2022-004 - Inadequate Controls over PayrollAward Year: 2022Award Numbers: 6LA700503, NU50CK000532, NU62PS924522, NU62PS924620, NU90TP922016Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesRepeat Finding: Yes (Prior Year Finding No. 2021-005)See Schedule of Findings and Questioned Costs for chart/tableCondition:The Louisiana Department of Health, Office of Public Health (OPH) did not ensure payroll expenditures were timely certified and approved for the WIC Special Supplemental Nutrition Program for Women, Infants, and Children; the Public Health Emergency Preparedness program; the Epidemiology and Laboratory Capacity for Infectious Diseases program; and the HIV Prevention Activities Health Department Based program. This is the third consecutive year payroll internal control deficiencies have been reported for Public Health Emergency Preparedness program and HIV Prevention Activities Health Department Based program, and the second consecutive year for WIC Special Supplemental Nutrition Program for Women, Infants, and Children and Epidemiology and Laboratory Capacity for Infectious Diseases program. Exceptions for each federal program are as follows:? For the WIC Special Supplemental Nutrition Program for Women, Infants, and Children, a non-statistical sample of 60 payroll transactions was tested from a population of 6,184 transactions totaling $8,970,425. Five (8%) time statements were not timely approved by the employees? supervisor, of which two (3%) were not approved at all, and two (3%) were not certified timely by the employees ranging from 13 to 236 days after the posting date.? For the Public Health Emergency Preparedness program, a non-statistical sample of 60 payroll transactions was tested from a population of 1,394 transactions totaling $3,988,398. Twenty-one (35%) time statements were not timely approved by the employees? supervisors, of which 12 (20%) were approved ranging from 23 days to 447 days after posting date and seven (12%) were not approved at all; two (3%) were not certified by the employees; and two (3%) were approved before certified.? For the Epidemiology and Laboratory Capacity for Infectious Diseases program, a non-statistical sample of 60 payroll transactions was tested from a population of 3,933 transactions totaling $5,190,684. Nine (15%) time statements were not timely approved by the employees? supervisors, of which four (7%) were not approved at all; one (2%) was not certified by the employee; and one (2%) was approved before certified.? For the HIV Prevention Activities Health Department Based program, a non-statistical sample of 60 payroll transactions was tested from a population of 1,024 transactions totaling $386,769. Nine (15%) time statements were not timely approved by the employees? supervisors, of which one (2%) was not approved at all; seven (12%) were approved ranging from one day to 351 days after the posting date; and one (2%) was not certified by the employee.Criteria:2 CFR 200.430(i) requires that records must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Furthermore, the records must comply with the established accounting policies and practices of the non-federal entity.The Division of Administration Personnel Policy No. 99 requires employees and supervisors to certify and/or approve time statements for accuracy by 10:00 p.m. on the Wednesday following the close of the pay period. Time administrators are responsible for reviewing the LaGov ZP241 eCertification report prior to processing to identify any employees who have not certified their time statements and any supervisors who have not approved their staff?s time statements.Cause:OPH lacked sufficient controls to ensure electronic time statements were properly certified and approved prior to the posting date in accordance with federal and state regulations.Effect:Failure to adequately approve program expenditures increases the risk that unallowable costs could be reimbursed by the federal grantor.Recommendation:OPH should ensure employees comply with existing policies and procedures, including certifying and approving electronic time statements in a timely manner.Management?s Response and Corrective Action Plan:Management concurred with the finding and provided a corrective action plan (B-43).
2022-005 - Noncompliance with and Weakness in Controls over Federal Research and Development ExpensesAward Years: VariousAward Numbers: VariousCompliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesPass-Through Entities: VariousRepeat Finding: Yes (Prior Year Finding No. 2021-007)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In addition, LSUHSC-S did not ensure that costs charged to federal awards were allowable in accordance with federal regulations and the terms and conditions of the award when requesting reimbursement.In a non-statistical random sample of 50 out of 10,798 expense transactions charged to R&D during the fiscal year ending June 30, 2022, the following exceptions were noted:? Three (6%) purchasing card (P-Card) transactions were not allowable in accordance with federal regulations and the terms and conditions of the award and are considered questioned costs totaling $1,073.? For five (10%) of 50 transactions tested, LSUHSC-S overstated expenses on the Schedule of Expenditures of Federal Awards because the award was fully funded, and expenses in excess of the award amount were not removed from the project used to identify expenditures to federal awards in the accounting records, or the expense was determined not allowable as noted above.? Seven (35%) of 20 time and effort certifications for salary and related benefit expenses tested were completed 119 to 461 days after the end of the quarter.We performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 838 (51%) out of 1,654 adjusting journal entries were made more than 90 days after the end of the quarter from the original transactions. The adjustments were made 97 to 1,026 days after the original transactions were recorded and 96 to 953 days after the end of the quarter.In a non-statistical random sample of 10 out of 1,654 payroll adjusting entries affecting R&D, tested by employee, project id (related to federal award), and journal id, six (60%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. Two of these adjusting entries added costs to the federal award projects and are considered questioned costs totaling $28,324.Criteria:2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity?s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments.Per LSUHSC-S?s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S?s policy, time and effort certifications should be completed within approximately 90 days of the end of the quarter. Management interprets the end of the quarter to be when the time and effort reports are sent to the departments once the last month of the quarter is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the quarterly reporting period, a payroll reallocation must be created within 30 days.Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework? issued by the Committee of Sponsoring Organizations of the Treadway Commission. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions.In addition, the National Institute of Health (NIH) is the grantor for the majority of the LSUHSC-S?s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made ?to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable.2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs.Cause:LSUHSC-S?s approval of P-Card transactions did not provide sufficient review of the allowability of expenses on federal awards. LSUHSC-S has procedures in place to review expenses prior to requesting reimbursement; however, it did not ensure that the necessary adjustments were made to the accounting system in a timely manner for expenses that were not allowed for reimbursement. In addition, training to emphasize accountability and the importance of completing time and effort certifications timely and accurately per policy was not completed as planned during fiscal year 2022 due to staffing shortages.LSUHSC-S is still in the process of implementing the corrective action outlined in the prior year to include documentation of adjusted effort and questions to address justification for the adjustment, errors, and timeliness on a modified Personnel Change form.Effect:Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects.In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor.Recommendation:Management should monitor time and effort certifications completed by the departments and investigate and obtain justification from department personnel for untimely certifications, as well as untimely adjustments and lack of supporting documentation for adjustments to enforce established policies. Management should ensure adequate design and operating effectiveness of controls over expenses, including P-Card expenses, charged to federal awards to verify allowability of costs in accordance with federal requirements and grant terms and conditions prior to requesting reimbursement. Management should also consider implementing other complementary controls such as preventing costs from being charged to projects in the accounting system beyond the approved budget or period of performance.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-52).
2022-006 - Control Weakness and Noncompliance with Personnel Expenses Charged to Federal AwardsAward Years: 2018, 2019, 2021, 2022Award Numbers: 2138930, 2000614536, B-18-DP-22-001, EMW-2020-SS-00011-S01, M19AC00015, NR227217XXXXC002, P01AI048240, R21AI165939, R33HD099745, U19AI159840Compliance Requirements: Allowable Costs/Cost Principles, Special Tests and ProvisionsPass-Through Entities: Board of Trustees of the Leland Stanford Junior University, Emory UniversityRepeat Finding: Yes (Prior Year Finding No. 2021-009)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the second consecutive year, the University of Louisiana at Lafayette (UL Lafayette) did not have adequate controls in place to ensure personnel expenses and effort charged to federal R&D awards accurately reflected work performed. From a population of 28,744 payroll and non-payroll expenses charged to R&D grants, a non-statistical sample of 25 transactions was tested. For all 12 (48%) of the payroll transactions, UL Lafayette was unable to provide documentation to show that personnel-related expenses, totaling $4,520, were supported by time and effort certifications to ensure the accuracy of budget estimates charged to federal awards as required by federal regulations. Additionally, because there is no after-the-fact review to ensure the accuracy of personnel costs and effort charged to the awards, UL Lafayette could not ensure compliance with the requirements of special tests and provisions related to key personnel effort.Criteria:2 CFR 200.430(i) specifies the documentation standards for personnel expenses. In order to be allowable, charges to federal awards for personnel expenses must be based on records that accurately reflect the work performed and must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Budget estimates alone do not qualify as support for charges to federal awards, but can be used for interim accounting purposes provided that internal controls include an after-the-fact review to confirm the accuracy of final amounts charged to federal awards.Prior approval requirements related to key personnel effort are contained in 2 CFR 200.308(c) and within grant terms and conditions. A reduction of 25% or greater in time devoted to the project from key personnel requires prior approval.Cause:Management represented that it?s still in the process of implementing the prior-year corrective actions to address the issues noted in the prior-year finding. As a result, time and effort certifications were not completed by employees to support the accuracy of budget estimates charged to federal awards as required by 2 CFR 200.430(i).Effect:Inadequate controls related to federal documentation standards for personnel expenses could result in noncompliance with federal allowable costs and cost principles, as well as noncompliance with special tests and provisions related to key personnel effort.Recommendation:Management should strengthen internal controls to ensure that personnel expenses charged to the federal awards are supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.Management?s Response and Corrective Action Plan:Management did not concur with the finding, noting it did not have sufficient time in fiscal year 2022 for corrective action and provided its progress on addressing the finding (B-82).
2022-008 ? Improper Employee Activity in Federal ProgramsAward Years: 2016 - 2022Award Number: 6LA400102Compliance Requirements: Allowable Costs/Cost Principles, EligibilityRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:The Department of Children and Family Services (DCFS), Fraud and Recovery Unit, identified improper activity by one employee who received benefits under the Supplemental Nutrition Assistance Program (SNAP) and by two employees who violated department policy as well as state law related to payroll.Three employees were cited for program or department policy violations as follows:? One former employee did not accurately report household members and accessed their own records in the DCFS system, resulting in improperly receiving $3,968 in SNAP benefits. The employee was cited for an intentional program violation and resigned in December 2022.? One former employee received wages from DCFS and another employer for the same hours worked during the period August 2016 through September 2020, resulting in a loss of $5,116 impacting various federal programs. The employee was terminated in July 2022.? One employee received wages from DCFS and another employer for the same hours worked during the period August 2021 through September 2022, resulting in a loss of $11,349 impacting various federal programs. DCFS is pursing disciplinary action against the employee.Criteria:DCFS Policy G-310 states that falsification of records consists of any deliberate act of annotating an activity which in fact differs factually from the activity that actually transpired.DCFS Policy 6-1 states that all staff members (state employees and contractors) are prohibited from taking any action on their personal case or on a case involving an immediate family member, friend, or social acquaintance of him/herself or his supervisor.7 CFR 273.16(c) defines intentional program violations as intentionally making a false or misleading statement; misrepresenting, concealing, or withholding facts; or committing any act that constitutes a violation of SNAP, SNAP regulations, or any state statute for the purpose of using, presenting, transferring, acquiring, receiving, possessing, or trafficking of SNAP benefits or Electronic Benefits Transfer (EBT) cards.DCFS Policy 4-2 states that Civil Service Rule 15.2 requires certification of payroll and attendance records by both an employee and his/her appointing authority or designee of hours actually worked and leave taken during a payroll period.Cause:The employees did not adhere to department policy and federal award requirements.Effect:Amounts not recouped by DCFS as of June 30, 2022, totaled $20,433 and represent questioned costs.Recommendation:Management should continue to investigate improper employee activities and emphasize the criminal consequences of such activities.Management?s Response and Corrective Action Plan:Management concurred with the finding and provided a corrective action plan (B-6).
2022-008 ? Improper Employee Activity in Federal ProgramsAward Years: 2016 - 2022Award Number: 6LA400102Compliance Requirements: Allowable Costs/Cost Principles, EligibilityRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:The Department of Children and Family Services (DCFS), Fraud and Recovery Unit, identified improper activity by one employee who received benefits under the Supplemental Nutrition Assistance Program (SNAP) and by two employees who violated department policy as well as state law related to payroll.Three employees were cited for program or department policy violations as follows:? One former employee did not accurately report household members and accessed their own records in the DCFS system, resulting in improperly receiving $3,968 in SNAP benefits. The employee was cited for an intentional program violation and resigned in December 2022.? One former employee received wages from DCFS and another employer for the same hours worked during the period August 2016 through September 2020, resulting in a loss of $5,116 impacting various federal programs. The employee was terminated in July 2022.? One employee received wages from DCFS and another employer for the same hours worked during the period August 2021 through September 2022, resulting in a loss of $11,349 impacting various federal programs. DCFS is pursing disciplinary action against the employee.Criteria:DCFS Policy G-310 states that falsification of records consists of any deliberate act of annotating an activity which in fact differs factually from the activity that actually transpired.DCFS Policy 6-1 states that all staff members (state employees and contractors) are prohibited from taking any action on their personal case or on a case involving an immediate family member, friend, or social acquaintance of him/herself or his supervisor.7 CFR 273.16(c) defines intentional program violations as intentionally making a false or misleading statement; misrepresenting, concealing, or withholding facts; or committing any act that constitutes a violation of SNAP, SNAP regulations, or any state statute for the purpose of using, presenting, transferring, acquiring, receiving, possessing, or trafficking of SNAP benefits or Electronic Benefits Transfer (EBT) cards.DCFS Policy 4-2 states that Civil Service Rule 15.2 requires certification of payroll and attendance records by both an employee and his/her appointing authority or designee of hours actually worked and leave taken during a payroll period.Cause:The employees did not adhere to department policy and federal award requirements.Effect:Amounts not recouped by DCFS as of June 30, 2022, totaled $20,433 and represent questioned costs.Recommendation:Management should continue to investigate improper employee activities and emphasize the criminal consequences of such activities.Management?s Response and Corrective Action Plan:Management concurred with the finding and provided a corrective action plan (B-6).
2022-008 ? Improper Employee Activity in Federal ProgramsAward Years: 2016 - 2022Award Number: 6LA400102Compliance Requirements: Allowable Costs/Cost Principles, EligibilityRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:The Department of Children and Family Services (DCFS), Fraud and Recovery Unit, identified improper activity by one employee who received benefits under the Supplemental Nutrition Assistance Program (SNAP) and by two employees who violated department policy as well as state law related to payroll.Three employees were cited for program or department policy violations as follows:? One former employee did not accurately report household members and accessed their own records in the DCFS system, resulting in improperly receiving $3,968 in SNAP benefits. The employee was cited for an intentional program violation and resigned in December 2022.? One former employee received wages from DCFS and another employer for the same hours worked during the period August 2016 through September 2020, resulting in a loss of $5,116 impacting various federal programs. The employee was terminated in July 2022.? One employee received wages from DCFS and another employer for the same hours worked during the period August 2021 through September 2022, resulting in a loss of $11,349 impacting various federal programs. DCFS is pursing disciplinary action against the employee.Criteria:DCFS Policy G-310 states that falsification of records consists of any deliberate act of annotating an activity which in fact differs factually from the activity that actually transpired.DCFS Policy 6-1 states that all staff members (state employees and contractors) are prohibited from taking any action on their personal case or on a case involving an immediate family member, friend, or social acquaintance of him/herself or his supervisor.7 CFR 273.16(c) defines intentional program violations as intentionally making a false or misleading statement; misrepresenting, concealing, or withholding facts; or committing any act that constitutes a violation of SNAP, SNAP regulations, or any state statute for the purpose of using, presenting, transferring, acquiring, receiving, possessing, or trafficking of SNAP benefits or Electronic Benefits Transfer (EBT) cards.DCFS Policy 4-2 states that Civil Service Rule 15.2 requires certification of payroll and attendance records by both an employee and his/her appointing authority or designee of hours actually worked and leave taken during a payroll period.Cause:The employees did not adhere to department policy and federal award requirements.Effect:Amounts not recouped by DCFS as of June 30, 2022, totaled $20,433 and represent questioned costs.Recommendation:Management should continue to investigate improper employee activities and emphasize the criminal consequences of such activities.Management?s Response and Corrective Action Plan:Management concurred with the finding and provided a corrective action plan (B-6).
