2022-007 ? Cash Management Federal Program Information: Funding Agency: All Major Programs Title: All Major Programs Assistance Listing Number: All Major Programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: Advanced grant/contract funds may not be transferred to other NTU accounts, lent to such NTU accounts, or expended for programs not authorized. There should be sufficient unrestricted cash and investment balances on hand to cover all unearned grant revenue associated with federal and nonfederal programs. Condition: NTU did not maintain cash and cash equivalents at least equal to the amount of unspent grant funds advanced from federal and nonfederal agencies at year-end. At May 31, 2022, NTU?s unrestricted cash and cash equivalents and unearned grant revenue totaled $29,728,594 and $34,490,432, respectively. As a result, unspent grant funds held by NTU exceeded the amount of available cash and cash equivalents by $5,761,748. Questioned Costs: None. Context: Federal programs that have been provided with advanced funds. Cause and Effect: NTU did not have effective internal controls to ensure sufficient cash and cash equivalents are on hand to cover all unearned grant revenue associated with federal and nonfederal programs. NTU is not in compliance with federal requirements. Auditor?s Recommendation: Thoroughly analyze the financial position of NTU and ensure adequate cash and cash equivalents are maintained in an amount at least equal to unearned grant revenues from federal and nonfederal sources. NTU may need to liquidate unrestricted investments and convert them into cash and cash equivalents or reallocate investments into securities backed by the full faith and credit of the United States government to accomplish this. Management?s Response: NTU has developed a monthly cash management schedule that tracks and identifies all grant funds along with total cash received in advance from grantors and amounts due to NTU. NTU will increase cash balances through the timely collection of outstanding grants receivable. NTU will also analyze cash requirements and may liquidate investments held in the Capital Reserve fund to ensure adequate cash is maintained for grants received in advance.
2022-014 ? Late Submission of Annual Federal Reporting Package Federal Program Information: Funding Agency: All major programs Title: All major programs Assistance Listing Number: All major programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: 2 CFR 200.512 requires that the annual federal reporting package including the data collection form be submitted within nine months after the end of the audit period. Condition: NTU did not submit the annual federal reporting package within nine months after May 31, 2022. Questioned Costs: None Context: The annual federal reporting package for the year ended May 31, 2022. Cause and Effect: Internal controls were not designed and implemented to the annual federal reporting package was submitted within the timeframe required by OMB Uniform Guidance. Auditors? Recommendation: NTU should improve internal controls to help ensure that financial statement balances are accurately reconciled to assist with the timely preparation and submission of the annual federal reporting package. Management?s Response: NTU has developed a comprehensive year-end financial close and annual federal reporting plan with the assistance of our consultants, Harshwal & Company, LLC in September 2022. This plan was not implemented until after the end of fiscal year 2022. As part of this plan, NTU will ensure that financial accounting books and records are reconciled and closed in a timely manner prior to providing the final trial balance to the auditor.
2022-007 ? Cash Management Federal Program Information: Funding Agency: All Major Programs Title: All Major Programs Assistance Listing Number: All Major Programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: Advanced grant/contract funds may not be transferred to other NTU accounts, lent to such NTU accounts, or expended for programs not authorized. There should be sufficient unrestricted cash and investment balances on hand to cover all unearned grant revenue associated with federal and nonfederal programs. Condition: NTU did not maintain cash and cash equivalents at least equal to the amount of unspent grant funds advanced from federal and nonfederal agencies at year-end. At May 31, 2022, NTU?s unrestricted cash and cash equivalents and unearned grant revenue totaled $29,728,594 and $34,490,432, respectively. As a result, unspent grant funds held by NTU exceeded the amount of available cash and cash equivalents by $5,761,748. Questioned Costs: None. Context: Federal programs that have been provided with advanced funds. Cause and Effect: NTU did not have effective internal controls to ensure sufficient cash and cash equivalents are on hand to cover all unearned grant revenue associated with federal and nonfederal programs. NTU is not in compliance with federal requirements. Auditor?s Recommendation: Thoroughly analyze the financial position of NTU and ensure adequate cash and cash equivalents are maintained in an amount at least equal to unearned grant revenues from federal and nonfederal sources. NTU may need to liquidate unrestricted investments and convert them into cash and cash equivalents or reallocate investments into securities backed by the full faith and credit of the United States government to accomplish this. Management?s Response: NTU has developed a monthly cash management schedule that tracks and identifies all grant funds along with total cash received in advance from grantors and amounts due to NTU. NTU will increase cash balances through the timely collection of outstanding grants receivable. NTU will also analyze cash requirements and may liquidate investments held in the Capital Reserve fund to ensure adequate cash is maintained for grants received in advance.
2022-014 ? Late Submission of Annual Federal Reporting Package Federal Program Information: Funding Agency: All major programs Title: All major programs Assistance Listing Number: All major programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: 2 CFR 200.512 requires that the annual federal reporting package including the data collection form be submitted within nine months after the end of the audit period. Condition: NTU did not submit the annual federal reporting package within nine months after May 31, 2022. Questioned Costs: None Context: The annual federal reporting package for the year ended May 31, 2022. Cause and Effect: Internal controls were not designed and implemented to the annual federal reporting package was submitted within the timeframe required by OMB Uniform Guidance. Auditors? Recommendation: NTU should improve internal controls to help ensure that financial statement balances are accurately reconciled to assist with the timely preparation and submission of the annual federal reporting package. Management?s Response: NTU has developed a comprehensive year-end financial close and annual federal reporting plan with the assistance of our consultants, Harshwal & Company, LLC in September 2022. This plan was not implemented until after the end of fiscal year 2022. As part of this plan, NTU will ensure that financial accounting books and records are reconciled and closed in a timely manner prior to providing the final trial balance to the auditor.
2022-007 ? Cash Management Federal Program Information: Funding Agency: All Major Programs Title: All Major Programs Assistance Listing Number: All Major Programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: Advanced grant/contract funds may not be transferred to other NTU accounts, lent to such NTU accounts, or expended for programs not authorized. There should be sufficient unrestricted cash and investment balances on hand to cover all unearned grant revenue associated with federal and nonfederal programs. Condition: NTU did not maintain cash and cash equivalents at least equal to the amount of unspent grant funds advanced from federal and nonfederal agencies at year-end. At May 31, 2022, NTU?s unrestricted cash and cash equivalents and unearned grant revenue totaled $29,728,594 and $34,490,432, respectively. As a result, unspent grant funds held by NTU exceeded the amount of available cash and cash equivalents by $5,761,748. Questioned Costs: None. Context: Federal programs that have been provided with advanced funds. Cause and Effect: NTU did not have effective internal controls to ensure sufficient cash and cash equivalents are on hand to cover all unearned grant revenue associated with federal and nonfederal programs. NTU is not in compliance with federal requirements. Auditor?s Recommendation: Thoroughly analyze the financial position of NTU and ensure adequate cash and cash equivalents are maintained in an amount at least equal to unearned grant revenues from federal and nonfederal sources. NTU may need to liquidate unrestricted investments and convert them into cash and cash equivalents or reallocate investments into securities backed by the full faith and credit of the United States government to accomplish this. Management?s Response: NTU has developed a monthly cash management schedule that tracks and identifies all grant funds along with total cash received in advance from grantors and amounts due to NTU. NTU will increase cash balances through the timely collection of outstanding grants receivable. NTU will also analyze cash requirements and may liquidate investments held in the Capital Reserve fund to ensure adequate cash is maintained for grants received in advance.
2022-014 ? Late Submission of Annual Federal Reporting Package Federal Program Information: Funding Agency: All major programs Title: All major programs Assistance Listing Number: All major programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: 2 CFR 200.512 requires that the annual federal reporting package including the data collection form be submitted within nine months after the end of the audit period. Condition: NTU did not submit the annual federal reporting package within nine months after May 31, 2022. Questioned Costs: None Context: The annual federal reporting package for the year ended May 31, 2022. Cause and Effect: Internal controls were not designed and implemented to the annual federal reporting package was submitted within the timeframe required by OMB Uniform Guidance. Auditors? Recommendation: NTU should improve internal controls to help ensure that financial statement balances are accurately reconciled to assist with the timely preparation and submission of the annual federal reporting package. Management?s Response: NTU has developed a comprehensive year-end financial close and annual federal reporting plan with the assistance of our consultants, Harshwal & Company, LLC in September 2022. This plan was not implemented until after the end of fiscal year 2022. As part of this plan, NTU will ensure that financial accounting books and records are reconciled and closed in a timely manner prior to providing the final trial balance to the auditor.
2022-007 ? Cash Management Federal Program Information: Funding Agency: All Major Programs Title: All Major Programs Assistance Listing Number: All Major Programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: Advanced grant/contract funds may not be transferred to other NTU accounts, lent to such NTU accounts, or expended for programs not authorized. There should be sufficient unrestricted cash and investment balances on hand to cover all unearned grant revenue associated with federal and nonfederal programs. Condition: NTU did not maintain cash and cash equivalents at least equal to the amount of unspent grant funds advanced from federal and nonfederal agencies at year-end. At May 31, 2022, NTU?s unrestricted cash and cash equivalents and unearned grant revenue totaled $29,728,594 and $34,490,432, respectively. As a result, unspent grant funds held by NTU exceeded the amount of available cash and cash equivalents by $5,761,748. Questioned Costs: None. Context: Federal programs that have been provided with advanced funds. Cause and Effect: NTU did not have effective internal controls to ensure sufficient cash and cash equivalents are on hand to cover all unearned grant revenue associated with federal and nonfederal programs. NTU is not in compliance with federal requirements. Auditor?s Recommendation: Thoroughly analyze the financial position of NTU and ensure adequate cash and cash equivalents are maintained in an amount at least equal to unearned grant revenues from federal and nonfederal sources. NTU may need to liquidate unrestricted investments and convert them into cash and cash equivalents or reallocate investments into securities backed by the full faith and credit of the United States government to accomplish this. Management?s Response: NTU has developed a monthly cash management schedule that tracks and identifies all grant funds along with total cash received in advance from grantors and amounts due to NTU. NTU will increase cash balances through the timely collection of outstanding grants receivable. NTU will also analyze cash requirements and may liquidate investments held in the Capital Reserve fund to ensure adequate cash is maintained for grants received in advance.
2022-014 ? Late Submission of Annual Federal Reporting Package Federal Program Information: Funding Agency: All major programs Title: All major programs Assistance Listing Number: All major programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: 2 CFR 200.512 requires that the annual federal reporting package including the data collection form be submitted within nine months after the end of the audit period. Condition: NTU did not submit the annual federal reporting package within nine months after May 31, 2022. Questioned Costs: None Context: The annual federal reporting package for the year ended May 31, 2022. Cause and Effect: Internal controls were not designed and implemented to the annual federal reporting package was submitted within the timeframe required by OMB Uniform Guidance. Auditors? Recommendation: NTU should improve internal controls to help ensure that financial statement balances are accurately reconciled to assist with the timely preparation and submission of the annual federal reporting package. Management?s Response: NTU has developed a comprehensive year-end financial close and annual federal reporting plan with the assistance of our consultants, Harshwal & Company, LLC in September 2022. This plan was not implemented until after the end of fiscal year 2022. As part of this plan, NTU will ensure that financial accounting books and records are reconciled and closed in a timely manner prior to providing the final trial balance to the auditor.
2022-007 ? Cash Management Federal Program Information: Funding Agency: All Major Programs Title: All Major Programs Assistance Listing Number: All Major Programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: Advanced grant/contract funds may not be transferred to other NTU accounts, lent to such NTU accounts, or expended for programs not authorized. There should be sufficient unrestricted cash and investment balances on hand to cover all unearned grant revenue associated with federal and nonfederal programs. Condition: NTU did not maintain cash and cash equivalents at least equal to the amount of unspent grant funds advanced from federal and nonfederal agencies at year-end. At May 31, 2022, NTU?s unrestricted cash and cash equivalents and unearned grant revenue totaled $29,728,594 and $34,490,432, respectively. As a result, unspent grant funds held by NTU exceeded the amount of available cash and cash equivalents by $5,761,748. Questioned Costs: None. Context: Federal programs that have been provided with advanced funds. Cause and Effect: NTU did not have effective internal controls to ensure sufficient cash and cash equivalents are on hand to cover all unearned grant revenue associated with federal and nonfederal programs. NTU is not in compliance with federal requirements. Auditor?s Recommendation: Thoroughly analyze the financial position of NTU and ensure adequate cash and cash equivalents are maintained in an amount at least equal to unearned grant revenues from federal and nonfederal sources. NTU may need to liquidate unrestricted investments and convert them into cash and cash equivalents or reallocate investments into securities backed by the full faith and credit of the United States government to accomplish this. Management?s Response: NTU has developed a monthly cash management schedule that tracks and identifies all grant funds along with total cash received in advance from grantors and amounts due to NTU. NTU will increase cash balances through the timely collection of outstanding grants receivable. NTU will also analyze cash requirements and may liquidate investments held in the Capital Reserve fund to ensure adequate cash is maintained for grants received in advance.
2022-014 ? Late Submission of Annual Federal Reporting Package Federal Program Information: Funding Agency: All major programs Title: All major programs Assistance Listing Number: All major programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: 2 CFR 200.512 requires that the annual federal reporting package including the data collection form be submitted within nine months after the end of the audit period. Condition: NTU did not submit the annual federal reporting package within nine months after May 31, 2022. Questioned Costs: None Context: The annual federal reporting package for the year ended May 31, 2022. Cause and Effect: Internal controls were not designed and implemented to the annual federal reporting package was submitted within the timeframe required by OMB Uniform Guidance. Auditors? Recommendation: NTU should improve internal controls to help ensure that financial statement balances are accurately reconciled to assist with the timely preparation and submission of the annual federal reporting package. Management?s Response: NTU has developed a comprehensive year-end financial close and annual federal reporting plan with the assistance of our consultants, Harshwal & Company, LLC in September 2022. This plan was not implemented until after the end of fiscal year 2022. As part of this plan, NTU will ensure that financial accounting books and records are reconciled and closed in a timely manner prior to providing the final trial balance to the auditor.
2022-007 ? Cash Management Federal Program Information: Funding Agency: All Major Programs Title: All Major Programs Assistance Listing Number: All Major Programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: Advanced grant/contract funds may not be transferred to other NTU accounts, lent to such NTU accounts, or expended for programs not authorized. There should be sufficient unrestricted cash and investment balances on hand to cover all unearned grant revenue associated with federal and nonfederal programs. Condition: NTU did not maintain cash and cash equivalents at least equal to the amount of unspent grant funds advanced from federal and nonfederal agencies at year-end. At May 31, 2022, NTU?s unrestricted cash and cash equivalents and unearned grant revenue totaled $29,728,594 and $34,490,432, respectively. As a result, unspent grant funds held by NTU exceeded the amount of available cash and cash equivalents by $5,761,748. Questioned Costs: None. Context: Federal programs that have been provided with advanced funds. Cause and Effect: NTU did not have effective internal controls to ensure sufficient cash and cash equivalents are on hand to cover all unearned grant revenue associated with federal and nonfederal programs. NTU is not in compliance with federal requirements. Auditor?s Recommendation: Thoroughly analyze the financial position of NTU and ensure adequate cash and cash equivalents are maintained in an amount at least equal to unearned grant revenues from federal and nonfederal sources. NTU may need to liquidate unrestricted investments and convert them into cash and cash equivalents or reallocate investments into securities backed by the full faith and credit of the United States government to accomplish this. Management?s Response: NTU has developed a monthly cash management schedule that tracks and identifies all grant funds along with total cash received in advance from grantors and amounts due to NTU. NTU will increase cash balances through the timely collection of outstanding grants receivable. NTU will also analyze cash requirements and may liquidate investments held in the Capital Reserve fund to ensure adequate cash is maintained for grants received in advance.
2022-014 ? Late Submission of Annual Federal Reporting Package Federal Program Information: Funding Agency: All major programs Title: All major programs Assistance Listing Number: All major programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: 2 CFR 200.512 requires that the annual federal reporting package including the data collection form be submitted within nine months after the end of the audit period. Condition: NTU did not submit the annual federal reporting package within nine months after May 31, 2022. Questioned Costs: None Context: The annual federal reporting package for the year ended May 31, 2022. Cause and Effect: Internal controls were not designed and implemented to the annual federal reporting package was submitted within the timeframe required by OMB Uniform Guidance. Auditors? Recommendation: NTU should improve internal controls to help ensure that financial statement balances are accurately reconciled to assist with the timely preparation and submission of the annual federal reporting package. Management?s Response: NTU has developed a comprehensive year-end financial close and annual federal reporting plan with the assistance of our consultants, Harshwal & Company, LLC in September 2022. This plan was not implemented until after the end of fiscal year 2022. As part of this plan, NTU will ensure that financial accounting books and records are reconciled and closed in a timely manner prior to providing the final trial balance to the auditor.
2022-007 ? Cash Management Federal Program Information: Funding Agency: All Major Programs Title: All Major Programs Assistance Listing Number: All Major Programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: Advanced grant/contract funds may not be transferred to other NTU accounts, lent to such NTU accounts, or expended for programs not authorized. There should be sufficient unrestricted cash and investment balances on hand to cover all unearned grant revenue associated with federal and nonfederal programs. Condition: NTU did not maintain cash and cash equivalents at least equal to the amount of unspent grant funds advanced from federal and nonfederal agencies at year-end. At May 31, 2022, NTU?s unrestricted cash and cash equivalents and unearned grant revenue totaled $29,728,594 and $34,490,432, respectively. As a result, unspent grant funds held by NTU exceeded the amount of available cash and cash equivalents by $5,761,748. Questioned Costs: None. Context: Federal programs that have been provided with advanced funds. Cause and Effect: NTU did not have effective internal controls to ensure sufficient cash and cash equivalents are on hand to cover all unearned grant revenue associated with federal and nonfederal programs. NTU is not in compliance with federal requirements. Auditor?s Recommendation: Thoroughly analyze the financial position of NTU and ensure adequate cash and cash equivalents are maintained in an amount at least equal to unearned grant revenues from federal and nonfederal sources. NTU may need to liquidate unrestricted investments and convert them into cash and cash equivalents or reallocate investments into securities backed by the full faith and credit of the United States government to accomplish this. Management?s Response: NTU has developed a monthly cash management schedule that tracks and identifies all grant funds along with total cash received in advance from grantors and amounts due to NTU. NTU will increase cash balances through the timely collection of outstanding grants receivable. NTU will also analyze cash requirements and may liquidate investments held in the Capital Reserve fund to ensure adequate cash is maintained for grants received in advance.
2022-014 ? Late Submission of Annual Federal Reporting Package Federal Program Information: Funding Agency: All major programs Title: All major programs Assistance Listing Number: All major programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: 2 CFR 200.512 requires that the annual federal reporting package including the data collection form be submitted within nine months after the end of the audit period. Condition: NTU did not submit the annual federal reporting package within nine months after May 31, 2022. Questioned Costs: None Context: The annual federal reporting package for the year ended May 31, 2022. Cause and Effect: Internal controls were not designed and implemented to the annual federal reporting package was submitted within the timeframe required by OMB Uniform Guidance. Auditors? Recommendation: NTU should improve internal controls to help ensure that financial statement balances are accurately reconciled to assist with the timely preparation and submission of the annual federal reporting package. Management?s Response: NTU has developed a comprehensive year-end financial close and annual federal reporting plan with the assistance of our consultants, Harshwal & Company, LLC in September 2022. This plan was not implemented until after the end of fiscal year 2022. As part of this plan, NTU will ensure that financial accounting books and records are reconciled and closed in a timely manner prior to providing the final trial balance to the auditor.
2022-007 ? Cash Management Federal Program Information: Funding Agency: All Major Programs Title: All Major Programs Assistance Listing Number: All Major Programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: Advanced grant/contract funds may not be transferred to other NTU accounts, lent to such NTU accounts, or expended for programs not authorized. There should be sufficient unrestricted cash and investment balances on hand to cover all unearned grant revenue associated with federal and nonfederal programs. Condition: NTU did not maintain cash and cash equivalents at least equal to the amount of unspent grant funds advanced from federal and nonfederal agencies at year-end. At May 31, 2022, NTU?s unrestricted cash and cash equivalents and unearned grant revenue totaled $29,728,594 and $34,490,432, respectively. As a result, unspent grant funds held by NTU exceeded the amount of available cash and cash equivalents by $5,761,748. Questioned Costs: None. Context: Federal programs that have been provided with advanced funds. Cause and Effect: NTU did not have effective internal controls to ensure sufficient cash and cash equivalents are on hand to cover all unearned grant revenue associated with federal and nonfederal programs. NTU is not in compliance with federal requirements. Auditor?s Recommendation: Thoroughly analyze the financial position of NTU and ensure adequate cash and cash equivalents are maintained in an amount at least equal to unearned grant revenues from federal and nonfederal sources. NTU may need to liquidate unrestricted investments and convert them into cash and cash equivalents or reallocate investments into securities backed by the full faith and credit of the United States government to accomplish this. Management?s Response: NTU has developed a monthly cash management schedule that tracks and identifies all grant funds along with total cash received in advance from grantors and amounts due to NTU. NTU will increase cash balances through the timely collection of outstanding grants receivable. NTU will also analyze cash requirements and may liquidate investments held in the Capital Reserve fund to ensure adequate cash is maintained for grants received in advance.
2022-014 ? Late Submission of Annual Federal Reporting Package Federal Program Information: Funding Agency: All major programs Title: All major programs Assistance Listing Number: All major programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: 2 CFR 200.512 requires that the annual federal reporting package including the data collection form be submitted within nine months after the end of the audit period. Condition: NTU did not submit the annual federal reporting package within nine months after May 31, 2022. Questioned Costs: None Context: The annual federal reporting package for the year ended May 31, 2022. Cause and Effect: Internal controls were not designed and implemented to the annual federal reporting package was submitted within the timeframe required by OMB Uniform Guidance. Auditors? Recommendation: NTU should improve internal controls to help ensure that financial statement balances are accurately reconciled to assist with the timely preparation and submission of the annual federal reporting package. Management?s Response: NTU has developed a comprehensive year-end financial close and annual federal reporting plan with the assistance of our consultants, Harshwal & Company, LLC in September 2022. This plan was not implemented until after the end of fiscal year 2022. As part of this plan, NTU will ensure that financial accounting books and records are reconciled and closed in a timely manner prior to providing the final trial balance to the auditor.
2022-007 ? Cash Management Federal Program Information: Funding Agency: All Major Programs Title: All Major Programs Assistance Listing Number: All Major Programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: Advanced grant/contract funds may not be transferred to other NTU accounts, lent to such NTU accounts, or expended for programs not authorized. There should be sufficient unrestricted cash and investment balances on hand to cover all unearned grant revenue associated with federal and nonfederal programs. Condition: NTU did not maintain cash and cash equivalents at least equal to the amount of unspent grant funds advanced from federal and nonfederal agencies at year-end. At May 31, 2022, NTU?s unrestricted cash and cash equivalents and unearned grant revenue totaled $29,728,594 and $34,490,432, respectively. As a result, unspent grant funds held by NTU exceeded the amount of available cash and cash equivalents by $5,761,748. Questioned Costs: None. Context: Federal programs that have been provided with advanced funds. Cause and Effect: NTU did not have effective internal controls to ensure sufficient cash and cash equivalents are on hand to cover all unearned grant revenue associated with federal and nonfederal programs. NTU is not in compliance with federal requirements. Auditor?s Recommendation: Thoroughly analyze the financial position of NTU and ensure adequate cash and cash equivalents are maintained in an amount at least equal to unearned grant revenues from federal and nonfederal sources. NTU may need to liquidate unrestricted investments and convert them into cash and cash equivalents or reallocate investments into securities backed by the full faith and credit of the United States government to accomplish this. Management?s Response: NTU has developed a monthly cash management schedule that tracks and identifies all grant funds along with total cash received in advance from grantors and amounts due to NTU. NTU will increase cash balances through the timely collection of outstanding grants receivable. NTU will also analyze cash requirements and may liquidate investments held in the Capital Reserve fund to ensure adequate cash is maintained for grants received in advance.
2022-014 ? Late Submission of Annual Federal Reporting Package Federal Program Information: Funding Agency: All major programs Title: All major programs Assistance Listing Number: All major programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: 2 CFR 200.512 requires that the annual federal reporting package including the data collection form be submitted within nine months after the end of the audit period. Condition: NTU did not submit the annual federal reporting package within nine months after May 31, 2022. Questioned Costs: None Context: The annual federal reporting package for the year ended May 31, 2022. Cause and Effect: Internal controls were not designed and implemented to the annual federal reporting package was submitted within the timeframe required by OMB Uniform Guidance. Auditors? Recommendation: NTU should improve internal controls to help ensure that financial statement balances are accurately reconciled to assist with the timely preparation and submission of the annual federal reporting package. Management?s Response: NTU has developed a comprehensive year-end financial close and annual federal reporting plan with the assistance of our consultants, Harshwal & Company, LLC in September 2022. This plan was not implemented until after the end of fiscal year 2022. As part of this plan, NTU will ensure that financial accounting books and records are reconciled and closed in a timely manner prior to providing the final trial balance to the auditor.
2022-007 ? Cash Management Federal Program Information: Funding Agency: All Major Programs Title: All Major Programs Assistance Listing Number: All Major Programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: Advanced grant/contract funds may not be transferred to other NTU accounts, lent to such NTU accounts, or expended for programs not authorized. There should be sufficient unrestricted cash and investment balances on hand to cover all unearned grant revenue associated with federal and nonfederal programs. Condition: NTU did not maintain cash and cash equivalents at least equal to the amount of unspent grant funds advanced from federal and nonfederal agencies at year-end. At May 31, 2022, NTU?s unrestricted cash and cash equivalents and unearned grant revenue totaled $29,728,594 and $34,490,432, respectively. As a result, unspent grant funds held by NTU exceeded the amount of available cash and cash equivalents by $5,761,748. Questioned Costs: None. Context: Federal programs that have been provided with advanced funds. Cause and Effect: NTU did not have effective internal controls to ensure sufficient cash and cash equivalents are on hand to cover all unearned grant revenue associated with federal and nonfederal programs. NTU is not in compliance with federal requirements. Auditor?s Recommendation: Thoroughly analyze the financial position of NTU and ensure adequate cash and cash equivalents are maintained in an amount at least equal to unearned grant revenues from federal and nonfederal sources. NTU may need to liquidate unrestricted investments and convert them into cash and cash equivalents or reallocate investments into securities backed by the full faith and credit of the United States government to accomplish this. Management?s Response: NTU has developed a monthly cash management schedule that tracks and identifies all grant funds along with total cash received in advance from grantors and amounts due to NTU. NTU will increase cash balances through the timely collection of outstanding grants receivable. NTU will also analyze cash requirements and may liquidate investments held in the Capital Reserve fund to ensure adequate cash is maintained for grants received in advance.
2022-014 ? Late Submission of Annual Federal Reporting Package Federal Program Information: Funding Agency: All major programs Title: All major programs Assistance Listing Number: All major programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: 2 CFR 200.512 requires that the annual federal reporting package including the data collection form be submitted within nine months after the end of the audit period. Condition: NTU did not submit the annual federal reporting package within nine months after May 31, 2022. Questioned Costs: None Context: The annual federal reporting package for the year ended May 31, 2022. Cause and Effect: Internal controls were not designed and implemented to the annual federal reporting package was submitted within the timeframe required by OMB Uniform Guidance. Auditors? Recommendation: NTU should improve internal controls to help ensure that financial statement balances are accurately reconciled to assist with the timely preparation and submission of the annual federal reporting package. Management?s Response: NTU has developed a comprehensive year-end financial close and annual federal reporting plan with the assistance of our consultants, Harshwal & Company, LLC in September 2022. This plan was not implemented until after the end of fiscal year 2022. As part of this plan, NTU will ensure that financial accounting books and records are reconciled and closed in a timely manner prior to providing the final trial balance to the auditor.
2022-007 ? Cash Management Federal Program Information: Funding Agency: All Major Programs Title: All Major Programs Assistance Listing Number: All Major Programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: Advanced grant/contract funds may not be transferred to other NTU accounts, lent to such NTU accounts, or expended for programs not authorized. There should be sufficient unrestricted cash and investment balances on hand to cover all unearned grant revenue associated with federal and nonfederal programs. Condition: NTU did not maintain cash and cash equivalents at least equal to the amount of unspent grant funds advanced from federal and nonfederal agencies at year-end. At May 31, 2022, NTU?s unrestricted cash and cash equivalents and unearned grant revenue totaled $29,728,594 and $34,490,432, respectively. As a result, unspent grant funds held by NTU exceeded the amount of available cash and cash equivalents by $5,761,748. Questioned Costs: None. Context: Federal programs that have been provided with advanced funds. Cause and Effect: NTU did not have effective internal controls to ensure sufficient cash and cash equivalents are on hand to cover all unearned grant revenue associated with federal and nonfederal programs. NTU is not in compliance with federal requirements. Auditor?s Recommendation: Thoroughly analyze the financial position of NTU and ensure adequate cash and cash equivalents are maintained in an amount at least equal to unearned grant revenues from federal and nonfederal sources. NTU may need to liquidate unrestricted investments and convert them into cash and cash equivalents or reallocate investments into securities backed by the full faith and credit of the United States government to accomplish this. Management?s Response: NTU has developed a monthly cash management schedule that tracks and identifies all grant funds along with total cash received in advance from grantors and amounts due to NTU. NTU will increase cash balances through the timely collection of outstanding grants receivable. NTU will also analyze cash requirements and may liquidate investments held in the Capital Reserve fund to ensure adequate cash is maintained for grants received in advance.
2022-014 ? Late Submission of Annual Federal Reporting Package Federal Program Information: Funding Agency: All major programs Title: All major programs Assistance Listing Number: All major programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: 2 CFR 200.512 requires that the annual federal reporting package including the data collection form be submitted within nine months after the end of the audit period. Condition: NTU did not submit the annual federal reporting package within nine months after May 31, 2022. Questioned Costs: None Context: The annual federal reporting package for the year ended May 31, 2022. Cause and Effect: Internal controls were not designed and implemented to the annual federal reporting package was submitted within the timeframe required by OMB Uniform Guidance. Auditors? Recommendation: NTU should improve internal controls to help ensure that financial statement balances are accurately reconciled to assist with the timely preparation and submission of the annual federal reporting package. Management?s Response: NTU has developed a comprehensive year-end financial close and annual federal reporting plan with the assistance of our consultants, Harshwal & Company, LLC in September 2022. This plan was not implemented until after the end of fiscal year 2022. As part of this plan, NTU will ensure that financial accounting books and records are reconciled and closed in a timely manner prior to providing the final trial balance to the auditor.
2022-007 ? Cash Management Federal Program Information: Funding Agency: All Major Programs Title: All Major Programs Assistance Listing Number: All Major Programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: Advanced grant/contract funds may not be transferred to other NTU accounts, lent to such NTU accounts, or expended for programs not authorized. There should be sufficient unrestricted cash and investment balances on hand to cover all unearned grant revenue associated with federal and nonfederal programs. Condition: NTU did not maintain cash and cash equivalents at least equal to the amount of unspent grant funds advanced from federal and nonfederal agencies at year-end. At May 31, 2022, NTU?s unrestricted cash and cash equivalents and unearned grant revenue totaled $29,728,594 and $34,490,432, respectively. As a result, unspent grant funds held by NTU exceeded the amount of available cash and cash equivalents by $5,761,748. Questioned Costs: None. Context: Federal programs that have been provided with advanced funds. Cause and Effect: NTU did not have effective internal controls to ensure sufficient cash and cash equivalents are on hand to cover all unearned grant revenue associated with federal and nonfederal programs. NTU is not in compliance with federal requirements. Auditor?s Recommendation: Thoroughly analyze the financial position of NTU and ensure adequate cash and cash equivalents are maintained in an amount at least equal to unearned grant revenues from federal and nonfederal sources. NTU may need to liquidate unrestricted investments and convert them into cash and cash equivalents or reallocate investments into securities backed by the full faith and credit of the United States government to accomplish this. Management?s Response: NTU has developed a monthly cash management schedule that tracks and identifies all grant funds along with total cash received in advance from grantors and amounts due to NTU. NTU will increase cash balances through the timely collection of outstanding grants receivable. NTU will also analyze cash requirements and may liquidate investments held in the Capital Reserve fund to ensure adequate cash is maintained for grants received in advance.
2022-014 ? Late Submission of Annual Federal Reporting Package Federal Program Information: Funding Agency: All major programs Title: All major programs Assistance Listing Number: All major programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: 2 CFR 200.512 requires that the annual federal reporting package including the data collection form be submitted within nine months after the end of the audit period. Condition: NTU did not submit the annual federal reporting package within nine months after May 31, 2022. Questioned Costs: None Context: The annual federal reporting package for the year ended May 31, 2022. Cause and Effect: Internal controls were not designed and implemented to the annual federal reporting package was submitted within the timeframe required by OMB Uniform Guidance. Auditors? Recommendation: NTU should improve internal controls to help ensure that financial statement balances are accurately reconciled to assist with the timely preparation and submission of the annual federal reporting package. Management?s Response: NTU has developed a comprehensive year-end financial close and annual federal reporting plan with the assistance of our consultants, Harshwal & Company, LLC in September 2022. This plan was not implemented until after the end of fiscal year 2022. As part of this plan, NTU will ensure that financial accounting books and records are reconciled and closed in a timely manner prior to providing the final trial balance to the auditor.
2022-007 ? Cash Management Federal Program Information: Funding Agency: All Major Programs Title: All Major Programs Assistance Listing Number: All Major Programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: Advanced grant/contract funds may not be transferred to other NTU accounts, lent to such NTU accounts, or expended for programs not authorized. There should be sufficient unrestricted cash and investment balances on hand to cover all unearned grant revenue associated with federal and nonfederal programs. Condition: NTU did not maintain cash and cash equivalents at least equal to the amount of unspent grant funds advanced from federal and nonfederal agencies at year-end. At May 31, 2022, NTU?s unrestricted cash and cash equivalents and unearned grant revenue totaled $29,728,594 and $34,490,432, respectively. As a result, unspent grant funds held by NTU exceeded the amount of available cash and cash equivalents by $5,761,748. Questioned Costs: None. Context: Federal programs that have been provided with advanced funds. Cause and Effect: NTU did not have effective internal controls to ensure sufficient cash and cash equivalents are on hand to cover all unearned grant revenue associated with federal and nonfederal programs. NTU is not in compliance with federal requirements. Auditor?s Recommendation: Thoroughly analyze the financial position of NTU and ensure adequate cash and cash equivalents are maintained in an amount at least equal to unearned grant revenues from federal and nonfederal sources. NTU may need to liquidate unrestricted investments and convert them into cash and cash equivalents or reallocate investments into securities backed by the full faith and credit of the United States government to accomplish this. Management?s Response: NTU has developed a monthly cash management schedule that tracks and identifies all grant funds along with total cash received in advance from grantors and amounts due to NTU. NTU will increase cash balances through the timely collection of outstanding grants receivable. NTU will also analyze cash requirements and may liquidate investments held in the Capital Reserve fund to ensure adequate cash is maintained for grants received in advance.
2022-014 ? Late Submission of Annual Federal Reporting Package Federal Program Information: Funding Agency: All major programs Title: All major programs Assistance Listing Number: All major programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: 2 CFR 200.512 requires that the annual federal reporting package including the data collection form be submitted within nine months after the end of the audit period. Condition: NTU did not submit the annual federal reporting package within nine months after May 31, 2022. Questioned Costs: None Context: The annual federal reporting package for the year ended May 31, 2022. Cause and Effect: Internal controls were not designed and implemented to the annual federal reporting package was submitted within the timeframe required by OMB Uniform Guidance. Auditors? Recommendation: NTU should improve internal controls to help ensure that financial statement balances are accurately reconciled to assist with the timely preparation and submission of the annual federal reporting package. Management?s Response: NTU has developed a comprehensive year-end financial close and annual federal reporting plan with the assistance of our consultants, Harshwal & Company, LLC in September 2022. This plan was not implemented until after the end of fiscal year 2022. As part of this plan, NTU will ensure that financial accounting books and records are reconciled and closed in a timely manner prior to providing the final trial balance to the auditor.
