A St. Louis agency that administers federal Head Start grants in the city made $337,194 in improper expenditures mostly due to bad bookkeeping, a federal audit has found.
In the audit to be released today the Office of Inspector General recommended the agency, YWCA of Metropolitan St. Louis, pay back the money.
The Office of Head Start has yet to make a decision on the recommendation, said Clarence Small, regional program manager out of Kansas City. He declined to comment further.
The problems were found through a routine audit, and there had been no allegations of intentional wrongdoing, said an official with the Office of Inspector General.
The discrepancies took place within grant years 2008 and 2009, and included a period when an outside contractor was overseeing federal compliance of some of its contracted Head Start centers.
In a letter to federal officials included in the audit, YWCA CEO Adrian Bracy said the discrepancies occurred after the agency’s chief financial officer died suddenly, leaving administrators without “historical knowledge” to operate a federally required Payment Management System.
From 2007 through 2009 the city-based YWCA received more than $63 million in federal grants to create Head Start centers and slots for low-income preschoolers in independent child care centers and through subcontracts with the Urban League of St. Louis.
According to the audit findings, the agency:
• Improperly used grant money from its 2009 grant year to pay for overspending in the 2008 grant budget after the agency, among other things, had spent surplus money that was owed back to the federal government.
• Used Head Start funds without required permission to temporarily fund nutrition and extended child care programs funded by the U.S. Department of Agriculture and the state of Missouri. The agency said it used the funds to cover a lag time between the payment from the other grantees.
• Paid 100 percent of teacher salaries at its Educare Center with Head Start funds when federal standards allowed only 50 percent of those salaries to be funded by Head Start. YWCA had previously self-reported this error to the Office of Head Start, the audit said.
• Counted $8,130 in donations of concert, theater and sporting event tickets as in-kind donations, even though they did not qualify under federal guidelines. Head Start grantees must have 20 percent of their budgets funded by in-kind donations to aid the mission of Head Start, such as volunteers and other educational resources.
• Counted a $100,000 in-kind donation received in its early 2009 grant year to balance a shortfall its 2008 in-kind budget. That donation included 38 cases of tiaras valued at $10,096, 58 cases of party blowers totaling $7,705 as well as party banners, gift bags, charm bracelets, confetti and note cards. The audit noted YWCA had no documentation that the donations “benefited the children or furthered the goals of Head Start,” as required by federal guidelines.
• Kept inappropriately high fund balances in its accounts, violating federal regulations that seek to protect federal money from bank failure.
Bracy, of the YWCA, said all of the issues in the audit have been addressed. That includes the hiring of a new chief financial officer, a new accounting team and a new system for handling in-kind donations in keeping with the standards of Head Start.