2022-007 - Noncompliance with Subrecipient Monitoring RequirementsAward Years: 2018, 2020 - 2022Award Numbers: DUE-2044358, NA18OAR4170098, OIA-2019511, OIA-2119688Compliance Requirement: Subrecipient MonitoringRepeat Finding: Yes (Prior Year Finding No. 2021-010)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the second consecutive year, UL Lafayette did not adequately monitor subrecipients of the R&D Cluster programs. In a non-statistical sample of five subawards out of a population of 49 subawards, it was noted that for four (80%) of the subrecipients evaluated UL Lafayette was unable to provide documentation that ensured each subrecipient obtained the required audit or that the audit was reviewed so that timely and appropriate action could be taken for any findings pertaining to the federal awards. Additionally, for all five (100%) of the subrecipients evaluated, UL Lafayette could not provide evidence that the required risk analyses were performed to evaluate each subrecipients? risk of noncompliance with federal regulations and the terms of the subaward.Criteria:2 CFR 200.332(b) requires pass-through entities to evaluate each subrecipient's risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring.Per 2 CFR 200.332(f), pass-through entities are responsible for verifying that every subrecipient is audited as required by 2 CFR Part 200, subpart F when it is expected that the subrecipient's federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in CFR 200.501 of $750,000 or more in federal awards during the subrecipient?s fiscal year.2 CFR 200.332(d)(2) requires that pass-through entities follow-up and ensure that the subrecipient takes timely and appropriate action on all deficiencies provided to the subrecipient from the pass-through entities detected through audits, on-site reviews, and written confirmation from the subrecipient.2 CFR 200.332(d)(2) and (3) require pass-through entities to issue a management decision on applicable audit findings in accordance with 2 CFR 200.521, within six months after acceptance of the subrecipient?s audit report by the Federal Audit Clearinghouse, and ensure that the subrecipient takes timely and appropriate corrective action on all findings.Cause:UL Lafayette management indicated that it was working on internal procedures to adequately monitor subrecipients as result of the prior-year finding. However, management has yet to finalize and apply these procedures on all active subrecipients.Effect:Failure to properly monitor subrecipients results in noncompliance with federal regulations and increases the likelihood of improper payments which may have to be returned to the federal awarding agency.Recommendation:UL Lafayette should strengthen controls to ensure the timely review of all required subrecipient audit reports in order to evaluate the impact of any findings noted in the audits and issue management decision letters, if applicable. In addition, UL Lafayette should strengthen controls to ensure risk assessments are performed and documented on all subrecipients in accordance with federal regulations.Management?s Response and Corrective Action Plan:Management did not concur with the finding, noting it did not have sufficient time in fiscal year 2022 for corrective action and provided its progress on addressing the finding (B-83).
2022-009 ? Inadequate Recovery of Small Rental Property Program LoansAward Years: 2006, 2007Award Numbers: B-06-DG-22-0001, B-06-DG-22-0002Compliance Requirement: EligibilityRepeat Finding: Yes (Prior Year Finding No. 2021-012)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fiscal year ended June 30, 2022, the Division of Administration, Louisiana Office of Community Development (LOCD) identified $2,635,609 in Small Rental Property Program (SRPP) loans for nine property owners under the Community Development Block Grant/State?s Program (CDBG) who failed to comply with one or more of their loan agreement requirements and were assigned to loan recovery status. Since LOCD has not recovered these loans, we consider these amounts totaling $2,635,609 to be questioned costs. In addition, 1,147 noncompliant loans identified in previous years totaling $104.5 million remain outstanding.As of June 30, 2022, of the 4,480 outstanding SRPP loans totaling $436.3 million, 993 noncompliant loans totaling $92.4 million are in active recovery status, and LOCD represented that current recovery efforts are to either recoup the loan funds or work with the applicants to bring them into compliance with the state?s continuing requirements of the program. The remaining 163 noncompliant loans totaling $14.7 million have been determined by LOCD to be uncollectable for various reasons such as foreclosure, property seizure, or legal dispute.Criteria:OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal Governments (now located in 2 CFR 225) stipulates that the state assume responsibility for administering federal awards in a manner consistent with underlying agreements, program objectives, and the terms and conditions of the federal award. In response to hurricanes Katrina and Rita, the state was awarded and has allocated approximately $653 million to the SRPP, as part of the Road Home program. In accordance with the state?s U.S. Department of Housing and Urban Development (HUD)-approved Action Plan Amendment 24, the SRPP offers forgivable loans to qualified property owners who agree to offer rental properties at affordable rents to be occupied by lower-income households. In exchange for accepting loans ranging between $10,000 and $100,000 per rental unit, property owners are required to accept limitations on rents and incomes of renters during an ?affordability period,? a specified period of time based on the amount of funding received and the type of work being done (renovation or full construction) ranging between three and 20 years. The loan amounts are determined based on location of property, number of bedrooms, and the poverty level of the renter. In addition to accepting limitations on rents and income of renters, property owners also agree to maintain property insurance and maintain flood insurance, if necessary. These requirements become effective one year after the closing date and remain until the expiration of the ?affordability period.? According to the loan agreements, failure to comply with any of the loan requirements shall constitute default and mandatory repayment. Good internal controls would ensure that policies and procedures are in place with an established timeline to monitor compliance with the loan agreements and provide for specific actions (i.e., loan modification, foreclosure, or repayment) if a property owner fails to comply with the loan agreement or does not provide evidence of compliance as required by the loan agreement.Cause:In June 2016, HUD issued a monitoring review report with a finding that the SRPP design lacked sufficient fiscal accounting controls and procedures to ensure that CDBG funds identified as ineligible expenses are able to be recaptured and repurposed for eligible uses. Since that time, there have been several monitoring reports indicating progression in this area. In its July 2021 monitoring report, HUD stated that LOCD continued to make gradual progression through its current recapture and reclassification efforts to reduce its overall repayment amount. In its response to that report, LOCD provided an update on the status of the remaining noncompliant properties as it continues to work with HUD to identify a solution for these properties.Effect:Ultimately, LOCD?s failure to recover loans from noncompliant property owners could result in disallowed costs. The state could be liable for noncompliant awards if disallowed by the federal grantor; however, it is unknown whether the federal government would demand repayment of the awards.Recommendation:LOCD should continue its monitoring to identify awards to be placed in recovery and continue the corrective actions as recommended by HUD to recover funds from noncompliant property owners.Management?s Response and Corrective Action Plan:LOCD stated in its response that it will continue the efforts to recover ineligible awards and will continue to work with rental property owners to become compliant and resolve loan compliance issues to reduce or eliminate the need to recapture funds from rental property owners (B-13).
2022-010 ? Restore Louisiana Homeowner Assistance Program Awards Identified for Grant RecoveryAward Year: 2016Award Number: B-16-DL-22-0001Compliance Requirement: EligibilityRepeat Finding: Yes (Prior Year Finding No. 2021-014)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fiscal year ended June 30, 2022, LOCD identified $121,650 in noncompliant Restore Louisiana Homeowner Assistance Program (RLHAP) awards for eight homeowners through established program implementation and monitoring procedures for the CDBG Program. Since LOCD has not recovered these noncompliant awards at year-end, we consider these amounts to be questioned costs. In addition, 36 noncompliant files totaling $644,913 identified in the previous years are still outstanding. LOCD is actively pursuing collections on the files.As of June 30, 2022, $666,587,500 in total RLHAP awards have been disbursed to 17,254 homeowners. LOCD is actively reviewing 38 files totaling $715,592 to make final determinations of the homeowner?s noncompliant status. At year-end, LOCD reported that 269 homeowner files totaling approximately $4.4 million have been reviewed through its monitoring procedures. Of the 269 homeowners, LOCD reported 82 homeowners were placed in recapture status, 148 homeowners were cleared through the review process, 15 homeowners returned their grant award, in whole or in part, and 24 homeowners entered into repayment plans.Criteria:2 CFR 200, Subpart E, Cost Principles, stipulates that the state assumes responsibility for administering federal funds in a manner consistent with underlying agreements, program objectives, and the terms and conditions of the federal award.In response to the March and August Floods of 2016, the state was awarded approximately $1.07 billion to administer RLHAP. In accordance with the state?s HUD-approved Action Plan, eligible homeowners must enter into grant agreements with the state which require homeowners to comply with program requirements in exchange for compensation to rehabilitate or reconstruct their damaged property. Homeowners have three program options to choose from based on their progress in the rebuilding process and their capacity to complete their home repair or reconstruction. Eligibility and grant award calculations are determined based on information provided by the homeowner, the results of field inspections, and available third-party datasets. Once eligibility has been established and award amounts have been calculated, funds are awarded to the homeowner upon the effective date of signing the grant agreement, which is referred to as the closing date. Should homeowners experience a change in the circumstances after grant determination or if additional information becomes available after closing, homeowners? grant calculation or program eligibility may change. In the event the change reduces their amount of eligible funding, RLHAP may require that a homeowner return all or a portion of their award.Cause:Circumstances that may result in homeowners being required to repay all or a portion of the award include: duplicative benefits received but not included in initial grant award calculation, information discovered identifying the homeowner as ineligible for the award received, failure to complete construction per program requirements, substantial noncompliance with requirements of grant agreements, voluntary withdrawal from the program, or discovery that the homeowner provided false or misleading information during the grant award process.Effect:If LOCD is unable to recover benefits from noncompliant homeowners, disallowed costs could result. The state could be liable for noncompliant awards if disallowed by the federal grantor; however, it is unknown whether the federal government would demand repayment of these awards.Recommendation:LOCD should continue its monitoring to identify awards to be placed in recovery and continue recovery efforts to collect those awards determined to be noncompliant.Management?s Response and Corrective Action Plan:LOCD agreed that the identified files have been placed in recapture and stated it will continue to follow the established recapture procedures for these grant awards to ensure ultimate compliance (B-15).
2022-006 - Control Weakness and Noncompliance with Personnel Expenses Charged to Federal AwardsAward Years: 2018, 2019, 2021, 2022Award Numbers: 2138930, 2000614536, B-18-DP-22-001, EMW-2020-SS-00011-S01, M19AC00015, NR227217XXXXC002, P01AI048240, R21AI165939, R33HD099745, U19AI159840Compliance Requirements: Allowable Costs/Cost Principles, Special Tests and ProvisionsPass-Through Entities: Board of Trustees of the Leland Stanford Junior University, Emory UniversityRepeat Finding: Yes (Prior Year Finding No. 2021-009)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the second consecutive year, the University of Louisiana at Lafayette (UL Lafayette) did not have adequate controls in place to ensure personnel expenses and effort charged to federal R&D awards accurately reflected work performed. From a population of 28,744 payroll and non-payroll expenses charged to R&D grants, a non-statistical sample of 25 transactions was tested. For all 12 (48%) of the payroll transactions, UL Lafayette was unable to provide documentation to show that personnel-related expenses, totaling $4,520, were supported by time and effort certifications to ensure the accuracy of budget estimates charged to federal awards as required by federal regulations. Additionally, because there is no after-the-fact review to ensure the accuracy of personnel costs and effort charged to the awards, UL Lafayette could not ensure compliance with the requirements of special tests and provisions related to key personnel effort.Criteria:2 CFR 200.430(i) specifies the documentation standards for personnel expenses. In order to be allowable, charges to federal awards for personnel expenses must be based on records that accurately reflect the work performed and must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Budget estimates alone do not qualify as support for charges to federal awards, but can be used for interim accounting purposes provided that internal controls include an after-the-fact review to confirm the accuracy of final amounts charged to federal awards.Prior approval requirements related to key personnel effort are contained in 2 CFR 200.308(c) and within grant terms and conditions. A reduction of 25% or greater in time devoted to the project from key personnel requires prior approval.Cause:Management represented that it?s still in the process of implementing the prior-year corrective actions to address the issues noted in the prior-year finding. As a result, time and effort certifications were not completed by employees to support the accuracy of budget estimates charged to federal awards as required by 2 CFR 200.430(i).Effect:Inadequate controls related to federal documentation standards for personnel expenses could result in noncompliance with federal allowable costs and cost principles, as well as noncompliance with special tests and provisions related to key personnel effort.Recommendation:Management should strengthen internal controls to ensure that personnel expenses charged to the federal awards are supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.Management?s Response and Corrective Action Plan:Management did not concur with the finding, noting it did not have sufficient time in fiscal year 2022 for corrective action and provided its progress on addressing the finding (B-82).
2022-006 - Control Weakness and Noncompliance with Personnel Expenses Charged to Federal AwardsAward Years: 2018, 2019, 2021, 2022Award Numbers: 2138930, 2000614536, B-18-DP-22-001, EMW-2020-SS-00011-S01, M19AC00015, NR227217XXXXC002, P01AI048240, R21AI165939, R33HD099745, U19AI159840Compliance Requirements: Allowable Costs/Cost Principles, Special Tests and ProvisionsPass-Through Entities: Board of Trustees of the Leland Stanford Junior University, Emory UniversityRepeat Finding: Yes (Prior Year Finding No. 2021-009)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the second consecutive year, the University of Louisiana at Lafayette (UL Lafayette) did not have adequate controls in place to ensure personnel expenses and effort charged to federal R&D awards accurately reflected work performed. From a population of 28,744 payroll and non-payroll expenses charged to R&D grants, a non-statistical sample of 25 transactions was tested. For all 12 (48%) of the payroll transactions, UL Lafayette was unable to provide documentation to show that personnel-related expenses, totaling $4,520, were supported by time and effort certifications to ensure the accuracy of budget estimates charged to federal awards as required by federal regulations. Additionally, because there is no after-the-fact review to ensure the accuracy of personnel costs and effort charged to the awards, UL Lafayette could not ensure compliance with the requirements of special tests and provisions related to key personnel effort.Criteria:2 CFR 200.430(i) specifies the documentation standards for personnel expenses. In order to be allowable, charges to federal awards for personnel expenses must be based on records that accurately reflect the work performed and must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Budget estimates alone do not qualify as support for charges to federal awards, but can be used for interim accounting purposes provided that internal controls include an after-the-fact review to confirm the accuracy of final amounts charged to federal awards.Prior approval requirements related to key personnel effort are contained in 2 CFR 200.308(c) and within grant terms and conditions. A reduction of 25% or greater in time devoted to the project from key personnel requires prior approval.Cause:Management represented that it?s still in the process of implementing the prior-year corrective actions to address the issues noted in the prior-year finding. As a result, time and effort certifications were not completed by employees to support the accuracy of budget estimates charged to federal awards as required by 2 CFR 200.430(i).Effect:Inadequate controls related to federal documentation standards for personnel expenses could result in noncompliance with federal allowable costs and cost principles, as well as noncompliance with special tests and provisions related to key personnel effort.Recommendation:Management should strengthen internal controls to ensure that personnel expenses charged to the federal awards are supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.Management?s Response and Corrective Action Plan:Management did not concur with the finding, noting it did not have sufficient time in fiscal year 2022 for corrective action and provided its progress on addressing the finding (B-82).