2022-008 ?Activities Allowed/Unallowed and Allowable Costs/Cost Principles Federal Program Information: Funding Agency: U.S. Department of Defense, National Science Foundation, U.S. Department of Energy, and U.S. Department of Education Title: Research and Development Cluster, Tribally Controlled Postsecondary Career and Technical Institutions. Higher Education Emergency Relief Fund (HEERF) Assistance Listing Number: 12.431, 47.076, 81.123, 84.245, 84.425 Award Period: June 1, 2021 ? May 31, 2022 Criteria: To be allowable under Federal awards, costs must be necessary and reasonable for the performance and administration of the federal award. Costs must meet the following criteria: 1) necessary and reasonable; 2) consistent with policies and procedures; 3) accorded consistent treatment; and 4) are adequately documented. Condition: We found the following in our review of federal expenditures: Research and Development Cluster ? ? One expenditure for the purchase of a gold spectrometer, microscope mainframe and accessories in the amount of $145,596 was incorrectly charged twice to the Expanding STEM Education to Meet Navajo Nation Needs project with the National Science Foundation. NTU subsequently corrected this by removing one of the duplicate charges from federal expenditures. ? One employee?s wages in the amount of $260 was incorrectly charged to Department of Defense Performance Enhancement Through HIS Assessment and Analysis Campaign Project. The employee?s wages should have been charged to another federal program. ? Two payroll transactions totaling $3,580 did not have accurate source documentation to support the allocation of salaries and wages charged to the program. Tribally Controlled Postsecondary Career and Technical Institutions ? ? One employee?s wages in the amount of $1,640.55 was incorrectly allocated and charged to the program. The employee?s salary should have been charged to the NTU general fund. Higher Education Emergency Relief Fund ? ? NTU incorrectly charged the HEERF Student Aid Portion (ALN 84.425E) for lost revenue in the amount of $870,725. NTU subsequently corrected this and charged the lost revenue to the HEERF Tribally Controlled Colleges and Universities portion (ALN 84.425K). Questioned Costs: None exceeding $25,000 as NTU made correcting adjustments to federal expenditures. Context: Four of fifty payroll and non-payroll transactions tested for the Research and Development Cluster. One of twenty-five payroll transactions tested for the Tribally Controlled Postsecondary Career and Technical Institutions program. One of twenty-nine non-payroll transactions tested for the Higher Education Emergency Relief Fund program. Cause and Effect: NTU did not have effective internal controls to ensure federal expenditures are accurately charged in accordance with federal activities allowed/unallowed and allowable costs/cost principles requirements. As a result, NTU was not in compliance with these federal requirements for the Research and Development Cluster, Tribally Controlled Post Secondary Career and Technical Institutions and HEERF programs. Auditor?s Recommendation: Improve internal controls to ensure expenditures are allowable under federal program requirements. This includes maintaining source documentation to support the allocation of payroll costs and ensuring expenses are not double recorded in the accounting system. Management?s Response: NTU will implement a monthly review of all grant expenditures to ensure amounts charged to federal awards are accurately posted and reflected in the accounting system. All journal entries will be reviewed for accuracy by the Accounting Manager and Senior Accountant. Payroll allocations provided by the Human Resources office will be included in the monthly review to ensure accuracy of the payroll expenditures. Principal Investigators and program managers will also be given read-only access to the accounting system to review expenditure postings for accuracy.
2022-007 ? Cash Management Federal Program Information: Funding Agency: All Major Programs Title: All Major Programs Assistance Listing Number: All Major Programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: Advanced grant/contract funds may not be transferred to other NTU accounts, lent to such NTU accounts, or expended for programs not authorized. There should be sufficient unrestricted cash and investment balances on hand to cover all unearned grant revenue associated with federal and nonfederal programs. Condition: NTU did not maintain cash and cash equivalents at least equal to the amount of unspent grant funds advanced from federal and nonfederal agencies at year-end. At May 31, 2022, NTU?s unrestricted cash and cash equivalents and unearned grant revenue totaled $29,728,594 and $34,490,432, respectively. As a result, unspent grant funds held by NTU exceeded the amount of available cash and cash equivalents by $5,761,748. Questioned Costs: None. Context: Federal programs that have been provided with advanced funds. Cause and Effect: NTU did not have effective internal controls to ensure sufficient cash and cash equivalents are on hand to cover all unearned grant revenue associated with federal and nonfederal programs. NTU is not in compliance with federal requirements. Auditor?s Recommendation: Thoroughly analyze the financial position of NTU and ensure adequate cash and cash equivalents are maintained in an amount at least equal to unearned grant revenues from federal and nonfederal sources. NTU may need to liquidate unrestricted investments and convert them into cash and cash equivalents or reallocate investments into securities backed by the full faith and credit of the United States government to accomplish this. Management?s Response: NTU has developed a monthly cash management schedule that tracks and identifies all grant funds along with total cash received in advance from grantors and amounts due to NTU. NTU will increase cash balances through the timely collection of outstanding grants receivable. NTU will also analyze cash requirements and may liquidate investments held in the Capital Reserve fund to ensure adequate cash is maintained for grants received in advance.
2022-014 ? Late Submission of Annual Federal Reporting Package Federal Program Information: Funding Agency: All major programs Title: All major programs Assistance Listing Number: All major programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: 2 CFR 200.512 requires that the annual federal reporting package including the data collection form be submitted within nine months after the end of the audit period. Condition: NTU did not submit the annual federal reporting package within nine months after May 31, 2022. Questioned Costs: None Context: The annual federal reporting package for the year ended May 31, 2022. Cause and Effect: Internal controls were not designed and implemented to the annual federal reporting package was submitted within the timeframe required by OMB Uniform Guidance. Auditors? Recommendation: NTU should improve internal controls to help ensure that financial statement balances are accurately reconciled to assist with the timely preparation and submission of the annual federal reporting package. Management?s Response: NTU has developed a comprehensive year-end financial close and annual federal reporting plan with the assistance of our consultants, Harshwal & Company, LLC in September 2022. This plan was not implemented until after the end of fiscal year 2022. As part of this plan, NTU will ensure that financial accounting books and records are reconciled and closed in a timely manner prior to providing the final trial balance to the auditor.
2022-008 ?Activities Allowed/Unallowed and Allowable Costs/Cost Principles Federal Program Information: Funding Agency: U.S. Department of Defense, National Science Foundation, U.S. Department of Energy, and U.S. Department of Education Title: Research and Development Cluster, Tribally Controlled Postsecondary Career and Technical Institutions. Higher Education Emergency Relief Fund (HEERF) Assistance Listing Number: 12.431, 47.076, 81.123, 84.245, 84.425 Award Period: June 1, 2021 ? May 31, 2022 Criteria: To be allowable under Federal awards, costs must be necessary and reasonable for the performance and administration of the federal award. Costs must meet the following criteria: 1) necessary and reasonable; 2) consistent with policies and procedures; 3) accorded consistent treatment; and 4) are adequately documented. Condition: We found the following in our review of federal expenditures: Research and Development Cluster ? ? One expenditure for the purchase of a gold spectrometer, microscope mainframe and accessories in the amount of $145,596 was incorrectly charged twice to the Expanding STEM Education to Meet Navajo Nation Needs project with the National Science Foundation. NTU subsequently corrected this by removing one of the duplicate charges from federal expenditures. ? One employee?s wages in the amount of $260 was incorrectly charged to Department of Defense Performance Enhancement Through HIS Assessment and Analysis Campaign Project. The employee?s wages should have been charged to another federal program. ? Two payroll transactions totaling $3,580 did not have accurate source documentation to support the allocation of salaries and wages charged to the program. Tribally Controlled Postsecondary Career and Technical Institutions ? ? One employee?s wages in the amount of $1,640.55 was incorrectly allocated and charged to the program. The employee?s salary should have been charged to the NTU general fund. Higher Education Emergency Relief Fund ? ? NTU incorrectly charged the HEERF Student Aid Portion (ALN 84.425E) for lost revenue in the amount of $870,725. NTU subsequently corrected this and charged the lost revenue to the HEERF Tribally Controlled Colleges and Universities portion (ALN 84.425K). Questioned Costs: None exceeding $25,000 as NTU made correcting adjustments to federal expenditures. Context: Four of fifty payroll and non-payroll transactions tested for the Research and Development Cluster. One of twenty-five payroll transactions tested for the Tribally Controlled Postsecondary Career and Technical Institutions program. One of twenty-nine non-payroll transactions tested for the Higher Education Emergency Relief Fund program. Cause and Effect: NTU did not have effective internal controls to ensure federal expenditures are accurately charged in accordance with federal activities allowed/unallowed and allowable costs/cost principles requirements. As a result, NTU was not in compliance with these federal requirements for the Research and Development Cluster, Tribally Controlled Post Secondary Career and Technical Institutions and HEERF programs. Auditor?s Recommendation: Improve internal controls to ensure expenditures are allowable under federal program requirements. This includes maintaining source documentation to support the allocation of payroll costs and ensuring expenses are not double recorded in the accounting system. Management?s Response: NTU will implement a monthly review of all grant expenditures to ensure amounts charged to federal awards are accurately posted and reflected in the accounting system. All journal entries will be reviewed for accuracy by the Accounting Manager and Senior Accountant. Payroll allocations provided by the Human Resources office will be included in the monthly review to ensure accuracy of the payroll expenditures. Principal Investigators and program managers will also be given read-only access to the accounting system to review expenditure postings for accuracy.
2022-007 ? Cash Management Federal Program Information: Funding Agency: All Major Programs Title: All Major Programs Assistance Listing Number: All Major Programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: Advanced grant/contract funds may not be transferred to other NTU accounts, lent to such NTU accounts, or expended for programs not authorized. There should be sufficient unrestricted cash and investment balances on hand to cover all unearned grant revenue associated with federal and nonfederal programs. Condition: NTU did not maintain cash and cash equivalents at least equal to the amount of unspent grant funds advanced from federal and nonfederal agencies at year-end. At May 31, 2022, NTU?s unrestricted cash and cash equivalents and unearned grant revenue totaled $29,728,594 and $34,490,432, respectively. As a result, unspent grant funds held by NTU exceeded the amount of available cash and cash equivalents by $5,761,748. Questioned Costs: None. Context: Federal programs that have been provided with advanced funds. Cause and Effect: NTU did not have effective internal controls to ensure sufficient cash and cash equivalents are on hand to cover all unearned grant revenue associated with federal and nonfederal programs. NTU is not in compliance with federal requirements. Auditor?s Recommendation: Thoroughly analyze the financial position of NTU and ensure adequate cash and cash equivalents are maintained in an amount at least equal to unearned grant revenues from federal and nonfederal sources. NTU may need to liquidate unrestricted investments and convert them into cash and cash equivalents or reallocate investments into securities backed by the full faith and credit of the United States government to accomplish this. Management?s Response: NTU has developed a monthly cash management schedule that tracks and identifies all grant funds along with total cash received in advance from grantors and amounts due to NTU. NTU will increase cash balances through the timely collection of outstanding grants receivable. NTU will also analyze cash requirements and may liquidate investments held in the Capital Reserve fund to ensure adequate cash is maintained for grants received in advance.
2022-014 ? Late Submission of Annual Federal Reporting Package Federal Program Information: Funding Agency: All major programs Title: All major programs Assistance Listing Number: All major programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: 2 CFR 200.512 requires that the annual federal reporting package including the data collection form be submitted within nine months after the end of the audit period. Condition: NTU did not submit the annual federal reporting package within nine months after May 31, 2022. Questioned Costs: None Context: The annual federal reporting package for the year ended May 31, 2022. Cause and Effect: Internal controls were not designed and implemented to the annual federal reporting package was submitted within the timeframe required by OMB Uniform Guidance. Auditors? Recommendation: NTU should improve internal controls to help ensure that financial statement balances are accurately reconciled to assist with the timely preparation and submission of the annual federal reporting package. Management?s Response: NTU has developed a comprehensive year-end financial close and annual federal reporting plan with the assistance of our consultants, Harshwal & Company, LLC in September 2022. This plan was not implemented until after the end of fiscal year 2022. As part of this plan, NTU will ensure that financial accounting books and records are reconciled and closed in a timely manner prior to providing the final trial balance to the auditor.
2022-008 ?Activities Allowed/Unallowed and Allowable Costs/Cost Principles Federal Program Information: Funding Agency: U.S. Department of Defense, National Science Foundation, U.S. Department of Energy, and U.S. Department of Education Title: Research and Development Cluster, Tribally Controlled Postsecondary Career and Technical Institutions. Higher Education Emergency Relief Fund (HEERF) Assistance Listing Number: 12.431, 47.076, 81.123, 84.245, 84.425 Award Period: June 1, 2021 ? May 31, 2022 Criteria: To be allowable under Federal awards, costs must be necessary and reasonable for the performance and administration of the federal award. Costs must meet the following criteria: 1) necessary and reasonable; 2) consistent with policies and procedures; 3) accorded consistent treatment; and 4) are adequately documented. Condition: We found the following in our review of federal expenditures: Research and Development Cluster ? ? One expenditure for the purchase of a gold spectrometer, microscope mainframe and accessories in the amount of $145,596 was incorrectly charged twice to the Expanding STEM Education to Meet Navajo Nation Needs project with the National Science Foundation. NTU subsequently corrected this by removing one of the duplicate charges from federal expenditures. ? One employee?s wages in the amount of $260 was incorrectly charged to Department of Defense Performance Enhancement Through HIS Assessment and Analysis Campaign Project. The employee?s wages should have been charged to another federal program. ? Two payroll transactions totaling $3,580 did not have accurate source documentation to support the allocation of salaries and wages charged to the program. Tribally Controlled Postsecondary Career and Technical Institutions ? ? One employee?s wages in the amount of $1,640.55 was incorrectly allocated and charged to the program. The employee?s salary should have been charged to the NTU general fund. Higher Education Emergency Relief Fund ? ? NTU incorrectly charged the HEERF Student Aid Portion (ALN 84.425E) for lost revenue in the amount of $870,725. NTU subsequently corrected this and charged the lost revenue to the HEERF Tribally Controlled Colleges and Universities portion (ALN 84.425K). Questioned Costs: None exceeding $25,000 as NTU made correcting adjustments to federal expenditures. Context: Four of fifty payroll and non-payroll transactions tested for the Research and Development Cluster. One of twenty-five payroll transactions tested for the Tribally Controlled Postsecondary Career and Technical Institutions program. One of twenty-nine non-payroll transactions tested for the Higher Education Emergency Relief Fund program. Cause and Effect: NTU did not have effective internal controls to ensure federal expenditures are accurately charged in accordance with federal activities allowed/unallowed and allowable costs/cost principles requirements. As a result, NTU was not in compliance with these federal requirements for the Research and Development Cluster, Tribally Controlled Post Secondary Career and Technical Institutions and HEERF programs. Auditor?s Recommendation: Improve internal controls to ensure expenditures are allowable under federal program requirements. This includes maintaining source documentation to support the allocation of payroll costs and ensuring expenses are not double recorded in the accounting system. Management?s Response: NTU will implement a monthly review of all grant expenditures to ensure amounts charged to federal awards are accurately posted and reflected in the accounting system. All journal entries will be reviewed for accuracy by the Accounting Manager and Senior Accountant. Payroll allocations provided by the Human Resources office will be included in the monthly review to ensure accuracy of the payroll expenditures. Principal Investigators and program managers will also be given read-only access to the accounting system to review expenditure postings for accuracy.
2022-007 ? Cash Management Federal Program Information: Funding Agency: All Major Programs Title: All Major Programs Assistance Listing Number: All Major Programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: Advanced grant/contract funds may not be transferred to other NTU accounts, lent to such NTU accounts, or expended for programs not authorized. There should be sufficient unrestricted cash and investment balances on hand to cover all unearned grant revenue associated with federal and nonfederal programs. Condition: NTU did not maintain cash and cash equivalents at least equal to the amount of unspent grant funds advanced from federal and nonfederal agencies at year-end. At May 31, 2022, NTU?s unrestricted cash and cash equivalents and unearned grant revenue totaled $29,728,594 and $34,490,432, respectively. As a result, unspent grant funds held by NTU exceeded the amount of available cash and cash equivalents by $5,761,748. Questioned Costs: None. Context: Federal programs that have been provided with advanced funds. Cause and Effect: NTU did not have effective internal controls to ensure sufficient cash and cash equivalents are on hand to cover all unearned grant revenue associated with federal and nonfederal programs. NTU is not in compliance with federal requirements. Auditor?s Recommendation: Thoroughly analyze the financial position of NTU and ensure adequate cash and cash equivalents are maintained in an amount at least equal to unearned grant revenues from federal and nonfederal sources. NTU may need to liquidate unrestricted investments and convert them into cash and cash equivalents or reallocate investments into securities backed by the full faith and credit of the United States government to accomplish this. Management?s Response: NTU has developed a monthly cash management schedule that tracks and identifies all grant funds along with total cash received in advance from grantors and amounts due to NTU. NTU will increase cash balances through the timely collection of outstanding grants receivable. NTU will also analyze cash requirements and may liquidate investments held in the Capital Reserve fund to ensure adequate cash is maintained for grants received in advance.
2022-014 ? Late Submission of Annual Federal Reporting Package Federal Program Information: Funding Agency: All major programs Title: All major programs Assistance Listing Number: All major programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: 2 CFR 200.512 requires that the annual federal reporting package including the data collection form be submitted within nine months after the end of the audit period. Condition: NTU did not submit the annual federal reporting package within nine months after May 31, 2022. Questioned Costs: None Context: The annual federal reporting package for the year ended May 31, 2022. Cause and Effect: Internal controls were not designed and implemented to the annual federal reporting package was submitted within the timeframe required by OMB Uniform Guidance. Auditors? Recommendation: NTU should improve internal controls to help ensure that financial statement balances are accurately reconciled to assist with the timely preparation and submission of the annual federal reporting package. Management?s Response: NTU has developed a comprehensive year-end financial close and annual federal reporting plan with the assistance of our consultants, Harshwal & Company, LLC in September 2022. This plan was not implemented until after the end of fiscal year 2022. As part of this plan, NTU will ensure that financial accounting books and records are reconciled and closed in a timely manner prior to providing the final trial balance to the auditor.
2022-008 ?Activities Allowed/Unallowed and Allowable Costs/Cost Principles Federal Program Information: Funding Agency: U.S. Department of Defense, National Science Foundation, U.S. Department of Energy, and U.S. Department of Education Title: Research and Development Cluster, Tribally Controlled Postsecondary Career and Technical Institutions. Higher Education Emergency Relief Fund (HEERF) Assistance Listing Number: 12.431, 47.076, 81.123, 84.245, 84.425 Award Period: June 1, 2021 ? May 31, 2022 Criteria: To be allowable under Federal awards, costs must be necessary and reasonable for the performance and administration of the federal award. Costs must meet the following criteria: 1) necessary and reasonable; 2) consistent with policies and procedures; 3) accorded consistent treatment; and 4) are adequately documented. Condition: We found the following in our review of federal expenditures: Research and Development Cluster ? ? One expenditure for the purchase of a gold spectrometer, microscope mainframe and accessories in the amount of $145,596 was incorrectly charged twice to the Expanding STEM Education to Meet Navajo Nation Needs project with the National Science Foundation. NTU subsequently corrected this by removing one of the duplicate charges from federal expenditures. ? One employee?s wages in the amount of $260 was incorrectly charged to Department of Defense Performance Enhancement Through HIS Assessment and Analysis Campaign Project. The employee?s wages should have been charged to another federal program. ? Two payroll transactions totaling $3,580 did not have accurate source documentation to support the allocation of salaries and wages charged to the program. Tribally Controlled Postsecondary Career and Technical Institutions ? ? One employee?s wages in the amount of $1,640.55 was incorrectly allocated and charged to the program. The employee?s salary should have been charged to the NTU general fund. Higher Education Emergency Relief Fund ? ? NTU incorrectly charged the HEERF Student Aid Portion (ALN 84.425E) for lost revenue in the amount of $870,725. NTU subsequently corrected this and charged the lost revenue to the HEERF Tribally Controlled Colleges and Universities portion (ALN 84.425K). Questioned Costs: None exceeding $25,000 as NTU made correcting adjustments to federal expenditures. Context: Four of fifty payroll and non-payroll transactions tested for the Research and Development Cluster. One of twenty-five payroll transactions tested for the Tribally Controlled Postsecondary Career and Technical Institutions program. One of twenty-nine non-payroll transactions tested for the Higher Education Emergency Relief Fund program. Cause and Effect: NTU did not have effective internal controls to ensure federal expenditures are accurately charged in accordance with federal activities allowed/unallowed and allowable costs/cost principles requirements. As a result, NTU was not in compliance with these federal requirements for the Research and Development Cluster, Tribally Controlled Post Secondary Career and Technical Institutions and HEERF programs. Auditor?s Recommendation: Improve internal controls to ensure expenditures are allowable under federal program requirements. This includes maintaining source documentation to support the allocation of payroll costs and ensuring expenses are not double recorded in the accounting system. Management?s Response: NTU will implement a monthly review of all grant expenditures to ensure amounts charged to federal awards are accurately posted and reflected in the accounting system. All journal entries will be reviewed for accuracy by the Accounting Manager and Senior Accountant. Payroll allocations provided by the Human Resources office will be included in the monthly review to ensure accuracy of the payroll expenditures. Principal Investigators and program managers will also be given read-only access to the accounting system to review expenditure postings for accuracy.
2022-007 ? Cash Management Federal Program Information: Funding Agency: All Major Programs Title: All Major Programs Assistance Listing Number: All Major Programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: Advanced grant/contract funds may not be transferred to other NTU accounts, lent to such NTU accounts, or expended for programs not authorized. There should be sufficient unrestricted cash and investment balances on hand to cover all unearned grant revenue associated with federal and nonfederal programs. Condition: NTU did not maintain cash and cash equivalents at least equal to the amount of unspent grant funds advanced from federal and nonfederal agencies at year-end. At May 31, 2022, NTU?s unrestricted cash and cash equivalents and unearned grant revenue totaled $29,728,594 and $34,490,432, respectively. As a result, unspent grant funds held by NTU exceeded the amount of available cash and cash equivalents by $5,761,748. Questioned Costs: None. Context: Federal programs that have been provided with advanced funds. Cause and Effect: NTU did not have effective internal controls to ensure sufficient cash and cash equivalents are on hand to cover all unearned grant revenue associated with federal and nonfederal programs. NTU is not in compliance with federal requirements. Auditor?s Recommendation: Thoroughly analyze the financial position of NTU and ensure adequate cash and cash equivalents are maintained in an amount at least equal to unearned grant revenues from federal and nonfederal sources. NTU may need to liquidate unrestricted investments and convert them into cash and cash equivalents or reallocate investments into securities backed by the full faith and credit of the United States government to accomplish this. Management?s Response: NTU has developed a monthly cash management schedule that tracks and identifies all grant funds along with total cash received in advance from grantors and amounts due to NTU. NTU will increase cash balances through the timely collection of outstanding grants receivable. NTU will also analyze cash requirements and may liquidate investments held in the Capital Reserve fund to ensure adequate cash is maintained for grants received in advance.
2022-014 ? Late Submission of Annual Federal Reporting Package Federal Program Information: Funding Agency: All major programs Title: All major programs Assistance Listing Number: All major programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: 2 CFR 200.512 requires that the annual federal reporting package including the data collection form be submitted within nine months after the end of the audit period. Condition: NTU did not submit the annual federal reporting package within nine months after May 31, 2022. Questioned Costs: None Context: The annual federal reporting package for the year ended May 31, 2022. Cause and Effect: Internal controls were not designed and implemented to the annual federal reporting package was submitted within the timeframe required by OMB Uniform Guidance. Auditors? Recommendation: NTU should improve internal controls to help ensure that financial statement balances are accurately reconciled to assist with the timely preparation and submission of the annual federal reporting package. Management?s Response: NTU has developed a comprehensive year-end financial close and annual federal reporting plan with the assistance of our consultants, Harshwal & Company, LLC in September 2022. This plan was not implemented until after the end of fiscal year 2022. As part of this plan, NTU will ensure that financial accounting books and records are reconciled and closed in a timely manner prior to providing the final trial balance to the auditor.
2022-010 ? Special Tests and Provisions (Return of Title IV Funds) Federal Program Information: Funding Agency: U.S. Department of Education Title: Student Financial Aid Cluster Assistance Listing Number: 84.007, 84.033, 84.063 Award Period: June 1, 2021 ? May 31, 2022 Criteria: When a recipient of Title IV grant or loan assistance withdraws from an institution during a payment period or period of enrollment in which the recipient began attendance, the institution must determine the amount of Title IV aid earned by the student as of the withdrawal date. If the total amount of Title IV assistance earned by the student is less than the amount that was disbursed to the student or on his or her behalf as of the date of the institution?s determination that the student withdrew, the difference must be returned to the Title IV programs. Condition: During our evaluation of Return of Title IV funds, we noted the following: ? No funds were remitted back to the Department of Education related to the Title IV programs. Subsequent analysis by NTU determined that approximately $14,562 was due back to Title IV programs for fiscal year 2022. ? Ten students tested appeared to unofficially withdraw from classes and an R2T4 calculation was not performed. ? Two students tested formally withdrew from classes and an R2T4 calculation was not performed. Questioned Costs: None. Context: Twenty-five students that received Title IV student financial aid and did not earn any credits in one of the semesters in fiscal year 2022. Cause and Effect: NTU did not have effective internal controls to ensure return to Title IV funds were performed in accordance with federal requirements. Auditor?s Recommendation: Establish formal procedures to ensure compliance with federal student aid requirements. These policies and procedures should address students that withdraw from classes without notifying NTU. Consider performing student file audits to ensure Return of Title IV calculations are performed. Lastly, consider increasing coordination efforts between the finance department and the student financial aid department to ensure amounts due back to Title IV programs are determined and remitted timely. Management?s Response: NTU will develop formal policies and procedures regarding Return of Title IV Funds. The procedures will be in alignment with the requirements of the U.S. Department of Education. The procedures will address student withdrawals and the data required to be entered and monitored in the student data information system. The Accounting Manager within the Student Accounts section of the NTU Business Office will review all student enrollment transactions to ensure Return to Title IV requirements are complied with.
2022-011 ? Special Tests and Provisions (Enrollment Reporting) Federal Program Information: Funding Agency: U.S. Department of Education Title: Student Financial Aid Cluster Assistance Listing Number: 84.007, 84.033, 84.063 Award Period: June 1, 2021 ? May 31, 2022 Criteria: Institutions are required to report enrollment information under the Pell grant via the National Student Loan Data System (NSLDS). Institutions must review, update, and verify student enrollment statuses, program information, and effective dates that appear on the Enrollment Reporting Roster file or on the Enrollment Maintenance page of the NSLDS Professional Access (NSLDSFAP) website. Condition: During our evaluation of NSLDS enrollment reporting, we noted the following: ? Ten students with an enrollment status change did not have their record updated in the NSLDS database. ? Two students with an enrollment status change did not have their record updated in the NSLDS database within 60 days of the change. ? Nine students did not have a record in the NSLDS database. Questioned Costs: None. Context: Twenty-one out of twenty-five students that had an enrollment status change in fiscal year 2022. Cause and Effect: Internal controls have not been designed and implemented to ensure compliance with enrollment reporting requirements of the Student Financial Aid Cluster. 34 CFR 690.83(c) states, ?In accordance with 34 CFR 668.84, the Secretary may impose a fine on the institution if the institution fails to comply with the (reporting) requirements specified?. There is a risk that NTU could face a potential fine if the required information is not being reported. Auditors? Recommendation: Develop and implement internal controls to ensure the enrollment reporting requirements of the Student Financial Aid Cluster are met. Management?s Response: NTU will develop formal policies and procedures regarding enrollment reporting. This will include identifying the necessary enrollment data to update the National Student Loan Database System (NSLDS) on a timely basis in accordance with the Student Financial Aid Cluster requirements. NTU has been negatively affected by staffing issues partly attributable to the COVID-19 pandemic. NTU will be hiring an additional Financial Aid Technician and a Financial Aid Counselor to assist in addressing this finding.
2022-012 ? Special Tests and Provisions (Gramm-Leach-Bliley Act ? Student Information Security) Federal Program Information: Funding Agency: U.S. Department of Education Title: Student Financial Aid Cluster Assistance Listing Number: 84.007, 84.033, 84.063 Award Period: June 1, 2021 ? May 31, 2022 Criteria: Title IV-eligible institutions are subject to the Gramm-Leach-Bliley Act (the ?Act?). The Act requires institutions to perform the following: ? Develop, implement, and maintain a written information security program. ? Designate the employee(s) responsible for coordinating the information security program. ? Identify and assess risks to customer information. ? Design and implement an information safeguards program Condition: We found that NTU has developed an information security plan, however this plan has not been formally adopted and implemented by NTU. Questioned Costs: None. Context: Evaluation of NTU?s information security protocols as it relates to the Gramm-Leach-Bliley Act requirements of the Student Financial Aid Cluster. Cause and Effect: NTU has not formally adopted and implemented an information security plan that addresses the requirements of the Gramm-Leach-Bliley Act. NTU did not comply with OMB Uniform Guidance related to special tests and provisions for the Student Financial Aid Cluster. Auditor?s Recommendation: Formally adopt and implement an information security plan that adequately addresses the requirements of the Student Financial Assistance Cluster. Management?s Response: NTU is currently working on policies and procedures and a comprehensive information security plan to address student information security. NTU is working closely with U.S. Federal Student Aid office (FSA) to ensure all required elements are incorporated into NTU?s information security plan. A draft policy been provided to the FSA_IHE Cyber Compliance group for review, once the review is completed, the policies and procedures along with the student information security plan will be presented to NTU Board of Regents for ratification and adoption.
2022-007 ? Cash Management Federal Program Information: Funding Agency: All Major Programs Title: All Major Programs Assistance Listing Number: All Major Programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: Advanced grant/contract funds may not be transferred to other NTU accounts, lent to such NTU accounts, or expended for programs not authorized. There should be sufficient unrestricted cash and investment balances on hand to cover all unearned grant revenue associated with federal and nonfederal programs. Condition: NTU did not maintain cash and cash equivalents at least equal to the amount of unspent grant funds advanced from federal and nonfederal agencies at year-end. At May 31, 2022, NTU?s unrestricted cash and cash equivalents and unearned grant revenue totaled $29,728,594 and $34,490,432, respectively. As a result, unspent grant funds held by NTU exceeded the amount of available cash and cash equivalents by $5,761,748. Questioned Costs: None. Context: Federal programs that have been provided with advanced funds. Cause and Effect: NTU did not have effective internal controls to ensure sufficient cash and cash equivalents are on hand to cover all unearned grant revenue associated with federal and nonfederal programs. NTU is not in compliance with federal requirements. Auditor?s Recommendation: Thoroughly analyze the financial position of NTU and ensure adequate cash and cash equivalents are maintained in an amount at least equal to unearned grant revenues from federal and nonfederal sources. NTU may need to liquidate unrestricted investments and convert them into cash and cash equivalents or reallocate investments into securities backed by the full faith and credit of the United States government to accomplish this. Management?s Response: NTU has developed a monthly cash management schedule that tracks and identifies all grant funds along with total cash received in advance from grantors and amounts due to NTU. NTU will increase cash balances through the timely collection of outstanding grants receivable. NTU will also analyze cash requirements and may liquidate investments held in the Capital Reserve fund to ensure adequate cash is maintained for grants received in advance.
2022-014 ? Late Submission of Annual Federal Reporting Package Federal Program Information: Funding Agency: All major programs Title: All major programs Assistance Listing Number: All major programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: 2 CFR 200.512 requires that the annual federal reporting package including the data collection form be submitted within nine months after the end of the audit period. Condition: NTU did not submit the annual federal reporting package within nine months after May 31, 2022. Questioned Costs: None Context: The annual federal reporting package for the year ended May 31, 2022. Cause and Effect: Internal controls were not designed and implemented to the annual federal reporting package was submitted within the timeframe required by OMB Uniform Guidance. Auditors? Recommendation: NTU should improve internal controls to help ensure that financial statement balances are accurately reconciled to assist with the timely preparation and submission of the annual federal reporting package. Management?s Response: NTU has developed a comprehensive year-end financial close and annual federal reporting plan with the assistance of our consultants, Harshwal & Company, LLC in September 2022. This plan was not implemented until after the end of fiscal year 2022. As part of this plan, NTU will ensure that financial accounting books and records are reconciled and closed in a timely manner prior to providing the final trial balance to the auditor.
2022-010 ? Special Tests and Provisions (Return of Title IV Funds) Federal Program Information: Funding Agency: U.S. Department of Education Title: Student Financial Aid Cluster Assistance Listing Number: 84.007, 84.033, 84.063 Award Period: June 1, 2021 ? May 31, 2022 Criteria: When a recipient of Title IV grant or loan assistance withdraws from an institution during a payment period or period of enrollment in which the recipient began attendance, the institution must determine the amount of Title IV aid earned by the student as of the withdrawal date. If the total amount of Title IV assistance earned by the student is less than the amount that was disbursed to the student or on his or her behalf as of the date of the institution?s determination that the student withdrew, the difference must be returned to the Title IV programs. Condition: During our evaluation of Return of Title IV funds, we noted the following: ? No funds were remitted back to the Department of Education related to the Title IV programs. Subsequent analysis by NTU determined that approximately $14,562 was due back to Title IV programs for fiscal year 2022. ? Ten students tested appeared to unofficially withdraw from classes and an R2T4 calculation was not performed. ? Two students tested formally withdrew from classes and an R2T4 calculation was not performed. Questioned Costs: None. Context: Twenty-five students that received Title IV student financial aid and did not earn any credits in one of the semesters in fiscal year 2022. Cause and Effect: NTU did not have effective internal controls to ensure return to Title IV funds were performed in accordance with federal requirements. Auditor?s Recommendation: Establish formal procedures to ensure compliance with federal student aid requirements. These policies and procedures should address students that withdraw from classes without notifying NTU. Consider performing student file audits to ensure Return of Title IV calculations are performed. Lastly, consider increasing coordination efforts between the finance department and the student financial aid department to ensure amounts due back to Title IV programs are determined and remitted timely. Management?s Response: NTU will develop formal policies and procedures regarding Return of Title IV Funds. The procedures will be in alignment with the requirements of the U.S. Department of Education. The procedures will address student withdrawals and the data required to be entered and monitored in the student data information system. The Accounting Manager within the Student Accounts section of the NTU Business Office will review all student enrollment transactions to ensure Return to Title IV requirements are complied with.
2022-011 ? Special Tests and Provisions (Enrollment Reporting) Federal Program Information: Funding Agency: U.S. Department of Education Title: Student Financial Aid Cluster Assistance Listing Number: 84.007, 84.033, 84.063 Award Period: June 1, 2021 ? May 31, 2022 Criteria: Institutions are required to report enrollment information under the Pell grant via the National Student Loan Data System (NSLDS). Institutions must review, update, and verify student enrollment statuses, program information, and effective dates that appear on the Enrollment Reporting Roster file or on the Enrollment Maintenance page of the NSLDS Professional Access (NSLDSFAP) website. Condition: During our evaluation of NSLDS enrollment reporting, we noted the following: ? Ten students with an enrollment status change did not have their record updated in the NSLDS database. ? Two students with an enrollment status change did not have their record updated in the NSLDS database within 60 days of the change. ? Nine students did not have a record in the NSLDS database. Questioned Costs: None. Context: Twenty-one out of twenty-five students that had an enrollment status change in fiscal year 2022. Cause and Effect: Internal controls have not been designed and implemented to ensure compliance with enrollment reporting requirements of the Student Financial Aid Cluster. 34 CFR 690.83(c) states, ?In accordance with 34 CFR 668.84, the Secretary may impose a fine on the institution if the institution fails to comply with the (reporting) requirements specified?. There is a risk that NTU could face a potential fine if the required information is not being reported. Auditors? Recommendation: Develop and implement internal controls to ensure the enrollment reporting requirements of the Student Financial Aid Cluster are met. Management?s Response: NTU will develop formal policies and procedures regarding enrollment reporting. This will include identifying the necessary enrollment data to update the National Student Loan Database System (NSLDS) on a timely basis in accordance with the Student Financial Aid Cluster requirements. NTU has been negatively affected by staffing issues partly attributable to the COVID-19 pandemic. NTU will be hiring an additional Financial Aid Technician and a Financial Aid Counselor to assist in addressing this finding.
2022-012 ? Special Tests and Provisions (Gramm-Leach-Bliley Act ? Student Information Security) Federal Program Information: Funding Agency: U.S. Department of Education Title: Student Financial Aid Cluster Assistance Listing Number: 84.007, 84.033, 84.063 Award Period: June 1, 2021 ? May 31, 2022 Criteria: Title IV-eligible institutions are subject to the Gramm-Leach-Bliley Act (the ?Act?). The Act requires institutions to perform the following: ? Develop, implement, and maintain a written information security program. ? Designate the employee(s) responsible for coordinating the information security program. ? Identify and assess risks to customer information. ? Design and implement an information safeguards program Condition: We found that NTU has developed an information security plan, however this plan has not been formally adopted and implemented by NTU. Questioned Costs: None. Context: Evaluation of NTU?s information security protocols as it relates to the Gramm-Leach-Bliley Act requirements of the Student Financial Aid Cluster. Cause and Effect: NTU has not formally adopted and implemented an information security plan that addresses the requirements of the Gramm-Leach-Bliley Act. NTU did not comply with OMB Uniform Guidance related to special tests and provisions for the Student Financial Aid Cluster. Auditor?s Recommendation: Formally adopt and implement an information security plan that adequately addresses the requirements of the Student Financial Assistance Cluster. Management?s Response: NTU is currently working on policies and procedures and a comprehensive information security plan to address student information security. NTU is working closely with U.S. Federal Student Aid office (FSA) to ensure all required elements are incorporated into NTU?s information security plan. A draft policy been provided to the FSA_IHE Cyber Compliance group for review, once the review is completed, the policies and procedures along with the student information security plan will be presented to NTU Board of Regents for ratification and adoption.
