO notate higher percentage of time spent working at Head Start/Early Head Start than expensed to the general ledger. (Appendix V-Q – M Gill Salary Summary)

Earnings record reports for Manvir Gill are provided for 2017 to 2020 (Appendix V-V) as requested.

Corrective Action Goal #2 – Action 10

Fiscal staff will receive fiscal training to be provided by TAS (L. Gillberg, GS) to strengthen their fiscal knowledge and ensure fiscal compliance, especially in those areas of deficiencies and non-compliance findings noted in the OHS monitoring report.  The training will cover the following topics:

• HSPPS: Administrative and Fiscal Requirements of the new HSPPS, in concurrence with the Head Start Act and Uniform Guidance
• Cost Principles (Uniform Guidance: 45 CFR Part 75, Sub-part E)
• Cost Allocation
• Non-Federal Match
• Procurement
• Personnel Compensation
• Financial management standards
• Internal Controls
• Facilities in a Deeper Dive

Click here to view the agenda and sign-in sheets for Fiscal Training held on 11/20/2019 & 11/21/2019

Corrective Action Goal #3 – Action 1

Corrective Action Goal #3 – Action 2

Revise FP&Ps to state that Head Start funds and disbursements will be segregated from other grants and programs at BCAP.

Please click here to refer to Appendix II.

Corrective Action Goal #3 – Action 3

Research the loan agreements to assure that the Head Start property was not used as collateral in the latest Lines of credit agreements.

Please click here to refer to Appendix V-X.

Click here to view confirmation letter to Office of Head Start – Region II

Corrective Action Goal #3 – Action 4

Revise FP&Ps and review bank agreements removing grantee assets as collateral for the line of credit account.

Please click here to refer to Appendix II.

Corrective Action Goal #3 – Action 5

Corrective Action Goal #3 – Action 6

Develop a cost allocation plan to ensure that the audit and other expenses are allocated across all the agency’s funding sources.

Please click here to refer to Appendix III.

Corrective Action Goal #3 – Action 7

Update/revise Fiscal Policies and Procedures that will ensure the internal controls, procurement procedures, property management, budget execution, personnel compensation, cost allocation are in compliance with the Uniform Guidance, Head Start Act, and HSPPS.

Please click here to refer to Appendix II.

Corrective Action Goal #3 – Action 8

Fiscal Staff will receive fiscal training to be provided by TAS (L. Gillberg, GS) to strengthen their fiscal knowledge and ensure fiscal compliance, especially in those areas of deficiencies and non-compliance findings noted in the OHS monitoring report.

Please click here to refer to Appendix II.

Corrective Action Goal #3 – Action 9

Update the inventory records as per the Head Start guidelines in order to ensure that all the equipment (including vehicles) is accounted for in a proper manner.

Please click here to refer to Appendix II.