2022-012 - Inadequate Controls over and Noncompliance with Unemployment Insurance Benefits RequirementsAward Year: Not ApplicableAward Number: Not ApplicableCompliance Requirements: Activities Allowed or Unallowed, EligibilityRepeat Finding: Yes (Prior Year Finding No. 2021-008)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the third consecutive year, LWC did not have adequate internal controls and did not comply with requirements of the Unemployment Insurance (UI) federal program. LWC issued more than $681 million in benefit payments to more than 260,000 claimants during fiscal year 2022.In December 2020, Congress passed the Continued Assistance for Unemployed Workers Act of 2020 (CAA), which extended many of the UI-related provisions in the Coronavirus Aid, Relief, and Economic Security (CARES) Act and also required claimants to provide supporting documents to verify income and identity, if receiving Pandemic Unemployment Assistance (PUA). Federal funding for the pandemic benefits ended after July 2021.In a non-statistical random sample of 60 claimants who were paid $188,180 in unemployment benefits in fiscal year 2022, we identified errors for 16 claimants, which resulted in questioned costs totaling $30,704. One claimant file contained multiple errors.For 13 (22%) out of 60 UI claimants, claimant files did not support monetary eligibility.? 12 claimant files did not have required wage documentation. CAA required all claimants receiving federal assistance payments after December 27, 2020, to provide evidence of self-employment earnings in order to remain eligible for PUA. According to LWC, a waiver has been requested from the U.S. Department of Labor from this requirement; as of March 21, 2023, LWC has not received a waiver.? One claimant file did not have evidence of child support payments properly withheld from the benefit payment by LWC as instructed by the child support order in the claimant file.For four (7%) out of 60 UI claimants, claimant files did not support non-monetary eligibility.? Four claimant files did not include required claimant identification. CAA requires states to verify the identity of PUA applicants whose identities were not previously verified on an Unemployment Compensation (UC), Extended Benefits (EB), or Pandemic Emergency Unemployment Compensation (PEUC) claim within the last 12 months.Criteria:Claimant files are required to contain certain information, including wage documentation and claimant identification to support eligibility for benefits paid under the PUA program. Upon notification from DCFS, child support court orders must be followed. Louisiana Revised Statute 23:1693 requires child support to be deducted from unemployment compensation when notified by DCFS.2 CFR 200.303(a) requires that non-federal entities receiving federal awards establish and maintain effective internal control designed to reasonably ensure compliance with federal statutes, regulations, and the terms and conditions of the federal awards.Cause:LWC failed to obtain needed documentation.Effect:Failure to obtain personal identifying information and wage documents results in noncompliance with federal program requirements and increases the risk of overpayments. Failure to properly withhold child support payments as ordered by a court results in noncompliance with state laws.Recommendation:LWC should strengthen controls to ensure all required documentation is obtained. In addition, LWC should take the necessary actions to ensure court ordered child support deductions are setup timely to ensure compliance with applicable laws.Management?s Response and Corrective Action Plan:Management concurred in part with the finding and provided a corrective action plan (B-72).Auditor?s Additional Comments:LWC noted in its response that a blanket waiver of overpayments resulting from the implementation of the proof of employment requirement has been requested; however, as noted in the finding and LWC?s response, the waiver has not yet been approved. LWC disagrees with the LLA?s interpretation of the identity verification requirements. The CAA provisions for identification verification noted above should be applied unless specific guidance is received from the federal grantor stating otherwise. Per CAA, states that previously verified an individual?s identity on a UC, EB, or PEUC claim within the last 12 months are not required to re-verify identity on the PUA claim. There was no evidence of verified identification in the claimant files for the errors noted. LWC remains responsible for administering the UI program with adequate internal controls to ensure compliance with federal requirements.
2022-012 - Inadequate Controls over and Noncompliance with Unemployment Insurance Benefits RequirementsAward Year: Not ApplicableAward Number: Not ApplicableCompliance Requirements: Activities Allowed or Unallowed, EligibilityRepeat Finding: Yes (Prior Year Finding No. 2021-008)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the third consecutive year, LWC did not have adequate internal controls and did not comply with requirements of the Unemployment Insurance (UI) federal program. LWC issued more than $681 million in benefit payments to more than 260,000 claimants during fiscal year 2022.In December 2020, Congress passed the Continued Assistance for Unemployed Workers Act of 2020 (CAA), which extended many of the UI-related provisions in the Coronavirus Aid, Relief, and Economic Security (CARES) Act and also required claimants to provide supporting documents to verify income and identity, if receiving Pandemic Unemployment Assistance (PUA). Federal funding for the pandemic benefits ended after July 2021.In a non-statistical random sample of 60 claimants who were paid $188,180 in unemployment benefits in fiscal year 2022, we identified errors for 16 claimants, which resulted in questioned costs totaling $30,704. One claimant file contained multiple errors.For 13 (22%) out of 60 UI claimants, claimant files did not support monetary eligibility.? 12 claimant files did not have required wage documentation. CAA required all claimants receiving federal assistance payments after December 27, 2020, to provide evidence of self-employment earnings in order to remain eligible for PUA. According to LWC, a waiver has been requested from the U.S. Department of Labor from this requirement; as of March 21, 2023, LWC has not received a waiver.? One claimant file did not have evidence of child support payments properly withheld from the benefit payment by LWC as instructed by the child support order in the claimant file.For four (7%) out of 60 UI claimants, claimant files did not support non-monetary eligibility.? Four claimant files did not include required claimant identification. CAA requires states to verify the identity of PUA applicants whose identities were not previously verified on an Unemployment Compensation (UC), Extended Benefits (EB), or Pandemic Emergency Unemployment Compensation (PEUC) claim within the last 12 months.Criteria:Claimant files are required to contain certain information, including wage documentation and claimant identification to support eligibility for benefits paid under the PUA program. Upon notification from DCFS, child support court orders must be followed. Louisiana Revised Statute 23:1693 requires child support to be deducted from unemployment compensation when notified by DCFS.2 CFR 200.303(a) requires that non-federal entities receiving federal awards establish and maintain effective internal control designed to reasonably ensure compliance with federal statutes, regulations, and the terms and conditions of the federal awards.Cause:LWC failed to obtain needed documentation.Effect:Failure to obtain personal identifying information and wage documents results in noncompliance with federal program requirements and increases the risk of overpayments. Failure to properly withhold child support payments as ordered by a court results in noncompliance with state laws.Recommendation:LWC should strengthen controls to ensure all required documentation is obtained. In addition, LWC should take the necessary actions to ensure court ordered child support deductions are setup timely to ensure compliance with applicable laws.Management?s Response and Corrective Action Plan:Management concurred in part with the finding and provided a corrective action plan (B-72).Auditor?s Additional Comments:LWC noted in its response that a blanket waiver of overpayments resulting from the implementation of the proof of employment requirement has been requested; however, as noted in the finding and LWC?s response, the waiver has not yet been approved. LWC disagrees with the LLA?s interpretation of the identity verification requirements. The CAA provisions for identification verification noted above should be applied unless specific guidance is received from the federal grantor stating otherwise. Per CAA, states that previously verified an individual?s identity on a UC, EB, or PEUC claim within the last 12 months are not required to re-verify identity on the PUA claim. There was no evidence of verified identification in the claimant files for the errors noted. LWC remains responsible for administering the UI program with adequate internal controls to ensure compliance with federal requirements.
2022-011 - Inadequate Controls over and Noncompliance with Subrecipient Monitoring RequirementsAward Years: 2019 - 2021Award Numbers: AA332321955A22, AA347712055A22, AA363222155A22Compliance Requirements: Activities Allowed or Unallowed, Subrecipient MonitoringRepeat Finding: Yes (Prior Year Finding No. 2021-019)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, the Louisiana Workforce Commission (LWC) did not adequately follow-up on subrecipient monitoring reports under the Workforce Innovation and Opportunity Act (WIOA) Cluster programs.Our review of LWC?s fiscal year 2022 monitoring reports, of fiscal year 2020, for all 15 of LWC?s subrecipients, disclosed the following:? Two monitoring reports were not issued timely by LWC. The monitoring reports were issued 74 and 75 days after the completion of the monitoring review. LWC?s policy requires monitoring review reports to be issued 60 days after the completion of the monitoring review.? For four monitoring reports, close out letters were issued 145 to 191 days after monitoring report issuance. For six monitoring reports, close out letters were not issued as of January 2023, while the monitoring reports for these reviews were issued more than 200 days prior. The monitoring reports include findings with possible questioned costs totaling $3.1 million. LWC policy does not specifically address timeliness requirements for close out letters.In a non-statistical random sample of five of 15 subrecipient working papers, we noted the following:? Three subrecipients had findings on the monitoring reports stemming from a lack of documentation supporting the subrecipients? drawdowns of WIOA funds, and drawdowns of federal funds could not be reconciled by LWC to the subrecipients accounting records. The monitoring reports noted potential questioned costs associated with these drawdowns. These reviews are included in the six monitoring reports not issued as of January 2023, noted in the bullet above. Timely resolution would allow LWC to quickly address any compliance issues at the subrecipient level. According to LWC, it is working with the subrecipients to reconcile the federal funds drawdowns and close out the reports.Criteria:2 CFR 200.332(d) requires that pass-through entities monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals.2 CFR 200.332(d)(2) requires that pass-through entities follow-up and ensure that the subrecipient takes timely and appropriate action on all deficiencies provided to the subrecipient from the pass-through entities detected through reviews.Annual monitoring reviews are required on all subrecipients for compliance with federal requirements. The review includes a review of LWC federal drawdowns for subrecipient expenditures. LWC fiscal relies on the monitoring section to review the drawdown documentation at the subrecipient to ensure that drawdowns are adequately supported.20 CFR 683.410 requires pass-through entities to issue management decisions (reports) on applicable findings and follow-up to ensure subrecipients take prompt and appropriate action on all audit findings.LWC?s Policy Number OWD 4-12 requires monitoring reviews to be issued within 60 days of completion of the monitoring review.Cause:LWC did not follow established policy for timely issuance of monitoring reports. LWC policy does not specifically address timeliness requirements for issuing close out letters.Effect:Failure to timely resolve documentation and questioned costs impairs LWC?s ability to ensure that program funds passed through to its subrecipients were spent in accordance with program regulations and increases the risk of improper payments, which LWC may have to repay to the federal grantor. WIOA program expenditures totaled $56.5 million during state fiscal year 2022, with approximately $46 million provided to subrecipients.Recommendation:LWC management should ensure that subrecipient monitoring reports are issued in a timely manner in accordance with LWC policy. LWC management should develop and implement policy ensuring timely and adequate close out of monitoring reviews.Management?s Response and Corrective Action Plan:Management concurred in part with the finding and provided a corrective action plan (B-59).
2022-011 - Inadequate Controls over and Noncompliance with Subrecipient Monitoring RequirementsAward Years: 2019 - 2021Award Numbers: AA332321955A22, AA347712055A22, AA363222155A22Compliance Requirements: Activities Allowed or Unallowed, Subrecipient MonitoringRepeat Finding: Yes (Prior Year Finding No. 2021-019)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, the Louisiana Workforce Commission (LWC) did not adequately follow-up on subrecipient monitoring reports under the Workforce Innovation and Opportunity Act (WIOA) Cluster programs.Our review of LWC?s fiscal year 2022 monitoring reports, of fiscal year 2020, for all 15 of LWC?s subrecipients, disclosed the following:? Two monitoring reports were not issued timely by LWC. The monitoring reports were issued 74 and 75 days after the completion of the monitoring review. LWC?s policy requires monitoring review reports to be issued 60 days after the completion of the monitoring review.? For four monitoring reports, close out letters were issued 145 to 191 days after monitoring report issuance. For six monitoring reports, close out letters were not issued as of January 2023, while the monitoring reports for these reviews were issued more than 200 days prior. The monitoring reports include findings with possible questioned costs totaling $3.1 million. LWC policy does not specifically address timeliness requirements for close out letters.In a non-statistical random sample of five of 15 subrecipient working papers, we noted the following:? Three subrecipients had findings on the monitoring reports stemming from a lack of documentation supporting the subrecipients? drawdowns of WIOA funds, and drawdowns of federal funds could not be reconciled by LWC to the subrecipients accounting records. The monitoring reports noted potential questioned costs associated with these drawdowns. These reviews are included in the six monitoring reports not issued as of January 2023, noted in the bullet above. Timely resolution would allow LWC to quickly address any compliance issues at the subrecipient level. According to LWC, it is working with the subrecipients to reconcile the federal funds drawdowns and close out the reports.Criteria:2 CFR 200.332(d) requires that pass-through entities monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals.2 CFR 200.332(d)(2) requires that pass-through entities follow-up and ensure that the subrecipient takes timely and appropriate action on all deficiencies provided to the subrecipient from the pass-through entities detected through reviews.Annual monitoring reviews are required on all subrecipients for compliance with federal requirements. The review includes a review of LWC federal drawdowns for subrecipient expenditures. LWC fiscal relies on the monitoring section to review the drawdown documentation at the subrecipient to ensure that drawdowns are adequately supported.20 CFR 683.410 requires pass-through entities to issue management decisions (reports) on applicable findings and follow-up to ensure subrecipients take prompt and appropriate action on all audit findings.LWC?s Policy Number OWD 4-12 requires monitoring reviews to be issued within 60 days of completion of the monitoring review.Cause:LWC did not follow established policy for timely issuance of monitoring reports. LWC policy does not specifically address timeliness requirements for issuing close out letters.Effect:Failure to timely resolve documentation and questioned costs impairs LWC?s ability to ensure that program funds passed through to its subrecipients were spent in accordance with program regulations and increases the risk of improper payments, which LWC may have to repay to the federal grantor. WIOA program expenditures totaled $56.5 million during state fiscal year 2022, with approximately $46 million provided to subrecipients.Recommendation:LWC management should ensure that subrecipient monitoring reports are issued in a timely manner in accordance with LWC policy. LWC management should develop and implement policy ensuring timely and adequate close out of monitoring reviews.Management?s Response and Corrective Action Plan:Management concurred in part with the finding and provided a corrective action plan (B-59).
2022-011 - Inadequate Controls over and Noncompliance with Subrecipient Monitoring RequirementsAward Years: 2019 - 2021Award Numbers: AA332321955A22, AA347712055A22, AA363222155A22Compliance Requirements: Activities Allowed or Unallowed, Subrecipient MonitoringRepeat Finding: Yes (Prior Year Finding No. 2021-019)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, the Louisiana Workforce Commission (LWC) did not adequately follow-up on subrecipient monitoring reports under the Workforce Innovation and Opportunity Act (WIOA) Cluster programs.Our review of LWC?s fiscal year 2022 monitoring reports, of fiscal year 2020, for all 15 of LWC?s subrecipients, disclosed the following:? Two monitoring reports were not issued timely by LWC. The monitoring reports were issued 74 and 75 days after the completion of the monitoring review. LWC?s policy requires monitoring review reports to be issued 60 days after the completion of the monitoring review.? For four monitoring reports, close out letters were issued 145 to 191 days after monitoring report issuance. For six monitoring reports, close out letters were not issued as of January 2023, while the monitoring reports for these reviews were issued more than 200 days prior. The monitoring reports include findings with possible questioned costs totaling $3.1 million. LWC policy does not specifically address timeliness requirements for close out letters.In a non-statistical random sample of five of 15 subrecipient working papers, we noted the following:? Three subrecipients had findings on the monitoring reports stemming from a lack of documentation supporting the subrecipients? drawdowns of WIOA funds, and drawdowns of federal funds could not be reconciled by LWC to the subrecipients accounting records. The monitoring reports noted potential questioned costs associated with these drawdowns. These reviews are included in the six monitoring reports not issued as of January 2023, noted in the bullet above. Timely resolution would allow LWC to quickly address any compliance issues at the subrecipient level. According to LWC, it is working with the subrecipients to reconcile the federal funds drawdowns and close out the reports.Criteria:2 CFR 200.332(d) requires that pass-through entities monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals.2 CFR 200.332(d)(2) requires that pass-through entities follow-up and ensure that the subrecipient takes timely and appropriate action on all deficiencies provided to the subrecipient from the pass-through entities detected through reviews.Annual monitoring reviews are required on all subrecipients for compliance with federal requirements. The review includes a review of LWC federal drawdowns for subrecipient expenditures. LWC fiscal relies on the monitoring section to review the drawdown documentation at the subrecipient to ensure that drawdowns are adequately supported.20 CFR 683.410 requires pass-through entities to issue management decisions (reports) on applicable findings and follow-up to ensure subrecipients take prompt and appropriate action on all audit findings.LWC?s Policy Number OWD 4-12 requires monitoring reviews to be issued within 60 days of completion of the monitoring review.Cause:LWC did not follow established policy for timely issuance of monitoring reports. LWC policy does not specifically address timeliness requirements for issuing close out letters.Effect:Failure to timely resolve documentation and questioned costs impairs LWC?s ability to ensure that program funds passed through to its subrecipients were spent in accordance with program regulations and increases the risk of improper payments, which LWC may have to repay to the federal grantor. WIOA program expenditures totaled $56.5 million during state fiscal year 2022, with approximately $46 million provided to subrecipients.Recommendation:LWC management should ensure that subrecipient monitoring reports are issued in a timely manner in accordance with LWC policy. LWC management should develop and implement policy ensuring timely and adequate close out of monitoring reviews.Management?s Response and Corrective Action Plan:Management concurred in part with the finding and provided a corrective action plan (B-59).