2022-007 ? Cash Management Federal Program Information: Funding Agency: All Major Programs Title: All Major Programs Assistance Listing Number: All Major Programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: Advanced grant/contract funds may not be transferred to other NTU accounts, lent to such NTU accounts, or expended for programs not authorized. There should be sufficient unrestricted cash and investment balances on hand to cover all unearned grant revenue associated with federal and nonfederal programs. Condition: NTU did not maintain cash and cash equivalents at least equal to the amount of unspent grant funds advanced from federal and nonfederal agencies at year-end. At May 31, 2022, NTU?s unrestricted cash and cash equivalents and unearned grant revenue totaled $29,728,594 and $34,490,432, respectively. As a result, unspent grant funds held by NTU exceeded the amount of available cash and cash equivalents by $5,761,748. Questioned Costs: None. Context: Federal programs that have been provided with advanced funds. Cause and Effect: NTU did not have effective internal controls to ensure sufficient cash and cash equivalents are on hand to cover all unearned grant revenue associated with federal and nonfederal programs. NTU is not in compliance with federal requirements. Auditor?s Recommendation: Thoroughly analyze the financial position of NTU and ensure adequate cash and cash equivalents are maintained in an amount at least equal to unearned grant revenues from federal and nonfederal sources. NTU may need to liquidate unrestricted investments and convert them into cash and cash equivalents or reallocate investments into securities backed by the full faith and credit of the United States government to accomplish this. Management?s Response: NTU has developed a monthly cash management schedule that tracks and identifies all grant funds along with total cash received in advance from grantors and amounts due to NTU. NTU will increase cash balances through the timely collection of outstanding grants receivable. NTU will also analyze cash requirements and may liquidate investments held in the Capital Reserve fund to ensure adequate cash is maintained for grants received in advance.
2022-014 ? Late Submission of Annual Federal Reporting Package Federal Program Information: Funding Agency: All major programs Title: All major programs Assistance Listing Number: All major programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: 2 CFR 200.512 requires that the annual federal reporting package including the data collection form be submitted within nine months after the end of the audit period. Condition: NTU did not submit the annual federal reporting package within nine months after May 31, 2022. Questioned Costs: None Context: The annual federal reporting package for the year ended May 31, 2022. Cause and Effect: Internal controls were not designed and implemented to the annual federal reporting package was submitted within the timeframe required by OMB Uniform Guidance. Auditors? Recommendation: NTU should improve internal controls to help ensure that financial statement balances are accurately reconciled to assist with the timely preparation and submission of the annual federal reporting package. Management?s Response: NTU has developed a comprehensive year-end financial close and annual federal reporting plan with the assistance of our consultants, Harshwal & Company, LLC in September 2022. This plan was not implemented until after the end of fiscal year 2022. As part of this plan, NTU will ensure that financial accounting books and records are reconciled and closed in a timely manner prior to providing the final trial balance to the auditor.
2022-010 ? Special Tests and Provisions (Return of Title IV Funds) Federal Program Information: Funding Agency: U.S. Department of Education Title: Student Financial Aid Cluster Assistance Listing Number: 84.007, 84.033, 84.063 Award Period: June 1, 2021 ? May 31, 2022 Criteria: When a recipient of Title IV grant or loan assistance withdraws from an institution during a payment period or period of enrollment in which the recipient began attendance, the institution must determine the amount of Title IV aid earned by the student as of the withdrawal date. If the total amount of Title IV assistance earned by the student is less than the amount that was disbursed to the student or on his or her behalf as of the date of the institution?s determination that the student withdrew, the difference must be returned to the Title IV programs. Condition: During our evaluation of Return of Title IV funds, we noted the following: ? No funds were remitted back to the Department of Education related to the Title IV programs. Subsequent analysis by NTU determined that approximately $14,562 was due back to Title IV programs for fiscal year 2022. ? Ten students tested appeared to unofficially withdraw from classes and an R2T4 calculation was not performed. ? Two students tested formally withdrew from classes and an R2T4 calculation was not performed. Questioned Costs: None. Context: Twenty-five students that received Title IV student financial aid and did not earn any credits in one of the semesters in fiscal year 2022. Cause and Effect: NTU did not have effective internal controls to ensure return to Title IV funds were performed in accordance with federal requirements. Auditor?s Recommendation: Establish formal procedures to ensure compliance with federal student aid requirements. These policies and procedures should address students that withdraw from classes without notifying NTU. Consider performing student file audits to ensure Return of Title IV calculations are performed. Lastly, consider increasing coordination efforts between the finance department and the student financial aid department to ensure amounts due back to Title IV programs are determined and remitted timely. Management?s Response: NTU will develop formal policies and procedures regarding Return of Title IV Funds. The procedures will be in alignment with the requirements of the U.S. Department of Education. The procedures will address student withdrawals and the data required to be entered and monitored in the student data information system. The Accounting Manager within the Student Accounts section of the NTU Business Office will review all student enrollment transactions to ensure Return to Title IV requirements are complied with.
2022-011 ? Special Tests and Provisions (Enrollment Reporting) Federal Program Information: Funding Agency: U.S. Department of Education Title: Student Financial Aid Cluster Assistance Listing Number: 84.007, 84.033, 84.063 Award Period: June 1, 2021 ? May 31, 2022 Criteria: Institutions are required to report enrollment information under the Pell grant via the National Student Loan Data System (NSLDS). Institutions must review, update, and verify student enrollment statuses, program information, and effective dates that appear on the Enrollment Reporting Roster file or on the Enrollment Maintenance page of the NSLDS Professional Access (NSLDSFAP) website. Condition: During our evaluation of NSLDS enrollment reporting, we noted the following: ? Ten students with an enrollment status change did not have their record updated in the NSLDS database. ? Two students with an enrollment status change did not have their record updated in the NSLDS database within 60 days of the change. ? Nine students did not have a record in the NSLDS database. Questioned Costs: None. Context: Twenty-one out of twenty-five students that had an enrollment status change in fiscal year 2022. Cause and Effect: Internal controls have not been designed and implemented to ensure compliance with enrollment reporting requirements of the Student Financial Aid Cluster. 34 CFR 690.83(c) states, ?In accordance with 34 CFR 668.84, the Secretary may impose a fine on the institution if the institution fails to comply with the (reporting) requirements specified?. There is a risk that NTU could face a potential fine if the required information is not being reported. Auditors? Recommendation: Develop and implement internal controls to ensure the enrollment reporting requirements of the Student Financial Aid Cluster are met. Management?s Response: NTU will develop formal policies and procedures regarding enrollment reporting. This will include identifying the necessary enrollment data to update the National Student Loan Database System (NSLDS) on a timely basis in accordance with the Student Financial Aid Cluster requirements. NTU has been negatively affected by staffing issues partly attributable to the COVID-19 pandemic. NTU will be hiring an additional Financial Aid Technician and a Financial Aid Counselor to assist in addressing this finding.
2022-012 ? Special Tests and Provisions (Gramm-Leach-Bliley Act ? Student Information Security) Federal Program Information: Funding Agency: U.S. Department of Education Title: Student Financial Aid Cluster Assistance Listing Number: 84.007, 84.033, 84.063 Award Period: June 1, 2021 ? May 31, 2022 Criteria: Title IV-eligible institutions are subject to the Gramm-Leach-Bliley Act (the ?Act?). The Act requires institutions to perform the following: ? Develop, implement, and maintain a written information security program. ? Designate the employee(s) responsible for coordinating the information security program. ? Identify and assess risks to customer information. ? Design and implement an information safeguards program Condition: We found that NTU has developed an information security plan, however this plan has not been formally adopted and implemented by NTU. Questioned Costs: None. Context: Evaluation of NTU?s information security protocols as it relates to the Gramm-Leach-Bliley Act requirements of the Student Financial Aid Cluster. Cause and Effect: NTU has not formally adopted and implemented an information security plan that addresses the requirements of the Gramm-Leach-Bliley Act. NTU did not comply with OMB Uniform Guidance related to special tests and provisions for the Student Financial Aid Cluster. Auditor?s Recommendation: Formally adopt and implement an information security plan that adequately addresses the requirements of the Student Financial Assistance Cluster. Management?s Response: NTU is currently working on policies and procedures and a comprehensive information security plan to address student information security. NTU is working closely with U.S. Federal Student Aid office (FSA) to ensure all required elements are incorporated into NTU?s information security plan. A draft policy been provided to the FSA_IHE Cyber Compliance group for review, once the review is completed, the policies and procedures along with the student information security plan will be presented to NTU Board of Regents for ratification and adoption.
2022-007 ? Cash Management Federal Program Information: Funding Agency: All Major Programs Title: All Major Programs Assistance Listing Number: All Major Programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: Advanced grant/contract funds may not be transferred to other NTU accounts, lent to such NTU accounts, or expended for programs not authorized. There should be sufficient unrestricted cash and investment balances on hand to cover all unearned grant revenue associated with federal and nonfederal programs. Condition: NTU did not maintain cash and cash equivalents at least equal to the amount of unspent grant funds advanced from federal and nonfederal agencies at year-end. At May 31, 2022, NTU?s unrestricted cash and cash equivalents and unearned grant revenue totaled $29,728,594 and $34,490,432, respectively. As a result, unspent grant funds held by NTU exceeded the amount of available cash and cash equivalents by $5,761,748. Questioned Costs: None. Context: Federal programs that have been provided with advanced funds. Cause and Effect: NTU did not have effective internal controls to ensure sufficient cash and cash equivalents are on hand to cover all unearned grant revenue associated with federal and nonfederal programs. NTU is not in compliance with federal requirements. Auditor?s Recommendation: Thoroughly analyze the financial position of NTU and ensure adequate cash and cash equivalents are maintained in an amount at least equal to unearned grant revenues from federal and nonfederal sources. NTU may need to liquidate unrestricted investments and convert them into cash and cash equivalents or reallocate investments into securities backed by the full faith and credit of the United States government to accomplish this. Management?s Response: NTU has developed a monthly cash management schedule that tracks and identifies all grant funds along with total cash received in advance from grantors and amounts due to NTU. NTU will increase cash balances through the timely collection of outstanding grants receivable. NTU will also analyze cash requirements and may liquidate investments held in the Capital Reserve fund to ensure adequate cash is maintained for grants received in advance.
2022-014 ? Late Submission of Annual Federal Reporting Package Federal Program Information: Funding Agency: All major programs Title: All major programs Assistance Listing Number: All major programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: 2 CFR 200.512 requires that the annual federal reporting package including the data collection form be submitted within nine months after the end of the audit period. Condition: NTU did not submit the annual federal reporting package within nine months after May 31, 2022. Questioned Costs: None Context: The annual federal reporting package for the year ended May 31, 2022. Cause and Effect: Internal controls were not designed and implemented to the annual federal reporting package was submitted within the timeframe required by OMB Uniform Guidance. Auditors? Recommendation: NTU should improve internal controls to help ensure that financial statement balances are accurately reconciled to assist with the timely preparation and submission of the annual federal reporting package. Management?s Response: NTU has developed a comprehensive year-end financial close and annual federal reporting plan with the assistance of our consultants, Harshwal & Company, LLC in September 2022. This plan was not implemented until after the end of fiscal year 2022. As part of this plan, NTU will ensure that financial accounting books and records are reconciled and closed in a timely manner prior to providing the final trial balance to the auditor.
2022-008 ?Activities Allowed/Unallowed and Allowable Costs/Cost Principles Federal Program Information: Funding Agency: U.S. Department of Defense, National Science Foundation, U.S. Department of Energy, and U.S. Department of Education Title: Research and Development Cluster, Tribally Controlled Postsecondary Career and Technical Institutions. Higher Education Emergency Relief Fund (HEERF) Assistance Listing Number: 12.431, 47.076, 81.123, 84.245, 84.425 Award Period: June 1, 2021 ? May 31, 2022 Criteria: To be allowable under Federal awards, costs must be necessary and reasonable for the performance and administration of the federal award. Costs must meet the following criteria: 1) necessary and reasonable; 2) consistent with policies and procedures; 3) accorded consistent treatment; and 4) are adequately documented. Condition: We found the following in our review of federal expenditures: Research and Development Cluster ? ? One expenditure for the purchase of a gold spectrometer, microscope mainframe and accessories in the amount of $145,596 was incorrectly charged twice to the Expanding STEM Education to Meet Navajo Nation Needs project with the National Science Foundation. NTU subsequently corrected this by removing one of the duplicate charges from federal expenditures. ? One employee?s wages in the amount of $260 was incorrectly charged to Department of Defense Performance Enhancement Through HIS Assessment and Analysis Campaign Project. The employee?s wages should have been charged to another federal program. ? Two payroll transactions totaling $3,580 did not have accurate source documentation to support the allocation of salaries and wages charged to the program. Tribally Controlled Postsecondary Career and Technical Institutions ? ? One employee?s wages in the amount of $1,640.55 was incorrectly allocated and charged to the program. The employee?s salary should have been charged to the NTU general fund. Higher Education Emergency Relief Fund ? ? NTU incorrectly charged the HEERF Student Aid Portion (ALN 84.425E) for lost revenue in the amount of $870,725. NTU subsequently corrected this and charged the lost revenue to the HEERF Tribally Controlled Colleges and Universities portion (ALN 84.425K). Questioned Costs: None exceeding $25,000 as NTU made correcting adjustments to federal expenditures. Context: Four of fifty payroll and non-payroll transactions tested for the Research and Development Cluster. One of twenty-five payroll transactions tested for the Tribally Controlled Postsecondary Career and Technical Institutions program. One of twenty-nine non-payroll transactions tested for the Higher Education Emergency Relief Fund program. Cause and Effect: NTU did not have effective internal controls to ensure federal expenditures are accurately charged in accordance with federal activities allowed/unallowed and allowable costs/cost principles requirements. As a result, NTU was not in compliance with these federal requirements for the Research and Development Cluster, Tribally Controlled Post Secondary Career and Technical Institutions and HEERF programs. Auditor?s Recommendation: Improve internal controls to ensure expenditures are allowable under federal program requirements. This includes maintaining source documentation to support the allocation of payroll costs and ensuring expenses are not double recorded in the accounting system. Management?s Response: NTU will implement a monthly review of all grant expenditures to ensure amounts charged to federal awards are accurately posted and reflected in the accounting system. All journal entries will be reviewed for accuracy by the Accounting Manager and Senior Accountant. Payroll allocations provided by the Human Resources office will be included in the monthly review to ensure accuracy of the payroll expenditures. Principal Investigators and program managers will also be given read-only access to the accounting system to review expenditure postings for accuracy.
2022-009 ? Cash Management Federal Program Information: Funding Agency: U.S. Department of Education Title: Tribally Controlled Postsecondary Career and Technical Institutions Assistance Listing Number: 84.245 Award Period: June 1, 2021 ? May 31, 2022 Criteria: Internal controls must be in place to demonstrate that the time between the transfer of funds from the federal entity to the non-federal entity and disbursement by the non-federal entity has been adequately minimized. This includes ensuring reimbursement and drawdown requests are adequately supported by underlying source documentation. Condition: During our evaluation of cash drawdowns, two out of four drawdowns tested did not have adequate source documentation to support the amount of funds drawn down. Questioned Costs: None. Context: Two of four drawdowns tested for the Tribally Controlled Postsecondary Career and Technical Institutions. Cause and Effect: Internal controls were not designed and implemented to ensure appropriate cash management requirements are met. NTU did not comply with the cash management requirements of the Tribally Controlled Postsecondary Career and Technical Institutions program. Auditor?s Recommendation: Established policies and procedures should be enforced to ensure compliance with federal cash management requirements and NTU?s policies and procedures. Management?s Response: NTU has developed cash management policies and procedures under NTU?s Sponsored Projects Manual. NTU will be enforcing policies and procedures for cash drawdowns to ensure all drawdowns are adequately supported. This will be managed by the new incoming Grants Accountant and Contract and Grants Manager that will be hired in the upcoming fiscal year.
2022-007 ? Cash Management Federal Program Information: Funding Agency: All Major Programs Title: All Major Programs Assistance Listing Number: All Major Programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: Advanced grant/contract funds may not be transferred to other NTU accounts, lent to such NTU accounts, or expended for programs not authorized. There should be sufficient unrestricted cash and investment balances on hand to cover all unearned grant revenue associated with federal and nonfederal programs. Condition: NTU did not maintain cash and cash equivalents at least equal to the amount of unspent grant funds advanced from federal and nonfederal agencies at year-end. At May 31, 2022, NTU?s unrestricted cash and cash equivalents and unearned grant revenue totaled $29,728,594 and $34,490,432, respectively. As a result, unspent grant funds held by NTU exceeded the amount of available cash and cash equivalents by $5,761,748. Questioned Costs: None. Context: Federal programs that have been provided with advanced funds. Cause and Effect: NTU did not have effective internal controls to ensure sufficient cash and cash equivalents are on hand to cover all unearned grant revenue associated with federal and nonfederal programs. NTU is not in compliance with federal requirements. Auditor?s Recommendation: Thoroughly analyze the financial position of NTU and ensure adequate cash and cash equivalents are maintained in an amount at least equal to unearned grant revenues from federal and nonfederal sources. NTU may need to liquidate unrestricted investments and convert them into cash and cash equivalents or reallocate investments into securities backed by the full faith and credit of the United States government to accomplish this. Management?s Response: NTU has developed a monthly cash management schedule that tracks and identifies all grant funds along with total cash received in advance from grantors and amounts due to NTU. NTU will increase cash balances through the timely collection of outstanding grants receivable. NTU will also analyze cash requirements and may liquidate investments held in the Capital Reserve fund to ensure adequate cash is maintained for grants received in advance.
2022-014 ? Late Submission of Annual Federal Reporting Package Federal Program Information: Funding Agency: All major programs Title: All major programs Assistance Listing Number: All major programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: 2 CFR 200.512 requires that the annual federal reporting package including the data collection form be submitted within nine months after the end of the audit period. Condition: NTU did not submit the annual federal reporting package within nine months after May 31, 2022. Questioned Costs: None Context: The annual federal reporting package for the year ended May 31, 2022. Cause and Effect: Internal controls were not designed and implemented to the annual federal reporting package was submitted within the timeframe required by OMB Uniform Guidance. Auditors? Recommendation: NTU should improve internal controls to help ensure that financial statement balances are accurately reconciled to assist with the timely preparation and submission of the annual federal reporting package. Management?s Response: NTU has developed a comprehensive year-end financial close and annual federal reporting plan with the assistance of our consultants, Harshwal & Company, LLC in September 2022. This plan was not implemented until after the end of fiscal year 2022. As part of this plan, NTU will ensure that financial accounting books and records are reconciled and closed in a timely manner prior to providing the final trial balance to the auditor.
2022-008 ?Activities Allowed/Unallowed and Allowable Costs/Cost Principles Federal Program Information: Funding Agency: U.S. Department of Defense, National Science Foundation, U.S. Department of Energy, and U.S. Department of Education Title: Research and Development Cluster, Tribally Controlled Postsecondary Career and Technical Institutions. Higher Education Emergency Relief Fund (HEERF) Assistance Listing Number: 12.431, 47.076, 81.123, 84.245, 84.425 Award Period: June 1, 2021 ? May 31, 2022 Criteria: To be allowable under Federal awards, costs must be necessary and reasonable for the performance and administration of the federal award. Costs must meet the following criteria: 1) necessary and reasonable; 2) consistent with policies and procedures; 3) accorded consistent treatment; and 4) are adequately documented. Condition: We found the following in our review of federal expenditures: Research and Development Cluster ? ? One expenditure for the purchase of a gold spectrometer, microscope mainframe and accessories in the amount of $145,596 was incorrectly charged twice to the Expanding STEM Education to Meet Navajo Nation Needs project with the National Science Foundation. NTU subsequently corrected this by removing one of the duplicate charges from federal expenditures. ? One employee?s wages in the amount of $260 was incorrectly charged to Department of Defense Performance Enhancement Through HIS Assessment and Analysis Campaign Project. The employee?s wages should have been charged to another federal program. ? Two payroll transactions totaling $3,580 did not have accurate source documentation to support the allocation of salaries and wages charged to the program. Tribally Controlled Postsecondary Career and Technical Institutions ? ? One employee?s wages in the amount of $1,640.55 was incorrectly allocated and charged to the program. The employee?s salary should have been charged to the NTU general fund. Higher Education Emergency Relief Fund ? ? NTU incorrectly charged the HEERF Student Aid Portion (ALN 84.425E) for lost revenue in the amount of $870,725. NTU subsequently corrected this and charged the lost revenue to the HEERF Tribally Controlled Colleges and Universities portion (ALN 84.425K). Questioned Costs: None exceeding $25,000 as NTU made correcting adjustments to federal expenditures. Context: Four of fifty payroll and non-payroll transactions tested for the Research and Development Cluster. One of twenty-five payroll transactions tested for the Tribally Controlled Postsecondary Career and Technical Institutions program. One of twenty-nine non-payroll transactions tested for the Higher Education Emergency Relief Fund program. Cause and Effect: NTU did not have effective internal controls to ensure federal expenditures are accurately charged in accordance with federal activities allowed/unallowed and allowable costs/cost principles requirements. As a result, NTU was not in compliance with these federal requirements for the Research and Development Cluster, Tribally Controlled Post Secondary Career and Technical Institutions and HEERF programs. Auditor?s Recommendation: Improve internal controls to ensure expenditures are allowable under federal program requirements. This includes maintaining source documentation to support the allocation of payroll costs and ensuring expenses are not double recorded in the accounting system. Management?s Response: NTU will implement a monthly review of all grant expenditures to ensure amounts charged to federal awards are accurately posted and reflected in the accounting system. All journal entries will be reviewed for accuracy by the Accounting Manager and Senior Accountant. Payroll allocations provided by the Human Resources office will be included in the monthly review to ensure accuracy of the payroll expenditures. Principal Investigators and program managers will also be given read-only access to the accounting system to review expenditure postings for accuracy.
2022-013 ? Reporting Federal Program Information: Funding Agency: U.S. Department of Education Title: Higher Education Emergency Relief Fund (HEERF) Assistance Listing Number: 84.425 Award Period: June 1, 2021 ? May 31, 2022 Criteria: Internal controls must be in place to ensure performance and financial reporting requirements for federal award programs are met Condition: During our assessment of reporting requirements, we found the following: ? The quarterly budget and expenditure reporting for the HEERF Institutional Portion (ALN 84.425K) for the quarter ending December 31, 2021 was not completed. ? The quarterly budget and expenditure reporting for the HEERF Institutional Portion (ALN 84.425K) and Student Aid Portion (84.425E) for the quarters ending December 31, 2021 and March 31, 2022 were not posted on NTU?s website as required. Questioned Costs: None Context: Four out of four quarterly budget and expenditures reports required by the HEERF program. Cause and Effect: Internal controls were not designed and implemented to ensure HEERF reporting requirements were met. NTU did not comply with OMB Uniform Guidance related to reporting for the HEERF program. Auditors? Recommendation: Establish formal reporting procedures to ensure compliance with federal reporting requirements. Management?s Response: Formal policies and procedures for grants reporting will be developed by NTU. Detailed schedules by funding source will be prepared that identifies the reporting requirements and deadlines for submission. Communication of reporting due dates to appropriate NTU financial and programmatic personnel will be improved. This will help ensure all financial and administrative reports are submitted in a timely manner.
2022-007 ? Cash Management Federal Program Information: Funding Agency: All Major Programs Title: All Major Programs Assistance Listing Number: All Major Programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: Advanced grant/contract funds may not be transferred to other NTU accounts, lent to such NTU accounts, or expended for programs not authorized. There should be sufficient unrestricted cash and investment balances on hand to cover all unearned grant revenue associated with federal and nonfederal programs. Condition: NTU did not maintain cash and cash equivalents at least equal to the amount of unspent grant funds advanced from federal and nonfederal agencies at year-end. At May 31, 2022, NTU?s unrestricted cash and cash equivalents and unearned grant revenue totaled $29,728,594 and $34,490,432, respectively. As a result, unspent grant funds held by NTU exceeded the amount of available cash and cash equivalents by $5,761,748. Questioned Costs: None. Context: Federal programs that have been provided with advanced funds. Cause and Effect: NTU did not have effective internal controls to ensure sufficient cash and cash equivalents are on hand to cover all unearned grant revenue associated with federal and nonfederal programs. NTU is not in compliance with federal requirements. Auditor?s Recommendation: Thoroughly analyze the financial position of NTU and ensure adequate cash and cash equivalents are maintained in an amount at least equal to unearned grant revenues from federal and nonfederal sources. NTU may need to liquidate unrestricted investments and convert them into cash and cash equivalents or reallocate investments into securities backed by the full faith and credit of the United States government to accomplish this. Management?s Response: NTU has developed a monthly cash management schedule that tracks and identifies all grant funds along with total cash received in advance from grantors and amounts due to NTU. NTU will increase cash balances through the timely collection of outstanding grants receivable. NTU will also analyze cash requirements and may liquidate investments held in the Capital Reserve fund to ensure adequate cash is maintained for grants received in advance.
2022-014 ? Late Submission of Annual Federal Reporting Package Federal Program Information: Funding Agency: All major programs Title: All major programs Assistance Listing Number: All major programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: 2 CFR 200.512 requires that the annual federal reporting package including the data collection form be submitted within nine months after the end of the audit period. Condition: NTU did not submit the annual federal reporting package within nine months after May 31, 2022. Questioned Costs: None Context: The annual federal reporting package for the year ended May 31, 2022. Cause and Effect: Internal controls were not designed and implemented to the annual federal reporting package was submitted within the timeframe required by OMB Uniform Guidance. Auditors? Recommendation: NTU should improve internal controls to help ensure that financial statement balances are accurately reconciled to assist with the timely preparation and submission of the annual federal reporting package. Management?s Response: NTU has developed a comprehensive year-end financial close and annual federal reporting plan with the assistance of our consultants, Harshwal & Company, LLC in September 2022. This plan was not implemented until after the end of fiscal year 2022. As part of this plan, NTU will ensure that financial accounting books and records are reconciled and closed in a timely manner prior to providing the final trial balance to the auditor.
2022-008 ?Activities Allowed/Unallowed and Allowable Costs/Cost Principles Federal Program Information: Funding Agency: U.S. Department of Defense, National Science Foundation, U.S. Department of Energy, and U.S. Department of Education Title: Research and Development Cluster, Tribally Controlled Postsecondary Career and Technical Institutions. Higher Education Emergency Relief Fund (HEERF) Assistance Listing Number: 12.431, 47.076, 81.123, 84.245, 84.425 Award Period: June 1, 2021 ? May 31, 2022 Criteria: To be allowable under Federal awards, costs must be necessary and reasonable for the performance and administration of the federal award. Costs must meet the following criteria: 1) necessary and reasonable; 2) consistent with policies and procedures; 3) accorded consistent treatment; and 4) are adequately documented. Condition: We found the following in our review of federal expenditures: Research and Development Cluster ? ? One expenditure for the purchase of a gold spectrometer, microscope mainframe and accessories in the amount of $145,596 was incorrectly charged twice to the Expanding STEM Education to Meet Navajo Nation Needs project with the National Science Foundation. NTU subsequently corrected this by removing one of the duplicate charges from federal expenditures. ? One employee?s wages in the amount of $260 was incorrectly charged to Department of Defense Performance Enhancement Through HIS Assessment and Analysis Campaign Project. The employee?s wages should have been charged to another federal program. ? Two payroll transactions totaling $3,580 did not have accurate source documentation to support the allocation of salaries and wages charged to the program. Tribally Controlled Postsecondary Career and Technical Institutions ? ? One employee?s wages in the amount of $1,640.55 was incorrectly allocated and charged to the program. The employee?s salary should have been charged to the NTU general fund. Higher Education Emergency Relief Fund ? ? NTU incorrectly charged the HEERF Student Aid Portion (ALN 84.425E) for lost revenue in the amount of $870,725. NTU subsequently corrected this and charged the lost revenue to the HEERF Tribally Controlled Colleges and Universities portion (ALN 84.425K). Questioned Costs: None exceeding $25,000 as NTU made correcting adjustments to federal expenditures. Context: Four of fifty payroll and non-payroll transactions tested for the Research and Development Cluster. One of twenty-five payroll transactions tested for the Tribally Controlled Postsecondary Career and Technical Institutions program. One of twenty-nine non-payroll transactions tested for the Higher Education Emergency Relief Fund program. Cause and Effect: NTU did not have effective internal controls to ensure federal expenditures are accurately charged in accordance with federal activities allowed/unallowed and allowable costs/cost principles requirements. As a result, NTU was not in compliance with these federal requirements for the Research and Development Cluster, Tribally Controlled Post Secondary Career and Technical Institutions and HEERF programs. Auditor?s Recommendation: Improve internal controls to ensure expenditures are allowable under federal program requirements. This includes maintaining source documentation to support the allocation of payroll costs and ensuring expenses are not double recorded in the accounting system. Management?s Response: NTU will implement a monthly review of all grant expenditures to ensure amounts charged to federal awards are accurately posted and reflected in the accounting system. All journal entries will be reviewed for accuracy by the Accounting Manager and Senior Accountant. Payroll allocations provided by the Human Resources office will be included in the monthly review to ensure accuracy of the payroll expenditures. Principal Investigators and program managers will also be given read-only access to the accounting system to review expenditure postings for accuracy.
2022-013 ? Reporting Federal Program Information: Funding Agency: U.S. Department of Education Title: Higher Education Emergency Relief Fund (HEERF) Assistance Listing Number: 84.425 Award Period: June 1, 2021 ? May 31, 2022 Criteria: Internal controls must be in place to ensure performance and financial reporting requirements for federal award programs are met Condition: During our assessment of reporting requirements, we found the following: ? The quarterly budget and expenditure reporting for the HEERF Institutional Portion (ALN 84.425K) for the quarter ending December 31, 2021 was not completed. ? The quarterly budget and expenditure reporting for the HEERF Institutional Portion (ALN 84.425K) and Student Aid Portion (84.425E) for the quarters ending December 31, 2021 and March 31, 2022 were not posted on NTU?s website as required. Questioned Costs: None Context: Four out of four quarterly budget and expenditures reports required by the HEERF program. Cause and Effect: Internal controls were not designed and implemented to ensure HEERF reporting requirements were met. NTU did not comply with OMB Uniform Guidance related to reporting for the HEERF program. Auditors? Recommendation: Establish formal reporting procedures to ensure compliance with federal reporting requirements. Management?s Response: Formal policies and procedures for grants reporting will be developed by NTU. Detailed schedules by funding source will be prepared that identifies the reporting requirements and deadlines for submission. Communication of reporting due dates to appropriate NTU financial and programmatic personnel will be improved. This will help ensure all financial and administrative reports are submitted in a timely manner.
2022-007 ? Cash Management Federal Program Information: Funding Agency: All Major Programs Title: All Major Programs Assistance Listing Number: All Major Programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: Advanced grant/contract funds may not be transferred to other NTU accounts, lent to such NTU accounts, or expended for programs not authorized. There should be sufficient unrestricted cash and investment balances on hand to cover all unearned grant revenue associated with federal and nonfederal programs. Condition: NTU did not maintain cash and cash equivalents at least equal to the amount of unspent grant funds advanced from federal and nonfederal agencies at year-end. At May 31, 2022, NTU?s unrestricted cash and cash equivalents and unearned grant revenue totaled $29,728,594 and $34,490,432, respectively. As a result, unspent grant funds held by NTU exceeded the amount of available cash and cash equivalents by $5,761,748. Questioned Costs: None. Context: Federal programs that have been provided with advanced funds. Cause and Effect: NTU did not have effective internal controls to ensure sufficient cash and cash equivalents are on hand to cover all unearned grant revenue associated with federal and nonfederal programs. NTU is not in compliance with federal requirements. Auditor?s Recommendation: Thoroughly analyze the financial position of NTU and ensure adequate cash and cash equivalents are maintained in an amount at least equal to unearned grant revenues from federal and nonfederal sources. NTU may need to liquidate unrestricted investments and convert them into cash and cash equivalents or reallocate investments into securities backed by the full faith and credit of the United States government to accomplish this. Management?s Response: NTU has developed a monthly cash management schedule that tracks and identifies all grant funds along with total cash received in advance from grantors and amounts due to NTU. NTU will increase cash balances through the timely collection of outstanding grants receivable. NTU will also analyze cash requirements and may liquidate investments held in the Capital Reserve fund to ensure adequate cash is maintained for grants received in advance.
2022-014 ? Late Submission of Annual Federal Reporting Package Federal Program Information: Funding Agency: All major programs Title: All major programs Assistance Listing Number: All major programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: 2 CFR 200.512 requires that the annual federal reporting package including the data collection form be submitted within nine months after the end of the audit period. Condition: NTU did not submit the annual federal reporting package within nine months after May 31, 2022. Questioned Costs: None Context: The annual federal reporting package for the year ended May 31, 2022. Cause and Effect: Internal controls were not designed and implemented to the annual federal reporting package was submitted within the timeframe required by OMB Uniform Guidance. Auditors? Recommendation: NTU should improve internal controls to help ensure that financial statement balances are accurately reconciled to assist with the timely preparation and submission of the annual federal reporting package. Management?s Response: NTU has developed a comprehensive year-end financial close and annual federal reporting plan with the assistance of our consultants, Harshwal & Company, LLC in September 2022. This plan was not implemented until after the end of fiscal year 2022. As part of this plan, NTU will ensure that financial accounting books and records are reconciled and closed in a timely manner prior to providing the final trial balance to the auditor.
2022-008 ?Activities Allowed/Unallowed and Allowable Costs/Cost Principles Federal Program Information: Funding Agency: U.S. Department of Defense, National Science Foundation, U.S. Department of Energy, and U.S. Department of Education Title: Research and Development Cluster, Tribally Controlled Postsecondary Career and Technical Institutions. Higher Education Emergency Relief Fund (HEERF) Assistance Listing Number: 12.431, 47.076, 81.123, 84.245, 84.425 Award Period: June 1, 2021 ? May 31, 2022 Criteria: To be allowable under Federal awards, costs must be necessary and reasonable for the performance and administration of the federal award. Costs must meet the following criteria: 1) necessary and reasonable; 2) consistent with policies and procedures; 3) accorded consistent treatment; and 4) are adequately documented. Condition: We found the following in our review of federal expenditures: Research and Development Cluster ? ? One expenditure for the purchase of a gold spectrometer, microscope mainframe and accessories in the amount of $145,596 was incorrectly charged twice to the Expanding STEM Education to Meet Navajo Nation Needs project with the National Science Foundation. NTU subsequently corrected this by removing one of the duplicate charges from federal expenditures. ? One employee?s wages in the amount of $260 was incorrectly charged to Department of Defense Performance Enhancement Through HIS Assessment and Analysis Campaign Project. The employee?s wages should have been charged to another federal program. ? Two payroll transactions totaling $3,580 did not have accurate source documentation to support the allocation of salaries and wages charged to the program. Tribally Controlled Postsecondary Career and Technical Institutions ? ? One employee?s wages in the amount of $1,640.55 was incorrectly allocated and charged to the program. The employee?s salary should have been charged to the NTU general fund. Higher Education Emergency Relief Fund ? ? NTU incorrectly charged the HEERF Student Aid Portion (ALN 84.425E) for lost revenue in the amount of $870,725. NTU subsequently corrected this and charged the lost revenue to the HEERF Tribally Controlled Colleges and Universities portion (ALN 84.425K). Questioned Costs: None exceeding $25,000 as NTU made correcting adjustments to federal expenditures. Context: Four of fifty payroll and non-payroll transactions tested for the Research and Development Cluster. One of twenty-five payroll transactions tested for the Tribally Controlled Postsecondary Career and Technical Institutions program. One of twenty-nine non-payroll transactions tested for the Higher Education Emergency Relief Fund program. Cause and Effect: NTU did not have effective internal controls to ensure federal expenditures are accurately charged in accordance with federal activities allowed/unallowed and allowable costs/cost principles requirements. As a result, NTU was not in compliance with these federal requirements for the Research and Development Cluster, Tribally Controlled Post Secondary Career and Technical Institutions and HEERF programs. Auditor?s Recommendation: Improve internal controls to ensure expenditures are allowable under federal program requirements. This includes maintaining source documentation to support the allocation of payroll costs and ensuring expenses are not double recorded in the accounting system. Management?s Response: NTU will implement a monthly review of all grant expenditures to ensure amounts charged to federal awards are accurately posted and reflected in the accounting system. All journal entries will be reviewed for accuracy by the Accounting Manager and Senior Accountant. Payroll allocations provided by the Human Resources office will be included in the monthly review to ensure accuracy of the payroll expenditures. Principal Investigators and program managers will also be given read-only access to the accounting system to review expenditure postings for accuracy.