2022-005 - Noncompliance with and Weakness in Controls over Federal Research and Development ExpensesAward Years: VariousAward Numbers: VariousCompliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesPass-Through Entities: VariousRepeat Finding: Yes (Prior Year Finding No. 2021-007)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In addition, LSUHSC-S did not ensure that costs charged to federal awards were allowable in accordance with federal regulations and the terms and conditions of the award when requesting reimbursement.In a non-statistical random sample of 50 out of 10,798 expense transactions charged to R&D during the fiscal year ending June 30, 2022, the following exceptions were noted:? Three (6%) purchasing card (P-Card) transactions were not allowable in accordance with federal regulations and the terms and conditions of the award and are considered questioned costs totaling $1,073.? For five (10%) of 50 transactions tested, LSUHSC-S overstated expenses on the Schedule of Expenditures of Federal Awards because the award was fully funded, and expenses in excess of the award amount were not removed from the project used to identify expenditures to federal awards in the accounting records, or the expense was determined not allowable as noted above.? Seven (35%) of 20 time and effort certifications for salary and related benefit expenses tested were completed 119 to 461 days after the end of the quarter.We performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 838 (51%) out of 1,654 adjusting journal entries were made more than 90 days after the end of the quarter from the original transactions. The adjustments were made 97 to 1,026 days after the original transactions were recorded and 96 to 953 days after the end of the quarter.In a non-statistical random sample of 10 out of 1,654 payroll adjusting entries affecting R&D, tested by employee, project id (related to federal award), and journal id, six (60%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. Two of these adjusting entries added costs to the federal award projects and are considered questioned costs totaling $28,324.Criteria:2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity?s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments.Per LSUHSC-S?s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S?s policy, time and effort certifications should be completed within approximately 90 days of the end of the quarter. Management interprets the end of the quarter to be when the time and effort reports are sent to the departments once the last month of the quarter is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the quarterly reporting period, a payroll reallocation must be created within 30 days.Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework? issued by the Committee of Sponsoring Organizations of the Treadway Commission. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions.In addition, the National Institute of Health (NIH) is the grantor for the majority of the LSUHSC-S?s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made ?to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable.2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs.Cause:LSUHSC-S?s approval of P-Card transactions did not provide sufficient review of the allowability of expenses on federal awards. LSUHSC-S has procedures in place to review expenses prior to requesting reimbursement; however, it did not ensure that the necessary adjustments were made to the accounting system in a timely manner for expenses that were not allowed for reimbursement. In addition, training to emphasize accountability and the importance of completing time and effort certifications timely and accurately per policy was not completed as planned during fiscal year 2022 due to staffing shortages.LSUHSC-S is still in the process of implementing the corrective action outlined in the prior year to include documentation of adjusted effort and questions to address justification for the adjustment, errors, and timeliness on a modified Personnel Change form.Effect:Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects.In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor.Recommendation:Management should monitor time and effort certifications completed by the departments and investigate and obtain justification from department personnel for untimely certifications, as well as untimely adjustments and lack of supporting documentation for adjustments to enforce established policies. Management should ensure adequate design and operating effectiveness of controls over expenses, including P-Card expenses, charged to federal awards to verify allowability of costs in accordance with federal requirements and grant terms and conditions prior to requesting reimbursement. Management should also consider implementing other complementary controls such as preventing costs from being charged to projects in the accounting system beyond the approved budget or period of performance.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-52).
2022-006 - Control Weakness and Noncompliance with Personnel Expenses Charged to Federal AwardsAward Years: 2018, 2019, 2021, 2022Award Numbers: 2138930, 2000614536, B-18-DP-22-001, EMW-2020-SS-00011-S01, M19AC00015, NR227217XXXXC002, P01AI048240, R21AI165939, R33HD099745, U19AI159840Compliance Requirements: Allowable Costs/Cost Principles, Special Tests and ProvisionsPass-Through Entities: Board of Trustees of the Leland Stanford Junior University, Emory UniversityRepeat Finding: Yes (Prior Year Finding No. 2021-009)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the second consecutive year, the University of Louisiana at Lafayette (UL Lafayette) did not have adequate controls in place to ensure personnel expenses and effort charged to federal R&D awards accurately reflected work performed. From a population of 28,744 payroll and non-payroll expenses charged to R&D grants, a non-statistical sample of 25 transactions was tested. For all 12 (48%) of the payroll transactions, UL Lafayette was unable to provide documentation to show that personnel-related expenses, totaling $4,520, were supported by time and effort certifications to ensure the accuracy of budget estimates charged to federal awards as required by federal regulations. Additionally, because there is no after-the-fact review to ensure the accuracy of personnel costs and effort charged to the awards, UL Lafayette could not ensure compliance with the requirements of special tests and provisions related to key personnel effort.Criteria:2 CFR 200.430(i) specifies the documentation standards for personnel expenses. In order to be allowable, charges to federal awards for personnel expenses must be based on records that accurately reflect the work performed and must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Budget estimates alone do not qualify as support for charges to federal awards, but can be used for interim accounting purposes provided that internal controls include an after-the-fact review to confirm the accuracy of final amounts charged to federal awards.Prior approval requirements related to key personnel effort are contained in 2 CFR 200.308(c) and within grant terms and conditions. A reduction of 25% or greater in time devoted to the project from key personnel requires prior approval.Cause:Management represented that it?s still in the process of implementing the prior-year corrective actions to address the issues noted in the prior-year finding. As a result, time and effort certifications were not completed by employees to support the accuracy of budget estimates charged to federal awards as required by 2 CFR 200.430(i).Effect:Inadequate controls related to federal documentation standards for personnel expenses could result in noncompliance with federal allowable costs and cost principles, as well as noncompliance with special tests and provisions related to key personnel effort.Recommendation:Management should strengthen internal controls to ensure that personnel expenses charged to the federal awards are supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.Management?s Response and Corrective Action Plan:Management did not concur with the finding, noting it did not have sufficient time in fiscal year 2022 for corrective action and provided its progress on addressing the finding (B-82).
2022-007 - Noncompliance with Subrecipient Monitoring RequirementsAward Years: 2018, 2020 - 2022Award Numbers: DUE-2044358, NA18OAR4170098, OIA-2019511, OIA-2119688Compliance Requirement: Subrecipient MonitoringRepeat Finding: Yes (Prior Year Finding No. 2021-010)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the second consecutive year, UL Lafayette did not adequately monitor subrecipients of the R&D Cluster programs. In a non-statistical sample of five subawards out of a population of 49 subawards, it was noted that for four (80%) of the subrecipients evaluated UL Lafayette was unable to provide documentation that ensured each subrecipient obtained the required audit or that the audit was reviewed so that timely and appropriate action could be taken for any findings pertaining to the federal awards. Additionally, for all five (100%) of the subrecipients evaluated, UL Lafayette could not provide evidence that the required risk analyses were performed to evaluate each subrecipients? risk of noncompliance with federal regulations and the terms of the subaward.Criteria:2 CFR 200.332(b) requires pass-through entities to evaluate each subrecipient's risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring.Per 2 CFR 200.332(f), pass-through entities are responsible for verifying that every subrecipient is audited as required by 2 CFR Part 200, subpart F when it is expected that the subrecipient's federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in CFR 200.501 of $750,000 or more in federal awards during the subrecipient?s fiscal year.2 CFR 200.332(d)(2) requires that pass-through entities follow-up and ensure that the subrecipient takes timely and appropriate action on all deficiencies provided to the subrecipient from the pass-through entities detected through audits, on-site reviews, and written confirmation from the subrecipient.2 CFR 200.332(d)(2) and (3) require pass-through entities to issue a management decision on applicable audit findings in accordance with 2 CFR 200.521, within six months after acceptance of the subrecipient?s audit report by the Federal Audit Clearinghouse, and ensure that the subrecipient takes timely and appropriate corrective action on all findings.Cause:UL Lafayette management indicated that it was working on internal procedures to adequately monitor subrecipients as result of the prior-year finding. However, management has yet to finalize and apply these procedures on all active subrecipients.Effect:Failure to properly monitor subrecipients results in noncompliance with federal regulations and increases the likelihood of improper payments which may have to be returned to the federal awarding agency.Recommendation:UL Lafayette should strengthen controls to ensure the timely review of all required subrecipient audit reports in order to evaluate the impact of any findings noted in the audits and issue management decision letters, if applicable. In addition, UL Lafayette should strengthen controls to ensure risk assessments are performed and documented on all subrecipients in accordance with federal regulations.Management?s Response and Corrective Action Plan:Management did not concur with the finding, noting it did not have sufficient time in fiscal year 2022 for corrective action and provided its progress on addressing the finding (B-83).
2022-007 - Noncompliance with Subrecipient Monitoring RequirementsAward Years: 2018, 2020 - 2022Award Numbers: DUE-2044358, NA18OAR4170098, OIA-2019511, OIA-2119688Compliance Requirement: Subrecipient MonitoringRepeat Finding: Yes (Prior Year Finding No. 2021-010)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the second consecutive year, UL Lafayette did not adequately monitor subrecipients of the R&D Cluster programs. In a non-statistical sample of five subawards out of a population of 49 subawards, it was noted that for four (80%) of the subrecipients evaluated UL Lafayette was unable to provide documentation that ensured each subrecipient obtained the required audit or that the audit was reviewed so that timely and appropriate action could be taken for any findings pertaining to the federal awards. Additionally, for all five (100%) of the subrecipients evaluated, UL Lafayette could not provide evidence that the required risk analyses were performed to evaluate each subrecipients? risk of noncompliance with federal regulations and the terms of the subaward.Criteria:2 CFR 200.332(b) requires pass-through entities to evaluate each subrecipient's risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring.Per 2 CFR 200.332(f), pass-through entities are responsible for verifying that every subrecipient is audited as required by 2 CFR Part 200, subpart F when it is expected that the subrecipient's federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in CFR 200.501 of $750,000 or more in federal awards during the subrecipient?s fiscal year.2 CFR 200.332(d)(2) requires that pass-through entities follow-up and ensure that the subrecipient takes timely and appropriate action on all deficiencies provided to the subrecipient from the pass-through entities detected through audits, on-site reviews, and written confirmation from the subrecipient.2 CFR 200.332(d)(2) and (3) require pass-through entities to issue a management decision on applicable audit findings in accordance with 2 CFR 200.521, within six months after acceptance of the subrecipient?s audit report by the Federal Audit Clearinghouse, and ensure that the subrecipient takes timely and appropriate corrective action on all findings.Cause:UL Lafayette management indicated that it was working on internal procedures to adequately monitor subrecipients as result of the prior-year finding. However, management has yet to finalize and apply these procedures on all active subrecipients.Effect:Failure to properly monitor subrecipients results in noncompliance with federal regulations and increases the likelihood of improper payments which may have to be returned to the federal awarding agency.Recommendation:UL Lafayette should strengthen controls to ensure the timely review of all required subrecipient audit reports in order to evaluate the impact of any findings noted in the audits and issue management decision letters, if applicable. In addition, UL Lafayette should strengthen controls to ensure risk assessments are performed and documented on all subrecipients in accordance with federal regulations.Management?s Response and Corrective Action Plan:Management did not concur with the finding, noting it did not have sufficient time in fiscal year 2022 for corrective action and provided its progress on addressing the finding (B-83).
2022-017 - Improper Payments to Southern University Law Center EmployeeAward Year: 2022Award Number: P031K190024Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:Southern University (SU) Human Resources identified improper payments to a former Southern University Law Center (SULC) professor totaling $77,896. In addition, $31,898 in related benefits were paid on behalf of the professor.The SULC employee resigned from a full-time position in June 2021, while continuing to teach as an adjunct professor during the Fall 2021 semester. SU Human Resources and SULC did not terminate the full-time position in the Banner system. This allowed the employee to complete time statements and be paid for both the adjunct and the full-time position. In June 2022, SU Human Resources discovered the overpayments and requested restitution.Criteria:2 CFR 200.430(i) requires that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed, and these records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.The SU handbook for university personnel, federal statutes, the Louisiana Department of Civil Service, and other Louisiana laws require that the university maintain accurate accounting of hours worked on every employee. In addition, the university processes payroll electronically through Banner Web Time, which requires employees to enter time worked, leave taken, and supervisors to approve the time sheets online.Cause:This overpayment occurred due to a failure of internal controls to ensure employment status changes were updated in the Banner system and that time sheet approvals were for actual hours worked.Effect:The overpayment of $109,794 was not recouped by SULC as of June 30, 2022. Of the total overpayment, $105,567 was charged to the Higher Education Institutional Aid federal program, including $30,670 in benefits, and is considered questioned costs.Recommendation:Management should strengthen internal controls to ensure terminated employee positions are deactivated in the Banner system timely and that timesheet approvals are for hours worked.Management?s Response and Corrective Action Plan:Management concurred with the finding and provided a corrective action plan (B-81).
2022-014 - Noncompliance with Reporting Requirements for the Federal Funding Accountability and Transparency ActAward Years: 2018 - 2021Award Numbers: S367A180017, S367A190017, S367A200017, S367A210017, S425B200042, S425D210003, S425U210003, S425W210019Compliance Requirement: ReportingRepeat Finding: Yes (Prior Year Finding No. 2021-027)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the second consecutive audit, the Department of Education (DOE) did not comply with Federal Funding Accountability and Transparency Act (FFATA) reporting requirements.Our procedures disclosed the following:? For the Supporting Effective Instruction State Grants (formerly Improving Teacher Quality State Grants) (Title II) program, no subaward information was entered into the FFATA Subaward Reporting System (FSRS) for 594 subawards of $30,000 or more totaling $167,969,408, related to four separate federal awards that were open during our audit period.See Schedule of Findings and Questioned Costs for chart/table? For the Education Stabilization Fund (ESF) program, we tested a total of 270 subawards and noted subawards that were not reported, reports not submitted timely, duplicated subawards, incorrect subaward amounts, and incorrect obligations dates.See Schedule of Findings and Questioned Costs for chart/tableCriteria:2 CFR Part 170 Appendix A(I)(a) requires the non-federal entity to report certain information about each obligating action that equals or exceeds $30,000 in federal funds for a subaward to a non-federal entity into the FSRS no later than the end of the month following the month in which the obligation was made.Cause:DOE management indicated that this noncompliance occurred due to a weakness in internal controls over FFATA reporting, not adequately maintaining a list of federal grants for which FFATA reporting was required, and staff turnover contributing to the incomplete knowledge of FFATA reporting. Management?s response to the prior-year finding indicated it would implement corrective action by September 30, 2022, and management was in the process of implementing the additional controls during fiscal year 2022 when our audit procedures were being performed.Effect:Not reporting obligating actions to FSRS or reporting inaccurate information to FSRS prevents the public from having access to accurate information on how DOE is obligating federal funds.Recommendation:DOE should continue to strengthen internal controls to ensure accurate information is reported and ensure that appropriate personnel are aware of the federal programs that are subject to FFATA reporting. In addition, DOE should correct all amounts previously reported incorrectly.Management?s Response and Corrective Action Plan:Management concurred with the finding and provided a plan of corrective action (B-9).
2022-014 - Noncompliance with Reporting Requirements for the Federal Funding Accountability and Transparency ActAward Years: 2018 - 2021Award Numbers: S367A180017, S367A190017, S367A200017, S367A210017, S425B200042, S425D210003, S425U210003, S425W210019Compliance Requirement: ReportingRepeat Finding: Yes (Prior Year Finding No. 2021-027)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the second consecutive audit, the Department of Education (DOE) did not comply with Federal Funding Accountability and Transparency Act (FFATA) reporting requirements.Our procedures disclosed the following:? For the Supporting Effective Instruction State Grants (formerly Improving Teacher Quality State Grants) (Title II) program, no subaward information was entered into the FFATA Subaward Reporting System (FSRS) for 594 subawards of $30,000 or more totaling $167,969,408, related to four separate federal awards that were open during our audit period.See Schedule of Findings and Questioned Costs for chart/table? For the Education Stabilization Fund (ESF) program, we tested a total of 270 subawards and noted subawards that were not reported, reports not submitted timely, duplicated subawards, incorrect subaward amounts, and incorrect obligations dates.See Schedule of Findings and Questioned Costs for chart/tableCriteria:2 CFR Part 170 Appendix A(I)(a) requires the non-federal entity to report certain information about each obligating action that equals or exceeds $30,000 in federal funds for a subaward to a non-federal entity into the FSRS no later than the end of the month following the month in which the obligation was made.Cause:DOE management indicated that this noncompliance occurred due to a weakness in internal controls over FFATA reporting, not adequately maintaining a list of federal grants for which FFATA reporting was required, and staff turnover contributing to the incomplete knowledge of FFATA reporting. Management?s response to the prior-year finding indicated it would implement corrective action by September 30, 2022, and management was in the process of implementing the additional controls during fiscal year 2022 when our audit procedures were being performed.Effect:Not reporting obligating actions to FSRS or reporting inaccurate information to FSRS prevents the public from having access to accurate information on how DOE is obligating federal funds.Recommendation:DOE should continue to strengthen internal controls to ensure accurate information is reported and ensure that appropriate personnel are aware of the federal programs that are subject to FFATA reporting. In addition, DOE should correct all amounts previously reported incorrectly.Management?s Response and Corrective Action Plan:Management concurred with the finding and provided a plan of corrective action (B-9).
2022-014 - Noncompliance with Reporting Requirements for the Federal Funding Accountability and Transparency ActAward Years: 2018 - 2021Award Numbers: S367A180017, S367A190017, S367A200017, S367A210017, S425B200042, S425D210003, S425U210003, S425W210019Compliance Requirement: ReportingRepeat Finding: Yes (Prior Year Finding No. 2021-027)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the second consecutive audit, the Department of Education (DOE) did not comply with Federal Funding Accountability and Transparency Act (FFATA) reporting requirements.Our procedures disclosed the following:? For the Supporting Effective Instruction State Grants (formerly Improving Teacher Quality State Grants) (Title II) program, no subaward information was entered into the FFATA Subaward Reporting System (FSRS) for 594 subawards of $30,000 or more totaling $167,969,408, related to four separate federal awards that were open during our audit period.See Schedule of Findings and Questioned Costs for chart/table? For the Education Stabilization Fund (ESF) program, we tested a total of 270 subawards and noted subawards that were not reported, reports not submitted timely, duplicated subawards, incorrect subaward amounts, and incorrect obligations dates.See Schedule of Findings and Questioned Costs for chart/tableCriteria:2 CFR Part 170 Appendix A(I)(a) requires the non-federal entity to report certain information about each obligating action that equals or exceeds $30,000 in federal funds for a subaward to a non-federal entity into the FSRS no later than the end of the month following the month in which the obligation was made.Cause:DOE management indicated that this noncompliance occurred due to a weakness in internal controls over FFATA reporting, not adequately maintaining a list of federal grants for which FFATA reporting was required, and staff turnover contributing to the incomplete knowledge of FFATA reporting. Management?s response to the prior-year finding indicated it would implement corrective action by September 30, 2022, and management was in the process of implementing the additional controls during fiscal year 2022 when our audit procedures were being performed.Effect:Not reporting obligating actions to FSRS or reporting inaccurate information to FSRS prevents the public from having access to accurate information on how DOE is obligating federal funds.Recommendation:DOE should continue to strengthen internal controls to ensure accurate information is reported and ensure that appropriate personnel are aware of the federal programs that are subject to FFATA reporting. In addition, DOE should correct all amounts previously reported incorrectly.Management?s Response and Corrective Action Plan:Management concurred with the finding and provided a plan of corrective action (B-9).
2022-013 - Higher Education Emergency Relief Fund Reporting WeaknessesAward Year: 2022Award Numbers: P425E201230, P425F201239, P425L200162Compliance Requirement: ReportingRepeat Finding: Yes (Prior Year Finding No. 2021-023)See Schedule of Findings and Questioned Costs for chart/tableCondition:Baton Rouge Community College (BRCC) did not ensure compliance with certain reporting requirements as established by the U.S. Department of Education (USDOE) for the Higher Education Emergency Relief Fund (HEERF) program.Based on our review of the four quarterly reports and the annual report, the following errors in reporting were identified:? BRCC incorrectly publicly posted the Quarterly Public Reporting for Institutional and Minority Serving Institutions (MSI) portions for the quarter ending September 30, 2021, as the report for the quarter ending December 31, 2021. BRCC subsequently publicly posted the correct report after auditor inquiry, 289 days after the required due date.? The Quarterly Public Reporting for Student Aid Portion for the quarters ending September 30, 2021, and December 31, 2021, were publicly posted 117 and 25 days, respectively, after the required due dates.? The Annual Report for the calendar year ending December 31, 2021, did not accurately report the number of students that received HEERF emergency financial aid grants and the amount disbursed directly to students as emergency financial aid grants.Criteria:The Coronavirus Aid, Relief, and Economic Security (CARES) Act Section 18004(e), the Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act Section 314(e), and the American Rescue Plan (ARP) Act Section 2003 require an institution receiving funds under HEERF I, HEERF II, and HEERF III to submit a report to the secretary, at such time in such a manner as the secretary may require. Per USDOE form instructions, BRCC must post the Quarterly Public Reporting for Institutional and MSI portions no later than 10 days after the end of each quarter on its website. Per the May 13, 2021, Federal Register, institutions must post the Quarterly Public Reporting for Student Aid portions no later than 10 days after the end of each calendar quarter.Cause:BRCC did not have adequate controls in place to ensure the accurate preparation of the reports or to ensure that the reports were publicly posted by the required deadlines. This is the second consecutive year we have reported weaknesses over HEERF reporting. Management's response to the prior-year finding indicated it would implement corrective action by June 30, 2022, and were in the process of implementing the additional controls during the fiscal year under audit.Effect:Failure to ensure the accuracy of quarterly and annual reports for the HEERF program and to ensure the reports were publicly posted by the required deadlines resulted in noncompliance with federal regulations.Recommendation:Management should strengthen its procedures over the preparation and public posting of quarterly and annual reports for the HEERF program to ensure compliance with reporting requirements.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-4).
2022-013 - Higher Education Emergency Relief Fund Reporting WeaknessesAward Year: 2022Award Numbers: P425E201230, P425F201239, P425L200162Compliance Requirement: ReportingRepeat Finding: Yes (Prior Year Finding No. 2021-023)See Schedule of Findings and Questioned Costs for chart/tableCondition:Baton Rouge Community College (BRCC) did not ensure compliance with certain reporting requirements as established by the U.S. Department of Education (USDOE) for the Higher Education Emergency Relief Fund (HEERF) program.Based on our review of the four quarterly reports and the annual report, the following errors in reporting were identified:? BRCC incorrectly publicly posted the Quarterly Public Reporting for Institutional and Minority Serving Institutions (MSI) portions for the quarter ending September 30, 2021, as the report for the quarter ending December 31, 2021. BRCC subsequently publicly posted the correct report after auditor inquiry, 289 days after the required due date.? The Quarterly Public Reporting for Student Aid Portion for the quarters ending September 30, 2021, and December 31, 2021, were publicly posted 117 and 25 days, respectively, after the required due dates.? The Annual Report for the calendar year ending December 31, 2021, did not accurately report the number of students that received HEERF emergency financial aid grants and the amount disbursed directly to students as emergency financial aid grants.Criteria:The Coronavirus Aid, Relief, and Economic Security (CARES) Act Section 18004(e), the Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act Section 314(e), and the American Rescue Plan (ARP) Act Section 2003 require an institution receiving funds under HEERF I, HEERF II, and HEERF III to submit a report to the secretary, at such time in such a manner as the secretary may require. Per USDOE form instructions, BRCC must post the Quarterly Public Reporting for Institutional and MSI portions no later than 10 days after the end of each quarter on its website. Per the May 13, 2021, Federal Register, institutions must post the Quarterly Public Reporting for Student Aid portions no later than 10 days after the end of each calendar quarter.Cause:BRCC did not have adequate controls in place to ensure the accurate preparation of the reports or to ensure that the reports were publicly posted by the required deadlines. This is the second consecutive year we have reported weaknesses over HEERF reporting. Management's response to the prior-year finding indicated it would implement corrective action by June 30, 2022, and were in the process of implementing the additional controls during the fiscal year under audit.Effect:Failure to ensure the accuracy of quarterly and annual reports for the HEERF program and to ensure the reports were publicly posted by the required deadlines resulted in noncompliance with federal regulations.Recommendation:Management should strengthen its procedures over the preparation and public posting of quarterly and annual reports for the HEERF program to ensure compliance with reporting requirements.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-4).
2022-015 - Control Weakness over Higher Education Emergency Relief Fund ReportingAward Year: 2022Award Numbers: P425F201887, P425J200055Compliance Requirement: ReportingRepeat Finding: Yes (Prior Year Finding No. 2021-041)See Schedule of Findings and Questioned Costs for chart/tableCondition:Southern University at Baton Rouge (SUBR) did not ensure the accuracy of the quarterly and annual reports for the HEERF program.Based on our procedures, the following errors in reporting were identified:? In a non-statistical sample of two quarters from a population of four quarters, the Institutional and Historically Black Colleges and Universities (HBCU) amounts reported on the Quarterly Budget and Expenditure Reporting Form did not agree to supporting documentation. Total expenditures for quarterly reports ending September 30, 2021, and March 31, 2022, were understated by $1,089,860 and $126,584, respectively.? Annual report amounts did not agree to supporting documentation for certain items. Annual institutional expenditures for each program was understated by $2,142,639 for the Institutional program and overstated by $467,662 for the HBCU program, which resulted in a total understatement of institutional annual expenditures of $1,674,977. Also, for emergency grants, gender and age was misclassified by 145 students between categories ages 25 and older and ages 24 and younger.Criteria:The Coronavirus Aid, Relief, and Economic Security (CARES) Act Section 18004(e), the Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act Section 314(e), and the American Rescue Plan (ARP) Act Section 2003 require an institution receiving funds under HEERF I, HEERF II, and HEERF III to submit a report to the secretary, at such time in such a manner as the secretary may require.Cause:SUBR did not have an effective review process in place to ensure accurate preparation of the reports. This is the third consecutive year we have reported weaknesses over HEERF reporting.Effect:Failure to ensure the accuracy of quarterly and annual reports for the HEERF program resulted in noncompliance with federal regulations.Recommendation:Management should strengthen its procedures over the preparation and review of information reported for HEERF to ensure compliance with reporting requirements.Management?s Response and Corrective Action Plan:Management concurred in part with the finding and outlined a plan of corrective action. Management stated that it does not concur that this is the third consecutive year to have the same reported weaknesses (B-78).Auditor?s Additional Comments:While errors reported in the current-year finding may not be exactly the same as those reported in prior years, this finding is considered a repeat finding due to internal control weaknesses related to HEERF reporting requirements being reported for three consecutive audits.
2022-016 - Control Weakness over Higher Education Emergency Relief Fund RequirementsAward Year: 2022Award Number: P425F201887Compliance Requirement: Activities Allowed or UnallowedRepeat Finding: Yes (Prior Year Finding No. 2021-044)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the second consecutive year, SUBR?s calculation of lost revenue under the HEERF was not consistent with guidance provided by the USDOE. SUBR calculated lost revenue using a four-year average of fiscal years 2016 through 2019 data as the baseline revenue, instead of a five-year average of fiscal years 2015 through 2019, as was used in the corrected fiscal year 2021 lost revenue calculation. In addition, SUBR did not include the correct amount of fiscal year 2022 revenue transactions as its current-year comparison.Criteria:Per the American Rescue Plan Act, the same terms and conditions of the Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act apply. Per the CRRSA Act, Section 314(c)(1), an institution of higher education may use HEERF to defray expenses associated with coronavirus (including lost revenue).On March 19, 2021, the USDOE published a HEERF I, II, and III Lost Revenue Frequently Asked Questions (FAQ) to provide further clarification regarding the calculation of lost revenue. Listed in the FAQ under Question No. 9, an institution?s calculation of lost revenue must be consistent with the cost principles of the Uniform Guidance (2 CFR Part 200 subpart E): must be accorded consistent treatment (e.g., if using the institution?s fiscal year as a baseline, the institution must estimate lost revenue over the course of a fiscal year) and be consistent with policies and procedures that apply uniformly to federally-financed and other activities of the institution.Cause:SUBR did not have an effective review process to ensure that guidance provided by the USDOE for the calculation of lost revenues was followed.Effect:Failure to adequately review and follow lost revenue guidance provided by the USDOE caused SUBR to overdraw funds in fiscal year 2022 by $1.9 million; however, SUBR had a $2.5 million under draw from fiscal year 2021 to offset this, resulting in a net under draw of approximately $600,000.Recommendation:Management should strengthen its review process and follow guidance provided by the USDOE for the calculation of lost revenues. SUBR should also revise its lost revenue calculation and return any funds overdrawn from the HEERF grant.Management?s Response and Corrective Action Plan:Management concurred in part with the finding and outlined a plan of corrective action. Management stated that it does not concur that this is the second consecutive year to have the same reported weaknesses (B-80).Auditor?s Additional Comments:Although corrections have been made for some of the issues noted in the prior-year audit finding, the results of our audit procedures indicate control weaknesses continue to exist over the related federal requirements.
2022-015 - Control Weakness over Higher Education Emergency Relief Fund ReportingAward Year: 2022Award Numbers: P425F201887, P425J200055Compliance Requirement: ReportingRepeat Finding: Yes (Prior Year Finding No. 2021-041)See Schedule of Findings and Questioned Costs for chart/tableCondition:Southern University at Baton Rouge (SUBR) did not ensure the accuracy of the quarterly and annual reports for the HEERF program.Based on our procedures, the following errors in reporting were identified:? In a non-statistical sample of two quarters from a population of four quarters, the Institutional and Historically Black Colleges and Universities (HBCU) amounts reported on the Quarterly Budget and Expenditure Reporting Form did not agree to supporting documentation. Total expenditures for quarterly reports ending September 30, 2021, and March 31, 2022, were understated by $1,089,860 and $126,584, respectively.? Annual report amounts did not agree to supporting documentation for certain items. Annual institutional expenditures for each program was understated by $2,142,639 for the Institutional program and overstated by $467,662 for the HBCU program, which resulted in a total understatement of institutional annual expenditures of $1,674,977. Also, for emergency grants, gender and age was misclassified by 145 students between categories ages 25 and older and ages 24 and younger.Criteria:The Coronavirus Aid, Relief, and Economic Security (CARES) Act Section 18004(e), the Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act Section 314(e), and the American Rescue Plan (ARP) Act Section 2003 require an institution receiving funds under HEERF I, HEERF II, and HEERF III to submit a report to the secretary, at such time in such a manner as the secretary may require.Cause:SUBR did not have an effective review process in place to ensure accurate preparation of the reports. This is the third consecutive year we have reported weaknesses over HEERF reporting.Effect:Failure to ensure the accuracy of quarterly and annual reports for the HEERF program resulted in noncompliance with federal regulations.Recommendation:Management should strengthen its procedures over the preparation and review of information reported for HEERF to ensure compliance with reporting requirements.Management?s Response and Corrective Action Plan:Management concurred in part with the finding and outlined a plan of corrective action. Management stated that it does not concur that this is the third consecutive year to have the same reported weaknesses (B-78).Auditor?s Additional Comments:While errors reported in the current-year finding may not be exactly the same as those reported in prior years, this finding is considered a repeat finding due to internal control weaknesses related to HEERF reporting requirements being reported for three consecutive audits.
2022-013 - Higher Education Emergency Relief Fund Reporting WeaknessesAward Year: 2022Award Numbers: P425E201230, P425F201239, P425L200162Compliance Requirement: ReportingRepeat Finding: Yes (Prior Year Finding No. 2021-023)See Schedule of Findings and Questioned Costs for chart/tableCondition:Baton Rouge Community College (BRCC) did not ensure compliance with certain reporting requirements as established by the U.S. Department of Education (USDOE) for the Higher Education Emergency Relief Fund (HEERF) program.Based on our review of the four quarterly reports and the annual report, the following errors in reporting were identified:? BRCC incorrectly publicly posted the Quarterly Public Reporting for Institutional and Minority Serving Institutions (MSI) portions for the quarter ending September 30, 2021, as the report for the quarter ending December 31, 2021. BRCC subsequently publicly posted the correct report after auditor inquiry, 289 days after the required due date.? The Quarterly Public Reporting for Student Aid Portion for the quarters ending September 30, 2021, and December 31, 2021, were publicly posted 117 and 25 days, respectively, after the required due dates.? The Annual Report for the calendar year ending December 31, 2021, did not accurately report the number of students that received HEERF emergency financial aid grants and the amount disbursed directly to students as emergency financial aid grants.Criteria:The Coronavirus Aid, Relief, and Economic Security (CARES) Act Section 18004(e), the Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act Section 314(e), and the American Rescue Plan (ARP) Act Section 2003 require an institution receiving funds under HEERF I, HEERF II, and HEERF III to submit a report to the secretary, at such time in such a manner as the secretary may require. Per USDOE form instructions, BRCC must post the Quarterly Public Reporting for Institutional and MSI portions no later than 10 days after the end of each quarter on its website. Per the May 13, 2021, Federal Register, institutions must post the Quarterly Public Reporting for Student Aid portions no later than 10 days after the end of each calendar quarter.Cause:BRCC did not have adequate controls in place to ensure the accurate preparation of the reports or to ensure that the reports were publicly posted by the required deadlines. This is the second consecutive year we have reported weaknesses over HEERF reporting. Management's response to the prior-year finding indicated it would implement corrective action by June 30, 2022, and were in the process of implementing the additional controls during the fiscal year under audit.Effect:Failure to ensure the accuracy of quarterly and annual reports for the HEERF program and to ensure the reports were publicly posted by the required deadlines resulted in noncompliance with federal regulations.Recommendation:Management should strengthen its procedures over the preparation and public posting of quarterly and annual reports for the HEERF program to ensure compliance with reporting requirements.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-4).