2022-007 ? Cash Management Federal Program Information: Funding Agency: All Major Programs Title: All Major Programs Assistance Listing Number: All Major Programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: Advanced grant/contract funds may not be transferred to other NTU accounts, lent to such NTU accounts, or expended for programs not authorized. There should be sufficient unrestricted cash and investment balances on hand to cover all unearned grant revenue associated with federal and nonfederal programs. Condition: NTU did not maintain cash and cash equivalents at least equal to the amount of unspent grant funds advanced from federal and nonfederal agencies at year-end. At May 31, 2022, NTU?s unrestricted cash and cash equivalents and unearned grant revenue totaled $29,728,594 and $34,490,432, respectively. As a result, unspent grant funds held by NTU exceeded the amount of available cash and cash equivalents by $5,761,748. Questioned Costs: None. Context: Federal programs that have been provided with advanced funds. Cause and Effect: NTU did not have effective internal controls to ensure sufficient cash and cash equivalents are on hand to cover all unearned grant revenue associated with federal and nonfederal programs. NTU is not in compliance with federal requirements. Auditor?s Recommendation: Thoroughly analyze the financial position of NTU and ensure adequate cash and cash equivalents are maintained in an amount at least equal to unearned grant revenues from federal and nonfederal sources. NTU may need to liquidate unrestricted investments and convert them into cash and cash equivalents or reallocate investments into securities backed by the full faith and credit of the United States government to accomplish this. Management?s Response: NTU has developed a monthly cash management schedule that tracks and identifies all grant funds along with total cash received in advance from grantors and amounts due to NTU. NTU will increase cash balances through the timely collection of outstanding grants receivable. NTU will also analyze cash requirements and may liquidate investments held in the Capital Reserve fund to ensure adequate cash is maintained for grants received in advance.
2022-014 ? Late Submission of Annual Federal Reporting Package Federal Program Information: Funding Agency: All major programs Title: All major programs Assistance Listing Number: All major programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: 2 CFR 200.512 requires that the annual federal reporting package including the data collection form be submitted within nine months after the end of the audit period. Condition: NTU did not submit the annual federal reporting package within nine months after May 31, 2022. Questioned Costs: None Context: The annual federal reporting package for the year ended May 31, 2022. Cause and Effect: Internal controls were not designed and implemented to the annual federal reporting package was submitted within the timeframe required by OMB Uniform Guidance. Auditors? Recommendation: NTU should improve internal controls to help ensure that financial statement balances are accurately reconciled to assist with the timely preparation and submission of the annual federal reporting package. Management?s Response: NTU has developed a comprehensive year-end financial close and annual federal reporting plan with the assistance of our consultants, Harshwal & Company, LLC in September 2022. This plan was not implemented until after the end of fiscal year 2022. As part of this plan, NTU will ensure that financial accounting books and records are reconciled and closed in a timely manner prior to providing the final trial balance to the auditor.
2022-008 ?Activities Allowed/Unallowed and Allowable Costs/Cost Principles Federal Program Information: Funding Agency: U.S. Department of Defense, National Science Foundation, U.S. Department of Energy, and U.S. Department of Education Title: Research and Development Cluster, Tribally Controlled Postsecondary Career and Technical Institutions. Higher Education Emergency Relief Fund (HEERF) Assistance Listing Number: 12.431, 47.076, 81.123, 84.245, 84.425 Award Period: June 1, 2021 ? May 31, 2022 Criteria: To be allowable under Federal awards, costs must be necessary and reasonable for the performance and administration of the federal award. Costs must meet the following criteria: 1) necessary and reasonable; 2) consistent with policies and procedures; 3) accorded consistent treatment; and 4) are adequately documented. Condition: We found the following in our review of federal expenditures: Research and Development Cluster ? ? One expenditure for the purchase of a gold spectrometer, microscope mainframe and accessories in the amount of $145,596 was incorrectly charged twice to the Expanding STEM Education to Meet Navajo Nation Needs project with the National Science Foundation. NTU subsequently corrected this by removing one of the duplicate charges from federal expenditures. ? One employee?s wages in the amount of $260 was incorrectly charged to Department of Defense Performance Enhancement Through HIS Assessment and Analysis Campaign Project. The employee?s wages should have been charged to another federal program. ? Two payroll transactions totaling $3,580 did not have accurate source documentation to support the allocation of salaries and wages charged to the program. Tribally Controlled Postsecondary Career and Technical Institutions ? ? One employee?s wages in the amount of $1,640.55 was incorrectly allocated and charged to the program. The employee?s salary should have been charged to the NTU general fund. Higher Education Emergency Relief Fund ? ? NTU incorrectly charged the HEERF Student Aid Portion (ALN 84.425E) for lost revenue in the amount of $870,725. NTU subsequently corrected this and charged the lost revenue to the HEERF Tribally Controlled Colleges and Universities portion (ALN 84.425K). Questioned Costs: None exceeding $25,000 as NTU made correcting adjustments to federal expenditures. Context: Four of fifty payroll and non-payroll transactions tested for the Research and Development Cluster. One of twenty-five payroll transactions tested for the Tribally Controlled Postsecondary Career and Technical Institutions program. One of twenty-nine non-payroll transactions tested for the Higher Education Emergency Relief Fund program. Cause and Effect: NTU did not have effective internal controls to ensure federal expenditures are accurately charged in accordance with federal activities allowed/unallowed and allowable costs/cost principles requirements. As a result, NTU was not in compliance with these federal requirements for the Research and Development Cluster, Tribally Controlled Post Secondary Career and Technical Institutions and HEERF programs. Auditor?s Recommendation: Improve internal controls to ensure expenditures are allowable under federal program requirements. This includes maintaining source documentation to support the allocation of payroll costs and ensuring expenses are not double recorded in the accounting system. Management?s Response: NTU will implement a monthly review of all grant expenditures to ensure amounts charged to federal awards are accurately posted and reflected in the accounting system. All journal entries will be reviewed for accuracy by the Accounting Manager and Senior Accountant. Payroll allocations provided by the Human Resources office will be included in the monthly review to ensure accuracy of the payroll expenditures. Principal Investigators and program managers will also be given read-only access to the accounting system to review expenditure postings for accuracy.
2022-007 ? Cash Management Federal Program Information: Funding Agency: All Major Programs Title: All Major Programs Assistance Listing Number: All Major Programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: Advanced grant/contract funds may not be transferred to other NTU accounts, lent to such NTU accounts, or expended for programs not authorized. There should be sufficient unrestricted cash and investment balances on hand to cover all unearned grant revenue associated with federal and nonfederal programs. Condition: NTU did not maintain cash and cash equivalents at least equal to the amount of unspent grant funds advanced from federal and nonfederal agencies at year-end. At May 31, 2022, NTU?s unrestricted cash and cash equivalents and unearned grant revenue totaled $29,728,594 and $34,490,432, respectively. As a result, unspent grant funds held by NTU exceeded the amount of available cash and cash equivalents by $5,761,748. Questioned Costs: None. Context: Federal programs that have been provided with advanced funds. Cause and Effect: NTU did not have effective internal controls to ensure sufficient cash and cash equivalents are on hand to cover all unearned grant revenue associated with federal and nonfederal programs. NTU is not in compliance with federal requirements. Auditor?s Recommendation: Thoroughly analyze the financial position of NTU and ensure adequate cash and cash equivalents are maintained in an amount at least equal to unearned grant revenues from federal and nonfederal sources. NTU may need to liquidate unrestricted investments and convert them into cash and cash equivalents or reallocate investments into securities backed by the full faith and credit of the United States government to accomplish this. Management?s Response: NTU has developed a monthly cash management schedule that tracks and identifies all grant funds along with total cash received in advance from grantors and amounts due to NTU. NTU will increase cash balances through the timely collection of outstanding grants receivable. NTU will also analyze cash requirements and may liquidate investments held in the Capital Reserve fund to ensure adequate cash is maintained for grants received in advance.
2022-014 ? Late Submission of Annual Federal Reporting Package Federal Program Information: Funding Agency: All major programs Title: All major programs Assistance Listing Number: All major programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: 2 CFR 200.512 requires that the annual federal reporting package including the data collection form be submitted within nine months after the end of the audit period. Condition: NTU did not submit the annual federal reporting package within nine months after May 31, 2022. Questioned Costs: None Context: The annual federal reporting package for the year ended May 31, 2022. Cause and Effect: Internal controls were not designed and implemented to the annual federal reporting package was submitted within the timeframe required by OMB Uniform Guidance. Auditors? Recommendation: NTU should improve internal controls to help ensure that financial statement balances are accurately reconciled to assist with the timely preparation and submission of the annual federal reporting package. Management?s Response: NTU has developed a comprehensive year-end financial close and annual federal reporting plan with the assistance of our consultants, Harshwal & Company, LLC in September 2022. This plan was not implemented until after the end of fiscal year 2022. As part of this plan, NTU will ensure that financial accounting books and records are reconciled and closed in a timely manner prior to providing the final trial balance to the auditor.
2022-008 ?Activities Allowed/Unallowed and Allowable Costs/Cost Principles Federal Program Information: Funding Agency: U.S. Department of Defense, National Science Foundation, U.S. Department of Energy, and U.S. Department of Education Title: Research and Development Cluster, Tribally Controlled Postsecondary Career and Technical Institutions. Higher Education Emergency Relief Fund (HEERF) Assistance Listing Number: 12.431, 47.076, 81.123, 84.245, 84.425 Award Period: June 1, 2021 ? May 31, 2022 Criteria: To be allowable under Federal awards, costs must be necessary and reasonable for the performance and administration of the federal award. Costs must meet the following criteria: 1) necessary and reasonable; 2) consistent with policies and procedures; 3) accorded consistent treatment; and 4) are adequately documented. Condition: We found the following in our review of federal expenditures: Research and Development Cluster ? ? One expenditure for the purchase of a gold spectrometer, microscope mainframe and accessories in the amount of $145,596 was incorrectly charged twice to the Expanding STEM Education to Meet Navajo Nation Needs project with the National Science Foundation. NTU subsequently corrected this by removing one of the duplicate charges from federal expenditures. ? One employee?s wages in the amount of $260 was incorrectly charged to Department of Defense Performance Enhancement Through HIS Assessment and Analysis Campaign Project. The employee?s wages should have been charged to another federal program. ? Two payroll transactions totaling $3,580 did not have accurate source documentation to support the allocation of salaries and wages charged to the program. Tribally Controlled Postsecondary Career and Technical Institutions ? ? One employee?s wages in the amount of $1,640.55 was incorrectly allocated and charged to the program. The employee?s salary should have been charged to the NTU general fund. Higher Education Emergency Relief Fund ? ? NTU incorrectly charged the HEERF Student Aid Portion (ALN 84.425E) for lost revenue in the amount of $870,725. NTU subsequently corrected this and charged the lost revenue to the HEERF Tribally Controlled Colleges and Universities portion (ALN 84.425K). Questioned Costs: None exceeding $25,000 as NTU made correcting adjustments to federal expenditures. Context: Four of fifty payroll and non-payroll transactions tested for the Research and Development Cluster. One of twenty-five payroll transactions tested for the Tribally Controlled Postsecondary Career and Technical Institutions program. One of twenty-nine non-payroll transactions tested for the Higher Education Emergency Relief Fund program. Cause and Effect: NTU did not have effective internal controls to ensure federal expenditures are accurately charged in accordance with federal activities allowed/unallowed and allowable costs/cost principles requirements. As a result, NTU was not in compliance with these federal requirements for the Research and Development Cluster, Tribally Controlled Post Secondary Career and Technical Institutions and HEERF programs. Auditor?s Recommendation: Improve internal controls to ensure expenditures are allowable under federal program requirements. This includes maintaining source documentation to support the allocation of payroll costs and ensuring expenses are not double recorded in the accounting system. Management?s Response: NTU will implement a monthly review of all grant expenditures to ensure amounts charged to federal awards are accurately posted and reflected in the accounting system. All journal entries will be reviewed for accuracy by the Accounting Manager and Senior Accountant. Payroll allocations provided by the Human Resources office will be included in the monthly review to ensure accuracy of the payroll expenditures. Principal Investigators and program managers will also be given read-only access to the accounting system to review expenditure postings for accuracy.
2022-007 ? Cash Management Federal Program Information: Funding Agency: All Major Programs Title: All Major Programs Assistance Listing Number: All Major Programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: Advanced grant/contract funds may not be transferred to other NTU accounts, lent to such NTU accounts, or expended for programs not authorized. There should be sufficient unrestricted cash and investment balances on hand to cover all unearned grant revenue associated with federal and nonfederal programs. Condition: NTU did not maintain cash and cash equivalents at least equal to the amount of unspent grant funds advanced from federal and nonfederal agencies at year-end. At May 31, 2022, NTU?s unrestricted cash and cash equivalents and unearned grant revenue totaled $29,728,594 and $34,490,432, respectively. As a result, unspent grant funds held by NTU exceeded the amount of available cash and cash equivalents by $5,761,748. Questioned Costs: None. Context: Federal programs that have been provided with advanced funds. Cause and Effect: NTU did not have effective internal controls to ensure sufficient cash and cash equivalents are on hand to cover all unearned grant revenue associated with federal and nonfederal programs. NTU is not in compliance with federal requirements. Auditor?s Recommendation: Thoroughly analyze the financial position of NTU and ensure adequate cash and cash equivalents are maintained in an amount at least equal to unearned grant revenues from federal and nonfederal sources. NTU may need to liquidate unrestricted investments and convert them into cash and cash equivalents or reallocate investments into securities backed by the full faith and credit of the United States government to accomplish this. Management?s Response: NTU has developed a monthly cash management schedule that tracks and identifies all grant funds along with total cash received in advance from grantors and amounts due to NTU. NTU will increase cash balances through the timely collection of outstanding grants receivable. NTU will also analyze cash requirements and may liquidate investments held in the Capital Reserve fund to ensure adequate cash is maintained for grants received in advance.
2022-014 ? Late Submission of Annual Federal Reporting Package Federal Program Information: Funding Agency: All major programs Title: All major programs Assistance Listing Number: All major programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: 2 CFR 200.512 requires that the annual federal reporting package including the data collection form be submitted within nine months after the end of the audit period. Condition: NTU did not submit the annual federal reporting package within nine months after May 31, 2022. Questioned Costs: None Context: The annual federal reporting package for the year ended May 31, 2022. Cause and Effect: Internal controls were not designed and implemented to the annual federal reporting package was submitted within the timeframe required by OMB Uniform Guidance. Auditors? Recommendation: NTU should improve internal controls to help ensure that financial statement balances are accurately reconciled to assist with the timely preparation and submission of the annual federal reporting package. Management?s Response: NTU has developed a comprehensive year-end financial close and annual federal reporting plan with the assistance of our consultants, Harshwal & Company, LLC in September 2022. This plan was not implemented until after the end of fiscal year 2022. As part of this plan, NTU will ensure that financial accounting books and records are reconciled and closed in a timely manner prior to providing the final trial balance to the auditor.
2022-008 ?Activities Allowed/Unallowed and Allowable Costs/Cost Principles Federal Program Information: Funding Agency: U.S. Department of Defense, National Science Foundation, U.S. Department of Energy, and U.S. Department of Education Title: Research and Development Cluster, Tribally Controlled Postsecondary Career and Technical Institutions. Higher Education Emergency Relief Fund (HEERF) Assistance Listing Number: 12.431, 47.076, 81.123, 84.245, 84.425 Award Period: June 1, 2021 ? May 31, 2022 Criteria: To be allowable under Federal awards, costs must be necessary and reasonable for the performance and administration of the federal award. Costs must meet the following criteria: 1) necessary and reasonable; 2) consistent with policies and procedures; 3) accorded consistent treatment; and 4) are adequately documented. Condition: We found the following in our review of federal expenditures: Research and Development Cluster ? ? One expenditure for the purchase of a gold spectrometer, microscope mainframe and accessories in the amount of $145,596 was incorrectly charged twice to the Expanding STEM Education to Meet Navajo Nation Needs project with the National Science Foundation. NTU subsequently corrected this by removing one of the duplicate charges from federal expenditures. ? One employee?s wages in the amount of $260 was incorrectly charged to Department of Defense Performance Enhancement Through HIS Assessment and Analysis Campaign Project. The employee?s wages should have been charged to another federal program. ? Two payroll transactions totaling $3,580 did not have accurate source documentation to support the allocation of salaries and wages charged to the program. Tribally Controlled Postsecondary Career and Technical Institutions ? ? One employee?s wages in the amount of $1,640.55 was incorrectly allocated and charged to the program. The employee?s salary should have been charged to the NTU general fund. Higher Education Emergency Relief Fund ? ? NTU incorrectly charged the HEERF Student Aid Portion (ALN 84.425E) for lost revenue in the amount of $870,725. NTU subsequently corrected this and charged the lost revenue to the HEERF Tribally Controlled Colleges and Universities portion (ALN 84.425K). Questioned Costs: None exceeding $25,000 as NTU made correcting adjustments to federal expenditures. Context: Four of fifty payroll and non-payroll transactions tested for the Research and Development Cluster. One of twenty-five payroll transactions tested for the Tribally Controlled Postsecondary Career and Technical Institutions program. One of twenty-nine non-payroll transactions tested for the Higher Education Emergency Relief Fund program. Cause and Effect: NTU did not have effective internal controls to ensure federal expenditures are accurately charged in accordance with federal activities allowed/unallowed and allowable costs/cost principles requirements. As a result, NTU was not in compliance with these federal requirements for the Research and Development Cluster, Tribally Controlled Post Secondary Career and Technical Institutions and HEERF programs. Auditor?s Recommendation: Improve internal controls to ensure expenditures are allowable under federal program requirements. This includes maintaining source documentation to support the allocation of payroll costs and ensuring expenses are not double recorded in the accounting system. Management?s Response: NTU will implement a monthly review of all grant expenditures to ensure amounts charged to federal awards are accurately posted and reflected in the accounting system. All journal entries will be reviewed for accuracy by the Accounting Manager and Senior Accountant. Payroll allocations provided by the Human Resources office will be included in the monthly review to ensure accuracy of the payroll expenditures. Principal Investigators and program managers will also be given read-only access to the accounting system to review expenditure postings for accuracy.
2022-007 ? Cash Management Federal Program Information: Funding Agency: All Major Programs Title: All Major Programs Assistance Listing Number: All Major Programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: Advanced grant/contract funds may not be transferred to other NTU accounts, lent to such NTU accounts, or expended for programs not authorized. There should be sufficient unrestricted cash and investment balances on hand to cover all unearned grant revenue associated with federal and nonfederal programs. Condition: NTU did not maintain cash and cash equivalents at least equal to the amount of unspent grant funds advanced from federal and nonfederal agencies at year-end. At May 31, 2022, NTU?s unrestricted cash and cash equivalents and unearned grant revenue totaled $29,728,594 and $34,490,432, respectively. As a result, unspent grant funds held by NTU exceeded the amount of available cash and cash equivalents by $5,761,748. Questioned Costs: None. Context: Federal programs that have been provided with advanced funds. Cause and Effect: NTU did not have effective internal controls to ensure sufficient cash and cash equivalents are on hand to cover all unearned grant revenue associated with federal and nonfederal programs. NTU is not in compliance with federal requirements. Auditor?s Recommendation: Thoroughly analyze the financial position of NTU and ensure adequate cash and cash equivalents are maintained in an amount at least equal to unearned grant revenues from federal and nonfederal sources. NTU may need to liquidate unrestricted investments and convert them into cash and cash equivalents or reallocate investments into securities backed by the full faith and credit of the United States government to accomplish this. Management?s Response: NTU has developed a monthly cash management schedule that tracks and identifies all grant funds along with total cash received in advance from grantors and amounts due to NTU. NTU will increase cash balances through the timely collection of outstanding grants receivable. NTU will also analyze cash requirements and may liquidate investments held in the Capital Reserve fund to ensure adequate cash is maintained for grants received in advance.
2022-014 ? Late Submission of Annual Federal Reporting Package Federal Program Information: Funding Agency: All major programs Title: All major programs Assistance Listing Number: All major programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: 2 CFR 200.512 requires that the annual federal reporting package including the data collection form be submitted within nine months after the end of the audit period. Condition: NTU did not submit the annual federal reporting package within nine months after May 31, 2022. Questioned Costs: None Context: The annual federal reporting package for the year ended May 31, 2022. Cause and Effect: Internal controls were not designed and implemented to the annual federal reporting package was submitted within the timeframe required by OMB Uniform Guidance. Auditors? Recommendation: NTU should improve internal controls to help ensure that financial statement balances are accurately reconciled to assist with the timely preparation and submission of the annual federal reporting package. Management?s Response: NTU has developed a comprehensive year-end financial close and annual federal reporting plan with the assistance of our consultants, Harshwal & Company, LLC in September 2022. This plan was not implemented until after the end of fiscal year 2022. As part of this plan, NTU will ensure that financial accounting books and records are reconciled and closed in a timely manner prior to providing the final trial balance to the auditor.
2022-008 ?Activities Allowed/Unallowed and Allowable Costs/Cost Principles Federal Program Information: Funding Agency: U.S. Department of Defense, National Science Foundation, U.S. Department of Energy, and U.S. Department of Education Title: Research and Development Cluster, Tribally Controlled Postsecondary Career and Technical Institutions. Higher Education Emergency Relief Fund (HEERF) Assistance Listing Number: 12.431, 47.076, 81.123, 84.245, 84.425 Award Period: June 1, 2021 ? May 31, 2022 Criteria: To be allowable under Federal awards, costs must be necessary and reasonable for the performance and administration of the federal award. Costs must meet the following criteria: 1) necessary and reasonable; 2) consistent with policies and procedures; 3) accorded consistent treatment; and 4) are adequately documented. Condition: We found the following in our review of federal expenditures: Research and Development Cluster ? ? One expenditure for the purchase of a gold spectrometer, microscope mainframe and accessories in the amount of $145,596 was incorrectly charged twice to the Expanding STEM Education to Meet Navajo Nation Needs project with the National Science Foundation. NTU subsequently corrected this by removing one of the duplicate charges from federal expenditures. ? One employee?s wages in the amount of $260 was incorrectly charged to Department of Defense Performance Enhancement Through HIS Assessment and Analysis Campaign Project. The employee?s wages should have been charged to another federal program. ? Two payroll transactions totaling $3,580 did not have accurate source documentation to support the allocation of salaries and wages charged to the program. Tribally Controlled Postsecondary Career and Technical Institutions ? ? One employee?s wages in the amount of $1,640.55 was incorrectly allocated and charged to the program. The employee?s salary should have been charged to the NTU general fund. Higher Education Emergency Relief Fund ? ? NTU incorrectly charged the HEERF Student Aid Portion (ALN 84.425E) for lost revenue in the amount of $870,725. NTU subsequently corrected this and charged the lost revenue to the HEERF Tribally Controlled Colleges and Universities portion (ALN 84.425K). Questioned Costs: None exceeding $25,000 as NTU made correcting adjustments to federal expenditures. Context: Four of fifty payroll and non-payroll transactions tested for the Research and Development Cluster. One of twenty-five payroll transactions tested for the Tribally Controlled Postsecondary Career and Technical Institutions program. One of twenty-nine non-payroll transactions tested for the Higher Education Emergency Relief Fund program. Cause and Effect: NTU did not have effective internal controls to ensure federal expenditures are accurately charged in accordance with federal activities allowed/unallowed and allowable costs/cost principles requirements. As a result, NTU was not in compliance with these federal requirements for the Research and Development Cluster, Tribally Controlled Post Secondary Career and Technical Institutions and HEERF programs. Auditor?s Recommendation: Improve internal controls to ensure expenditures are allowable under federal program requirements. This includes maintaining source documentation to support the allocation of payroll costs and ensuring expenses are not double recorded in the accounting system. Management?s Response: NTU will implement a monthly review of all grant expenditures to ensure amounts charged to federal awards are accurately posted and reflected in the accounting system. All journal entries will be reviewed for accuracy by the Accounting Manager and Senior Accountant. Payroll allocations provided by the Human Resources office will be included in the monthly review to ensure accuracy of the payroll expenditures. Principal Investigators and program managers will also be given read-only access to the accounting system to review expenditure postings for accuracy.
2022-007 ? Cash Management Federal Program Information: Funding Agency: All Major Programs Title: All Major Programs Assistance Listing Number: All Major Programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: Advanced grant/contract funds may not be transferred to other NTU accounts, lent to such NTU accounts, or expended for programs not authorized. There should be sufficient unrestricted cash and investment balances on hand to cover all unearned grant revenue associated with federal and nonfederal programs. Condition: NTU did not maintain cash and cash equivalents at least equal to the amount of unspent grant funds advanced from federal and nonfederal agencies at year-end. At May 31, 2022, NTU?s unrestricted cash and cash equivalents and unearned grant revenue totaled $29,728,594 and $34,490,432, respectively. As a result, unspent grant funds held by NTU exceeded the amount of available cash and cash equivalents by $5,761,748. Questioned Costs: None. Context: Federal programs that have been provided with advanced funds. Cause and Effect: NTU did not have effective internal controls to ensure sufficient cash and cash equivalents are on hand to cover all unearned grant revenue associated with federal and nonfederal programs. NTU is not in compliance with federal requirements. Auditor?s Recommendation: Thoroughly analyze the financial position of NTU and ensure adequate cash and cash equivalents are maintained in an amount at least equal to unearned grant revenues from federal and nonfederal sources. NTU may need to liquidate unrestricted investments and convert them into cash and cash equivalents or reallocate investments into securities backed by the full faith and credit of the United States government to accomplish this. Management?s Response: NTU has developed a monthly cash management schedule that tracks and identifies all grant funds along with total cash received in advance from grantors and amounts due to NTU. NTU will increase cash balances through the timely collection of outstanding grants receivable. NTU will also analyze cash requirements and may liquidate investments held in the Capital Reserve fund to ensure adequate cash is maintained for grants received in advance.
2022-014 ? Late Submission of Annual Federal Reporting Package Federal Program Information: Funding Agency: All major programs Title: All major programs Assistance Listing Number: All major programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: 2 CFR 200.512 requires that the annual federal reporting package including the data collection form be submitted within nine months after the end of the audit period. Condition: NTU did not submit the annual federal reporting package within nine months after May 31, 2022. Questioned Costs: None Context: The annual federal reporting package for the year ended May 31, 2022. Cause and Effect: Internal controls were not designed and implemented to the annual federal reporting package was submitted within the timeframe required by OMB Uniform Guidance. Auditors? Recommendation: NTU should improve internal controls to help ensure that financial statement balances are accurately reconciled to assist with the timely preparation and submission of the annual federal reporting package. Management?s Response: NTU has developed a comprehensive year-end financial close and annual federal reporting plan with the assistance of our consultants, Harshwal & Company, LLC in September 2022. This plan was not implemented until after the end of fiscal year 2022. As part of this plan, NTU will ensure that financial accounting books and records are reconciled and closed in a timely manner prior to providing the final trial balance to the auditor.
2022-008 ?Activities Allowed/Unallowed and Allowable Costs/Cost Principles Federal Program Information: Funding Agency: U.S. Department of Defense, National Science Foundation, U.S. Department of Energy, and U.S. Department of Education Title: Research and Development Cluster, Tribally Controlled Postsecondary Career and Technical Institutions. Higher Education Emergency Relief Fund (HEERF) Assistance Listing Number: 12.431, 47.076, 81.123, 84.245, 84.425 Award Period: June 1, 2021 ? May 31, 2022 Criteria: To be allowable under Federal awards, costs must be necessary and reasonable for the performance and administration of the federal award. Costs must meet the following criteria: 1) necessary and reasonable; 2) consistent with policies and procedures; 3) accorded consistent treatment; and 4) are adequately documented. Condition: We found the following in our review of federal expenditures: Research and Development Cluster ? ? One expenditure for the purchase of a gold spectrometer, microscope mainframe and accessories in the amount of $145,596 was incorrectly charged twice to the Expanding STEM Education to Meet Navajo Nation Needs project with the National Science Foundation. NTU subsequently corrected this by removing one of the duplicate charges from federal expenditures. ? One employee?s wages in the amount of $260 was incorrectly charged to Department of Defense Performance Enhancement Through HIS Assessment and Analysis Campaign Project. The employee?s wages should have been charged to another federal program. ? Two payroll transactions totaling $3,580 did not have accurate source documentation to support the allocation of salaries and wages charged to the program. Tribally Controlled Postsecondary Career and Technical Institutions ? ? One employee?s wages in the amount of $1,640.55 was incorrectly allocated and charged to the program. The employee?s salary should have been charged to the NTU general fund. Higher Education Emergency Relief Fund ? ? NTU incorrectly charged the HEERF Student Aid Portion (ALN 84.425E) for lost revenue in the amount of $870,725. NTU subsequently corrected this and charged the lost revenue to the HEERF Tribally Controlled Colleges and Universities portion (ALN 84.425K). Questioned Costs: None exceeding $25,000 as NTU made correcting adjustments to federal expenditures. Context: Four of fifty payroll and non-payroll transactions tested for the Research and Development Cluster. One of twenty-five payroll transactions tested for the Tribally Controlled Postsecondary Career and Technical Institutions program. One of twenty-nine non-payroll transactions tested for the Higher Education Emergency Relief Fund program. Cause and Effect: NTU did not have effective internal controls to ensure federal expenditures are accurately charged in accordance with federal activities allowed/unallowed and allowable costs/cost principles requirements. As a result, NTU was not in compliance with these federal requirements for the Research and Development Cluster, Tribally Controlled Post Secondary Career and Technical Institutions and HEERF programs. Auditor?s Recommendation: Improve internal controls to ensure expenditures are allowable under federal program requirements. This includes maintaining source documentation to support the allocation of payroll costs and ensuring expenses are not double recorded in the accounting system. Management?s Response: NTU will implement a monthly review of all grant expenditures to ensure amounts charged to federal awards are accurately posted and reflected in the accounting system. All journal entries will be reviewed for accuracy by the Accounting Manager and Senior Accountant. Payroll allocations provided by the Human Resources office will be included in the monthly review to ensure accuracy of the payroll expenditures. Principal Investigators and program managers will also be given read-only access to the accounting system to review expenditure postings for accuracy.
2022-007 ? Cash Management Federal Program Information: Funding Agency: All Major Programs Title: All Major Programs Assistance Listing Number: All Major Programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: Advanced grant/contract funds may not be transferred to other NTU accounts, lent to such NTU accounts, or expended for programs not authorized. There should be sufficient unrestricted cash and investment balances on hand to cover all unearned grant revenue associated with federal and nonfederal programs. Condition: NTU did not maintain cash and cash equivalents at least equal to the amount of unspent grant funds advanced from federal and nonfederal agencies at year-end. At May 31, 2022, NTU?s unrestricted cash and cash equivalents and unearned grant revenue totaled $29,728,594 and $34,490,432, respectively. As a result, unspent grant funds held by NTU exceeded the amount of available cash and cash equivalents by $5,761,748. Questioned Costs: None. Context: Federal programs that have been provided with advanced funds. Cause and Effect: NTU did not have effective internal controls to ensure sufficient cash and cash equivalents are on hand to cover all unearned grant revenue associated with federal and nonfederal programs. NTU is not in compliance with federal requirements. Auditor?s Recommendation: Thoroughly analyze the financial position of NTU and ensure adequate cash and cash equivalents are maintained in an amount at least equal to unearned grant revenues from federal and nonfederal sources. NTU may need to liquidate unrestricted investments and convert them into cash and cash equivalents or reallocate investments into securities backed by the full faith and credit of the United States government to accomplish this. Management?s Response: NTU has developed a monthly cash management schedule that tracks and identifies all grant funds along with total cash received in advance from grantors and amounts due to NTU. NTU will increase cash balances through the timely collection of outstanding grants receivable. NTU will also analyze cash requirements and may liquidate investments held in the Capital Reserve fund to ensure adequate cash is maintained for grants received in advance.
2022-014 ? Late Submission of Annual Federal Reporting Package Federal Program Information: Funding Agency: All major programs Title: All major programs Assistance Listing Number: All major programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: 2 CFR 200.512 requires that the annual federal reporting package including the data collection form be submitted within nine months after the end of the audit period. Condition: NTU did not submit the annual federal reporting package within nine months after May 31, 2022. Questioned Costs: None Context: The annual federal reporting package for the year ended May 31, 2022. Cause and Effect: Internal controls were not designed and implemented to the annual federal reporting package was submitted within the timeframe required by OMB Uniform Guidance. Auditors? Recommendation: NTU should improve internal controls to help ensure that financial statement balances are accurately reconciled to assist with the timely preparation and submission of the annual federal reporting package. Management?s Response: NTU has developed a comprehensive year-end financial close and annual federal reporting plan with the assistance of our consultants, Harshwal & Company, LLC in September 2022. This plan was not implemented until after the end of fiscal year 2022. As part of this plan, NTU will ensure that financial accounting books and records are reconciled and closed in a timely manner prior to providing the final trial balance to the auditor.
2022-008 ?Activities Allowed/Unallowed and Allowable Costs/Cost Principles Federal Program Information: Funding Agency: U.S. Department of Defense, National Science Foundation, U.S. Department of Energy, and U.S. Department of Education Title: Research and Development Cluster, Tribally Controlled Postsecondary Career and Technical Institutions. Higher Education Emergency Relief Fund (HEERF) Assistance Listing Number: 12.431, 47.076, 81.123, 84.245, 84.425 Award Period: June 1, 2021 ? May 31, 2022 Criteria: To be allowable under Federal awards, costs must be necessary and reasonable for the performance and administration of the federal award. Costs must meet the following criteria: 1) necessary and reasonable; 2) consistent with policies and procedures; 3) accorded consistent treatment; and 4) are adequately documented. Condition: We found the following in our review of federal expenditures: Research and Development Cluster ? ? One expenditure for the purchase of a gold spectrometer, microscope mainframe and accessories in the amount of $145,596 was incorrectly charged twice to the Expanding STEM Education to Meet Navajo Nation Needs project with the National Science Foundation. NTU subsequently corrected this by removing one of the duplicate charges from federal expenditures. ? One employee?s wages in the amount of $260 was incorrectly charged to Department of Defense Performance Enhancement Through HIS Assessment and Analysis Campaign Project. The employee?s wages should have been charged to another federal program. ? Two payroll transactions totaling $3,580 did not have accurate source documentation to support the allocation of salaries and wages charged to the program. Tribally Controlled Postsecondary Career and Technical Institutions ? ? One employee?s wages in the amount of $1,640.55 was incorrectly allocated and charged to the program. The employee?s salary should have been charged to the NTU general fund. Higher Education Emergency Relief Fund ? ? NTU incorrectly charged the HEERF Student Aid Portion (ALN 84.425E) for lost revenue in the amount of $870,725. NTU subsequently corrected this and charged the lost revenue to the HEERF Tribally Controlled Colleges and Universities portion (ALN 84.425K). Questioned Costs: None exceeding $25,000 as NTU made correcting adjustments to federal expenditures. Context: Four of fifty payroll and non-payroll transactions tested for the Research and Development Cluster. One of twenty-five payroll transactions tested for the Tribally Controlled Postsecondary Career and Technical Institutions program. One of twenty-nine non-payroll transactions tested for the Higher Education Emergency Relief Fund program. Cause and Effect: NTU did not have effective internal controls to ensure federal expenditures are accurately charged in accordance with federal activities allowed/unallowed and allowable costs/cost principles requirements. As a result, NTU was not in compliance with these federal requirements for the Research and Development Cluster, Tribally Controlled Post Secondary Career and Technical Institutions and HEERF programs. Auditor?s Recommendation: Improve internal controls to ensure expenditures are allowable under federal program requirements. This includes maintaining source documentation to support the allocation of payroll costs and ensuring expenses are not double recorded in the accounting system. Management?s Response: NTU will implement a monthly review of all grant expenditures to ensure amounts charged to federal awards are accurately posted and reflected in the accounting system. All journal entries will be reviewed for accuracy by the Accounting Manager and Senior Accountant. Payroll allocations provided by the Human Resources office will be included in the monthly review to ensure accuracy of the payroll expenditures. Principal Investigators and program managers will also be given read-only access to the accounting system to review expenditure postings for accuracy.