2022-014 - Noncompliance with Reporting Requirements for the Federal Funding Accountability and Transparency ActAward Years: 2018 - 2021Award Numbers: S367A180017, S367A190017, S367A200017, S367A210017, S425B200042, S425D210003, S425U210003, S425W210019Compliance Requirement: ReportingRepeat Finding: Yes (Prior Year Finding No. 2021-027)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the second consecutive audit, the Department of Education (DOE) did not comply with Federal Funding Accountability and Transparency Act (FFATA) reporting requirements.Our procedures disclosed the following:? For the Supporting Effective Instruction State Grants (formerly Improving Teacher Quality State Grants) (Title II) program, no subaward information was entered into the FFATA Subaward Reporting System (FSRS) for 594 subawards of $30,000 or more totaling $167,969,408, related to four separate federal awards that were open during our audit period.See Schedule of Findings and Questioned Costs for chart/table? For the Education Stabilization Fund (ESF) program, we tested a total of 270 subawards and noted subawards that were not reported, reports not submitted timely, duplicated subawards, incorrect subaward amounts, and incorrect obligations dates.See Schedule of Findings and Questioned Costs for chart/tableCriteria:2 CFR Part 170 Appendix A(I)(a) requires the non-federal entity to report certain information about each obligating action that equals or exceeds $30,000 in federal funds for a subaward to a non-federal entity into the FSRS no later than the end of the month following the month in which the obligation was made.Cause:DOE management indicated that this noncompliance occurred due to a weakness in internal controls over FFATA reporting, not adequately maintaining a list of federal grants for which FFATA reporting was required, and staff turnover contributing to the incomplete knowledge of FFATA reporting. Management?s response to the prior-year finding indicated it would implement corrective action by September 30, 2022, and management was in the process of implementing the additional controls during fiscal year 2022 when our audit procedures were being performed.Effect:Not reporting obligating actions to FSRS or reporting inaccurate information to FSRS prevents the public from having access to accurate information on how DOE is obligating federal funds.Recommendation:DOE should continue to strengthen internal controls to ensure accurate information is reported and ensure that appropriate personnel are aware of the federal programs that are subject to FFATA reporting. In addition, DOE should correct all amounts previously reported incorrectly.Management?s Response and Corrective Action Plan:Management concurred with the finding and provided a plan of corrective action (B-9).
2022-014 - Noncompliance with Reporting Requirements for the Federal Funding Accountability and Transparency ActAward Years: 2018 - 2021Award Numbers: S367A180017, S367A190017, S367A200017, S367A210017, S425B200042, S425D210003, S425U210003, S425W210019Compliance Requirement: ReportingRepeat Finding: Yes (Prior Year Finding No. 2021-027)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the second consecutive audit, the Department of Education (DOE) did not comply with Federal Funding Accountability and Transparency Act (FFATA) reporting requirements.Our procedures disclosed the following:? For the Supporting Effective Instruction State Grants (formerly Improving Teacher Quality State Grants) (Title II) program, no subaward information was entered into the FFATA Subaward Reporting System (FSRS) for 594 subawards of $30,000 or more totaling $167,969,408, related to four separate federal awards that were open during our audit period.See Schedule of Findings and Questioned Costs for chart/table? For the Education Stabilization Fund (ESF) program, we tested a total of 270 subawards and noted subawards that were not reported, reports not submitted timely, duplicated subawards, incorrect subaward amounts, and incorrect obligations dates.See Schedule of Findings and Questioned Costs for chart/tableCriteria:2 CFR Part 170 Appendix A(I)(a) requires the non-federal entity to report certain information about each obligating action that equals or exceeds $30,000 in federal funds for a subaward to a non-federal entity into the FSRS no later than the end of the month following the month in which the obligation was made.Cause:DOE management indicated that this noncompliance occurred due to a weakness in internal controls over FFATA reporting, not adequately maintaining a list of federal grants for which FFATA reporting was required, and staff turnover contributing to the incomplete knowledge of FFATA reporting. Management?s response to the prior-year finding indicated it would implement corrective action by September 30, 2022, and management was in the process of implementing the additional controls during fiscal year 2022 when our audit procedures were being performed.Effect:Not reporting obligating actions to FSRS or reporting inaccurate information to FSRS prevents the public from having access to accurate information on how DOE is obligating federal funds.Recommendation:DOE should continue to strengthen internal controls to ensure accurate information is reported and ensure that appropriate personnel are aware of the federal programs that are subject to FFATA reporting. In addition, DOE should correct all amounts previously reported incorrectly.Management?s Response and Corrective Action Plan:Management concurred with the finding and provided a plan of corrective action (B-9).
2022-004 - Inadequate Controls over PayrollAward Year: 2022Award Numbers: 6LA700503, NU50CK000532, NU62PS924522, NU62PS924620, NU90TP922016Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesRepeat Finding: Yes (Prior Year Finding No. 2021-005)See Schedule of Findings and Questioned Costs for chart/tableCondition:The Louisiana Department of Health, Office of Public Health (OPH) did not ensure payroll expenditures were timely certified and approved for the WIC Special Supplemental Nutrition Program for Women, Infants, and Children; the Public Health Emergency Preparedness program; the Epidemiology and Laboratory Capacity for Infectious Diseases program; and the HIV Prevention Activities Health Department Based program. This is the third consecutive year payroll internal control deficiencies have been reported for Public Health Emergency Preparedness program and HIV Prevention Activities Health Department Based program, and the second consecutive year for WIC Special Supplemental Nutrition Program for Women, Infants, and Children and Epidemiology and Laboratory Capacity for Infectious Diseases program. Exceptions for each federal program are as follows:? For the WIC Special Supplemental Nutrition Program for Women, Infants, and Children, a non-statistical sample of 60 payroll transactions was tested from a population of 6,184 transactions totaling $8,970,425. Five (8%) time statements were not timely approved by the employees? supervisor, of which two (3%) were not approved at all, and two (3%) were not certified timely by the employees ranging from 13 to 236 days after the posting date.? For the Public Health Emergency Preparedness program, a non-statistical sample of 60 payroll transactions was tested from a population of 1,394 transactions totaling $3,988,398. Twenty-one (35%) time statements were not timely approved by the employees? supervisors, of which 12 (20%) were approved ranging from 23 days to 447 days after posting date and seven (12%) were not approved at all; two (3%) were not certified by the employees; and two (3%) were approved before certified.? For the Epidemiology and Laboratory Capacity for Infectious Diseases program, a non-statistical sample of 60 payroll transactions was tested from a population of 3,933 transactions totaling $5,190,684. Nine (15%) time statements were not timely approved by the employees? supervisors, of which four (7%) were not approved at all; one (2%) was not certified by the employee; and one (2%) was approved before certified.? For the HIV Prevention Activities Health Department Based program, a non-statistical sample of 60 payroll transactions was tested from a population of 1,024 transactions totaling $386,769. Nine (15%) time statements were not timely approved by the employees? supervisors, of which one (2%) was not approved at all; seven (12%) were approved ranging from one day to 351 days after the posting date; and one (2%) was not certified by the employee.Criteria:2 CFR 200.430(i) requires that records must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Furthermore, the records must comply with the established accounting policies and practices of the non-federal entity.The Division of Administration Personnel Policy No. 99 requires employees and supervisors to certify and/or approve time statements for accuracy by 10:00 p.m. on the Wednesday following the close of the pay period. Time administrators are responsible for reviewing the LaGov ZP241 eCertification report prior to processing to identify any employees who have not certified their time statements and any supervisors who have not approved their staff?s time statements.Cause:OPH lacked sufficient controls to ensure electronic time statements were properly certified and approved prior to the posting date in accordance with federal and state regulations.Effect:Failure to adequately approve program expenditures increases the risk that unallowable costs could be reimbursed by the federal grantor.Recommendation:OPH should ensure employees comply with existing policies and procedures, including certifying and approving electronic time statements in a timely manner.Management?s Response and Corrective Action Plan:Management concurred with the finding and provided a corrective action plan (B-43).
2022-004 - Inadequate Controls over PayrollAward Year: 2022Award Numbers: 6LA700503, NU50CK000532, NU62PS924522, NU62PS924620, NU90TP922016Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesRepeat Finding: Yes (Prior Year Finding No. 2021-005)See Schedule of Findings and Questioned Costs for chart/tableCondition:The Louisiana Department of Health, Office of Public Health (OPH) did not ensure payroll expenditures were timely certified and approved for the WIC Special Supplemental Nutrition Program for Women, Infants, and Children; the Public Health Emergency Preparedness program; the Epidemiology and Laboratory Capacity for Infectious Diseases program; and the HIV Prevention Activities Health Department Based program. This is the third consecutive year payroll internal control deficiencies have been reported for Public Health Emergency Preparedness program and HIV Prevention Activities Health Department Based program, and the second consecutive year for WIC Special Supplemental Nutrition Program for Women, Infants, and Children and Epidemiology and Laboratory Capacity for Infectious Diseases program. Exceptions for each federal program are as follows:? For the WIC Special Supplemental Nutrition Program for Women, Infants, and Children, a non-statistical sample of 60 payroll transactions was tested from a population of 6,184 transactions totaling $8,970,425. Five (8%) time statements were not timely approved by the employees? supervisor, of which two (3%) were not approved at all, and two (3%) were not certified timely by the employees ranging from 13 to 236 days after the posting date.? For the Public Health Emergency Preparedness program, a non-statistical sample of 60 payroll transactions was tested from a population of 1,394 transactions totaling $3,988,398. Twenty-one (35%) time statements were not timely approved by the employees? supervisors, of which 12 (20%) were approved ranging from 23 days to 447 days after posting date and seven (12%) were not approved at all; two (3%) were not certified by the employees; and two (3%) were approved before certified.? For the Epidemiology and Laboratory Capacity for Infectious Diseases program, a non-statistical sample of 60 payroll transactions was tested from a population of 3,933 transactions totaling $5,190,684. Nine (15%) time statements were not timely approved by the employees? supervisors, of which four (7%) were not approved at all; one (2%) was not certified by the employee; and one (2%) was approved before certified.? For the HIV Prevention Activities Health Department Based program, a non-statistical sample of 60 payroll transactions was tested from a population of 1,024 transactions totaling $386,769. Nine (15%) time statements were not timely approved by the employees? supervisors, of which one (2%) was not approved at all; seven (12%) were approved ranging from one day to 351 days after the posting date; and one (2%) was not certified by the employee.Criteria:2 CFR 200.430(i) requires that records must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Furthermore, the records must comply with the established accounting policies and practices of the non-federal entity.The Division of Administration Personnel Policy No. 99 requires employees and supervisors to certify and/or approve time statements for accuracy by 10:00 p.m. on the Wednesday following the close of the pay period. Time administrators are responsible for reviewing the LaGov ZP241 eCertification report prior to processing to identify any employees who have not certified their time statements and any supervisors who have not approved their staff?s time statements.Cause:OPH lacked sufficient controls to ensure electronic time statements were properly certified and approved prior to the posting date in accordance with federal and state regulations.Effect:Failure to adequately approve program expenditures increases the risk that unallowable costs could be reimbursed by the federal grantor.Recommendation:OPH should ensure employees comply with existing policies and procedures, including certifying and approving electronic time statements in a timely manner.Management?s Response and Corrective Action Plan:Management concurred with the finding and provided a corrective action plan (B-43).
2022-018 - Inadequate Controls over Subrecipient AgreementsAward Years: 2019 - 2022Award Numbers: 2201LATANF, B08TI083018-01, B08TI083450-01, B09SM082603-01, B09SM083804-01, H79SM083477, H79SP081004, H79TI081691, X06SM016019-19, X06SM083694-01Compliance Requirement: Subrecipient MonitoringRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:The Acadiana Area Human Services District (AAHSD) failed to comply with all regulations set forth by 2 CFR 200.332.AAHSD is allocated federal funds from the Louisiana Department of Health (LDH), Office of Behavioral Health (OBH) as interagency transfers, and AAHSD passes these funds to other entities via contracts to perform consulting, social, and professional services. The federal programs involved had awards totaling $3,895,985 and $6,108,836 allocated to AAHSD for fiscal years 2021 and 2022, respectively.We reviewed all 28 agreements identified by AAHSD as subrecipients and determined that for 18 (64%) of the subawards, AAHSD was unable to provide documentation of whether each subrecipient was required to obtain an audit or that the audit was reviewed so that timely and appropriate action could be taken for any findings pertaining to the federal awards, as required by federal regulations. Additionally, for all 28 of the subrecipients, AAHSD could not provide evidence that the required risk assessment was performed to evaluate each subrecipients? risk of noncompliance with federal regulations and the terms of the subaward.Criteria:Federal regulations require AAHSD, as the pass-through entity, to comply with 2 CFR 200.332 when subawards are made to subrecipients.Cause:AAHSD failed to develop adequate policies and procedures to ensure compliance with regulations set forth by 2 CFR 200.332 were performed timely.Effect:AAHSD or the subrecipient may not comply with the award and federal regulations.Recommendation:AAHSD management should strengthen its policies and procedures to ensure that regulations set forth by 2 CFR 200.332 are being addressed timely.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-2).
2022-018 - Inadequate Controls over Subrecipient AgreementsAward Years: 2019 - 2022Award Numbers: 2201LATANF, B08TI083018-01, B08TI083450-01, B09SM082603-01, B09SM083804-01, H79SM083477, H79SP081004, H79TI081691, X06SM016019-19, X06SM083694-01Compliance Requirement: Subrecipient MonitoringRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:The Acadiana Area Human Services District (AAHSD) failed to comply with all regulations set forth by 2 CFR 200.332.AAHSD is allocated federal funds from the Louisiana Department of Health (LDH), Office of Behavioral Health (OBH) as interagency transfers, and AAHSD passes these funds to other entities via contracts to perform consulting, social, and professional services. The federal programs involved had awards totaling $3,895,985 and $6,108,836 allocated to AAHSD for fiscal years 2021 and 2022, respectively.We reviewed all 28 agreements identified by AAHSD as subrecipients and determined that for 18 (64%) of the subawards, AAHSD was unable to provide documentation of whether each subrecipient was required to obtain an audit or that the audit was reviewed so that timely and appropriate action could be taken for any findings pertaining to the federal awards, as required by federal regulations. Additionally, for all 28 of the subrecipients, AAHSD could not provide evidence that the required risk assessment was performed to evaluate each subrecipients? risk of noncompliance with federal regulations and the terms of the subaward.Criteria:Federal regulations require AAHSD, as the pass-through entity, to comply with 2 CFR 200.332 when subawards are made to subrecipients.Cause:AAHSD failed to develop adequate policies and procedures to ensure compliance with regulations set forth by 2 CFR 200.332 were performed timely.Effect:AAHSD or the subrecipient may not comply with the award and federal regulations.Recommendation:AAHSD management should strengthen its policies and procedures to ensure that regulations set forth by 2 CFR 200.332 are being addressed timely.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-2).
2022-004 - Inadequate Controls over PayrollAward Year: 2022Award Numbers: 6LA700503, NU50CK000532, NU62PS924522, NU62PS924620, NU90TP922016Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesRepeat Finding: Yes (Prior Year Finding No. 2021-005)See Schedule of Findings and Questioned Costs for chart/tableCondition:The Louisiana Department of Health, Office of Public Health (OPH) did not ensure payroll expenditures were timely certified and approved for the WIC Special Supplemental Nutrition Program for Women, Infants, and Children; the Public Health Emergency Preparedness program; the Epidemiology and Laboratory Capacity for Infectious Diseases program; and the HIV Prevention Activities Health Department Based program. This is the third consecutive year payroll internal control deficiencies have been reported for Public Health Emergency Preparedness program and HIV Prevention Activities Health Department Based program, and the second consecutive year for WIC Special Supplemental Nutrition Program for Women, Infants, and Children and Epidemiology and Laboratory Capacity for Infectious Diseases program. Exceptions for each federal program are as follows:? For the WIC Special Supplemental Nutrition Program for Women, Infants, and Children, a non-statistical sample of 60 payroll transactions was tested from a population of 6,184 transactions totaling $8,970,425. Five (8%) time statements were not timely approved by the employees? supervisor, of which two (3%) were not approved at all, and two (3%) were not certified timely by the employees ranging from 13 to 236 days after the posting date.? For the Public Health Emergency Preparedness program, a non-statistical sample of 60 payroll transactions was tested from a population of 1,394 transactions totaling $3,988,398. Twenty-one (35%) time statements were not timely approved by the employees? supervisors, of which 12 (20%) were approved ranging from 23 days to 447 days after posting date and seven (12%) were not approved at all; two (3%) were not certified by the employees; and two (3%) were approved before certified.? For the Epidemiology and Laboratory Capacity for Infectious Diseases program, a non-statistical sample of 60 payroll transactions was tested from a population of 3,933 transactions totaling $5,190,684. Nine (15%) time statements were not timely approved by the employees? supervisors, of which four (7%) were not approved at all; one (2%) was not certified by the employee; and one (2%) was approved before certified.? For the HIV Prevention Activities Health Department Based program, a non-statistical sample of 60 payroll transactions was tested from a population of 1,024 transactions totaling $386,769. Nine (15%) time statements were not timely approved by the employees? supervisors, of which one (2%) was not approved at all; seven (12%) were approved ranging from one day to 351 days after the posting date; and one (2%) was not certified by the employee.Criteria:2 CFR 200.430(i) requires that records must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Furthermore, the records must comply with the established accounting policies and practices of the non-federal entity.The Division of Administration Personnel Policy No. 99 requires employees and supervisors to certify and/or approve time statements for accuracy by 10:00 p.m. on the Wednesday following the close of the pay period. Time administrators are responsible for reviewing the LaGov ZP241 eCertification report prior to processing to identify any employees who have not certified their time statements and any supervisors who have not approved their staff?s time statements.Cause:OPH lacked sufficient controls to ensure electronic time statements were properly certified and approved prior to the posting date in accordance with federal and state regulations.Effect:Failure to adequately approve program expenditures increases the risk that unallowable costs could be reimbursed by the federal grantor.Recommendation:OPH should ensure employees comply with existing policies and procedures, including certifying and approving electronic time statements in a timely manner.Management?s Response and Corrective Action Plan:Management concurred with the finding and provided a corrective action plan (B-43).
2022-004 - Inadequate Controls over PayrollAward Year: 2022Award Numbers: 6LA700503, NU50CK000532, NU62PS924522, NU62PS924620, NU90TP922016Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesRepeat Finding: Yes (Prior Year Finding No. 2021-005)See Schedule of Findings and Questioned Costs for chart/tableCondition:The Louisiana Department of Health, Office of Public Health (OPH) did not ensure payroll expenditures were timely certified and approved for the WIC Special Supplemental Nutrition Program for Women, Infants, and Children; the Public Health Emergency Preparedness program; the Epidemiology and Laboratory Capacity for Infectious Diseases program; and the HIV Prevention Activities Health Department Based program. This is the third consecutive year payroll internal control deficiencies have been reported for Public Health Emergency Preparedness program and HIV Prevention Activities Health Department Based program, and the second consecutive year for WIC Special Supplemental Nutrition Program for Women, Infants, and Children and Epidemiology and Laboratory Capacity for Infectious Diseases program. Exceptions for each federal program are as follows:? For the WIC Special Supplemental Nutrition Program for Women, Infants, and Children, a non-statistical sample of 60 payroll transactions was tested from a population of 6,184 transactions totaling $8,970,425. Five (8%) time statements were not timely approved by the employees? supervisor, of which two (3%) were not approved at all, and two (3%) were not certified timely by the employees ranging from 13 to 236 days after the posting date.? For the Public Health Emergency Preparedness program, a non-statistical sample of 60 payroll transactions was tested from a population of 1,394 transactions totaling $3,988,398. Twenty-one (35%) time statements were not timely approved by the employees? supervisors, of which 12 (20%) were approved ranging from 23 days to 447 days after posting date and seven (12%) were not approved at all; two (3%) were not certified by the employees; and two (3%) were approved before certified.? For the Epidemiology and Laboratory Capacity for Infectious Diseases program, a non-statistical sample of 60 payroll transactions was tested from a population of 3,933 transactions totaling $5,190,684. Nine (15%) time statements were not timely approved by the employees? supervisors, of which four (7%) were not approved at all; one (2%) was not certified by the employee; and one (2%) was approved before certified.? For the HIV Prevention Activities Health Department Based program, a non-statistical sample of 60 payroll transactions was tested from a population of 1,024 transactions totaling $386,769. Nine (15%) time statements were not timely approved by the employees? supervisors, of which one (2%) was not approved at all; seven (12%) were approved ranging from one day to 351 days after the posting date; and one (2%) was not certified by the employee.Criteria:2 CFR 200.430(i) requires that records must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Furthermore, the records must comply with the established accounting policies and practices of the non-federal entity.The Division of Administration Personnel Policy No. 99 requires employees and supervisors to certify and/or approve time statements for accuracy by 10:00 p.m. on the Wednesday following the close of the pay period. Time administrators are responsible for reviewing the LaGov ZP241 eCertification report prior to processing to identify any employees who have not certified their time statements and any supervisors who have not approved their staff?s time statements.Cause:OPH lacked sufficient controls to ensure electronic time statements were properly certified and approved prior to the posting date in accordance with federal and state regulations.Effect:Failure to adequately approve program expenditures increases the risk that unallowable costs could be reimbursed by the federal grantor.Recommendation:OPH should ensure employees comply with existing policies and procedures, including certifying and approving electronic time statements in a timely manner.Management?s Response and Corrective Action Plan:Management concurred with the finding and provided a corrective action plan (B-43).
2022-020 - Noncompliance and Control Weakness Related to the Temporary Assistance for Needy Families Work Verification PlanAward Years: 2021, 2022Award Numbers: 2101LATANF, 2201LATANFCompliance Requirement: Special Tests and ProvisionsRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:DCFS did not ensure that all work activity supporting documentation for cash assistance recipients was accurate and maintained for hours worked under the Temporary Assistance for Needy Families (TANF) program.In a non-statistical sample of 60 out of 12,851 work activity records in the job-tracking system for approximately 1,000 clients per month, 13 (22%) work-eligible participant?s hours either did not agree to supporting documentation or supporting documentation of work activities was not maintained, and one of the 13 was not engaged in work activities, as required by federal regulations.Criteria:Per 45 CFR 261.61(a), a state must support each individual?s hours of participation through documentation in accordance with its Work Verification Plan.45 CFR 261.10(a)(1) states, in part, a parent or caretaker receiving assistance must engage in work activities when the state has determined that the individual is ready to engage in work.Per 45 CFR 261.65(a)(2) and 45 CFR 262.1(a)(15), if determined that the state has not maintained adequate documentation, verification, or internal control procedures to ensure the accuracy of the data used in calculating the work participation rates, the federal grantor could impose a penalty to the state of not less than one percent and not more than five percent of the adjusted state Family Assistance Grant.Cause:DCFS employees did not adhere to requirements in the state?s work verification plan pertaining to maintaining and verifying supporting documentation for the hours worked by clients and did not ensure individuals were engaged in work activities.Effect:This is the eleventh consecutive year we have reported to DCFS management exceptions with internal controls and compliance related to this TANF requirement. Noncompliance could result in penalties assessed on the state by the federal grantor.Recommendation:DCFS management should ensure DCFS employees comply with existing policies and procedures regarding the state?s work verification plan.Management?s Response and Corrective Action Plan:Management concurred with the finding and provided a corrective action plan (B-7).
2022-021 - Noncompliance with Reporting Requirements for the Federal Funding Accountability and Transparency ActAward Years: 2021, 2022Award Numbers: 2101LAFOST, 2101LATANF, 2201LAFOST, 2201LATANFCompliance Requirement: ReportingRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:DCFS did not report subawards in compliance with the Federal Funding Accountability and Transparency Act (FFATA) in the FFATA Subaward Reporting System (FSRS) during fiscal year 2022 for the following federal programs:? For the Foster Care program, DCFS disbursed approximately $8.8 million in subawards to eight different subrecipients, four of which were state entities, during fiscal year 2022. These subawards account for approximately 18% of the programs? fiscal year expenditures.? For the TANF program, DCFS disbursed approximately $76.6 million in subawards to 41 different subrecipients, of which eight were state entities, during fiscal year 2022. These subawards account for approximately 48% of the programs? fiscal year expenditures.Criteria:2 CFR 170 Appendix A(I)(a) requires the non-federal entity to report to FSRS each obligating action equal to or exceeding $30,000 in federal funds for a subaward to a non-federal entity.Cause:Management represented there were no procedures in place to ensure compliance with FFATA requirements.Effect:Not reporting obligating actions to the FSRS prevents the public from having access to accurate information on how DCFS is obligating federal funds.Recommendation:DCFS should strengthen internal controls to ensure that appropriate personnel are aware of the federal programs that are subject to FFATA reporting and assign appropriate personnel to complete the FFATA reporting in accordance with federal requirements.Management?s Response and Corrective Action Plan:Management concurred with the finding and provided a corrective action plan (B-8).
2022-018 - Inadequate Controls over Subrecipient AgreementsAward Years: 2019 - 2022Award Numbers: 2201LATANF, B08TI083018-01, B08TI083450-01, B09SM082603-01, B09SM083804-01, H79SM083477, H79SP081004, H79TI081691, X06SM016019-19, X06SM083694-01Compliance Requirement: Subrecipient MonitoringRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:The Acadiana Area Human Services District (AAHSD) failed to comply with all regulations set forth by 2 CFR 200.332.AAHSD is allocated federal funds from the Louisiana Department of Health (LDH), Office of Behavioral Health (OBH) as interagency transfers, and AAHSD passes these funds to other entities via contracts to perform consulting, social, and professional services. The federal programs involved had awards totaling $3,895,985 and $6,108,836 allocated to AAHSD for fiscal years 2021 and 2022, respectively.We reviewed all 28 agreements identified by AAHSD as subrecipients and determined that for 18 (64%) of the subawards, AAHSD was unable to provide documentation of whether each subrecipient was required to obtain an audit or that the audit was reviewed so that timely and appropriate action could be taken for any findings pertaining to the federal awards, as required by federal regulations. Additionally, for all 28 of the subrecipients, AAHSD could not provide evidence that the required risk assessment was performed to evaluate each subrecipients? risk of noncompliance with federal regulations and the terms of the subaward.Criteria:Federal regulations require AAHSD, as the pass-through entity, to comply with 2 CFR 200.332 when subawards are made to subrecipients.Cause:AAHSD failed to develop adequate policies and procedures to ensure compliance with regulations set forth by 2 CFR 200.332 were performed timely.Effect:AAHSD or the subrecipient may not comply with the award and federal regulations.Recommendation:AAHSD management should strengthen its policies and procedures to ensure that regulations set forth by 2 CFR 200.332 are being addressed timely.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-2).
2022-020 - Noncompliance and Control Weakness Related to the Temporary Assistance for Needy Families Work Verification PlanAward Years: 2021, 2022Award Numbers: 2101LATANF, 2201LATANFCompliance Requirement: Special Tests and ProvisionsRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:DCFS did not ensure that all work activity supporting documentation for cash assistance recipients was accurate and maintained for hours worked under the Temporary Assistance for Needy Families (TANF) program.In a non-statistical sample of 60 out of 12,851 work activity records in the job-tracking system for approximately 1,000 clients per month, 13 (22%) work-eligible participant?s hours either did not agree to supporting documentation or supporting documentation of work activities was not maintained, and one of the 13 was not engaged in work activities, as required by federal regulations.Criteria:Per 45 CFR 261.61(a), a state must support each individual?s hours of participation through documentation in accordance with its Work Verification Plan.45 CFR 261.10(a)(1) states, in part, a parent or caretaker receiving assistance must engage in work activities when the state has determined that the individual is ready to engage in work.Per 45 CFR 261.65(a)(2) and 45 CFR 262.1(a)(15), if determined that the state has not maintained adequate documentation, verification, or internal control procedures to ensure the accuracy of the data used in calculating the work participation rates, the federal grantor could impose a penalty to the state of not less than one percent and not more than five percent of the adjusted state Family Assistance Grant.Cause:DCFS employees did not adhere to requirements in the state?s work verification plan pertaining to maintaining and verifying supporting documentation for the hours worked by clients and did not ensure individuals were engaged in work activities.Effect:This is the eleventh consecutive year we have reported to DCFS management exceptions with internal controls and compliance related to this TANF requirement. Noncompliance could result in penalties assessed on the state by the federal grantor.Recommendation:DCFS management should ensure DCFS employees comply with existing policies and procedures regarding the state?s work verification plan.Management?s Response and Corrective Action Plan:Management concurred with the finding and provided a corrective action plan (B-7).
2022-021 - Noncompliance with Reporting Requirements for the Federal Funding Accountability and Transparency ActAward Years: 2021, 2022Award Numbers: 2101LAFOST, 2101LATANF, 2201LAFOST, 2201LATANFCompliance Requirement: ReportingRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:DCFS did not report subawards in compliance with the Federal Funding Accountability and Transparency Act (FFATA) in the FFATA Subaward Reporting System (FSRS) during fiscal year 2022 for the following federal programs:? For the Foster Care program, DCFS disbursed approximately $8.8 million in subawards to eight different subrecipients, four of which were state entities, during fiscal year 2022. These subawards account for approximately 18% of the programs? fiscal year expenditures.? For the TANF program, DCFS disbursed approximately $76.6 million in subawards to 41 different subrecipients, of which eight were state entities, during fiscal year 2022. These subawards account for approximately 48% of the programs? fiscal year expenditures.Criteria:2 CFR 170 Appendix A(I)(a) requires the non-federal entity to report to FSRS each obligating action equal to or exceeding $30,000 in federal funds for a subaward to a non-federal entity.Cause:Management represented there were no procedures in place to ensure compliance with FFATA requirements.Effect:Not reporting obligating actions to the FSRS prevents the public from having access to accurate information on how DCFS is obligating federal funds.Recommendation:DCFS should strengthen internal controls to ensure that appropriate personnel are aware of the federal programs that are subject to FFATA reporting and assign appropriate personnel to complete the FFATA reporting in accordance with federal requirements.Management?s Response and Corrective Action Plan:Management concurred with the finding and provided a corrective action plan (B-8).
2022-019 - Control Weakness Relating to Foster Care Subrecipient MonitoringAward Year: 2022Award Number: 2201LAFOSTCompliance Requirement: Subrecipient MonitoringRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:The Department of Children and Family Services (DCFS) did not adequately review subrecipient Foster Care Title IV-E (Foster Care) invoices submitted by the Department of Public Safety and Corrections ? Youth Services ? Office of Juvenile Justice (OJJ) for reimbursement of administrative expenditures to ensure billings were accurately calculated.During our procedures performed at OJJ, which was in addition to our testing conducted through sampling at DCFS, it came to our attention that on the administrative invoice for the quarter ending December 2021, there were errors due to OJJ using incorrect expenditure data, resulting in billing errors that were not detected by DCFS.Criteria:2 CFR 200.332(d) requires that pass-through entities monitor the activities of subrecipients as necessary to ensure that the subaward complies with the terms and conditions of the subaward.Per DCFS?s contract with OJJ related to the Foster Care program, DCFS agrees to receive, review, and certify expenditure reports for Foster Care expenditures.Cause:These conditions occurred because of a weakness in controls in monitoring Foster Care administrative invoices.Effect:Failure to properly review invoices resulted in an over reimbursement and could result in disallowed costs by the federal grantor. Based on the methodology used, there was $128,236 in overpayments considered questioned costs.Recommendation:DCFS should strengthen controls over review to ensure administrative invoices submitted by OJJ are calculated accurately.Management?s Response and Corrective Action Plan:Management concurred with the finding and provided a corrective action plan (B-5).