2022-007 ? Cash Management Federal Program Information: Funding Agency: All Major Programs Title: All Major Programs Assistance Listing Number: All Major Programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: Advanced grant/contract funds may not be transferred to other NTU accounts, lent to such NTU accounts, or expended for programs not authorized. There should be sufficient unrestricted cash and investment balances on hand to cover all unearned grant revenue associated with federal and nonfederal programs. Condition: NTU did not maintain cash and cash equivalents at least equal to the amount of unspent grant funds advanced from federal and nonfederal agencies at year-end. At May 31, 2022, NTU?s unrestricted cash and cash equivalents and unearned grant revenue totaled $29,728,594 and $34,490,432, respectively. As a result, unspent grant funds held by NTU exceeded the amount of available cash and cash equivalents by $5,761,748. Questioned Costs: None. Context: Federal programs that have been provided with advanced funds. Cause and Effect: NTU did not have effective internal controls to ensure sufficient cash and cash equivalents are on hand to cover all unearned grant revenue associated with federal and nonfederal programs. NTU is not in compliance with federal requirements. Auditor?s Recommendation: Thoroughly analyze the financial position of NTU and ensure adequate cash and cash equivalents are maintained in an amount at least equal to unearned grant revenues from federal and nonfederal sources. NTU may need to liquidate unrestricted investments and convert them into cash and cash equivalents or reallocate investments into securities backed by the full faith and credit of the United States government to accomplish this. Management?s Response: NTU has developed a monthly cash management schedule that tracks and identifies all grant funds along with total cash received in advance from grantors and amounts due to NTU. NTU will increase cash balances through the timely collection of outstanding grants receivable. NTU will also analyze cash requirements and may liquidate investments held in the Capital Reserve fund to ensure adequate cash is maintained for grants received in advance.
2022-014 ? Late Submission of Annual Federal Reporting Package Federal Program Information: Funding Agency: All major programs Title: All major programs Assistance Listing Number: All major programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: 2 CFR 200.512 requires that the annual federal reporting package including the data collection form be submitted within nine months after the end of the audit period. Condition: NTU did not submit the annual federal reporting package within nine months after May 31, 2022. Questioned Costs: None Context: The annual federal reporting package for the year ended May 31, 2022. Cause and Effect: Internal controls were not designed and implemented to the annual federal reporting package was submitted within the timeframe required by OMB Uniform Guidance. Auditors? Recommendation: NTU should improve internal controls to help ensure that financial statement balances are accurately reconciled to assist with the timely preparation and submission of the annual federal reporting package. Management?s Response: NTU has developed a comprehensive year-end financial close and annual federal reporting plan with the assistance of our consultants, Harshwal & Company, LLC in September 2022. This plan was not implemented until after the end of fiscal year 2022. As part of this plan, NTU will ensure that financial accounting books and records are reconciled and closed in a timely manner prior to providing the final trial balance to the auditor.
2022-007 ? Cash Management Federal Program Information: Funding Agency: All Major Programs Title: All Major Programs Assistance Listing Number: All Major Programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: Advanced grant/contract funds may not be transferred to other NTU accounts, lent to such NTU accounts, or expended for programs not authorized. There should be sufficient unrestricted cash and investment balances on hand to cover all unearned grant revenue associated with federal and nonfederal programs. Condition: NTU did not maintain cash and cash equivalents at least equal to the amount of unspent grant funds advanced from federal and nonfederal agencies at year-end. At May 31, 2022, NTU?s unrestricted cash and cash equivalents and unearned grant revenue totaled $29,728,594 and $34,490,432, respectively. As a result, unspent grant funds held by NTU exceeded the amount of available cash and cash equivalents by $5,761,748. Questioned Costs: None. Context: Federal programs that have been provided with advanced funds. Cause and Effect: NTU did not have effective internal controls to ensure sufficient cash and cash equivalents are on hand to cover all unearned grant revenue associated with federal and nonfederal programs. NTU is not in compliance with federal requirements. Auditor?s Recommendation: Thoroughly analyze the financial position of NTU and ensure adequate cash and cash equivalents are maintained in an amount at least equal to unearned grant revenues from federal and nonfederal sources. NTU may need to liquidate unrestricted investments and convert them into cash and cash equivalents or reallocate investments into securities backed by the full faith and credit of the United States government to accomplish this. Management?s Response: NTU has developed a monthly cash management schedule that tracks and identifies all grant funds along with total cash received in advance from grantors and amounts due to NTU. NTU will increase cash balances through the timely collection of outstanding grants receivable. NTU will also analyze cash requirements and may liquidate investments held in the Capital Reserve fund to ensure adequate cash is maintained for grants received in advance.
2022-014 ? Late Submission of Annual Federal Reporting Package Federal Program Information: Funding Agency: All major programs Title: All major programs Assistance Listing Number: All major programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: 2 CFR 200.512 requires that the annual federal reporting package including the data collection form be submitted within nine months after the end of the audit period. Condition: NTU did not submit the annual federal reporting package within nine months after May 31, 2022. Questioned Costs: None Context: The annual federal reporting package for the year ended May 31, 2022. Cause and Effect: Internal controls were not designed and implemented to the annual federal reporting package was submitted within the timeframe required by OMB Uniform Guidance. Auditors? Recommendation: NTU should improve internal controls to help ensure that financial statement balances are accurately reconciled to assist with the timely preparation and submission of the annual federal reporting package. Management?s Response: NTU has developed a comprehensive year-end financial close and annual federal reporting plan with the assistance of our consultants, Harshwal & Company, LLC in September 2022. This plan was not implemented until after the end of fiscal year 2022. As part of this plan, NTU will ensure that financial accounting books and records are reconciled and closed in a timely manner prior to providing the final trial balance to the auditor.
2022-007 ? Cash Management Federal Program Information: Funding Agency: All Major Programs Title: All Major Programs Assistance Listing Number: All Major Programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: Advanced grant/contract funds may not be transferred to other NTU accounts, lent to such NTU accounts, or expended for programs not authorized. There should be sufficient unrestricted cash and investment balances on hand to cover all unearned grant revenue associated with federal and nonfederal programs. Condition: NTU did not maintain cash and cash equivalents at least equal to the amount of unspent grant funds advanced from federal and nonfederal agencies at year-end. At May 31, 2022, NTU?s unrestricted cash and cash equivalents and unearned grant revenue totaled $29,728,594 and $34,490,432, respectively. As a result, unspent grant funds held by NTU exceeded the amount of available cash and cash equivalents by $5,761,748. Questioned Costs: None. Context: Federal programs that have been provided with advanced funds. Cause and Effect: NTU did not have effective internal controls to ensure sufficient cash and cash equivalents are on hand to cover all unearned grant revenue associated with federal and nonfederal programs. NTU is not in compliance with federal requirements. Auditor?s Recommendation: Thoroughly analyze the financial position of NTU and ensure adequate cash and cash equivalents are maintained in an amount at least equal to unearned grant revenues from federal and nonfederal sources. NTU may need to liquidate unrestricted investments and convert them into cash and cash equivalents or reallocate investments into securities backed by the full faith and credit of the United States government to accomplish this. Management?s Response: NTU has developed a monthly cash management schedule that tracks and identifies all grant funds along with total cash received in advance from grantors and amounts due to NTU. NTU will increase cash balances through the timely collection of outstanding grants receivable. NTU will also analyze cash requirements and may liquidate investments held in the Capital Reserve fund to ensure adequate cash is maintained for grants received in advance.
2022-014 ? Late Submission of Annual Federal Reporting Package Federal Program Information: Funding Agency: All major programs Title: All major programs Assistance Listing Number: All major programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: 2 CFR 200.512 requires that the annual federal reporting package including the data collection form be submitted within nine months after the end of the audit period. Condition: NTU did not submit the annual federal reporting package within nine months after May 31, 2022. Questioned Costs: None Context: The annual federal reporting package for the year ended May 31, 2022. Cause and Effect: Internal controls were not designed and implemented to the annual federal reporting package was submitted within the timeframe required by OMB Uniform Guidance. Auditors? Recommendation: NTU should improve internal controls to help ensure that financial statement balances are accurately reconciled to assist with the timely preparation and submission of the annual federal reporting package. Management?s Response: NTU has developed a comprehensive year-end financial close and annual federal reporting plan with the assistance of our consultants, Harshwal & Company, LLC in September 2022. This plan was not implemented until after the end of fiscal year 2022. As part of this plan, NTU will ensure that financial accounting books and records are reconciled and closed in a timely manner prior to providing the final trial balance to the auditor.
2022-007 ? Cash Management Federal Program Information: Funding Agency: All Major Programs Title: All Major Programs Assistance Listing Number: All Major Programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: Advanced grant/contract funds may not be transferred to other NTU accounts, lent to such NTU accounts, or expended for programs not authorized. There should be sufficient unrestricted cash and investment balances on hand to cover all unearned grant revenue associated with federal and nonfederal programs. Condition: NTU did not maintain cash and cash equivalents at least equal to the amount of unspent grant funds advanced from federal and nonfederal agencies at year-end. At May 31, 2022, NTU?s unrestricted cash and cash equivalents and unearned grant revenue totaled $29,728,594 and $34,490,432, respectively. As a result, unspent grant funds held by NTU exceeded the amount of available cash and cash equivalents by $5,761,748. Questioned Costs: None. Context: Federal programs that have been provided with advanced funds. Cause and Effect: NTU did not have effective internal controls to ensure sufficient cash and cash equivalents are on hand to cover all unearned grant revenue associated with federal and nonfederal programs. NTU is not in compliance with federal requirements. Auditor?s Recommendation: Thoroughly analyze the financial position of NTU and ensure adequate cash and cash equivalents are maintained in an amount at least equal to unearned grant revenues from federal and nonfederal sources. NTU may need to liquidate unrestricted investments and convert them into cash and cash equivalents or reallocate investments into securities backed by the full faith and credit of the United States government to accomplish this. Management?s Response: NTU has developed a monthly cash management schedule that tracks and identifies all grant funds along with total cash received in advance from grantors and amounts due to NTU. NTU will increase cash balances through the timely collection of outstanding grants receivable. NTU will also analyze cash requirements and may liquidate investments held in the Capital Reserve fund to ensure adequate cash is maintained for grants received in advance.
2022-014 ? Late Submission of Annual Federal Reporting Package Federal Program Information: Funding Agency: All major programs Title: All major programs Assistance Listing Number: All major programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: 2 CFR 200.512 requires that the annual federal reporting package including the data collection form be submitted within nine months after the end of the audit period. Condition: NTU did not submit the annual federal reporting package within nine months after May 31, 2022. Questioned Costs: None Context: The annual federal reporting package for the year ended May 31, 2022. Cause and Effect: Internal controls were not designed and implemented to the annual federal reporting package was submitted within the timeframe required by OMB Uniform Guidance. Auditors? Recommendation: NTU should improve internal controls to help ensure that financial statement balances are accurately reconciled to assist with the timely preparation and submission of the annual federal reporting package. Management?s Response: NTU has developed a comprehensive year-end financial close and annual federal reporting plan with the assistance of our consultants, Harshwal & Company, LLC in September 2022. This plan was not implemented until after the end of fiscal year 2022. As part of this plan, NTU will ensure that financial accounting books and records are reconciled and closed in a timely manner prior to providing the final trial balance to the auditor.
2022-007 ? Cash Management Federal Program Information: Funding Agency: All Major Programs Title: All Major Programs Assistance Listing Number: All Major Programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: Advanced grant/contract funds may not be transferred to other NTU accounts, lent to such NTU accounts, or expended for programs not authorized. There should be sufficient unrestricted cash and investment balances on hand to cover all unearned grant revenue associated with federal and nonfederal programs. Condition: NTU did not maintain cash and cash equivalents at least equal to the amount of unspent grant funds advanced from federal and nonfederal agencies at year-end. At May 31, 2022, NTU?s unrestricted cash and cash equivalents and unearned grant revenue totaled $29,728,594 and $34,490,432, respectively. As a result, unspent grant funds held by NTU exceeded the amount of available cash and cash equivalents by $5,761,748. Questioned Costs: None. Context: Federal programs that have been provided with advanced funds. Cause and Effect: NTU did not have effective internal controls to ensure sufficient cash and cash equivalents are on hand to cover all unearned grant revenue associated with federal and nonfederal programs. NTU is not in compliance with federal requirements. Auditor?s Recommendation: Thoroughly analyze the financial position of NTU and ensure adequate cash and cash equivalents are maintained in an amount at least equal to unearned grant revenues from federal and nonfederal sources. NTU may need to liquidate unrestricted investments and convert them into cash and cash equivalents or reallocate investments into securities backed by the full faith and credit of the United States government to accomplish this. Management?s Response: NTU has developed a monthly cash management schedule that tracks and identifies all grant funds along with total cash received in advance from grantors and amounts due to NTU. NTU will increase cash balances through the timely collection of outstanding grants receivable. NTU will also analyze cash requirements and may liquidate investments held in the Capital Reserve fund to ensure adequate cash is maintained for grants received in advance.
2022-014 ? Late Submission of Annual Federal Reporting Package Federal Program Information: Funding Agency: All major programs Title: All major programs Assistance Listing Number: All major programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: 2 CFR 200.512 requires that the annual federal reporting package including the data collection form be submitted within nine months after the end of the audit period. Condition: NTU did not submit the annual federal reporting package within nine months after May 31, 2022. Questioned Costs: None Context: The annual federal reporting package for the year ended May 31, 2022. Cause and Effect: Internal controls were not designed and implemented to the annual federal reporting package was submitted within the timeframe required by OMB Uniform Guidance. Auditors? Recommendation: NTU should improve internal controls to help ensure that financial statement balances are accurately reconciled to assist with the timely preparation and submission of the annual federal reporting package. Management?s Response: NTU has developed a comprehensive year-end financial close and annual federal reporting plan with the assistance of our consultants, Harshwal & Company, LLC in September 2022. This plan was not implemented until after the end of fiscal year 2022. As part of this plan, NTU will ensure that financial accounting books and records are reconciled and closed in a timely manner prior to providing the final trial balance to the auditor.
2022-007 ? Cash Management Federal Program Information: Funding Agency: All Major Programs Title: All Major Programs Assistance Listing Number: All Major Programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: Advanced grant/contract funds may not be transferred to other NTU accounts, lent to such NTU accounts, or expended for programs not authorized. There should be sufficient unrestricted cash and investment balances on hand to cover all unearned grant revenue associated with federal and nonfederal programs. Condition: NTU did not maintain cash and cash equivalents at least equal to the amount of unspent grant funds advanced from federal and nonfederal agencies at year-end. At May 31, 2022, NTU?s unrestricted cash and cash equivalents and unearned grant revenue totaled $29,728,594 and $34,490,432, respectively. As a result, unspent grant funds held by NTU exceeded the amount of available cash and cash equivalents by $5,761,748. Questioned Costs: None. Context: Federal programs that have been provided with advanced funds. Cause and Effect: NTU did not have effective internal controls to ensure sufficient cash and cash equivalents are on hand to cover all unearned grant revenue associated with federal and nonfederal programs. NTU is not in compliance with federal requirements. Auditor?s Recommendation: Thoroughly analyze the financial position of NTU and ensure adequate cash and cash equivalents are maintained in an amount at least equal to unearned grant revenues from federal and nonfederal sources. NTU may need to liquidate unrestricted investments and convert them into cash and cash equivalents or reallocate investments into securities backed by the full faith and credit of the United States government to accomplish this. Management?s Response: NTU has developed a monthly cash management schedule that tracks and identifies all grant funds along with total cash received in advance from grantors and amounts due to NTU. NTU will increase cash balances through the timely collection of outstanding grants receivable. NTU will also analyze cash requirements and may liquidate investments held in the Capital Reserve fund to ensure adequate cash is maintained for grants received in advance.
2022-014 ? Late Submission of Annual Federal Reporting Package Federal Program Information: Funding Agency: All major programs Title: All major programs Assistance Listing Number: All major programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: 2 CFR 200.512 requires that the annual federal reporting package including the data collection form be submitted within nine months after the end of the audit period. Condition: NTU did not submit the annual federal reporting package within nine months after May 31, 2022. Questioned Costs: None Context: The annual federal reporting package for the year ended May 31, 2022. Cause and Effect: Internal controls were not designed and implemented to the annual federal reporting package was submitted within the timeframe required by OMB Uniform Guidance. Auditors? Recommendation: NTU should improve internal controls to help ensure that financial statement balances are accurately reconciled to assist with the timely preparation and submission of the annual federal reporting package. Management?s Response: NTU has developed a comprehensive year-end financial close and annual federal reporting plan with the assistance of our consultants, Harshwal & Company, LLC in September 2022. This plan was not implemented until after the end of fiscal year 2022. As part of this plan, NTU will ensure that financial accounting books and records are reconciled and closed in a timely manner prior to providing the final trial balance to the auditor.
2022-007 ? Cash Management Federal Program Information: Funding Agency: All Major Programs Title: All Major Programs Assistance Listing Number: All Major Programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: Advanced grant/contract funds may not be transferred to other NTU accounts, lent to such NTU accounts, or expended for programs not authorized. There should be sufficient unrestricted cash and investment balances on hand to cover all unearned grant revenue associated with federal and nonfederal programs. Condition: NTU did not maintain cash and cash equivalents at least equal to the amount of unspent grant funds advanced from federal and nonfederal agencies at year-end. At May 31, 2022, NTU?s unrestricted cash and cash equivalents and unearned grant revenue totaled $29,728,594 and $34,490,432, respectively. As a result, unspent grant funds held by NTU exceeded the amount of available cash and cash equivalents by $5,761,748. Questioned Costs: None. Context: Federal programs that have been provided with advanced funds. Cause and Effect: NTU did not have effective internal controls to ensure sufficient cash and cash equivalents are on hand to cover all unearned grant revenue associated with federal and nonfederal programs. NTU is not in compliance with federal requirements. Auditor?s Recommendation: Thoroughly analyze the financial position of NTU and ensure adequate cash and cash equivalents are maintained in an amount at least equal to unearned grant revenues from federal and nonfederal sources. NTU may need to liquidate unrestricted investments and convert them into cash and cash equivalents or reallocate investments into securities backed by the full faith and credit of the United States government to accomplish this. Management?s Response: NTU has developed a monthly cash management schedule that tracks and identifies all grant funds along with total cash received in advance from grantors and amounts due to NTU. NTU will increase cash balances through the timely collection of outstanding grants receivable. NTU will also analyze cash requirements and may liquidate investments held in the Capital Reserve fund to ensure adequate cash is maintained for grants received in advance.
2022-014 ? Late Submission of Annual Federal Reporting Package Federal Program Information: Funding Agency: All major programs Title: All major programs Assistance Listing Number: All major programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: 2 CFR 200.512 requires that the annual federal reporting package including the data collection form be submitted within nine months after the end of the audit period. Condition: NTU did not submit the annual federal reporting package within nine months after May 31, 2022. Questioned Costs: None Context: The annual federal reporting package for the year ended May 31, 2022. Cause and Effect: Internal controls were not designed and implemented to the annual federal reporting package was submitted within the timeframe required by OMB Uniform Guidance. Auditors? Recommendation: NTU should improve internal controls to help ensure that financial statement balances are accurately reconciled to assist with the timely preparation and submission of the annual federal reporting package. Management?s Response: NTU has developed a comprehensive year-end financial close and annual federal reporting plan with the assistance of our consultants, Harshwal & Company, LLC in September 2022. This plan was not implemented until after the end of fiscal year 2022. As part of this plan, NTU will ensure that financial accounting books and records are reconciled and closed in a timely manner prior to providing the final trial balance to the auditor.
2022-007 ? Cash Management Federal Program Information: Funding Agency: All Major Programs Title: All Major Programs Assistance Listing Number: All Major Programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: Advanced grant/contract funds may not be transferred to other NTU accounts, lent to such NTU accounts, or expended for programs not authorized. There should be sufficient unrestricted cash and investment balances on hand to cover all unearned grant revenue associated with federal and nonfederal programs. Condition: NTU did not maintain cash and cash equivalents at least equal to the amount of unspent grant funds advanced from federal and nonfederal agencies at year-end. At May 31, 2022, NTU?s unrestricted cash and cash equivalents and unearned grant revenue totaled $29,728,594 and $34,490,432, respectively. As a result, unspent grant funds held by NTU exceeded the amount of available cash and cash equivalents by $5,761,748. Questioned Costs: None. Context: Federal programs that have been provided with advanced funds. Cause and Effect: NTU did not have effective internal controls to ensure sufficient cash and cash equivalents are on hand to cover all unearned grant revenue associated with federal and nonfederal programs. NTU is not in compliance with federal requirements. Auditor?s Recommendation: Thoroughly analyze the financial position of NTU and ensure adequate cash and cash equivalents are maintained in an amount at least equal to unearned grant revenues from federal and nonfederal sources. NTU may need to liquidate unrestricted investments and convert them into cash and cash equivalents or reallocate investments into securities backed by the full faith and credit of the United States government to accomplish this. Management?s Response: NTU has developed a monthly cash management schedule that tracks and identifies all grant funds along with total cash received in advance from grantors and amounts due to NTU. NTU will increase cash balances through the timely collection of outstanding grants receivable. NTU will also analyze cash requirements and may liquidate investments held in the Capital Reserve fund to ensure adequate cash is maintained for grants received in advance.
2022-014 ? Late Submission of Annual Federal Reporting Package Federal Program Information: Funding Agency: All major programs Title: All major programs Assistance Listing Number: All major programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: 2 CFR 200.512 requires that the annual federal reporting package including the data collection form be submitted within nine months after the end of the audit period. Condition: NTU did not submit the annual federal reporting package within nine months after May 31, 2022. Questioned Costs: None Context: The annual federal reporting package for the year ended May 31, 2022. Cause and Effect: Internal controls were not designed and implemented to the annual federal reporting package was submitted within the timeframe required by OMB Uniform Guidance. Auditors? Recommendation: NTU should improve internal controls to help ensure that financial statement balances are accurately reconciled to assist with the timely preparation and submission of the annual federal reporting package. Management?s Response: NTU has developed a comprehensive year-end financial close and annual federal reporting plan with the assistance of our consultants, Harshwal & Company, LLC in September 2022. This plan was not implemented until after the end of fiscal year 2022. As part of this plan, NTU will ensure that financial accounting books and records are reconciled and closed in a timely manner prior to providing the final trial balance to the auditor.
2022-007 ? Cash Management Federal Program Information: Funding Agency: All Major Programs Title: All Major Programs Assistance Listing Number: All Major Programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: Advanced grant/contract funds may not be transferred to other NTU accounts, lent to such NTU accounts, or expended for programs not authorized. There should be sufficient unrestricted cash and investment balances on hand to cover all unearned grant revenue associated with federal and nonfederal programs. Condition: NTU did not maintain cash and cash equivalents at least equal to the amount of unspent grant funds advanced from federal and nonfederal agencies at year-end. At May 31, 2022, NTU?s unrestricted cash and cash equivalents and unearned grant revenue totaled $29,728,594 and $34,490,432, respectively. As a result, unspent grant funds held by NTU exceeded the amount of available cash and cash equivalents by $5,761,748. Questioned Costs: None. Context: Federal programs that have been provided with advanced funds. Cause and Effect: NTU did not have effective internal controls to ensure sufficient cash and cash equivalents are on hand to cover all unearned grant revenue associated with federal and nonfederal programs. NTU is not in compliance with federal requirements. Auditor?s Recommendation: Thoroughly analyze the financial position of NTU and ensure adequate cash and cash equivalents are maintained in an amount at least equal to unearned grant revenues from federal and nonfederal sources. NTU may need to liquidate unrestricted investments and convert them into cash and cash equivalents or reallocate investments into securities backed by the full faith and credit of the United States government to accomplish this. Management?s Response: NTU has developed a monthly cash management schedule that tracks and identifies all grant funds along with total cash received in advance from grantors and amounts due to NTU. NTU will increase cash balances through the timely collection of outstanding grants receivable. NTU will also analyze cash requirements and may liquidate investments held in the Capital Reserve fund to ensure adequate cash is maintained for grants received in advance.
2022-014 ? Late Submission of Annual Federal Reporting Package Federal Program Information: Funding Agency: All major programs Title: All major programs Assistance Listing Number: All major programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: 2 CFR 200.512 requires that the annual federal reporting package including the data collection form be submitted within nine months after the end of the audit period. Condition: NTU did not submit the annual federal reporting package within nine months after May 31, 2022. Questioned Costs: None Context: The annual federal reporting package for the year ended May 31, 2022. Cause and Effect: Internal controls were not designed and implemented to the annual federal reporting package was submitted within the timeframe required by OMB Uniform Guidance. Auditors? Recommendation: NTU should improve internal controls to help ensure that financial statement balances are accurately reconciled to assist with the timely preparation and submission of the annual federal reporting package. Management?s Response: NTU has developed a comprehensive year-end financial close and annual federal reporting plan with the assistance of our consultants, Harshwal & Company, LLC in September 2022. This plan was not implemented until after the end of fiscal year 2022. As part of this plan, NTU will ensure that financial accounting books and records are reconciled and closed in a timely manner prior to providing the final trial balance to the auditor.
2022-007 ? Cash Management Federal Program Information: Funding Agency: All Major Programs Title: All Major Programs Assistance Listing Number: All Major Programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: Advanced grant/contract funds may not be transferred to other NTU accounts, lent to such NTU accounts, or expended for programs not authorized. There should be sufficient unrestricted cash and investment balances on hand to cover all unearned grant revenue associated with federal and nonfederal programs. Condition: NTU did not maintain cash and cash equivalents at least equal to the amount of unspent grant funds advanced from federal and nonfederal agencies at year-end. At May 31, 2022, NTU?s unrestricted cash and cash equivalents and unearned grant revenue totaled $29,728,594 and $34,490,432, respectively. As a result, unspent grant funds held by NTU exceeded the amount of available cash and cash equivalents by $5,761,748. Questioned Costs: None. Context: Federal programs that have been provided with advanced funds. Cause and Effect: NTU did not have effective internal controls to ensure sufficient cash and cash equivalents are on hand to cover all unearned grant revenue associated with federal and nonfederal programs. NTU is not in compliance with federal requirements. Auditor?s Recommendation: Thoroughly analyze the financial position of NTU and ensure adequate cash and cash equivalents are maintained in an amount at least equal to unearned grant revenues from federal and nonfederal sources. NTU may need to liquidate unrestricted investments and convert them into cash and cash equivalents or reallocate investments into securities backed by the full faith and credit of the United States government to accomplish this. Management?s Response: NTU has developed a monthly cash management schedule that tracks and identifies all grant funds along with total cash received in advance from grantors and amounts due to NTU. NTU will increase cash balances through the timely collection of outstanding grants receivable. NTU will also analyze cash requirements and may liquidate investments held in the Capital Reserve fund to ensure adequate cash is maintained for grants received in advance.
2022-014 ? Late Submission of Annual Federal Reporting Package Federal Program Information: Funding Agency: All major programs Title: All major programs Assistance Listing Number: All major programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: 2 CFR 200.512 requires that the annual federal reporting package including the data collection form be submitted within nine months after the end of the audit period. Condition: NTU did not submit the annual federal reporting package within nine months after May 31, 2022. Questioned Costs: None Context: The annual federal reporting package for the year ended May 31, 2022. Cause and Effect: Internal controls were not designed and implemented to the annual federal reporting package was submitted within the timeframe required by OMB Uniform Guidance. Auditors? Recommendation: NTU should improve internal controls to help ensure that financial statement balances are accurately reconciled to assist with the timely preparation and submission of the annual federal reporting package. Management?s Response: NTU has developed a comprehensive year-end financial close and annual federal reporting plan with the assistance of our consultants, Harshwal & Company, LLC in September 2022. This plan was not implemented until after the end of fiscal year 2022. As part of this plan, NTU will ensure that financial accounting books and records are reconciled and closed in a timely manner prior to providing the final trial balance to the auditor.
2022-007 ? Cash Management Federal Program Information: Funding Agency: All Major Programs Title: All Major Programs Assistance Listing Number: All Major Programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: Advanced grant/contract funds may not be transferred to other NTU accounts, lent to such NTU accounts, or expended for programs not authorized. There should be sufficient unrestricted cash and investment balances on hand to cover all unearned grant revenue associated with federal and nonfederal programs. Condition: NTU did not maintain cash and cash equivalents at least equal to the amount of unspent grant funds advanced from federal and nonfederal agencies at year-end. At May 31, 2022, NTU?s unrestricted cash and cash equivalents and unearned grant revenue totaled $29,728,594 and $34,490,432, respectively. As a result, unspent grant funds held by NTU exceeded the amount of available cash and cash equivalents by $5,761,748. Questioned Costs: None. Context: Federal programs that have been provided with advanced funds. Cause and Effect: NTU did not have effective internal controls to ensure sufficient cash and cash equivalents are on hand to cover all unearned grant revenue associated with federal and nonfederal programs. NTU is not in compliance with federal requirements. Auditor?s Recommendation: Thoroughly analyze the financial position of NTU and ensure adequate cash and cash equivalents are maintained in an amount at least equal to unearned grant revenues from federal and nonfederal sources. NTU may need to liquidate unrestricted investments and convert them into cash and cash equivalents or reallocate investments into securities backed by the full faith and credit of the United States government to accomplish this. Management?s Response: NTU has developed a monthly cash management schedule that tracks and identifies all grant funds along with total cash received in advance from grantors and amounts due to NTU. NTU will increase cash balances through the timely collection of outstanding grants receivable. NTU will also analyze cash requirements and may liquidate investments held in the Capital Reserve fund to ensure adequate cash is maintained for grants received in advance.
2022-014 ? Late Submission of Annual Federal Reporting Package Federal Program Information: Funding Agency: All major programs Title: All major programs Assistance Listing Number: All major programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: 2 CFR 200.512 requires that the annual federal reporting package including the data collection form be submitted within nine months after the end of the audit period. Condition: NTU did not submit the annual federal reporting package within nine months after May 31, 2022. Questioned Costs: None Context: The annual federal reporting package for the year ended May 31, 2022. Cause and Effect: Internal controls were not designed and implemented to the annual federal reporting package was submitted within the timeframe required by OMB Uniform Guidance. Auditors? Recommendation: NTU should improve internal controls to help ensure that financial statement balances are accurately reconciled to assist with the timely preparation and submission of the annual federal reporting package. Management?s Response: NTU has developed a comprehensive year-end financial close and annual federal reporting plan with the assistance of our consultants, Harshwal & Company, LLC in September 2022. This plan was not implemented until after the end of fiscal year 2022. As part of this plan, NTU will ensure that financial accounting books and records are reconciled and closed in a timely manner prior to providing the final trial balance to the auditor.
2022-007 ? Cash Management Federal Program Information: Funding Agency: All Major Programs Title: All Major Programs Assistance Listing Number: All Major Programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: Advanced grant/contract funds may not be transferred to other NTU accounts, lent to such NTU accounts, or expended for programs not authorized. There should be sufficient unrestricted cash and investment balances on hand to cover all unearned grant revenue associated with federal and nonfederal programs. Condition: NTU did not maintain cash and cash equivalents at least equal to the amount of unspent grant funds advanced from federal and nonfederal agencies at year-end. At May 31, 2022, NTU?s unrestricted cash and cash equivalents and unearned grant revenue totaled $29,728,594 and $34,490,432, respectively. As a result, unspent grant funds held by NTU exceeded the amount of available cash and cash equivalents by $5,761,748. Questioned Costs: None. Context: Federal programs that have been provided with advanced funds. Cause and Effect: NTU did not have effective internal controls to ensure sufficient cash and cash equivalents are on hand to cover all unearned grant revenue associated with federal and nonfederal programs. NTU is not in compliance with federal requirements. Auditor?s Recommendation: Thoroughly analyze the financial position of NTU and ensure adequate cash and cash equivalents are maintained in an amount at least equal to unearned grant revenues from federal and nonfederal sources. NTU may need to liquidate unrestricted investments and convert them into cash and cash equivalents or reallocate investments into securities backed by the full faith and credit of the United States government to accomplish this. Management?s Response: NTU has developed a monthly cash management schedule that tracks and identifies all grant funds along with total cash received in advance from grantors and amounts due to NTU. NTU will increase cash balances through the timely collection of outstanding grants receivable. NTU will also analyze cash requirements and may liquidate investments held in the Capital Reserve fund to ensure adequate cash is maintained for grants received in advance.
2022-014 ? Late Submission of Annual Federal Reporting Package Federal Program Information: Funding Agency: All major programs Title: All major programs Assistance Listing Number: All major programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: 2 CFR 200.512 requires that the annual federal reporting package including the data collection form be submitted within nine months after the end of the audit period. Condition: NTU did not submit the annual federal reporting package within nine months after May 31, 2022. Questioned Costs: None Context: The annual federal reporting package for the year ended May 31, 2022. Cause and Effect: Internal controls were not designed and implemented to the annual federal reporting package was submitted within the timeframe required by OMB Uniform Guidance. Auditors? Recommendation: NTU should improve internal controls to help ensure that financial statement balances are accurately reconciled to assist with the timely preparation and submission of the annual federal reporting package. Management?s Response: NTU has developed a comprehensive year-end financial close and annual federal reporting plan with the assistance of our consultants, Harshwal & Company, LLC in September 2022. This plan was not implemented until after the end of fiscal year 2022. As part of this plan, NTU will ensure that financial accounting books and records are reconciled and closed in a timely manner prior to providing the final trial balance to the auditor.
2022-007 ? Cash Management Federal Program Information: Funding Agency: All Major Programs Title: All Major Programs Assistance Listing Number: All Major Programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: Advanced grant/contract funds may not be transferred to other NTU accounts, lent to such NTU accounts, or expended for programs not authorized. There should be sufficient unrestricted cash and investment balances on hand to cover all unearned grant revenue associated with federal and nonfederal programs. Condition: NTU did not maintain cash and cash equivalents at least equal to the amount of unspent grant funds advanced from federal and nonfederal agencies at year-end. At May 31, 2022, NTU?s unrestricted cash and cash equivalents and unearned grant revenue totaled $29,728,594 and $34,490,432, respectively. As a result, unspent grant funds held by NTU exceeded the amount of available cash and cash equivalents by $5,761,748. Questioned Costs: None. Context: Federal programs that have been provided with advanced funds. Cause and Effect: NTU did not have effective internal controls to ensure sufficient cash and cash equivalents are on hand to cover all unearned grant revenue associated with federal and nonfederal programs. NTU is not in compliance with federal requirements. Auditor?s Recommendation: Thoroughly analyze the financial position of NTU and ensure adequate cash and cash equivalents are maintained in an amount at least equal to unearned grant revenues from federal and nonfederal sources. NTU may need to liquidate unrestricted investments and convert them into cash and cash equivalents or reallocate investments into securities backed by the full faith and credit of the United States government to accomplish this. Management?s Response: NTU has developed a monthly cash management schedule that tracks and identifies all grant funds along with total cash received in advance from grantors and amounts due to NTU. NTU will increase cash balances through the timely collection of outstanding grants receivable. NTU will also analyze cash requirements and may liquidate investments held in the Capital Reserve fund to ensure adequate cash is maintained for grants received in advance.
2022-014 ? Late Submission of Annual Federal Reporting Package Federal Program Information: Funding Agency: All major programs Title: All major programs Assistance Listing Number: All major programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: 2 CFR 200.512 requires that the annual federal reporting package including the data collection form be submitted within nine months after the end of the audit period. Condition: NTU did not submit the annual federal reporting package within nine months after May 31, 2022. Questioned Costs: None Context: The annual federal reporting package for the year ended May 31, 2022. Cause and Effect: Internal controls were not designed and implemented to the annual federal reporting package was submitted within the timeframe required by OMB Uniform Guidance. Auditors? Recommendation: NTU should improve internal controls to help ensure that financial statement balances are accurately reconciled to assist with the timely preparation and submission of the annual federal reporting package. Management?s Response: NTU has developed a comprehensive year-end financial close and annual federal reporting plan with the assistance of our consultants, Harshwal & Company, LLC in September 2022. This plan was not implemented until after the end of fiscal year 2022. As part of this plan, NTU will ensure that financial accounting books and records are reconciled and closed in a timely manner prior to providing the final trial balance to the auditor.
2022-008 ?Activities Allowed/Unallowed and Allowable Costs/Cost Principles Federal Program Information: Funding Agency: U.S. Department of Defense, National Science Foundation, U.S. Department of Energy, and U.S. Department of Education Title: Research and Development Cluster, Tribally Controlled Postsecondary Career and Technical Institutions. Higher Education Emergency Relief Fund (HEERF) Assistance Listing Number: 12.431, 47.076, 81.123, 84.245, 84.425 Award Period: June 1, 2021 ? May 31, 2022 Criteria: To be allowable under Federal awards, costs must be necessary and reasonable for the performance and administration of the federal award. Costs must meet the following criteria: 1) necessary and reasonable; 2) consistent with policies and procedures; 3) accorded consistent treatment; and 4) are adequately documented. Condition: We found the following in our review of federal expenditures: Research and Development Cluster ? ? One expenditure for the purchase of a gold spectrometer, microscope mainframe and accessories in the amount of $145,596 was incorrectly charged twice to the Expanding STEM Education to Meet Navajo Nation Needs project with the National Science Foundation. NTU subsequently corrected this by removing one of the duplicate charges from federal expenditures. ? One employee?s wages in the amount of $260 was incorrectly charged to Department of Defense Performance Enhancement Through HIS Assessment and Analysis Campaign Project. The employee?s wages should have been charged to another federal program. ? Two payroll transactions totaling $3,580 did not have accurate source documentation to support the allocation of salaries and wages charged to the program. Tribally Controlled Postsecondary Career and Technical Institutions ? ? One employee?s wages in the amount of $1,640.55 was incorrectly allocated and charged to the program. The employee?s salary should have been charged to the NTU general fund. Higher Education Emergency Relief Fund ? ? NTU incorrectly charged the HEERF Student Aid Portion (ALN 84.425E) for lost revenue in the amount of $870,725. NTU subsequently corrected this and charged the lost revenue to the HEERF Tribally Controlled Colleges and Universities portion (ALN 84.425K). Questioned Costs: None exceeding $25,000 as NTU made correcting adjustments to federal expenditures. Context: Four of fifty payroll and non-payroll transactions tested for the Research and Development Cluster. One of twenty-five payroll transactions tested for the Tribally Controlled Postsecondary Career and Technical Institutions program. One of twenty-nine non-payroll transactions tested for the Higher Education Emergency Relief Fund program. Cause and Effect: NTU did not have effective internal controls to ensure federal expenditures are accurately charged in accordance with federal activities allowed/unallowed and allowable costs/cost principles requirements. As a result, NTU was not in compliance with these federal requirements for the Research and Development Cluster, Tribally Controlled Post Secondary Career and Technical Institutions and HEERF programs. Auditor?s Recommendation: Improve internal controls to ensure expenditures are allowable under federal program requirements. This includes maintaining source documentation to support the allocation of payroll costs and ensuring expenses are not double recorded in the accounting system. Management?s Response: NTU will implement a monthly review of all grant expenditures to ensure amounts charged to federal awards are accurately posted and reflected in the accounting system. All journal entries will be reviewed for accuracy by the Accounting Manager and Senior Accountant. Payroll allocations provided by the Human Resources office will be included in the monthly review to ensure accuracy of the payroll expenditures. Principal Investigators and program managers will also be given read-only access to the accounting system to review expenditure postings for accuracy.
2022-007 ? Cash Management Federal Program Information: Funding Agency: All Major Programs Title: All Major Programs Assistance Listing Number: All Major Programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: Advanced grant/contract funds may not be transferred to other NTU accounts, lent to such NTU accounts, or expended for programs not authorized. There should be sufficient unrestricted cash and investment balances on hand to cover all unearned grant revenue associated with federal and nonfederal programs. Condition: NTU did not maintain cash and cash equivalents at least equal to the amount of unspent grant funds advanced from federal and nonfederal agencies at year-end. At May 31, 2022, NTU?s unrestricted cash and cash equivalents and unearned grant revenue totaled $29,728,594 and $34,490,432, respectively. As a result, unspent grant funds held by NTU exceeded the amount of available cash and cash equivalents by $5,761,748. Questioned Costs: None. Context: Federal programs that have been provided with advanced funds. Cause and Effect: NTU did not have effective internal controls to ensure sufficient cash and cash equivalents are on hand to cover all unearned grant revenue associated with federal and nonfederal programs. NTU is not in compliance with federal requirements. Auditor?s Recommendation: Thoroughly analyze the financial position of NTU and ensure adequate cash and cash equivalents are maintained in an amount at least equal to unearned grant revenues from federal and nonfederal sources. NTU may need to liquidate unrestricted investments and convert them into cash and cash equivalents or reallocate investments into securities backed by the full faith and credit of the United States government to accomplish this. Management?s Response: NTU has developed a monthly cash management schedule that tracks and identifies all grant funds along with total cash received in advance from grantors and amounts due to NTU. NTU will increase cash balances through the timely collection of outstanding grants receivable. NTU will also analyze cash requirements and may liquidate investments held in the Capital Reserve fund to ensure adequate cash is maintained for grants received in advance.
2022-014 ? Late Submission of Annual Federal Reporting Package Federal Program Information: Funding Agency: All major programs Title: All major programs Assistance Listing Number: All major programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: 2 CFR 200.512 requires that the annual federal reporting package including the data collection form be submitted within nine months after the end of the audit period. Condition: NTU did not submit the annual federal reporting package within nine months after May 31, 2022. Questioned Costs: None Context: The annual federal reporting package for the year ended May 31, 2022. Cause and Effect: Internal controls were not designed and implemented to the annual federal reporting package was submitted within the timeframe required by OMB Uniform Guidance. Auditors? Recommendation: NTU should improve internal controls to help ensure that financial statement balances are accurately reconciled to assist with the timely preparation and submission of the annual federal reporting package. Management?s Response: NTU has developed a comprehensive year-end financial close and annual federal reporting plan with the assistance of our consultants, Harshwal & Company, LLC in September 2022. This plan was not implemented until after the end of fiscal year 2022. As part of this plan, NTU will ensure that financial accounting books and records are reconciled and closed in a timely manner prior to providing the final trial balance to the auditor.
2022-008 ?Activities Allowed/Unallowed and Allowable Costs/Cost Principles Federal Program Information: Funding Agency: U.S. Department of Defense, National Science Foundation, U.S. Department of Energy, and U.S. Department of Education Title: Research and Development Cluster, Tribally Controlled Postsecondary Career and Technical Institutions. Higher Education Emergency Relief Fund (HEERF) Assistance Listing Number: 12.431, 47.076, 81.123, 84.245, 84.425 Award Period: June 1, 2021 ? May 31, 2022 Criteria: To be allowable under Federal awards, costs must be necessary and reasonable for the performance and administration of the federal award. Costs must meet the following criteria: 1) necessary and reasonable; 2) consistent with policies and procedures; 3) accorded consistent treatment; and 4) are adequately documented. Condition: We found the following in our review of federal expenditures: Research and Development Cluster ? ? One expenditure for the purchase of a gold spectrometer, microscope mainframe and accessories in the amount of $145,596 was incorrectly charged twice to the Expanding STEM Education to Meet Navajo Nation Needs project with the National Science Foundation. NTU subsequently corrected this by removing one of the duplicate charges from federal expenditures. ? One employee?s wages in the amount of $260 was incorrectly charged to Department of Defense Performance Enhancement Through HIS Assessment and Analysis Campaign Project. The employee?s wages should have been charged to another federal program. ? Two payroll transactions totaling $3,580 did not have accurate source documentation to support the allocation of salaries and wages charged to the program. Tribally Controlled Postsecondary Career and Technical Institutions ? ? One employee?s wages in the amount of $1,640.55 was incorrectly allocated and charged to the program. The employee?s salary should have been charged to the NTU general fund. Higher Education Emergency Relief Fund ? ? NTU incorrectly charged the HEERF Student Aid Portion (ALN 84.425E) for lost revenue in the amount of $870,725. NTU subsequently corrected this and charged the lost revenue to the HEERF Tribally Controlled Colleges and Universities portion (ALN 84.425K). Questioned Costs: None exceeding $25,000 as NTU made correcting adjustments to federal expenditures. Context: Four of fifty payroll and non-payroll transactions tested for the Research and Development Cluster. One of twenty-five payroll transactions tested for the Tribally Controlled Postsecondary Career and Technical Institutions program. One of twenty-nine non-payroll transactions tested for the Higher Education Emergency Relief Fund program. Cause and Effect: NTU did not have effective internal controls to ensure federal expenditures are accurately charged in accordance with federal activities allowed/unallowed and allowable costs/cost principles requirements. As a result, NTU was not in compliance with these federal requirements for the Research and Development Cluster, Tribally Controlled Post Secondary Career and Technical Institutions and HEERF programs. Auditor?s Recommendation: Improve internal controls to ensure expenditures are allowable under federal program requirements. This includes maintaining source documentation to support the allocation of payroll costs and ensuring expenses are not double recorded in the accounting system. Management?s Response: NTU will implement a monthly review of all grant expenditures to ensure amounts charged to federal awards are accurately posted and reflected in the accounting system. All journal entries will be reviewed for accuracy by the Accounting Manager and Senior Accountant. Payroll allocations provided by the Human Resources office will be included in the monthly review to ensure accuracy of the payroll expenditures. Principal Investigators and program managers will also be given read-only access to the accounting system to review expenditure postings for accuracy.
2022-007 ? Cash Management Federal Program Information: Funding Agency: All Major Programs Title: All Major Programs Assistance Listing Number: All Major Programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: Advanced grant/contract funds may not be transferred to other NTU accounts, lent to such NTU accounts, or expended for programs not authorized. There should be sufficient unrestricted cash and investment balances on hand to cover all unearned grant revenue associated with federal and nonfederal programs. Condition: NTU did not maintain cash and cash equivalents at least equal to the amount of unspent grant funds advanced from federal and nonfederal agencies at year-end. At May 31, 2022, NTU?s unrestricted cash and cash equivalents and unearned grant revenue totaled $29,728,594 and $34,490,432, respectively. As a result, unspent grant funds held by NTU exceeded the amount of available cash and cash equivalents by $5,761,748. Questioned Costs: None. Context: Federal programs that have been provided with advanced funds. Cause and Effect: NTU did not have effective internal controls to ensure sufficient cash and cash equivalents are on hand to cover all unearned grant revenue associated with federal and nonfederal programs. NTU is not in compliance with federal requirements. Auditor?s Recommendation: Thoroughly analyze the financial position of NTU and ensure adequate cash and cash equivalents are maintained in an amount at least equal to unearned grant revenues from federal and nonfederal sources. NTU may need to liquidate unrestricted investments and convert them into cash and cash equivalents or reallocate investments into securities backed by the full faith and credit of the United States government to accomplish this. Management?s Response: NTU has developed a monthly cash management schedule that tracks and identifies all grant funds along with total cash received in advance from grantors and amounts due to NTU. NTU will increase cash balances through the timely collection of outstanding grants receivable. NTU will also analyze cash requirements and may liquidate investments held in the Capital Reserve fund to ensure adequate cash is maintained for grants received in advance.
2022-014 ? Late Submission of Annual Federal Reporting Package Federal Program Information: Funding Agency: All major programs Title: All major programs Assistance Listing Number: All major programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: 2 CFR 200.512 requires that the annual federal reporting package including the data collection form be submitted within nine months after the end of the audit period. Condition: NTU did not submit the annual federal reporting package within nine months after May 31, 2022. Questioned Costs: None Context: The annual federal reporting package for the year ended May 31, 2022. Cause and Effect: Internal controls were not designed and implemented to the annual federal reporting package was submitted within the timeframe required by OMB Uniform Guidance. Auditors? Recommendation: NTU should improve internal controls to help ensure that financial statement balances are accurately reconciled to assist with the timely preparation and submission of the annual federal reporting package. Management?s Response: NTU has developed a comprehensive year-end financial close and annual federal reporting plan with the assistance of our consultants, Harshwal & Company, LLC in September 2022. This plan was not implemented until after the end of fiscal year 2022. As part of this plan, NTU will ensure that financial accounting books and records are reconciled and closed in a timely manner prior to providing the final trial balance to the auditor.
2022-008 ?Activities Allowed/Unallowed and Allowable Costs/Cost Principles Federal Program Information: Funding Agency: U.S. Department of Defense, National Science Foundation, U.S. Department of Energy, and U.S. Department of Education Title: Research and Development Cluster, Tribally Controlled Postsecondary Career and Technical Institutions. Higher Education Emergency Relief Fund (HEERF) Assistance Listing Number: 12.431, 47.076, 81.123, 84.245, 84.425 Award Period: June 1, 2021 ? May 31, 2022 Criteria: To be allowable under Federal awards, costs must be necessary and reasonable for the performance and administration of the federal award. Costs must meet the following criteria: 1) necessary and reasonable; 2) consistent with policies and procedures; 3) accorded consistent treatment; and 4) are adequately documented. Condition: We found the following in our review of federal expenditures: Research and Development Cluster ? ? One expenditure for the purchase of a gold spectrometer, microscope mainframe and accessories in the amount of $145,596 was incorrectly charged twice to the Expanding STEM Education to Meet Navajo Nation Needs project with the National Science Foundation. NTU subsequently corrected this by removing one of the duplicate charges from federal expenditures. ? One employee?s wages in the amount of $260 was incorrectly charged to Department of Defense Performance Enhancement Through HIS Assessment and Analysis Campaign Project. The employee?s wages should have been charged to another federal program. ? Two payroll transactions totaling $3,580 did not have accurate source documentation to support the allocation of salaries and wages charged to the program. Tribally Controlled Postsecondary Career and Technical Institutions ? ? One employee?s wages in the amount of $1,640.55 was incorrectly allocated and charged to the program. The employee?s salary should have been charged to the NTU general fund. Higher Education Emergency Relief Fund ? ? NTU incorrectly charged the HEERF Student Aid Portion (ALN 84.425E) for lost revenue in the amount of $870,725. NTU subsequently corrected this and charged the lost revenue to the HEERF Tribally Controlled Colleges and Universities portion (ALN 84.425K). Questioned Costs: None exceeding $25,000 as NTU made correcting adjustments to federal expenditures. Context: Four of fifty payroll and non-payroll transactions tested for the Research and Development Cluster. One of twenty-five payroll transactions tested for the Tribally Controlled Postsecondary Career and Technical Institutions program. One of twenty-nine non-payroll transactions tested for the Higher Education Emergency Relief Fund program. Cause and Effect: NTU did not have effective internal controls to ensure federal expenditures are accurately charged in accordance with federal activities allowed/unallowed and allowable costs/cost principles requirements. As a result, NTU was not in compliance with these federal requirements for the Research and Development Cluster, Tribally Controlled Post Secondary Career and Technical Institutions and HEERF programs. Auditor?s Recommendation: Improve internal controls to ensure expenditures are allowable under federal program requirements. This includes maintaining source documentation to support the allocation of payroll costs and ensuring expenses are not double recorded in the accounting system. Management?s Response: NTU will implement a monthly review of all grant expenditures to ensure amounts charged to federal awards are accurately posted and reflected in the accounting system. All journal entries will be reviewed for accuracy by the Accounting Manager and Senior Accountant. Payroll allocations provided by the Human Resources office will be included in the monthly review to ensure accuracy of the payroll expenditures. Principal Investigators and program managers will also be given read-only access to the accounting system to review expenditure postings for accuracy.
2022-007 ? Cash Management Federal Program Information: Funding Agency: All Major Programs Title: All Major Programs Assistance Listing Number: All Major Programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: Advanced grant/contract funds may not be transferred to other NTU accounts, lent to such NTU accounts, or expended for programs not authorized. There should be sufficient unrestricted cash and investment balances on hand to cover all unearned grant revenue associated with federal and nonfederal programs. Condition: NTU did not maintain cash and cash equivalents at least equal to the amount of unspent grant funds advanced from federal and nonfederal agencies at year-end. At May 31, 2022, NTU?s unrestricted cash and cash equivalents and unearned grant revenue totaled $29,728,594 and $34,490,432, respectively. As a result, unspent grant funds held by NTU exceeded the amount of available cash and cash equivalents by $5,761,748. Questioned Costs: None. Context: Federal programs that have been provided with advanced funds. Cause and Effect: NTU did not have effective internal controls to ensure sufficient cash and cash equivalents are on hand to cover all unearned grant revenue associated with federal and nonfederal programs. NTU is not in compliance with federal requirements. Auditor?s Recommendation: Thoroughly analyze the financial position of NTU and ensure adequate cash and cash equivalents are maintained in an amount at least equal to unearned grant revenues from federal and nonfederal sources. NTU may need to liquidate unrestricted investments and convert them into cash and cash equivalents or reallocate investments into securities backed by the full faith and credit of the United States government to accomplish this. Management?s Response: NTU has developed a monthly cash management schedule that tracks and identifies all grant funds along with total cash received in advance from grantors and amounts due to NTU. NTU will increase cash balances through the timely collection of outstanding grants receivable. NTU will also analyze cash requirements and may liquidate investments held in the Capital Reserve fund to ensure adequate cash is maintained for grants received in advance.
2022-014 ? Late Submission of Annual Federal Reporting Package Federal Program Information: Funding Agency: All major programs Title: All major programs Assistance Listing Number: All major programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: 2 CFR 200.512 requires that the annual federal reporting package including the data collection form be submitted within nine months after the end of the audit period. Condition: NTU did not submit the annual federal reporting package within nine months after May 31, 2022. Questioned Costs: None Context: The annual federal reporting package for the year ended May 31, 2022. Cause and Effect: Internal controls were not designed and implemented to the annual federal reporting package was submitted within the timeframe required by OMB Uniform Guidance. Auditors? Recommendation: NTU should improve internal controls to help ensure that financial statement balances are accurately reconciled to assist with the timely preparation and submission of the annual federal reporting package. Management?s Response: NTU has developed a comprehensive year-end financial close and annual federal reporting plan with the assistance of our consultants, Harshwal & Company, LLC in September 2022. This plan was not implemented until after the end of fiscal year 2022. As part of this plan, NTU will ensure that financial accounting books and records are reconciled and closed in a timely manner prior to providing the final trial balance to the auditor.
2022-008 ?Activities Allowed/Unallowed and Allowable Costs/Cost Principles Federal Program Information: Funding Agency: U.S. Department of Defense, National Science Foundation, U.S. Department of Energy, and U.S. Department of Education Title: Research and Development Cluster, Tribally Controlled Postsecondary Career and Technical Institutions. Higher Education Emergency Relief Fund (HEERF) Assistance Listing Number: 12.431, 47.076, 81.123, 84.245, 84.425 Award Period: June 1, 2021 ? May 31, 2022 Criteria: To be allowable under Federal awards, costs must be necessary and reasonable for the performance and administration of the federal award. Costs must meet the following criteria: 1) necessary and reasonable; 2) consistent with policies and procedures; 3) accorded consistent treatment; and 4) are adequately documented. Condition: We found the following in our review of federal expenditures: Research and Development Cluster ? ? One expenditure for the purchase of a gold spectrometer, microscope mainframe and accessories in the amount of $145,596 was incorrectly charged twice to the Expanding STEM Education to Meet Navajo Nation Needs project with the National Science Foundation. NTU subsequently corrected this by removing one of the duplicate charges from federal expenditures. ? One employee?s wages in the amount of $260 was incorrectly charged to Department of Defense Performance Enhancement Through HIS Assessment and Analysis Campaign Project. The employee?s wages should have been charged to another federal program. ? Two payroll transactions totaling $3,580 did not have accurate source documentation to support the allocation of salaries and wages charged to the program. Tribally Controlled Postsecondary Career and Technical Institutions ? ? One employee?s wages in the amount of $1,640.55 was incorrectly allocated and charged to the program. The employee?s salary should have been charged to the NTU general fund. Higher Education Emergency Relief Fund ? ? NTU incorrectly charged the HEERF Student Aid Portion (ALN 84.425E) for lost revenue in the amount of $870,725. NTU subsequently corrected this and charged the lost revenue to the HEERF Tribally Controlled Colleges and Universities portion (ALN 84.425K). Questioned Costs: None exceeding $25,000 as NTU made correcting adjustments to federal expenditures. Context: Four of fifty payroll and non-payroll transactions tested for the Research and Development Cluster. One of twenty-five payroll transactions tested for the Tribally Controlled Postsecondary Career and Technical Institutions program. One of twenty-nine non-payroll transactions tested for the Higher Education Emergency Relief Fund program. Cause and Effect: NTU did not have effective internal controls to ensure federal expenditures are accurately charged in accordance with federal activities allowed/unallowed and allowable costs/cost principles requirements. As a result, NTU was not in compliance with these federal requirements for the Research and Development Cluster, Tribally Controlled Post Secondary Career and Technical Institutions and HEERF programs. Auditor?s Recommendation: Improve internal controls to ensure expenditures are allowable under federal program requirements. This includes maintaining source documentation to support the allocation of payroll costs and ensuring expenses are not double recorded in the accounting system. Management?s Response: NTU will implement a monthly review of all grant expenditures to ensure amounts charged to federal awards are accurately posted and reflected in the accounting system. All journal entries will be reviewed for accuracy by the Accounting Manager and Senior Accountant. Payroll allocations provided by the Human Resources office will be included in the monthly review to ensure accuracy of the payroll expenditures. Principal Investigators and program managers will also be given read-only access to the accounting system to review expenditure postings for accuracy.
2022-007 ? Cash Management Federal Program Information: Funding Agency: All Major Programs Title: All Major Programs Assistance Listing Number: All Major Programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: Advanced grant/contract funds may not be transferred to other NTU accounts, lent to such NTU accounts, or expended for programs not authorized. There should be sufficient unrestricted cash and investment balances on hand to cover all unearned grant revenue associated with federal and nonfederal programs. Condition: NTU did not maintain cash and cash equivalents at least equal to the amount of unspent grant funds advanced from federal and nonfederal agencies at year-end. At May 31, 2022, NTU?s unrestricted cash and cash equivalents and unearned grant revenue totaled $29,728,594 and $34,490,432, respectively. As a result, unspent grant funds held by NTU exceeded the amount of available cash and cash equivalents by $5,761,748. Questioned Costs: None. Context: Federal programs that have been provided with advanced funds. Cause and Effect: NTU did not have effective internal controls to ensure sufficient cash and cash equivalents are on hand to cover all unearned grant revenue associated with federal and nonfederal programs. NTU is not in compliance with federal requirements. Auditor?s Recommendation: Thoroughly analyze the financial position of NTU and ensure adequate cash and cash equivalents are maintained in an amount at least equal to unearned grant revenues from federal and nonfederal sources. NTU may need to liquidate unrestricted investments and convert them into cash and cash equivalents or reallocate investments into securities backed by the full faith and credit of the United States government to accomplish this. Management?s Response: NTU has developed a monthly cash management schedule that tracks and identifies all grant funds along with total cash received in advance from grantors and amounts due to NTU. NTU will increase cash balances through the timely collection of outstanding grants receivable. NTU will also analyze cash requirements and may liquidate investments held in the Capital Reserve fund to ensure adequate cash is maintained for grants received in advance.
2022-014 ? Late Submission of Annual Federal Reporting Package Federal Program Information: Funding Agency: All major programs Title: All major programs Assistance Listing Number: All major programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: 2 CFR 200.512 requires that the annual federal reporting package including the data collection form be submitted within nine months after the end of the audit period. Condition: NTU did not submit the annual federal reporting package within nine months after May 31, 2022. Questioned Costs: None Context: The annual federal reporting package for the year ended May 31, 2022. Cause and Effect: Internal controls were not designed and implemented to the annual federal reporting package was submitted within the timeframe required by OMB Uniform Guidance. Auditors? Recommendation: NTU should improve internal controls to help ensure that financial statement balances are accurately reconciled to assist with the timely preparation and submission of the annual federal reporting package. Management?s Response: NTU has developed a comprehensive year-end financial close and annual federal reporting plan with the assistance of our consultants, Harshwal & Company, LLC in September 2022. This plan was not implemented until after the end of fiscal year 2022. As part of this plan, NTU will ensure that financial accounting books and records are reconciled and closed in a timely manner prior to providing the final trial balance to the auditor.
2022-010 ? Special Tests and Provisions (Return of Title IV Funds) Federal Program Information: Funding Agency: U.S. Department of Education Title: Student Financial Aid Cluster Assistance Listing Number: 84.007, 84.033, 84.063 Award Period: June 1, 2021 ? May 31, 2022 Criteria: When a recipient of Title IV grant or loan assistance withdraws from an institution during a payment period or period of enrollment in which the recipient began attendance, the institution must determine the amount of Title IV aid earned by the student as of the withdrawal date. If the total amount of Title IV assistance earned by the student is less than the amount that was disbursed to the student or on his or her behalf as of the date of the institution?s determination that the student withdrew, the difference must be returned to the Title IV programs. Condition: During our evaluation of Return of Title IV funds, we noted the following: ? No funds were remitted back to the Department of Education related to the Title IV programs. Subsequent analysis by NTU determined that approximately $14,562 was due back to Title IV programs for fiscal year 2022. ? Ten students tested appeared to unofficially withdraw from classes and an R2T4 calculation was not performed. ? Two students tested formally withdrew from classes and an R2T4 calculation was not performed. Questioned Costs: None. Context: Twenty-five students that received Title IV student financial aid and did not earn any credits in one of the semesters in fiscal year 2022. Cause and Effect: NTU did not have effective internal controls to ensure return to Title IV funds were performed in accordance with federal requirements. Auditor?s Recommendation: Establish formal procedures to ensure compliance with federal student aid requirements. These policies and procedures should address students that withdraw from classes without notifying NTU. Consider performing student file audits to ensure Return of Title IV calculations are performed. Lastly, consider increasing coordination efforts between the finance department and the student financial aid department to ensure amounts due back to Title IV programs are determined and remitted timely. Management?s Response: NTU will develop formal policies and procedures regarding Return of Title IV Funds. The procedures will be in alignment with the requirements of the U.S. Department of Education. The procedures will address student withdrawals and the data required to be entered and monitored in the student data information system. The Accounting Manager within the Student Accounts section of the NTU Business Office will review all student enrollment transactions to ensure Return to Title IV requirements are complied with.
2022-011 ? Special Tests and Provisions (Enrollment Reporting) Federal Program Information: Funding Agency: U.S. Department of Education Title: Student Financial Aid Cluster Assistance Listing Number: 84.007, 84.033, 84.063 Award Period: June 1, 2021 ? May 31, 2022 Criteria: Institutions are required to report enrollment information under the Pell grant via the National Student Loan Data System (NSLDS). Institutions must review, update, and verify student enrollment statuses, program information, and effective dates that appear on the Enrollment Reporting Roster file or on the Enrollment Maintenance page of the NSLDS Professional Access (NSLDSFAP) website. Condition: During our evaluation of NSLDS enrollment reporting, we noted the following: ? Ten students with an enrollment status change did not have their record updated in the NSLDS database. ? Two students with an enrollment status change did not have their record updated in the NSLDS database within 60 days of the change. ? Nine students did not have a record in the NSLDS database. Questioned Costs: None. Context: Twenty-one out of twenty-five students that had an enrollment status change in fiscal year 2022. Cause and Effect: Internal controls have not been designed and implemented to ensure compliance with enrollment reporting requirements of the Student Financial Aid Cluster. 34 CFR 690.83(c) states, ?In accordance with 34 CFR 668.84, the Secretary may impose a fine on the institution if the institution fails to comply with the (reporting) requirements specified?. There is a risk that NTU could face a potential fine if the required information is not being reported. Auditors? Recommendation: Develop and implement internal controls to ensure the enrollment reporting requirements of the Student Financial Aid Cluster are met. Management?s Response: NTU will develop formal policies and procedures regarding enrollment reporting. This will include identifying the necessary enrollment data to update the National Student Loan Database System (NSLDS) on a timely basis in accordance with the Student Financial Aid Cluster requirements. NTU has been negatively affected by staffing issues partly attributable to the COVID-19 pandemic. NTU will be hiring an additional Financial Aid Technician and a Financial Aid Counselor to assist in addressing this finding.
2022-012 ? Special Tests and Provisions (Gramm-Leach-Bliley Act ? Student Information Security) Federal Program Information: Funding Agency: U.S. Department of Education Title: Student Financial Aid Cluster Assistance Listing Number: 84.007, 84.033, 84.063 Award Period: June 1, 2021 ? May 31, 2022 Criteria: Title IV-eligible institutions are subject to the Gramm-Leach-Bliley Act (the ?Act?). The Act requires institutions to perform the following: ? Develop, implement, and maintain a written information security program. ? Designate the employee(s) responsible for coordinating the information security program. ? Identify and assess risks to customer information. ? Design and implement an information safeguards program Condition: We found that NTU has developed an information security plan, however this plan has not been formally adopted and implemented by NTU. Questioned Costs: None. Context: Evaluation of NTU?s information security protocols as it relates to the Gramm-Leach-Bliley Act requirements of the Student Financial Aid Cluster. Cause and Effect: NTU has not formally adopted and implemented an information security plan that addresses the requirements of the Gramm-Leach-Bliley Act. NTU did not comply with OMB Uniform Guidance related to special tests and provisions for the Student Financial Aid Cluster. Auditor?s Recommendation: Formally adopt and implement an information security plan that adequately addresses the requirements of the Student Financial Assistance Cluster. Management?s Response: NTU is currently working on policies and procedures and a comprehensive information security plan to address student information security. NTU is working closely with U.S. Federal Student Aid office (FSA) to ensure all required elements are incorporated into NTU?s information security plan. A draft policy been provided to the FSA_IHE Cyber Compliance group for review, once the review is completed, the policies and procedures along with the student information security plan will be presented to NTU Board of Regents for ratification and adoption.
2022-007 ? Cash Management Federal Program Information: Funding Agency: All Major Programs Title: All Major Programs Assistance Listing Number: All Major Programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: Advanced grant/contract funds may not be transferred to other NTU accounts, lent to such NTU accounts, or expended for programs not authorized. There should be sufficient unrestricted cash and investment balances on hand to cover all unearned grant revenue associated with federal and nonfederal programs. Condition: NTU did not maintain cash and cash equivalents at least equal to the amount of unspent grant funds advanced from federal and nonfederal agencies at year-end. At May 31, 2022, NTU?s unrestricted cash and cash equivalents and unearned grant revenue totaled $29,728,594 and $34,490,432, respectively. As a result, unspent grant funds held by NTU exceeded the amount of available cash and cash equivalents by $5,761,748. Questioned Costs: None. Context: Federal programs that have been provided with advanced funds. Cause and Effect: NTU did not have effective internal controls to ensure sufficient cash and cash equivalents are on hand to cover all unearned grant revenue associated with federal and nonfederal programs. NTU is not in compliance with federal requirements. Auditor?s Recommendation: Thoroughly analyze the financial position of NTU and ensure adequate cash and cash equivalents are maintained in an amount at least equal to unearned grant revenues from federal and nonfederal sources. NTU may need to liquidate unrestricted investments and convert them into cash and cash equivalents or reallocate investments into securities backed by the full faith and credit of the United States government to accomplish this. Management?s Response: NTU has developed a monthly cash management schedule that tracks and identifies all grant funds along with total cash received in advance from grantors and amounts due to NTU. NTU will increase cash balances through the timely collection of outstanding grants receivable. NTU will also analyze cash requirements and may liquidate investments held in the Capital Reserve fund to ensure adequate cash is maintained for grants received in advance.
2022-014 ? Late Submission of Annual Federal Reporting Package Federal Program Information: Funding Agency: All major programs Title: All major programs Assistance Listing Number: All major programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: 2 CFR 200.512 requires that the annual federal reporting package including the data collection form be submitted within nine months after the end of the audit period. Condition: NTU did not submit the annual federal reporting package within nine months after May 31, 2022. Questioned Costs: None Context: The annual federal reporting package for the year ended May 31, 2022. Cause and Effect: Internal controls were not designed and implemented to the annual federal reporting package was submitted within the timeframe required by OMB Uniform Guidance. Auditors? Recommendation: NTU should improve internal controls to help ensure that financial statement balances are accurately reconciled to assist with the timely preparation and submission of the annual federal reporting package. Management?s Response: NTU has developed a comprehensive year-end financial close and annual federal reporting plan with the assistance of our consultants, Harshwal & Company, LLC in September 2022. This plan was not implemented until after the end of fiscal year 2022. As part of this plan, NTU will ensure that financial accounting books and records are reconciled and closed in a timely manner prior to providing the final trial balance to the auditor.
2022-010 ? Special Tests and Provisions (Return of Title IV Funds) Federal Program Information: Funding Agency: U.S. Department of Education Title: Student Financial Aid Cluster Assistance Listing Number: 84.007, 84.033, 84.063 Award Period: June 1, 2021 ? May 31, 2022 Criteria: When a recipient of Title IV grant or loan assistance withdraws from an institution during a payment period or period of enrollment in which the recipient began attendance, the institution must determine the amount of Title IV aid earned by the student as of the withdrawal date. If the total amount of Title IV assistance earned by the student is less than the amount that was disbursed to the student or on his or her behalf as of the date of the institution?s determination that the student withdrew, the difference must be returned to the Title IV programs. Condition: During our evaluation of Return of Title IV funds, we noted the following: ? No funds were remitted back to the Department of Education related to the Title IV programs. Subsequent analysis by NTU determined that approximately $14,562 was due back to Title IV programs for fiscal year 2022. ? Ten students tested appeared to unofficially withdraw from classes and an R2T4 calculation was not performed. ? Two students tested formally withdrew from classes and an R2T4 calculation was not performed. Questioned Costs: None. Context: Twenty-five students that received Title IV student financial aid and did not earn any credits in one of the semesters in fiscal year 2022. Cause and Effect: NTU did not have effective internal controls to ensure return to Title IV funds were performed in accordance with federal requirements. Auditor?s Recommendation: Establish formal procedures to ensure compliance with federal student aid requirements. These policies and procedures should address students that withdraw from classes without notifying NTU. Consider performing student file audits to ensure Return of Title IV calculations are performed. Lastly, consider increasing coordination efforts between the finance department and the student financial aid department to ensure amounts due back to Title IV programs are determined and remitted timely. Management?s Response: NTU will develop formal policies and procedures regarding Return of Title IV Funds. The procedures will be in alignment with the requirements of the U.S. Department of Education. The procedures will address student withdrawals and the data required to be entered and monitored in the student data information system. The Accounting Manager within the Student Accounts section of the NTU Business Office will review all student enrollment transactions to ensure Return to Title IV requirements are complied with.
2022-011 ? Special Tests and Provisions (Enrollment Reporting) Federal Program Information: Funding Agency: U.S. Department of Education Title: Student Financial Aid Cluster Assistance Listing Number: 84.007, 84.033, 84.063 Award Period: June 1, 2021 ? May 31, 2022 Criteria: Institutions are required to report enrollment information under the Pell grant via the National Student Loan Data System (NSLDS). Institutions must review, update, and verify student enrollment statuses, program information, and effective dates that appear on the Enrollment Reporting Roster file or on the Enrollment Maintenance page of the NSLDS Professional Access (NSLDSFAP) website. Condition: During our evaluation of NSLDS enrollment reporting, we noted the following: ? Ten students with an enrollment status change did not have their record updated in the NSLDS database. ? Two students with an enrollment status change did not have their record updated in the NSLDS database within 60 days of the change. ? Nine students did not have a record in the NSLDS database. Questioned Costs: None. Context: Twenty-one out of twenty-five students that had an enrollment status change in fiscal year 2022. Cause and Effect: Internal controls have not been designed and implemented to ensure compliance with enrollment reporting requirements of the Student Financial Aid Cluster. 34 CFR 690.83(c) states, ?In accordance with 34 CFR 668.84, the Secretary may impose a fine on the institution if the institution fails to comply with the (reporting) requirements specified?. There is a risk that NTU could face a potential fine if the required information is not being reported. Auditors? Recommendation: Develop and implement internal controls to ensure the enrollment reporting requirements of the Student Financial Aid Cluster are met. Management?s Response: NTU will develop formal policies and procedures regarding enrollment reporting. This will include identifying the necessary enrollment data to update the National Student Loan Database System (NSLDS) on a timely basis in accordance with the Student Financial Aid Cluster requirements. NTU has been negatively affected by staffing issues partly attributable to the COVID-19 pandemic. NTU will be hiring an additional Financial Aid Technician and a Financial Aid Counselor to assist in addressing this finding.
2022-012 ? Special Tests and Provisions (Gramm-Leach-Bliley Act ? Student Information Security) Federal Program Information: Funding Agency: U.S. Department of Education Title: Student Financial Aid Cluster Assistance Listing Number: 84.007, 84.033, 84.063 Award Period: June 1, 2021 ? May 31, 2022 Criteria: Title IV-eligible institutions are subject to the Gramm-Leach-Bliley Act (the ?Act?). The Act requires institutions to perform the following: ? Develop, implement, and maintain a written information security program. ? Designate the employee(s) responsible for coordinating the information security program. ? Identify and assess risks to customer information. ? Design and implement an information safeguards program Condition: We found that NTU has developed an information security plan, however this plan has not been formally adopted and implemented by NTU. Questioned Costs: None. Context: Evaluation of NTU?s information security protocols as it relates to the Gramm-Leach-Bliley Act requirements of the Student Financial Aid Cluster. Cause and Effect: NTU has not formally adopted and implemented an information security plan that addresses the requirements of the Gramm-Leach-Bliley Act. NTU did not comply with OMB Uniform Guidance related to special tests and provisions for the Student Financial Aid Cluster. Auditor?s Recommendation: Formally adopt and implement an information security plan that adequately addresses the requirements of the Student Financial Assistance Cluster. Management?s Response: NTU is currently working on policies and procedures and a comprehensive information security plan to address student information security. NTU is working closely with U.S. Federal Student Aid office (FSA) to ensure all required elements are incorporated into NTU?s information security plan. A draft policy been provided to the FSA_IHE Cyber Compliance group for review, once the review is completed, the policies and procedures along with the student information security plan will be presented to NTU Board of Regents for ratification and adoption.
2022-007 ? Cash Management Federal Program Information: Funding Agency: All Major Programs Title: All Major Programs Assistance Listing Number: All Major Programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: Advanced grant/contract funds may not be transferred to other NTU accounts, lent to such NTU accounts, or expended for programs not authorized. There should be sufficient unrestricted cash and investment balances on hand to cover all unearned grant revenue associated with federal and nonfederal programs. Condition: NTU did not maintain cash and cash equivalents at least equal to the amount of unspent grant funds advanced from federal and nonfederal agencies at year-end. At May 31, 2022, NTU?s unrestricted cash and cash equivalents and unearned grant revenue totaled $29,728,594 and $34,490,432, respectively. As a result, unspent grant funds held by NTU exceeded the amount of available cash and cash equivalents by $5,761,748. Questioned Costs: None. Context: Federal programs that have been provided with advanced funds. Cause and Effect: NTU did not have effective internal controls to ensure sufficient cash and cash equivalents are on hand to cover all unearned grant revenue associated with federal and nonfederal programs. NTU is not in compliance with federal requirements. Auditor?s Recommendation: Thoroughly analyze the financial position of NTU and ensure adequate cash and cash equivalents are maintained in an amount at least equal to unearned grant revenues from federal and nonfederal sources. NTU may need to liquidate unrestricted investments and convert them into cash and cash equivalents or reallocate investments into securities backed by the full faith and credit of the United States government to accomplish this. Management?s Response: NTU has developed a monthly cash management schedule that tracks and identifies all grant funds along with total cash received in advance from grantors and amounts due to NTU. NTU will increase cash balances through the timely collection of outstanding grants receivable. NTU will also analyze cash requirements and may liquidate investments held in the Capital Reserve fund to ensure adequate cash is maintained for grants received in advance.
2022-014 ? Late Submission of Annual Federal Reporting Package Federal Program Information: Funding Agency: All major programs Title: All major programs Assistance Listing Number: All major programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: 2 CFR 200.512 requires that the annual federal reporting package including the data collection form be submitted within nine months after the end of the audit period. Condition: NTU did not submit the annual federal reporting package within nine months after May 31, 2022. Questioned Costs: None Context: The annual federal reporting package for the year ended May 31, 2022. Cause and Effect: Internal controls were not designed and implemented to the annual federal reporting package was submitted within the timeframe required by OMB Uniform Guidance. Auditors? Recommendation: NTU should improve internal controls to help ensure that financial statement balances are accurately reconciled to assist with the timely preparation and submission of the annual federal reporting package. Management?s Response: NTU has developed a comprehensive year-end financial close and annual federal reporting plan with the assistance of our consultants, Harshwal & Company, LLC in September 2022. This plan was not implemented until after the end of fiscal year 2022. As part of this plan, NTU will ensure that financial accounting books and records are reconciled and closed in a timely manner prior to providing the final trial balance to the auditor.
2022-010 ? Special Tests and Provisions (Return of Title IV Funds) Federal Program Information: Funding Agency: U.S. Department of Education Title: Student Financial Aid Cluster Assistance Listing Number: 84.007, 84.033, 84.063 Award Period: June 1, 2021 ? May 31, 2022 Criteria: When a recipient of Title IV grant or loan assistance withdraws from an institution during a payment period or period of enrollment in which the recipient began attendance, the institution must determine the amount of Title IV aid earned by the student as of the withdrawal date. If the total amount of Title IV assistance earned by the student is less than the amount that was disbursed to the student or on his or her behalf as of the date of the institution?s determination that the student withdrew, the difference must be returned to the Title IV programs. Condition: During our evaluation of Return of Title IV funds, we noted the following: ? No funds were remitted back to the Department of Education related to the Title IV programs. Subsequent analysis by NTU determined that approximately $14,562 was due back to Title IV programs for fiscal year 2022. ? Ten students tested appeared to unofficially withdraw from classes and an R2T4 calculation was not performed. ? Two students tested formally withdrew from classes and an R2T4 calculation was not performed. Questioned Costs: None. Context: Twenty-five students that received Title IV student financial aid and did not earn any credits in one of the semesters in fiscal year 2022. Cause and Effect: NTU did not have effective internal controls to ensure return to Title IV funds were performed in accordance with federal requirements. Auditor?s Recommendation: Establish formal procedures to ensure compliance with federal student aid requirements. These policies and procedures should address students that withdraw from classes without notifying NTU. Consider performing student file audits to ensure Return of Title IV calculations are performed. Lastly, consider increasing coordination efforts between the finance department and the student financial aid department to ensure amounts due back to Title IV programs are determined and remitted timely. Management?s Response: NTU will develop formal policies and procedures regarding Return of Title IV Funds. The procedures will be in alignment with the requirements of the U.S. Department of Education. The procedures will address student withdrawals and the data required to be entered and monitored in the student data information system. The Accounting Manager within the Student Accounts section of the NTU Business Office will review all student enrollment transactions to ensure Return to Title IV requirements are complied with.
2022-011 ? Special Tests and Provisions (Enrollment Reporting) Federal Program Information: Funding Agency: U.S. Department of Education Title: Student Financial Aid Cluster Assistance Listing Number: 84.007, 84.033, 84.063 Award Period: June 1, 2021 ? May 31, 2022 Criteria: Institutions are required to report enrollment information under the Pell grant via the National Student Loan Data System (NSLDS). Institutions must review, update, and verify student enrollment statuses, program information, and effective dates that appear on the Enrollment Reporting Roster file or on the Enrollment Maintenance page of the NSLDS Professional Access (NSLDSFAP) website. Condition: During our evaluation of NSLDS enrollment reporting, we noted the following: ? Ten students with an enrollment status change did not have their record updated in the NSLDS database. ? Two students with an enrollment status change did not have their record updated in the NSLDS database within 60 days of the change. ? Nine students did not have a record in the NSLDS database. Questioned Costs: None. Context: Twenty-one out of twenty-five students that had an enrollment status change in fiscal year 2022. Cause and Effect: Internal controls have not been designed and implemented to ensure compliance with enrollment reporting requirements of the Student Financial Aid Cluster. 34 CFR 690.83(c) states, ?In accordance with 34 CFR 668.84, the Secretary may impose a fine on the institution if the institution fails to comply with the (reporting) requirements specified?. There is a risk that NTU could face a potential fine if the required information is not being reported. Auditors? Recommendation: Develop and implement internal controls to ensure the enrollment reporting requirements of the Student Financial Aid Cluster are met. Management?s Response: NTU will develop formal policies and procedures regarding enrollment reporting. This will include identifying the necessary enrollment data to update the National Student Loan Database System (NSLDS) on a timely basis in accordance with the Student Financial Aid Cluster requirements. NTU has been negatively affected by staffing issues partly attributable to the COVID-19 pandemic. NTU will be hiring an additional Financial Aid Technician and a Financial Aid Counselor to assist in addressing this finding.
2022-012 ? Special Tests and Provisions (Gramm-Leach-Bliley Act ? Student Information Security) Federal Program Information: Funding Agency: U.S. Department of Education Title: Student Financial Aid Cluster Assistance Listing Number: 84.007, 84.033, 84.063 Award Period: June 1, 2021 ? May 31, 2022 Criteria: Title IV-eligible institutions are subject to the Gramm-Leach-Bliley Act (the ?Act?). The Act requires institutions to perform the following: ? Develop, implement, and maintain a written information security program. ? Designate the employee(s) responsible for coordinating the information security program. ? Identify and assess risks to customer information. ? Design and implement an information safeguards program Condition: We found that NTU has developed an information security plan, however this plan has not been formally adopted and implemented by NTU. Questioned Costs: None. Context: Evaluation of NTU?s information security protocols as it relates to the Gramm-Leach-Bliley Act requirements of the Student Financial Aid Cluster. Cause and Effect: NTU has not formally adopted and implemented an information security plan that addresses the requirements of the Gramm-Leach-Bliley Act. NTU did not comply with OMB Uniform Guidance related to special tests and provisions for the Student Financial Aid Cluster. Auditor?s Recommendation: Formally adopt and implement an information security plan that adequately addresses the requirements of the Student Financial Assistance Cluster. Management?s Response: NTU is currently working on policies and procedures and a comprehensive information security plan to address student information security. NTU is working closely with U.S. Federal Student Aid office (FSA) to ensure all required elements are incorporated into NTU?s information security plan. A draft policy been provided to the FSA_IHE Cyber Compliance group for review, once the review is completed, the policies and procedures along with the student information security plan will be presented to NTU Board of Regents for ratification and adoption.
2022-007 ? Cash Management Federal Program Information: Funding Agency: All Major Programs Title: All Major Programs Assistance Listing Number: All Major Programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: Advanced grant/contract funds may not be transferred to other NTU accounts, lent to such NTU accounts, or expended for programs not authorized. There should be sufficient unrestricted cash and investment balances on hand to cover all unearned grant revenue associated with federal and nonfederal programs. Condition: NTU did not maintain cash and cash equivalents at least equal to the amount of unspent grant funds advanced from federal and nonfederal agencies at year-end. At May 31, 2022, NTU?s unrestricted cash and cash equivalents and unearned grant revenue totaled $29,728,594 and $34,490,432, respectively. As a result, unspent grant funds held by NTU exceeded the amount of available cash and cash equivalents by $5,761,748. Questioned Costs: None. Context: Federal programs that have been provided with advanced funds. Cause and Effect: NTU did not have effective internal controls to ensure sufficient cash and cash equivalents are on hand to cover all unearned grant revenue associated with federal and nonfederal programs. NTU is not in compliance with federal requirements. Auditor?s Recommendation: Thoroughly analyze the financial position of NTU and ensure adequate cash and cash equivalents are maintained in an amount at least equal to unearned grant revenues from federal and nonfederal sources. NTU may need to liquidate unrestricted investments and convert them into cash and cash equivalents or reallocate investments into securities backed by the full faith and credit of the United States government to accomplish this. Management?s Response: NTU has developed a monthly cash management schedule that tracks and identifies all grant funds along with total cash received in advance from grantors and amounts due to NTU. NTU will increase cash balances through the timely collection of outstanding grants receivable. NTU will also analyze cash requirements and may liquidate investments held in the Capital Reserve fund to ensure adequate cash is maintained for grants received in advance.
2022-014 ? Late Submission of Annual Federal Reporting Package Federal Program Information: Funding Agency: All major programs Title: All major programs Assistance Listing Number: All major programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: 2 CFR 200.512 requires that the annual federal reporting package including the data collection form be submitted within nine months after the end of the audit period. Condition: NTU did not submit the annual federal reporting package within nine months after May 31, 2022. Questioned Costs: None Context: The annual federal reporting package for the year ended May 31, 2022. Cause and Effect: Internal controls were not designed and implemented to the annual federal reporting package was submitted within the timeframe required by OMB Uniform Guidance. Auditors? Recommendation: NTU should improve internal controls to help ensure that financial statement balances are accurately reconciled to assist with the timely preparation and submission of the annual federal reporting package. Management?s Response: NTU has developed a comprehensive year-end financial close and annual federal reporting plan with the assistance of our consultants, Harshwal & Company, LLC in September 2022. This plan was not implemented until after the end of fiscal year 2022. As part of this plan, NTU will ensure that financial accounting books and records are reconciled and closed in a timely manner prior to providing the final trial balance to the auditor.
2022-008 ?Activities Allowed/Unallowed and Allowable Costs/Cost Principles Federal Program Information: Funding Agency: U.S. Department of Defense, National Science Foundation, U.S. Department of Energy, and U.S. Department of Education Title: Research and Development Cluster, Tribally Controlled Postsecondary Career and Technical Institutions. Higher Education Emergency Relief Fund (HEERF) Assistance Listing Number: 12.431, 47.076, 81.123, 84.245, 84.425 Award Period: June 1, 2021 ? May 31, 2022 Criteria: To be allowable under Federal awards, costs must be necessary and reasonable for the performance and administration of the federal award. Costs must meet the following criteria: 1) necessary and reasonable; 2) consistent with policies and procedures; 3) accorded consistent treatment; and 4) are adequately documented. Condition: We found the following in our review of federal expenditures: Research and Development Cluster ? ? One expenditure for the purchase of a gold spectrometer, microscope mainframe and accessories in the amount of $145,596 was incorrectly charged twice to the Expanding STEM Education to Meet Navajo Nation Needs project with the National Science Foundation. NTU subsequently corrected this by removing one of the duplicate charges from federal expenditures. ? One employee?s wages in the amount of $260 was incorrectly charged to Department of Defense Performance Enhancement Through HIS Assessment and Analysis Campaign Project. The employee?s wages should have been charged to another federal program. ? Two payroll transactions totaling $3,580 did not have accurate source documentation to support the allocation of salaries and wages charged to the program. Tribally Controlled Postsecondary Career and Technical Institutions ? ? One employee?s wages in the amount of $1,640.55 was incorrectly allocated and charged to the program. The employee?s salary should have been charged to the NTU general fund. Higher Education Emergency Relief Fund ? ? NTU incorrectly charged the HEERF Student Aid Portion (ALN 84.425E) for lost revenue in the amount of $870,725. NTU subsequently corrected this and charged the lost revenue to the HEERF Tribally Controlled Colleges and Universities portion (ALN 84.425K). Questioned Costs: None exceeding $25,000 as NTU made correcting adjustments to federal expenditures. Context: Four of fifty payroll and non-payroll transactions tested for the Research and Development Cluster. One of twenty-five payroll transactions tested for the Tribally Controlled Postsecondary Career and Technical Institutions program. One of twenty-nine non-payroll transactions tested for the Higher Education Emergency Relief Fund program. Cause and Effect: NTU did not have effective internal controls to ensure federal expenditures are accurately charged in accordance with federal activities allowed/unallowed and allowable costs/cost principles requirements. As a result, NTU was not in compliance with these federal requirements for the Research and Development Cluster, Tribally Controlled Post Secondary Career and Technical Institutions and HEERF programs. Auditor?s Recommendation: Improve internal controls to ensure expenditures are allowable under federal program requirements. This includes maintaining source documentation to support the allocation of payroll costs and ensuring expenses are not double recorded in the accounting system. Management?s Response: NTU will implement a monthly review of all grant expenditures to ensure amounts charged to federal awards are accurately posted and reflected in the accounting system. All journal entries will be reviewed for accuracy by the Accounting Manager and Senior Accountant. Payroll allocations provided by the Human Resources office will be included in the monthly review to ensure accuracy of the payroll expenditures. Principal Investigators and program managers will also be given read-only access to the accounting system to review expenditure postings for accuracy.
2022-009 ? Cash Management Federal Program Information: Funding Agency: U.S. Department of Education Title: Tribally Controlled Postsecondary Career and Technical Institutions Assistance Listing Number: 84.245 Award Period: June 1, 2021 ? May 31, 2022 Criteria: Internal controls must be in place to demonstrate that the time between the transfer of funds from the federal entity to the non-federal entity and disbursement by the non-federal entity has been adequately minimized. This includes ensuring reimbursement and drawdown requests are adequately supported by underlying source documentation. Condition: During our evaluation of cash drawdowns, two out of four drawdowns tested did not have adequate source documentation to support the amount of funds drawn down. Questioned Costs: None. Context: Two of four drawdowns tested for the Tribally Controlled Postsecondary Career and Technical Institutions. Cause and Effect: Internal controls were not designed and implemented to ensure appropriate cash management requirements are met. NTU did not comply with the cash management requirements of the Tribally Controlled Postsecondary Career and Technical Institutions program. Auditor?s Recommendation: Established policies and procedures should be enforced to ensure compliance with federal cash management requirements and NTU?s policies and procedures. Management?s Response: NTU has developed cash management policies and procedures under NTU?s Sponsored Projects Manual. NTU will be enforcing policies and procedures for cash drawdowns to ensure all drawdowns are adequately supported. This will be managed by the new incoming Grants Accountant and Contract and Grants Manager that will be hired in the upcoming fiscal year.
2022-007 ? Cash Management Federal Program Information: Funding Agency: All Major Programs Title: All Major Programs Assistance Listing Number: All Major Programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: Advanced grant/contract funds may not be transferred to other NTU accounts, lent to such NTU accounts, or expended for programs not authorized. There should be sufficient unrestricted cash and investment balances on hand to cover all unearned grant revenue associated with federal and nonfederal programs. Condition: NTU did not maintain cash and cash equivalents at least equal to the amount of unspent grant funds advanced from federal and nonfederal agencies at year-end. At May 31, 2022, NTU?s unrestricted cash and cash equivalents and unearned grant revenue totaled $29,728,594 and $34,490,432, respectively. As a result, unspent grant funds held by NTU exceeded the amount of available cash and cash equivalents by $5,761,748. Questioned Costs: None. Context: Federal programs that have been provided with advanced funds. Cause and Effect: NTU did not have effective internal controls to ensure sufficient cash and cash equivalents are on hand to cover all unearned grant revenue associated with federal and nonfederal programs. NTU is not in compliance with federal requirements. Auditor?s Recommendation: Thoroughly analyze the financial position of NTU and ensure adequate cash and cash equivalents are maintained in an amount at least equal to unearned grant revenues from federal and nonfederal sources. NTU may need to liquidate unrestricted investments and convert them into cash and cash equivalents or reallocate investments into securities backed by the full faith and credit of the United States government to accomplish this. Management?s Response: NTU has developed a monthly cash management schedule that tracks and identifies all grant funds along with total cash received in advance from grantors and amounts due to NTU. NTU will increase cash balances through the timely collection of outstanding grants receivable. NTU will also analyze cash requirements and may liquidate investments held in the Capital Reserve fund to ensure adequate cash is maintained for grants received in advance.
2022-014 ? Late Submission of Annual Federal Reporting Package Federal Program Information: Funding Agency: All major programs Title: All major programs Assistance Listing Number: All major programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: 2 CFR 200.512 requires that the annual federal reporting package including the data collection form be submitted within nine months after the end of the audit period. Condition: NTU did not submit the annual federal reporting package within nine months after May 31, 2022. Questioned Costs: None Context: The annual federal reporting package for the year ended May 31, 2022. Cause and Effect: Internal controls were not designed and implemented to the annual federal reporting package was submitted within the timeframe required by OMB Uniform Guidance. Auditors? Recommendation: NTU should improve internal controls to help ensure that financial statement balances are accurately reconciled to assist with the timely preparation and submission of the annual federal reporting package. Management?s Response: NTU has developed a comprehensive year-end financial close and annual federal reporting plan with the assistance of our consultants, Harshwal & Company, LLC in September 2022. This plan was not implemented until after the end of fiscal year 2022. As part of this plan, NTU will ensure that financial accounting books and records are reconciled and closed in a timely manner prior to providing the final trial balance to the auditor.
2022-008 ?Activities Allowed/Unallowed and Allowable Costs/Cost Principles Federal Program Information: Funding Agency: U.S. Department of Defense, National Science Foundation, U.S. Department of Energy, and U.S. Department of Education Title: Research and Development Cluster, Tribally Controlled Postsecondary Career and Technical Institutions. Higher Education Emergency Relief Fund (HEERF) Assistance Listing Number: 12.431, 47.076, 81.123, 84.245, 84.425 Award Period: June 1, 2021 ? May 31, 2022 Criteria: To be allowable under Federal awards, costs must be necessary and reasonable for the performance and administration of the federal award. Costs must meet the following criteria: 1) necessary and reasonable; 2) consistent with policies and procedures; 3) accorded consistent treatment; and 4) are adequately documented. Condition: We found the following in our review of federal expenditures: Research and Development Cluster ? ? One expenditure for the purchase of a gold spectrometer, microscope mainframe and accessories in the amount of $145,596 was incorrectly charged twice to the Expanding STEM Education to Meet Navajo Nation Needs project with the National Science Foundation. NTU subsequently corrected this by removing one of the duplicate charges from federal expenditures. ? One employee?s wages in the amount of $260 was incorrectly charged to Department of Defense Performance Enhancement Through HIS Assessment and Analysis Campaign Project. The employee?s wages should have been charged to another federal program. ? Two payroll transactions totaling $3,580 did not have accurate source documentation to support the allocation of salaries and wages charged to the program. Tribally Controlled Postsecondary Career and Technical Institutions ? ? One employee?s wages in the amount of $1,640.55 was incorrectly allocated and charged to the program. The employee?s salary should have been charged to the NTU general fund. Higher Education Emergency Relief Fund ? ? NTU incorrectly charged the HEERF Student Aid Portion (ALN 84.425E) for lost revenue in the amount of $870,725. NTU subsequently corrected this and charged the lost revenue to the HEERF Tribally Controlled Colleges and Universities portion (ALN 84.425K). Questioned Costs: None exceeding $25,000 as NTU made correcting adjustments to federal expenditures. Context: Four of fifty payroll and non-payroll transactions tested for the Research and Development Cluster. One of twenty-five payroll transactions tested for the Tribally Controlled Postsecondary Career and Technical Institutions program. One of twenty-nine non-payroll transactions tested for the Higher Education Emergency Relief Fund program. Cause and Effect: NTU did not have effective internal controls to ensure federal expenditures are accurately charged in accordance with federal activities allowed/unallowed and allowable costs/cost principles requirements. As a result, NTU was not in compliance with these federal requirements for the Research and Development Cluster, Tribally Controlled Post Secondary Career and Technical Institutions and HEERF programs. Auditor?s Recommendation: Improve internal controls to ensure expenditures are allowable under federal program requirements. This includes maintaining source documentation to support the allocation of payroll costs and ensuring expenses are not double recorded in the accounting system. Management?s Response: NTU will implement a monthly review of all grant expenditures to ensure amounts charged to federal awards are accurately posted and reflected in the accounting system. All journal entries will be reviewed for accuracy by the Accounting Manager and Senior Accountant. Payroll allocations provided by the Human Resources office will be included in the monthly review to ensure accuracy of the payroll expenditures. Principal Investigators and program managers will also be given read-only access to the accounting system to review expenditure postings for accuracy.
2022-013 ? Reporting Federal Program Information: Funding Agency: U.S. Department of Education Title: Higher Education Emergency Relief Fund (HEERF) Assistance Listing Number: 84.425 Award Period: June 1, 2021 ? May 31, 2022 Criteria: Internal controls must be in place to ensure performance and financial reporting requirements for federal award programs are met Condition: During our assessment of reporting requirements, we found the following: ? The quarterly budget and expenditure reporting for the HEERF Institutional Portion (ALN 84.425K) for the quarter ending December 31, 2021 was not completed. ? The quarterly budget and expenditure reporting for the HEERF Institutional Portion (ALN 84.425K) and Student Aid Portion (84.425E) for the quarters ending December 31, 2021 and March 31, 2022 were not posted on NTU?s website as required. Questioned Costs: None Context: Four out of four quarterly budget and expenditures reports required by the HEERF program. Cause and Effect: Internal controls were not designed and implemented to ensure HEERF reporting requirements were met. NTU did not comply with OMB Uniform Guidance related to reporting for the HEERF program. Auditors? Recommendation: Establish formal reporting procedures to ensure compliance with federal reporting requirements. Management?s Response: Formal policies and procedures for grants reporting will be developed by NTU. Detailed schedules by funding source will be prepared that identifies the reporting requirements and deadlines for submission. Communication of reporting due dates to appropriate NTU financial and programmatic personnel will be improved. This will help ensure all financial and administrative reports are submitted in a timely manner.
2022-007 ? Cash Management Federal Program Information: Funding Agency: All Major Programs Title: All Major Programs Assistance Listing Number: All Major Programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: Advanced grant/contract funds may not be transferred to other NTU accounts, lent to such NTU accounts, or expended for programs not authorized. There should be sufficient unrestricted cash and investment balances on hand to cover all unearned grant revenue associated with federal and nonfederal programs. Condition: NTU did not maintain cash and cash equivalents at least equal to the amount of unspent grant funds advanced from federal and nonfederal agencies at year-end. At May 31, 2022, NTU?s unrestricted cash and cash equivalents and unearned grant revenue totaled $29,728,594 and $34,490,432, respectively. As a result, unspent grant funds held by NTU exceeded the amount of available cash and cash equivalents by $5,761,748. Questioned Costs: None. Context: Federal programs that have been provided with advanced funds. Cause and Effect: NTU did not have effective internal controls to ensure sufficient cash and cash equivalents are on hand to cover all unearned grant revenue associated with federal and nonfederal programs. NTU is not in compliance with federal requirements. Auditor?s Recommendation: Thoroughly analyze the financial position of NTU and ensure adequate cash and cash equivalents are maintained in an amount at least equal to unearned grant revenues from federal and nonfederal sources. NTU may need to liquidate unrestricted investments and convert them into cash and cash equivalents or reallocate investments into securities backed by the full faith and credit of the United States government to accomplish this. Management?s Response: NTU has developed a monthly cash management schedule that tracks and identifies all grant funds along with total cash received in advance from grantors and amounts due to NTU. NTU will increase cash balances through the timely collection of outstanding grants receivable. NTU will also analyze cash requirements and may liquidate investments held in the Capital Reserve fund to ensure adequate cash is maintained for grants received in advance.
2022-014 ? Late Submission of Annual Federal Reporting Package Federal Program Information: Funding Agency: All major programs Title: All major programs Assistance Listing Number: All major programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: 2 CFR 200.512 requires that the annual federal reporting package including the data collection form be submitted within nine months after the end of the audit period. Condition: NTU did not submit the annual federal reporting package within nine months after May 31, 2022. Questioned Costs: None Context: The annual federal reporting package for the year ended May 31, 2022. Cause and Effect: Internal controls were not designed and implemented to the annual federal reporting package was submitted within the timeframe required by OMB Uniform Guidance. Auditors? Recommendation: NTU should improve internal controls to help ensure that financial statement balances are accurately reconciled to assist with the timely preparation and submission of the annual federal reporting package. Management?s Response: NTU has developed a comprehensive year-end financial close and annual federal reporting plan with the assistance of our consultants, Harshwal & Company, LLC in September 2022. This plan was not implemented until after the end of fiscal year 2022. As part of this plan, NTU will ensure that financial accounting books and records are reconciled and closed in a timely manner prior to providing the final trial balance to the auditor.
2022-008 ?Activities Allowed/Unallowed and Allowable Costs/Cost Principles Federal Program Information: Funding Agency: U.S. Department of Defense, National Science Foundation, U.S. Department of Energy, and U.S. Department of Education Title: Research and Development Cluster, Tribally Controlled Postsecondary Career and Technical Institutions. Higher Education Emergency Relief Fund (HEERF) Assistance Listing Number: 12.431, 47.076, 81.123, 84.245, 84.425 Award Period: June 1, 2021 ? May 31, 2022 Criteria: To be allowable under Federal awards, costs must be necessary and reasonable for the performance and administration of the federal award. Costs must meet the following criteria: 1) necessary and reasonable; 2) consistent with policies and procedures; 3) accorded consistent treatment; and 4) are adequately documented. Condition: We found the following in our review of federal expenditures: Research and Development Cluster ? ? One expenditure for the purchase of a gold spectrometer, microscope mainframe and accessories in the amount of $145,596 was incorrectly charged twice to the Expanding STEM Education to Meet Navajo Nation Needs project with the National Science Foundation. NTU subsequently corrected this by removing one of the duplicate charges from federal expenditures. ? One employee?s wages in the amount of $260 was incorrectly charged to Department of Defense Performance Enhancement Through HIS Assessment and Analysis Campaign Project. The employee?s wages should have been charged to another federal program. ? Two payroll transactions totaling $3,580 did not have accurate source documentation to support the allocation of salaries and wages charged to the program. Tribally Controlled Postsecondary Career and Technical Institutions ? ? One employee?s wages in the amount of $1,640.55 was incorrectly allocated and charged to the program. The employee?s salary should have been charged to the NTU general fund. Higher Education Emergency Relief Fund ? ? NTU incorrectly charged the HEERF Student Aid Portion (ALN 84.425E) for lost revenue in the amount of $870,725. NTU subsequently corrected this and charged the lost revenue to the HEERF Tribally Controlled Colleges and Universities portion (ALN 84.425K). Questioned Costs: None exceeding $25,000 as NTU made correcting adjustments to federal expenditures. Context: Four of fifty payroll and non-payroll transactions tested for the Research and Development Cluster. One of twenty-five payroll transactions tested for the Tribally Controlled Postsecondary Career and Technical Institutions program. One of twenty-nine non-payroll transactions tested for the Higher Education Emergency Relief Fund program. Cause and Effect: NTU did not have effective internal controls to ensure federal expenditures are accurately charged in accordance with federal activities allowed/unallowed and allowable costs/cost principles requirements. As a result, NTU was not in compliance with these federal requirements for the Research and Development Cluster, Tribally Controlled Post Secondary Career and Technical Institutions and HEERF programs. Auditor?s Recommendation: Improve internal controls to ensure expenditures are allowable under federal program requirements. This includes maintaining source documentation to support the allocation of payroll costs and ensuring expenses are not double recorded in the accounting system. Management?s Response: NTU will implement a monthly review of all grant expenditures to ensure amounts charged to federal awards are accurately posted and reflected in the accounting system. All journal entries will be reviewed for accuracy by the Accounting Manager and Senior Accountant. Payroll allocations provided by the Human Resources office will be included in the monthly review to ensure accuracy of the payroll expenditures. Principal Investigators and program managers will also be given read-only access to the accounting system to review expenditure postings for accuracy.
2022-013 ? Reporting Federal Program Information: Funding Agency: U.S. Department of Education Title: Higher Education Emergency Relief Fund (HEERF) Assistance Listing Number: 84.425 Award Period: June 1, 2021 ? May 31, 2022 Criteria: Internal controls must be in place to ensure performance and financial reporting requirements for federal award programs are met Condition: During our assessment of reporting requirements, we found the following: ? The quarterly budget and expenditure reporting for the HEERF Institutional Portion (ALN 84.425K) for the quarter ending December 31, 2021 was not completed. ? The quarterly budget and expenditure reporting for the HEERF Institutional Portion (ALN 84.425K) and Student Aid Portion (84.425E) for the quarters ending December 31, 2021 and March 31, 2022 were not posted on NTU?s website as required. Questioned Costs: None Context: Four out of four quarterly budget and expenditures reports required by the HEERF program. Cause and Effect: Internal controls were not designed and implemented to ensure HEERF reporting requirements were met. NTU did not comply with OMB Uniform Guidance related to reporting for the HEERF program. Auditors? Recommendation: Establish formal reporting procedures to ensure compliance with federal reporting requirements. Management?s Response: Formal policies and procedures for grants reporting will be developed by NTU. Detailed schedules by funding source will be prepared that identifies the reporting requirements and deadlines for submission. Communication of reporting due dates to appropriate NTU financial and programmatic personnel will be improved. This will help ensure all financial and administrative reports are submitted in a timely manner.
2022-007 ? Cash Management Federal Program Information: Funding Agency: All Major Programs Title: All Major Programs Assistance Listing Number: All Major Programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: Advanced grant/contract funds may not be transferred to other NTU accounts, lent to such NTU accounts, or expended for programs not authorized. There should be sufficient unrestricted cash and investment balances on hand to cover all unearned grant revenue associated with federal and nonfederal programs. Condition: NTU did not maintain cash and cash equivalents at least equal to the amount of unspent grant funds advanced from federal and nonfederal agencies at year-end. At May 31, 2022, NTU?s unrestricted cash and cash equivalents and unearned grant revenue totaled $29,728,594 and $34,490,432, respectively. As a result, unspent grant funds held by NTU exceeded the amount of available cash and cash equivalents by $5,761,748. Questioned Costs: None. Context: Federal programs that have been provided with advanced funds. Cause and Effect: NTU did not have effective internal controls to ensure sufficient cash and cash equivalents are on hand to cover all unearned grant revenue associated with federal and nonfederal programs. NTU is not in compliance with federal requirements. Auditor?s Recommendation: Thoroughly analyze the financial position of NTU and ensure adequate cash and cash equivalents are maintained in an amount at least equal to unearned grant revenues from federal and nonfederal sources. NTU may need to liquidate unrestricted investments and convert them into cash and cash equivalents or reallocate investments into securities backed by the full faith and credit of the United States government to accomplish this. Management?s Response: NTU has developed a monthly cash management schedule that tracks and identifies all grant funds along with total cash received in advance from grantors and amounts due to NTU. NTU will increase cash balances through the timely collection of outstanding grants receivable. NTU will also analyze cash requirements and may liquidate investments held in the Capital Reserve fund to ensure adequate cash is maintained for grants received in advance.
2022-014 ? Late Submission of Annual Federal Reporting Package Federal Program Information: Funding Agency: All major programs Title: All major programs Assistance Listing Number: All major programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: 2 CFR 200.512 requires that the annual federal reporting package including the data collection form be submitted within nine months after the end of the audit period. Condition: NTU did not submit the annual federal reporting package within nine months after May 31, 2022. Questioned Costs: None Context: The annual federal reporting package for the year ended May 31, 2022. Cause and Effect: Internal controls were not designed and implemented to the annual federal reporting package was submitted within the timeframe required by OMB Uniform Guidance. Auditors? Recommendation: NTU should improve internal controls to help ensure that financial statement balances are accurately reconciled to assist with the timely preparation and submission of the annual federal reporting package. Management?s Response: NTU has developed a comprehensive year-end financial close and annual federal reporting plan with the assistance of our consultants, Harshwal & Company, LLC in September 2022. This plan was not implemented until after the end of fiscal year 2022. As part of this plan, NTU will ensure that financial accounting books and records are reconciled and closed in a timely manner prior to providing the final trial balance to the auditor.
2022-008 ?Activities Allowed/Unallowed and Allowable Costs/Cost Principles Federal Program Information: Funding Agency: U.S. Department of Defense, National Science Foundation, U.S. Department of Energy, and U.S. Department of Education Title: Research and Development Cluster, Tribally Controlled Postsecondary Career and Technical Institutions. Higher Education Emergency Relief Fund (HEERF) Assistance Listing Number: 12.431, 47.076, 81.123, 84.245, 84.425 Award Period: June 1, 2021 ? May 31, 2022 Criteria: To be allowable under Federal awards, costs must be necessary and reasonable for the performance and administration of the federal award. Costs must meet the following criteria: 1) necessary and reasonable; 2) consistent with policies and procedures; 3) accorded consistent treatment; and 4) are adequately documented. Condition: We found the following in our review of federal expenditures: Research and Development Cluster ? ? One expenditure for the purchase of a gold spectrometer, microscope mainframe and accessories in the amount of $145,596 was incorrectly charged twice to the Expanding STEM Education to Meet Navajo Nation Needs project with the National Science Foundation. NTU subsequently corrected this by removing one of the duplicate charges from federal expenditures. ? One employee?s wages in the amount of $260 was incorrectly charged to Department of Defense Performance Enhancement Through HIS Assessment and Analysis Campaign Project. The employee?s wages should have been charged to another federal program. ? Two payroll transactions totaling $3,580 did not have accurate source documentation to support the allocation of salaries and wages charged to the program. Tribally Controlled Postsecondary Career and Technical Institutions ? ? One employee?s wages in the amount of $1,640.55 was incorrectly allocated and charged to the program. The employee?s salary should have been charged to the NTU general fund. Higher Education Emergency Relief Fund ? ? NTU incorrectly charged the HEERF Student Aid Portion (ALN 84.425E) for lost revenue in the amount of $870,725. NTU subsequently corrected this and charged the lost revenue to the HEERF Tribally Controlled Colleges and Universities portion (ALN 84.425K). Questioned Costs: None exceeding $25,000 as NTU made correcting adjustments to federal expenditures. Context: Four of fifty payroll and non-payroll transactions tested for the Research and Development Cluster. One of twenty-five payroll transactions tested for the Tribally Controlled Postsecondary Career and Technical Institutions program. One of twenty-nine non-payroll transactions tested for the Higher Education Emergency Relief Fund program. Cause and Effect: NTU did not have effective internal controls to ensure federal expenditures are accurately charged in accordance with federal activities allowed/unallowed and allowable costs/cost principles requirements. As a result, NTU was not in compliance with these federal requirements for the Research and Development Cluster, Tribally Controlled Post Secondary Career and Technical Institutions and HEERF programs. Auditor?s Recommendation: Improve internal controls to ensure expenditures are allowable under federal program requirements. This includes maintaining source documentation to support the allocation of payroll costs and ensuring expenses are not double recorded in the accounting system. Management?s Response: NTU will implement a monthly review of all grant expenditures to ensure amounts charged to federal awards are accurately posted and reflected in the accounting system. All journal entries will be reviewed for accuracy by the Accounting Manager and Senior Accountant. Payroll allocations provided by the Human Resources office will be included in the monthly review to ensure accuracy of the payroll expenditures. Principal Investigators and program managers will also be given read-only access to the accounting system to review expenditure postings for accuracy.
2022-007 ? Cash Management Federal Program Information: Funding Agency: All Major Programs Title: All Major Programs Assistance Listing Number: All Major Programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: Advanced grant/contract funds may not be transferred to other NTU accounts, lent to such NTU accounts, or expended for programs not authorized. There should be sufficient unrestricted cash and investment balances on hand to cover all unearned grant revenue associated with federal and nonfederal programs. Condition: NTU did not maintain cash and cash equivalents at least equal to the amount of unspent grant funds advanced from federal and nonfederal agencies at year-end. At May 31, 2022, NTU?s unrestricted cash and cash equivalents and unearned grant revenue totaled $29,728,594 and $34,490,432, respectively. As a result, unspent grant funds held by NTU exceeded the amount of available cash and cash equivalents by $5,761,748. Questioned Costs: None. Context: Federal programs that have been provided with advanced funds. Cause and Effect: NTU did not have effective internal controls to ensure sufficient cash and cash equivalents are on hand to cover all unearned grant revenue associated with federal and nonfederal programs. NTU is not in compliance with federal requirements. Auditor?s Recommendation: Thoroughly analyze the financial position of NTU and ensure adequate cash and cash equivalents are maintained in an amount at least equal to unearned grant revenues from federal and nonfederal sources. NTU may need to liquidate unrestricted investments and convert them into cash and cash equivalents or reallocate investments into securities backed by the full faith and credit of the United States government to accomplish this. Management?s Response: NTU has developed a monthly cash management schedule that tracks and identifies all grant funds along with total cash received in advance from grantors and amounts due to NTU. NTU will increase cash balances through the timely collection of outstanding grants receivable. NTU will also analyze cash requirements and may liquidate investments held in the Capital Reserve fund to ensure adequate cash is maintained for grants received in advance.
2022-014 ? Late Submission of Annual Federal Reporting Package Federal Program Information: Funding Agency: All major programs Title: All major programs Assistance Listing Number: All major programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: 2 CFR 200.512 requires that the annual federal reporting package including the data collection form be submitted within nine months after the end of the audit period. Condition: NTU did not submit the annual federal reporting package within nine months after May 31, 2022. Questioned Costs: None Context: The annual federal reporting package for the year ended May 31, 2022. Cause and Effect: Internal controls were not designed and implemented to the annual federal reporting package was submitted within the timeframe required by OMB Uniform Guidance. Auditors? Recommendation: NTU should improve internal controls to help ensure that financial statement balances are accurately reconciled to assist with the timely preparation and submission of the annual federal reporting package. Management?s Response: NTU has developed a comprehensive year-end financial close and annual federal reporting plan with the assistance of our consultants, Harshwal & Company, LLC in September 2022. This plan was not implemented until after the end of fiscal year 2022. As part of this plan, NTU will ensure that financial accounting books and records are reconciled and closed in a timely manner prior to providing the final trial balance to the auditor.
2022-008 ?Activities Allowed/Unallowed and Allowable Costs/Cost Principles Federal Program Information: Funding Agency: U.S. Department of Defense, National Science Foundation, U.S. Department of Energy, and U.S. Department of Education Title: Research and Development Cluster, Tribally Controlled Postsecondary Career and Technical Institutions. Higher Education Emergency Relief Fund (HEERF) Assistance Listing Number: 12.431, 47.076, 81.123, 84.245, 84.425 Award Period: June 1, 2021 ? May 31, 2022 Criteria: To be allowable under Federal awards, costs must be necessary and reasonable for the performance and administration of the federal award. Costs must meet the following criteria: 1) necessary and reasonable; 2) consistent with policies and procedures; 3) accorded consistent treatment; and 4) are adequately documented. Condition: We found the following in our review of federal expenditures: Research and Development Cluster ? ? One expenditure for the purchase of a gold spectrometer, microscope mainframe and accessories in the amount of $145,596 was incorrectly charged twice to the Expanding STEM Education to Meet Navajo Nation Needs project with the National Science Foundation. NTU subsequently corrected this by removing one of the duplicate charges from federal expenditures. ? One employee?s wages in the amount of $260 was incorrectly charged to Department of Defense Performance Enhancement Through HIS Assessment and Analysis Campaign Project. The employee?s wages should have been charged to another federal program. ? Two payroll transactions totaling $3,580 did not have accurate source documentation to support the allocation of salaries and wages charged to the program. Tribally Controlled Postsecondary Career and Technical Institutions ? ? One employee?s wages in the amount of $1,640.55 was incorrectly allocated and charged to the program. The employee?s salary should have been charged to the NTU general fund. Higher Education Emergency Relief Fund ? ? NTU incorrectly charged the HEERF Student Aid Portion (ALN 84.425E) for lost revenue in the amount of $870,725. NTU subsequently corrected this and charged the lost revenue to the HEERF Tribally Controlled Colleges and Universities portion (ALN 84.425K). Questioned Costs: None exceeding $25,000 as NTU made correcting adjustments to federal expenditures. Context: Four of fifty payroll and non-payroll transactions tested for the Research and Development Cluster. One of twenty-five payroll transactions tested for the Tribally Controlled Postsecondary Career and Technical Institutions program. One of twenty-nine non-payroll transactions tested for the Higher Education Emergency Relief Fund program. Cause and Effect: NTU did not have effective internal controls to ensure federal expenditures are accurately charged in accordance with federal activities allowed/unallowed and allowable costs/cost principles requirements. As a result, NTU was not in compliance with these federal requirements for the Research and Development Cluster, Tribally Controlled Post Secondary Career and Technical Institutions and HEERF programs. Auditor?s Recommendation: Improve internal controls to ensure expenditures are allowable under federal program requirements. This includes maintaining source documentation to support the allocation of payroll costs and ensuring expenses are not double recorded in the accounting system. Management?s Response: NTU will implement a monthly review of all grant expenditures to ensure amounts charged to federal awards are accurately posted and reflected in the accounting system. All journal entries will be reviewed for accuracy by the Accounting Manager and Senior Accountant. Payroll allocations provided by the Human Resources office will be included in the monthly review to ensure accuracy of the payroll expenditures. Principal Investigators and program managers will also be given read-only access to the accounting system to review expenditure postings for accuracy.
2022-007 ? Cash Management Federal Program Information: Funding Agency: All Major Programs Title: All Major Programs Assistance Listing Number: All Major Programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: Advanced grant/contract funds may not be transferred to other NTU accounts, lent to such NTU accounts, or expended for programs not authorized. There should be sufficient unrestricted cash and investment balances on hand to cover all unearned grant revenue associated with federal and nonfederal programs. Condition: NTU did not maintain cash and cash equivalents at least equal to the amount of unspent grant funds advanced from federal and nonfederal agencies at year-end. At May 31, 2022, NTU?s unrestricted cash and cash equivalents and unearned grant revenue totaled $29,728,594 and $34,490,432, respectively. As a result, unspent grant funds held by NTU exceeded the amount of available cash and cash equivalents by $5,761,748. Questioned Costs: None. Context: Federal programs that have been provided with advanced funds. Cause and Effect: NTU did not have effective internal controls to ensure sufficient cash and cash equivalents are on hand to cover all unearned grant revenue associated with federal and nonfederal programs. NTU is not in compliance with federal requirements. Auditor?s Recommendation: Thoroughly analyze the financial position of NTU and ensure adequate cash and cash equivalents are maintained in an amount at least equal to unearned grant revenues from federal and nonfederal sources. NTU may need to liquidate unrestricted investments and convert them into cash and cash equivalents or reallocate investments into securities backed by the full faith and credit of the United States government to accomplish this. Management?s Response: NTU has developed a monthly cash management schedule that tracks and identifies all grant funds along with total cash received in advance from grantors and amounts due to NTU. NTU will increase cash balances through the timely collection of outstanding grants receivable. NTU will also analyze cash requirements and may liquidate investments held in the Capital Reserve fund to ensure adequate cash is maintained for grants received in advance.
2022-014 ? Late Submission of Annual Federal Reporting Package Federal Program Information: Funding Agency: All major programs Title: All major programs Assistance Listing Number: All major programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: 2 CFR 200.512 requires that the annual federal reporting package including the data collection form be submitted within nine months after the end of the audit period. Condition: NTU did not submit the annual federal reporting package within nine months after May 31, 2022. Questioned Costs: None Context: The annual federal reporting package for the year ended May 31, 2022. Cause and Effect: Internal controls were not designed and implemented to the annual federal reporting package was submitted within the timeframe required by OMB Uniform Guidance. Auditors? Recommendation: NTU should improve internal controls to help ensure that financial statement balances are accurately reconciled to assist with the timely preparation and submission of the annual federal reporting package. Management?s Response: NTU has developed a comprehensive year-end financial close and annual federal reporting plan with the assistance of our consultants, Harshwal & Company, LLC in September 2022. This plan was not implemented until after the end of fiscal year 2022. As part of this plan, NTU will ensure that financial accounting books and records are reconciled and closed in a timely manner prior to providing the final trial balance to the auditor.
2022-008 ?Activities Allowed/Unallowed and Allowable Costs/Cost Principles Federal Program Information: Funding Agency: U.S. Department of Defense, National Science Foundation, U.S. Department of Energy, and U.S. Department of Education Title: Research and Development Cluster, Tribally Controlled Postsecondary Career and Technical Institutions. Higher Education Emergency Relief Fund (HEERF) Assistance Listing Number: 12.431, 47.076, 81.123, 84.245, 84.425 Award Period: June 1, 2021 ? May 31, 2022 Criteria: To be allowable under Federal awards, costs must be necessary and reasonable for the performance and administration of the federal award. Costs must meet the following criteria: 1) necessary and reasonable; 2) consistent with policies and procedures; 3) accorded consistent treatment; and 4) are adequately documented. Condition: We found the following in our review of federal expenditures: Research and Development Cluster ? ? One expenditure for the purchase of a gold spectrometer, microscope mainframe and accessories in the amount of $145,596 was incorrectly charged twice to the Expanding STEM Education to Meet Navajo Nation Needs project with the National Science Foundation. NTU subsequently corrected this by removing one of the duplicate charges from federal expenditures. ? One employee?s wages in the amount of $260 was incorrectly charged to Department of Defense Performance Enhancement Through HIS Assessment and Analysis Campaign Project. The employee?s wages should have been charged to another federal program. ? Two payroll transactions totaling $3,580 did not have accurate source documentation to support the allocation of salaries and wages charged to the program. Tribally Controlled Postsecondary Career and Technical Institutions ? ? One employee?s wages in the amount of $1,640.55 was incorrectly allocated and charged to the program. The employee?s salary should have been charged to the NTU general fund. Higher Education Emergency Relief Fund ? ? NTU incorrectly charged the HEERF Student Aid Portion (ALN 84.425E) for lost revenue in the amount of $870,725. NTU subsequently corrected this and charged the lost revenue to the HEERF Tribally Controlled Colleges and Universities portion (ALN 84.425K). Questioned Costs: None exceeding $25,000 as NTU made correcting adjustments to federal expenditures. Context: Four of fifty payroll and non-payroll transactions tested for the Research and Development Cluster. One of twenty-five payroll transactions tested for the Tribally Controlled Postsecondary Career and Technical Institutions program. One of twenty-nine non-payroll transactions tested for the Higher Education Emergency Relief Fund program. Cause and Effect: NTU did not have effective internal controls to ensure federal expenditures are accurately charged in accordance with federal activities allowed/unallowed and allowable costs/cost principles requirements. As a result, NTU was not in compliance with these federal requirements for the Research and Development Cluster, Tribally Controlled Post Secondary Career and Technical Institutions and HEERF programs. Auditor?s Recommendation: Improve internal controls to ensure expenditures are allowable under federal program requirements. This includes maintaining source documentation to support the allocation of payroll costs and ensuring expenses are not double recorded in the accounting system. Management?s Response: NTU will implement a monthly review of all grant expenditures to ensure amounts charged to federal awards are accurately posted and reflected in the accounting system. All journal entries will be reviewed for accuracy by the Accounting Manager and Senior Accountant. Payroll allocations provided by the Human Resources office will be included in the monthly review to ensure accuracy of the payroll expenditures. Principal Investigators and program managers will also be given read-only access to the accounting system to review expenditure postings for accuracy.
2022-007 ? Cash Management Federal Program Information: Funding Agency: All Major Programs Title: All Major Programs Assistance Listing Number: All Major Programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: Advanced grant/contract funds may not be transferred to other NTU accounts, lent to such NTU accounts, or expended for programs not authorized. There should be sufficient unrestricted cash and investment balances on hand to cover all unearned grant revenue associated with federal and nonfederal programs. Condition: NTU did not maintain cash and cash equivalents at least equal to the amount of unspent grant funds advanced from federal and nonfederal agencies at year-end. At May 31, 2022, NTU?s unrestricted cash and cash equivalents and unearned grant revenue totaled $29,728,594 and $34,490,432, respectively. As a result, unspent grant funds held by NTU exceeded the amount of available cash and cash equivalents by $5,761,748. Questioned Costs: None. Context: Federal programs that have been provided with advanced funds. Cause and Effect: NTU did not have effective internal controls to ensure sufficient cash and cash equivalents are on hand to cover all unearned grant revenue associated with federal and nonfederal programs. NTU is not in compliance with federal requirements. Auditor?s Recommendation: Thoroughly analyze the financial position of NTU and ensure adequate cash and cash equivalents are maintained in an amount at least equal to unearned grant revenues from federal and nonfederal sources. NTU may need to liquidate unrestricted investments and convert them into cash and cash equivalents or reallocate investments into securities backed by the full faith and credit of the United States government to accomplish this. Management?s Response: NTU has developed a monthly cash management schedule that tracks and identifies all grant funds along with total cash received in advance from grantors and amounts due to NTU. NTU will increase cash balances through the timely collection of outstanding grants receivable. NTU will also analyze cash requirements and may liquidate investments held in the Capital Reserve fund to ensure adequate cash is maintained for grants received in advance.
2022-014 ? Late Submission of Annual Federal Reporting Package Federal Program Information: Funding Agency: All major programs Title: All major programs Assistance Listing Number: All major programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: 2 CFR 200.512 requires that the annual federal reporting package including the data collection form be submitted within nine months after the end of the audit period. Condition: NTU did not submit the annual federal reporting package within nine months after May 31, 2022. Questioned Costs: None Context: The annual federal reporting package for the year ended May 31, 2022. Cause and Effect: Internal controls were not designed and implemented to the annual federal reporting package was submitted within the timeframe required by OMB Uniform Guidance. Auditors? Recommendation: NTU should improve internal controls to help ensure that financial statement balances are accurately reconciled to assist with the timely preparation and submission of the annual federal reporting package. Management?s Response: NTU has developed a comprehensive year-end financial close and annual federal reporting plan with the assistance of our consultants, Harshwal & Company, LLC in September 2022. This plan was not implemented until after the end of fiscal year 2022. As part of this plan, NTU will ensure that financial accounting books and records are reconciled and closed in a timely manner prior to providing the final trial balance to the auditor.
2022-008 ?Activities Allowed/Unallowed and Allowable Costs/Cost Principles Federal Program Information: Funding Agency: U.S. Department of Defense, National Science Foundation, U.S. Department of Energy, and U.S. Department of Education Title: Research and Development Cluster, Tribally Controlled Postsecondary Career and Technical Institutions. Higher Education Emergency Relief Fund (HEERF) Assistance Listing Number: 12.431, 47.076, 81.123, 84.245, 84.425 Award Period: June 1, 2021 ? May 31, 2022 Criteria: To be allowable under Federal awards, costs must be necessary and reasonable for the performance and administration of the federal award. Costs must meet the following criteria: 1) necessary and reasonable; 2) consistent with policies and procedures; 3) accorded consistent treatment; and 4) are adequately documented. Condition: We found the following in our review of federal expenditures: Research and Development Cluster ? ? One expenditure for the purchase of a gold spectrometer, microscope mainframe and accessories in the amount of $145,596 was incorrectly charged twice to the Expanding STEM Education to Meet Navajo Nation Needs project with the National Science Foundation. NTU subsequently corrected this by removing one of the duplicate charges from federal expenditures. ? One employee?s wages in the amount of $260 was incorrectly charged to Department of Defense Performance Enhancement Through HIS Assessment and Analysis Campaign Project. The employee?s wages should have been charged to another federal program. ? Two payroll transactions totaling $3,580 did not have accurate source documentation to support the allocation of salaries and wages charged to the program. Tribally Controlled Postsecondary Career and Technical Institutions ? ? One employee?s wages in the amount of $1,640.55 was incorrectly allocated and charged to the program. The employee?s salary should have been charged to the NTU general fund. Higher Education Emergency Relief Fund ? ? NTU incorrectly charged the HEERF Student Aid Portion (ALN 84.425E) for lost revenue in the amount of $870,725. NTU subsequently corrected this and charged the lost revenue to the HEERF Tribally Controlled Colleges and Universities portion (ALN 84.425K). Questioned Costs: None exceeding $25,000 as NTU made correcting adjustments to federal expenditures. Context: Four of fifty payroll and non-payroll transactions tested for the Research and Development Cluster. One of twenty-five payroll transactions tested for the Tribally Controlled Postsecondary Career and Technical Institutions program. One of twenty-nine non-payroll transactions tested for the Higher Education Emergency Relief Fund program. Cause and Effect: NTU did not have effective internal controls to ensure federal expenditures are accurately charged in accordance with federal activities allowed/unallowed and allowable costs/cost principles requirements. As a result, NTU was not in compliance with these federal requirements for the Research and Development Cluster, Tribally Controlled Post Secondary Career and Technical Institutions and HEERF programs. Auditor?s Recommendation: Improve internal controls to ensure expenditures are allowable under federal program requirements. This includes maintaining source documentation to support the allocation of payroll costs and ensuring expenses are not double recorded in the accounting system. Management?s Response: NTU will implement a monthly review of all grant expenditures to ensure amounts charged to federal awards are accurately posted and reflected in the accounting system. All journal entries will be reviewed for accuracy by the Accounting Manager and Senior Accountant. Payroll allocations provided by the Human Resources office will be included in the monthly review to ensure accuracy of the payroll expenditures. Principal Investigators and program managers will also be given read-only access to the accounting system to review expenditure postings for accuracy.
2022-007 ? Cash Management Federal Program Information: Funding Agency: All Major Programs Title: All Major Programs Assistance Listing Number: All Major Programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: Advanced grant/contract funds may not be transferred to other NTU accounts, lent to such NTU accounts, or expended for programs not authorized. There should be sufficient unrestricted cash and investment balances on hand to cover all unearned grant revenue associated with federal and nonfederal programs. Condition: NTU did not maintain cash and cash equivalents at least equal to the amount of unspent grant funds advanced from federal and nonfederal agencies at year-end. At May 31, 2022, NTU?s unrestricted cash and cash equivalents and unearned grant revenue totaled $29,728,594 and $34,490,432, respectively. As a result, unspent grant funds held by NTU exceeded the amount of available cash and cash equivalents by $5,761,748. Questioned Costs: None. Context: Federal programs that have been provided with advanced funds. Cause and Effect: NTU did not have effective internal controls to ensure sufficient cash and cash equivalents are on hand to cover all unearned grant revenue associated with federal and nonfederal programs. NTU is not in compliance with federal requirements. Auditor?s Recommendation: Thoroughly analyze the financial position of NTU and ensure adequate cash and cash equivalents are maintained in an amount at least equal to unearned grant revenues from federal and nonfederal sources. NTU may need to liquidate unrestricted investments and convert them into cash and cash equivalents or reallocate investments into securities backed by the full faith and credit of the United States government to accomplish this. Management?s Response: NTU has developed a monthly cash management schedule that tracks and identifies all grant funds along with total cash received in advance from grantors and amounts due to NTU. NTU will increase cash balances through the timely collection of outstanding grants receivable. NTU will also analyze cash requirements and may liquidate investments held in the Capital Reserve fund to ensure adequate cash is maintained for grants received in advance.
2022-014 ? Late Submission of Annual Federal Reporting Package Federal Program Information: Funding Agency: All major programs Title: All major programs Assistance Listing Number: All major programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: 2 CFR 200.512 requires that the annual federal reporting package including the data collection form be submitted within nine months after the end of the audit period. Condition: NTU did not submit the annual federal reporting package within nine months after May 31, 2022. Questioned Costs: None Context: The annual federal reporting package for the year ended May 31, 2022. Cause and Effect: Internal controls were not designed and implemented to the annual federal reporting package was submitted within the timeframe required by OMB Uniform Guidance. Auditors? Recommendation: NTU should improve internal controls to help ensure that financial statement balances are accurately reconciled to assist with the timely preparation and submission of the annual federal reporting package. Management?s Response: NTU has developed a comprehensive year-end financial close and annual federal reporting plan with the assistance of our consultants, Harshwal & Company, LLC in September 2022. This plan was not implemented until after the end of fiscal year 2022. As part of this plan, NTU will ensure that financial accounting books and records are reconciled and closed in a timely manner prior to providing the final trial balance to the auditor.
2022-008 ?Activities Allowed/Unallowed and Allowable Costs/Cost Principles Federal Program Information: Funding Agency: U.S. Department of Defense, National Science Foundation, U.S. Department of Energy, and U.S. Department of Education Title: Research and Development Cluster, Tribally Controlled Postsecondary Career and Technical Institutions. Higher Education Emergency Relief Fund (HEERF) Assistance Listing Number: 12.431, 47.076, 81.123, 84.245, 84.425 Award Period: June 1, 2021 ? May 31, 2022 Criteria: To be allowable under Federal awards, costs must be necessary and reasonable for the performance and administration of the federal award. Costs must meet the following criteria: 1) necessary and reasonable; 2) consistent with policies and procedures; 3) accorded consistent treatment; and 4) are adequately documented. Condition: We found the following in our review of federal expenditures: Research and Development Cluster ? ? One expenditure for the purchase of a gold spectrometer, microscope mainframe and accessories in the amount of $145,596 was incorrectly charged twice to the Expanding STEM Education to Meet Navajo Nation Needs project with the National Science Foundation. NTU subsequently corrected this by removing one of the duplicate charges from federal expenditures. ? One employee?s wages in the amount of $260 was incorrectly charged to Department of Defense Performance Enhancement Through HIS Assessment and Analysis Campaign Project. The employee?s wages should have been charged to another federal program. ? Two payroll transactions totaling $3,580 did not have accurate source documentation to support the allocation of salaries and wages charged to the program. Tribally Controlled Postsecondary Career and Technical Institutions ? ? One employee?s wages in the amount of $1,640.55 was incorrectly allocated and charged to the program. The employee?s salary should have been charged to the NTU general fund. Higher Education Emergency Relief Fund ? ? NTU incorrectly charged the HEERF Student Aid Portion (ALN 84.425E) for lost revenue in the amount of $870,725. NTU subsequently corrected this and charged the lost revenue to the HEERF Tribally Controlled Colleges and Universities portion (ALN 84.425K). Questioned Costs: None exceeding $25,000 as NTU made correcting adjustments to federal expenditures. Context: Four of fifty payroll and non-payroll transactions tested for the Research and Development Cluster. One of twenty-five payroll transactions tested for the Tribally Controlled Postsecondary Career and Technical Institutions program. One of twenty-nine non-payroll transactions tested for the Higher Education Emergency Relief Fund program. Cause and Effect: NTU did not have effective internal controls to ensure federal expenditures are accurately charged in accordance with federal activities allowed/unallowed and allowable costs/cost principles requirements. As a result, NTU was not in compliance with these federal requirements for the Research and Development Cluster, Tribally Controlled Post Secondary Career and Technical Institutions and HEERF programs. Auditor?s Recommendation: Improve internal controls to ensure expenditures are allowable under federal program requirements. This includes maintaining source documentation to support the allocation of payroll costs and ensuring expenses are not double recorded in the accounting system. Management?s Response: NTU will implement a monthly review of all grant expenditures to ensure amounts charged to federal awards are accurately posted and reflected in the accounting system. All journal entries will be reviewed for accuracy by the Accounting Manager and Senior Accountant. Payroll allocations provided by the Human Resources office will be included in the monthly review to ensure accuracy of the payroll expenditures. Principal Investigators and program managers will also be given read-only access to the accounting system to review expenditure postings for accuracy.
2022-007 ? Cash Management Federal Program Information: Funding Agency: All Major Programs Title: All Major Programs Assistance Listing Number: All Major Programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: Advanced grant/contract funds may not be transferred to other NTU accounts, lent to such NTU accounts, or expended for programs not authorized. There should be sufficient unrestricted cash and investment balances on hand to cover all unearned grant revenue associated with federal and nonfederal programs. Condition: NTU did not maintain cash and cash equivalents at least equal to the amount of unspent grant funds advanced from federal and nonfederal agencies at year-end. At May 31, 2022, NTU?s unrestricted cash and cash equivalents and unearned grant revenue totaled $29,728,594 and $34,490,432, respectively. As a result, unspent grant funds held by NTU exceeded the amount of available cash and cash equivalents by $5,761,748. Questioned Costs: None. Context: Federal programs that have been provided with advanced funds. Cause and Effect: NTU did not have effective internal controls to ensure sufficient cash and cash equivalents are on hand to cover all unearned grant revenue associated with federal and nonfederal programs. NTU is not in compliance with federal requirements. Auditor?s Recommendation: Thoroughly analyze the financial position of NTU and ensure adequate cash and cash equivalents are maintained in an amount at least equal to unearned grant revenues from federal and nonfederal sources. NTU may need to liquidate unrestricted investments and convert them into cash and cash equivalents or reallocate investments into securities backed by the full faith and credit of the United States government to accomplish this. Management?s Response: NTU has developed a monthly cash management schedule that tracks and identifies all grant funds along with total cash received in advance from grantors and amounts due to NTU. NTU will increase cash balances through the timely collection of outstanding grants receivable. NTU will also analyze cash requirements and may liquidate investments held in the Capital Reserve fund to ensure adequate cash is maintained for grants received in advance.
2022-014 ? Late Submission of Annual Federal Reporting Package Federal Program Information: Funding Agency: All major programs Title: All major programs Assistance Listing Number: All major programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: 2 CFR 200.512 requires that the annual federal reporting package including the data collection form be submitted within nine months after the end of the audit period. Condition: NTU did not submit the annual federal reporting package within nine months after May 31, 2022. Questioned Costs: None Context: The annual federal reporting package for the year ended May 31, 2022. Cause and Effect: Internal controls were not designed and implemented to the annual federal reporting package was submitted within the timeframe required by OMB Uniform Guidance. Auditors? Recommendation: NTU should improve internal controls to help ensure that financial statement balances are accurately reconciled to assist with the timely preparation and submission of the annual federal reporting package. Management?s Response: NTU has developed a comprehensive year-end financial close and annual federal reporting plan with the assistance of our consultants, Harshwal & Company, LLC in September 2022. This plan was not implemented until after the end of fiscal year 2022. As part of this plan, NTU will ensure that financial accounting books and records are reconciled and closed in a timely manner prior to providing the final trial balance to the auditor.
2022-008 ?Activities Allowed/Unallowed and Allowable Costs/Cost Principles Federal Program Information: Funding Agency: U.S. Department of Defense, National Science Foundation, U.S. Department of Energy, and U.S. Department of Education Title: Research and Development Cluster, Tribally Controlled Postsecondary Career and Technical Institutions. Higher Education Emergency Relief Fund (HEERF) Assistance Listing Number: 12.431, 47.076, 81.123, 84.245, 84.425 Award Period: June 1, 2021 ? May 31, 2022 Criteria: To be allowable under Federal awards, costs must be necessary and reasonable for the performance and administration of the federal award. Costs must meet the following criteria: 1) necessary and reasonable; 2) consistent with policies and procedures; 3) accorded consistent treatment; and 4) are adequately documented. Condition: We found the following in our review of federal expenditures: Research and Development Cluster ? ? One expenditure for the purchase of a gold spectrometer, microscope mainframe and accessories in the amount of $145,596 was incorrectly charged twice to the Expanding STEM Education to Meet Navajo Nation Needs project with the National Science Foundation. NTU subsequently corrected this by removing one of the duplicate charges from federal expenditures. ? One employee?s wages in the amount of $260 was incorrectly charged to Department of Defense Performance Enhancement Through HIS Assessment and Analysis Campaign Project. The employee?s wages should have been charged to another federal program. ? Two payroll transactions totaling $3,580 did not have accurate source documentation to support the allocation of salaries and wages charged to the program. Tribally Controlled Postsecondary Career and Technical Institutions ? ? One employee?s wages in the amount of $1,640.55 was incorrectly allocated and charged to the program. The employee?s salary should have been charged to the NTU general fund. Higher Education Emergency Relief Fund ? ? NTU incorrectly charged the HEERF Student Aid Portion (ALN 84.425E) for lost revenue in the amount of $870,725. NTU subsequently corrected this and charged the lost revenue to the HEERF Tribally Controlled Colleges and Universities portion (ALN 84.425K). Questioned Costs: None exceeding $25,000 as NTU made correcting adjustments to federal expenditures. Context: Four of fifty payroll and non-payroll transactions tested for the Research and Development Cluster. One of twenty-five payroll transactions tested for the Tribally Controlled Postsecondary Career and Technical Institutions program. One of twenty-nine non-payroll transactions tested for the Higher Education Emergency Relief Fund program. Cause and Effect: NTU did not have effective internal controls to ensure federal expenditures are accurately charged in accordance with federal activities allowed/unallowed and allowable costs/cost principles requirements. As a result, NTU was not in compliance with these federal requirements for the Research and Development Cluster, Tribally Controlled Post Secondary Career and Technical Institutions and HEERF programs. Auditor?s Recommendation: Improve internal controls to ensure expenditures are allowable under federal program requirements. This includes maintaining source documentation to support the allocation of payroll costs and ensuring expenses are not double recorded in the accounting system. Management?s Response: NTU will implement a monthly review of all grant expenditures to ensure amounts charged to federal awards are accurately posted and reflected in the accounting system. All journal entries will be reviewed for accuracy by the Accounting Manager and Senior Accountant. Payroll allocations provided by the Human Resources office will be included in the monthly review to ensure accuracy of the payroll expenditures. Principal Investigators and program managers will also be given read-only access to the accounting system to review expenditure postings for accuracy.
2022-007 ? Cash Management Federal Program Information: Funding Agency: All Major Programs Title: All Major Programs Assistance Listing Number: All Major Programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: Advanced grant/contract funds may not be transferred to other NTU accounts, lent to such NTU accounts, or expended for programs not authorized. There should be sufficient unrestricted cash and investment balances on hand to cover all unearned grant revenue associated with federal and nonfederal programs. Condition: NTU did not maintain cash and cash equivalents at least equal to the amount of unspent grant funds advanced from federal and nonfederal agencies at year-end. At May 31, 2022, NTU?s unrestricted cash and cash equivalents and unearned grant revenue totaled $29,728,594 and $34,490,432, respectively. As a result, unspent grant funds held by NTU exceeded the amount of available cash and cash equivalents by $5,761,748. Questioned Costs: None. Context: Federal programs that have been provided with advanced funds. Cause and Effect: NTU did not have effective internal controls to ensure sufficient cash and cash equivalents are on hand to cover all unearned grant revenue associated with federal and nonfederal programs. NTU is not in compliance with federal requirements. Auditor?s Recommendation: Thoroughly analyze the financial position of NTU and ensure adequate cash and cash equivalents are maintained in an amount at least equal to unearned grant revenues from federal and nonfederal sources. NTU may need to liquidate unrestricted investments and convert them into cash and cash equivalents or reallocate investments into securities backed by the full faith and credit of the United States government to accomplish this. Management?s Response: NTU has developed a monthly cash management schedule that tracks and identifies all grant funds along with total cash received in advance from grantors and amounts due to NTU. NTU will increase cash balances through the timely collection of outstanding grants receivable. NTU will also analyze cash requirements and may liquidate investments held in the Capital Reserve fund to ensure adequate cash is maintained for grants received in advance.
2022-014 ? Late Submission of Annual Federal Reporting Package Federal Program Information: Funding Agency: All major programs Title: All major programs Assistance Listing Number: All major programs Award Period: June 1, 2021 ? May 31, 2022 Criteria: 2 CFR 200.512 requires that the annual federal reporting package including the data collection form be submitted within nine months after the end of the audit period. Condition: NTU did not submit the annual federal reporting package within nine months after May 31, 2022. Questioned Costs: None Context: The annual federal reporting package for the year ended May 31, 2022. Cause and Effect: Internal controls were not designed and implemented to the annual federal reporting package was submitted within the timeframe required by OMB Uniform Guidance. Auditors? Recommendation: NTU should improve internal controls to help ensure that financial statement balances are accurately reconciled to assist with the timely preparation and submission of the annual federal reporting package. Management?s Response: NTU has developed a comprehensive year-end financial close and annual federal reporting plan with the assistance of our consultants, Harshwal & Company, LLC in September 2022. This plan was not implemented until after the end of fiscal year 2022. As part of this plan, NTU will ensure that financial accounting books and records are reconciled and closed in a timely manner prior to providing the final trial balance to the auditor.
2022-008 ?Activities Allowed/Unallowed and Allowable Costs/Cost Principles Federal Program Information: Funding Agency: U.S. Department of Defense, National Science Foundation, U.S. Department of Energy, and U.S. Department of Education Title: Research and Development Cluster, Tribally Controlled Postsecondary Career and Technical Institutions. Higher Education Emergency Relief Fund (HEERF) Assistance Listing Number: 12.431, 47.076, 81.123, 84.245, 84.425 Award Period: June 1, 2021 ? May 31, 2022 Criteria: To be allowable under Federal awards, costs must be necessary and reasonable for the performance and administration of the federal award. Costs must meet the following criteria: 1) necessary and reasonable; 2) consistent with policies and procedures; 3) accorded consistent treatment; and 4) are adequately documented. Condition: We found the following in our review of federal expenditures: Research and Development Cluster ? ? One expenditure for the purchase of a gold spectrometer, microscope mainframe and accessories in the amount of $145,596 was incorrectly charged twice to the Expanding STEM Education to Meet Navajo Nation Needs project with the National Science Foundation. NTU subsequently corrected this by removing one of the duplicate charges from federal expenditures. ? One employee?s wages in the amount of $260 was incorrectly charged to Department of Defense Performance Enhancement Through HIS Assessment and Analysis Campaign Project. The employee?s wages should have been charged to another federal program. ? Two payroll transactions totaling $3,580 did not have accurate source documentation to support the allocation of salaries and wages charged to the program. Tribally Controlled Postsecondary Career and Technical Institutions ? ? One employee?s wages in the amount of $1,640.55 was incorrectly allocated and charged to the program. The employee?s salary should have been charged to the NTU general fund. Higher Education Emergency Relief Fund ? ? NTU incorrectly charged the HEERF Student Aid Portion (ALN 84.425E) for lost revenue in the amount of $870,725. NTU subsequently corrected this and charged the lost revenue to the HEERF Tribally Controlled Colleges and Universities portion (ALN 84.425K). Questioned Costs: None exceeding $25,000 as NTU made correcting adjustments to federal expenditures. Context: Four of fifty payroll and non-payroll transactions tested for the Research and Development Cluster. One of twenty-five payroll transactions tested for the Tribally Controlled Postsecondary Career and Technical Institutions program. One of twenty-nine non-payroll transactions tested for the Higher Education Emergency Relief Fund program. Cause and Effect: NTU did not have effective internal controls to ensure federal expenditures are accurately charged in accordance with federal activities allowed/unallowed and allowable costs/cost principles requirements. As a result, NTU was not in compliance with these federal requirements for the Research and Development Cluster, Tribally Controlled Post Secondary Career and Technical Institutions and HEERF programs. Auditor?s Recommendation: Improve internal controls to ensure expenditures are allowable under federal program requirements. This includes maintaining source documentation to support the allocation of payroll costs and ensuring expenses are not double recorded in the accounting system. Management?s Response: NTU will implement a monthly review of all grant expenditures to ensure amounts charged to federal awards are accurately posted and reflected in the accounting system. All journal entries will be reviewed for accuracy by the Accounting Manager and Senior Accountant. Payroll allocations provided by the Human Resources office will be included in the monthly review to ensure accuracy of the payroll expenditures. Principal Investigators and program managers will also be given read-only access to the accounting system to review expenditure postings for accuracy.