2022-021 - Noncompliance with Reporting Requirements for the Federal Funding Accountability and Transparency ActAward Years: 2021, 2022Award Numbers: 2101LAFOST, 2101LATANF, 2201LAFOST, 2201LATANFCompliance Requirement: ReportingRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:DCFS did not report subawards in compliance with the Federal Funding Accountability and Transparency Act (FFATA) in the FFATA Subaward Reporting System (FSRS) during fiscal year 2022 for the following federal programs:? For the Foster Care program, DCFS disbursed approximately $8.8 million in subawards to eight different subrecipients, four of which were state entities, during fiscal year 2022. These subawards account for approximately 18% of the programs? fiscal year expenditures.? For the TANF program, DCFS disbursed approximately $76.6 million in subawards to 41 different subrecipients, of which eight were state entities, during fiscal year 2022. These subawards account for approximately 48% of the programs? fiscal year expenditures.Criteria:2 CFR 170 Appendix A(I)(a) requires the non-federal entity to report to FSRS each obligating action equal to or exceeding $30,000 in federal funds for a subaward to a non-federal entity.Cause:Management represented there were no procedures in place to ensure compliance with FFATA requirements.Effect:Not reporting obligating actions to the FSRS prevents the public from having access to accurate information on how DCFS is obligating federal funds.Recommendation:DCFS should strengthen internal controls to ensure that appropriate personnel are aware of the federal programs that are subject to FFATA reporting and assign appropriate personnel to complete the FFATA reporting in accordance with federal requirements.Management?s Response and Corrective Action Plan:Management concurred with the finding and provided a corrective action plan (B-8).
2022-032 - Control Weakness Related to Foster Care BillingsAward Year: 2022Award Number: 2201LAFOSTCompliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:OJJ did not adequately review Foster Care invoices submitted to DCFS for reimbursement to ensure billings were accurately calculated.In a non-statistical sample of two quarterly administrative invoices billed to DCFS totaling $831,311 from a population of four quarterly administrative invoices totaling $1,708,503, one (50%) invoice for the quarter ending December 2021 was calculated using incorrect expenditure data, resulting in billing errors.Criteria:2 CFR 200.303(a) requires that non-federal entities receiving federal awards establish and maintain effective internal control designed to reasonably ensure compliance with federal statutes, regulations, and the terms and conditions of the federal award.Per OJJ?s contract with DCFS for reimbursement of Foster Care expenditures, OJJ must submit quarterly administrative billing reports to DCFS and monitor and track allowable administrative claim information.Cause:These conditions occurred because of a weakness in controls in the review of Foster Care administrative invoices.Effect:Failure to properly review invoices resulted in over billings and could result in disallowed costs by the federal grantor. Based on the methodology used, there was $128,236 in overpayments considered questioned costs.Recommendation:OJJ should strengthen controls to ensure administrative invoices submitted to DCFS are calculated accurately.Management?s Response and Corrective Action Plan:Management concurred with the finding and provided a corrective action plan (B-45).
2022-023 - Inadequate Controls and Noncompliance over ADP Risk Analysis and System Security ReviewAward Years: 2021, 2022Award Numbers: 2105LA5021, 2105LA5MAP, 2205LA5021, 2205LA5MAPCompliance Requirement: Special Tests and ProvisionsRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:The Louisiana Department of Health (LDH) did not have adequate controls in place to ensure that the Magellan Medicaid Administration (Magellan) Service Organization Control (SOC) 1 type 2 report was reviewed in accordance with the Automated Data Processing (ADP) Risk Analysis and System Security Review federal requirements for the year ending June 30, 2022. LDH contracted with Magellan in fiscal year 2022 to provide services that include maintaining system controls related to the drug rebates program.Criteria:According to 45 CFR 95.621, the state shall maintain reports on its biennial ADP system security reviews, together with pertinent supporting documentation, for on-site reviews. Good internal controls require that policies and procedures are established and followed to ensure compliance with federal requirements.Cause:LDH received the required SOC 1 type 2 report from Magellan but was unable to provide any evidence to support its review and did not have written procedures regarding the review of the SOC report.Effect:Proper review of the required SOC report is critical to ensuring the controls utilized by Magellan are adequate and operating effectively.Recommendation:LDH should design and implement procedures to document and support its review of all ADP system security reports.Management?s Response and Corrective Action Plan:Management partially concurred with the finding and provided a corrective action plan (B-19).
2022-025 - Inadequate Controls over Billing for Behavioral Health ServicesAward Years: 2021, 2022Award Numbers: 2105LA5021, 2105LA5MAP, 2205LA5021, 2205LA5MAPCompliance Requirement: Activities Allowed or UnallowedRepeat Finding: Yes (Prior Year Finding No. 2021-055)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, LDH, the managed care organizations (MCOs), and Magellan Health Services (Magellan) did not have adequate controls in place to ensure that behavioral health services in the Medical Assistance Program (Medicaid) and Children?s Health Insurance Program (CHIP) were properly billed and that improper encounters were denied. For fiscal year 2022, we identified approximately $8.8 million in encounters for services between July 1, 2021, and June 30, 2022, that were paid by the MCOs and Magellan even though the encounters do not appear to comply with LDH?s encounter coding requirements and/or approved fee schedules.Our analysis identified the following instances of billing errors:? Providers were paid $8,329,594 for 125,734 encounters that were billed using incorrect procedure and modifier codes.? Providers were paid $489,342 more than indicated on approved fee schedules for 13,019 encounters for behavioral health services.Criteria:LDH?s fee schedule outlines procedure codes for services and the applicable billing rates. Some services require that procedure codes also contain modifier codes which indicate information such as the age of the recipient, location where the service was provided, the educational background of the person providing the service, and the license(s) they have obtained.The approved fee schedules outline different rates depending on the procedure code and modifier codes. The MCOs can optionally pay more than the minimum LDH fee schedule.Cause:The billing errors could be avoided by LDH, the MCOs, and Magellan applying system edits that would flag encounters for further review when encounter coding and/or fee schedule requirements are not followed.Effect:Without the required modifiers, the encounter does not contain enough information to determine that the billing was appropriate.Because LDH does not currently maintain a list of providers in which the MCO pays more than the minimum fee schedule, LDH cannot determine if an encounter paid at an excessive rate was improperly billed.It is important that encounter data is accurate because LDH and other stakeholders, such as the Medicaid Fraud Control Unit within the Attorney General?s Office, use this data to identify improper payments and potential fraud. LDH also uses this encounter data to establish per member per month rates for the MCOs.Recommendation:LDH should implement adequate internal controls to ensure that encounters are coded correctly, which could include edit checks to flag potential improper billings for further review.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-25).
2022-027 - Inadequate Controls over Monitoring of Abortion ClaimsAward Years: 2021, 2022Award Numbers: 2105LA5021, 2105LA5MAP, 2205LA5021, 2205LA5MAPCompliance Requirement: Activities Allowed or UnallowedRepeat Finding: Yes (Prior Year Finding No. 2021-057)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, LDH did not have adequate controls to ensure compliance with federal regulations prohibiting the use of federal funding for abortion claims.Criteria:42 CFR 441 Subpart E and 42 USC 1397ee(c) prohibit Medicaid and CHIP funding for abortion services except in instances where abortion is necessary to save the mother?s life or if the pregnancy is the result of an act of rape or incest.Cause:Under managed care, LDH pays the health plans monthly premiums for enrolled recipients. The health plans pay provider claims for services provided to enrolled recipients and submit the claims to LDH as encounter claims.LDH included provisions in the Healthy Louisiana managed care contracts requiring the health plans to comply with the federal regulations regarding funding of prohibited abortion services, but LDH did not have adequate procedures in place to monitor the health plans? compliance with the federal regulations. While LDH received monthly self-reported information from the health plans, LDH was not comparing or validating the self-reported information to ensure the reporting was accurate and complete for the entire year. In addition, the instructions provided to the health plans concerning how to complete the reports are not detailed and could potentially lead to all five health plans reporting different information.In fiscal year 2022, LDH began the process of implementing new controls to validate the health plans self-reported information in order to ensure compliance with federal regulations regarding the funding of prohibited abortion claims. Specifically, in July of 2022 LDH began a spot check review of the health plans self-reported encounter claims information and reviewed data retroactively for the third and fourth quarter of fiscal year 2022 (January 2022 to June 2022). However, this process was not fully implemented during fiscal year 2022, nor did it cover the first two quarters of the audit period of July 1, 2021, to December 31, 2021. It is expected this process will cover all four quarters beginning in fiscal year 2023.Effect:Claims paid by the managed care health plans for abortion services that do not meet exceptions noted in federal regulations may go undetected, and LDH may accept these improper claims as encounter claims. Encounter claims are considered in future premium rate setting and are used for reporting and monitoring of the Medicaid and CHIP programs.Recommendation:LDH should continue its process to validate self-reported information from the health plans and ensure its process is operating effectively to ensure compliance with federal regulations regarding funding of prohibited abortions claims.Management?s Response and Corrective Action Plan:Management concurred in part with the finding and provided a corrective action plan (B-32).
2022-028 - Inadequate Internal Controls over Eligibility DeterminationsAward Years: 2020 - 2022Award Numbers: 2005LA5MAP, 2105LA5021, 2105LA5MAP, 2205LA5021, 2205LA5MAPCompliance Requirement: EligibilityRepeat Finding: Yes (Prior Year Finding No. 2021-060)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the third consecutive year, LDH lacked adequate internal controls over eligibility determinations in the Medicaid and CHIP programs for the state fiscal year ending June 30, 2022.From a population of 1,919,113 Medicaid recipients, a non-statistical sample of 60 recipients was tested. Five (8.3%) out of 60 Medicaid recipients tested did not have adequate documentation to support the eligibility determination or redetermination within the recipient?s case record.The following errors were noted for Medicaid:? For one recipient, LDH personnel did not discontinue coverage on a beneficiary that was invalidly enrolled prior to the start of the public health emergency (PHE).? For one recipient, LDH personnel did not discontinue coverage on a recipient who moved out of state.? For three recipients, renewals were not performed during the state fiscal year as required by federal regulations.During our testing of Medicaid managed care premiums, we identified an additional recipient with eligibility not supported by the case record. The recipient?s case record did not reflect timely transition into an appropriate case type based on the recipient?s age.In addition, from a population of 212,933 CHIP eligibility recipients, a non-statistical sample of 60 recipients was tested. For two (3.3%) out of 60 CHIP recipients tested, LDH did not perform renewals during the state fiscal year as required by federal regulations.Criteria:42 CFR 431, 42 CFR 435, and 42 CFR 457 require that in order to be considered eligible, a recipient must meet eligibility factors and the recipient case record must include facts to support agency eligibility decision. 42 CFR 435 and 457 also require annual renewal of eligibility.42 CFR 433.400 also states in order to claim the temporary increase in the federal medical assistance percentage (FMAP), states must maintain the Medicaid enrollment of ?validly enrolled beneficiaries? in one of three tiers of coverage. States may terminate individuals not validly enrolled.LDH has outlined eligibility criteria and documentation to support determinations and renewals in its Medicaid eligibility manual.Cause:LDH did not adhere to established control procedures to ensure case records support eligibility decisions, including performance of annual renewals, per federal regulations, and the Medicaid Eligibility Manual.Effect:Proper eligibility determination and renewals are critical to ensuring appropriate service eligibility, appropriate premium payments, and appropriate federal match rate on expenditures.We noted questioned costs totaling $77,983 in federal funds in relation to the two Medicaid recipients whose coverage was not discontinued. We did not note any questioned costs related to the other errors due to certain restrictions on eligibility actions during the PHE.Recommendation:LDH should ensure its employees follow procedures relating to eligibility determinations and renewals in the Medicaid and CHIP programs to ensure the case records support the eligibility decisions.Management?s Response and Corrective Action Plan:Management did not concur with the finding and noted that the Center for Medicare and Medicaid Services (CMS) provided certain flexibilities in meeting the timeliness of renewals in accordance with 42 CFR 435.912(e)(2), and LDH used this flexibility to suspend renewals during the PHE. LDH also indicated, while there was no particular documentation in the ?case note? section of the Louisiana Medicaid Eligibility Determination System (LaMEDS), LDH provided audit staff with LaMEDS log tables which documented system jobs called ?data fixes? that were completed which set certain renewals to a future date per the approved flexibility.In addition, on the one instance of coverage that was not discontinued on a beneficiary invalidly enrolled prior to the start of the PHE, LDH noted that in November 2020 CMS issued an Interim Final Rule (CMS-9912-IFC) which provided additional information concerning the continuous enrollment period and allowable terminations and transitions during the PHE for beneficiaries invalidly enrolled. LDH?s opinion is the Interim Final Rule nor the FAQ guidance that followed provided any instruction to review or take action on cases that were prevented from termination prior to its release; therefore, LDH applied the clarification of ?validly enrolled? on decisions going forward (B-34).Auditor?s Additional Comments:The LaMEDS log tables were considered during testing by the auditor. For the exceptions related to renewals above, there was no evidence of any systems being checked with the data logs provided by LDH during state fiscal year 2022. Although CMS granted flexibilities for completing the renewals at a future date, it did not appear that CMS was granting approval for suspension of renewals. CMS also notified LDH that federal regulation requires the agency to document the reason for the delay in each case record, but there was no evidence of this in the exceptions noted above.In reference to the one beneficiary invalidly enrolled prior to the start of the PHE, LDH should have implemented the CMS Interim Final Rule (CMS-9912-IFC) to include all months during the PHE in order to discontinue coverage on a beneficiary that was invalidly enrolled prior to the start of the PHE or during the PHE.
2022-029 - Noncompliance with Managed Care Provider Enrollment and Screening RequirementAward Years: 2021, 2022Award Numbers: 2105LA5021, 2105LA5MAP, 2205LA5021, 2205LA5MAPCompliance Requirement: Special Tests and ProvisionsRepeat Finding: Yes (Prior Year Finding No. 2021-061)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fifth consecutive year, LDH did not enroll and screen Healthy Louisiana managed care providers and dental managed care providers as required by federal regulations. During fiscal year 2022, the managed care plans continued to enroll and screen some managed care providers, in violation of federal regulations.Criteria:42 CFR 438.602 (2016 Managed Care Final Rule) and Section 5005 of the 21st Century Cures Act require that the enrollment process include providing the Medicaid agency with the provider?s identifying information including the name, specialty, date of birth, Social Security number, national provider identifier, federal taxpayer identification number, and state license or certification number of the provider. Additionally, the state agency is required to screen enrolled providers, require certain disclosures, provide enhanced oversight of certain providers, and comply with reporting of adverse provider actions and provider terminations. By using the federally required process, managed care providers must participate in the same screening and enrollment process as Medicaid and CHIP fee-for-service providers.Cause:LDH noted that enrollment and screening of managed care providers was to be performed as part of a new provider management system. After cancellation of the new provider management system contract, the state?s current provider enrollment vendor, Gainwell Technologies Inc. (Gainwell), began the process of creating a web-based portal for Medicaid and its providers to complete the necessary screenings required by federal regulations.In July 2021, LDH launched the enrollment portal created by Gainwell. Although the enrollment portal was launched in fiscal year 2022, LDH gave providers until December 31, 2022, to enroll. Therefore, LDH did not enroll and screen all of the Healthy Louisiana managed care providers and dental managed care providers as required by federal regulations before the fiscal year-end.Effect:LDH cannot ensure the accuracy of provider information obtained from the Louisiana Medicaid managed care plans and cannot ensure compliance with enrollment requirements defined by law and the Medicaid and CHIP state plan. LDH accepted 96 million Healthy Louisiana encounter claims totaling $7.5 billion and 2.8 million dental encounter claims totaling $125.8 million in fiscal year 2022 from the managed care plans and paid $14.7 billion in Healthy Louisiana premiums and $375.8 million in dental premiums.Recommendation:LDH should ensure all providers are screened and enrolled as required by federal regulations.Management?s Response and Corrective Action Plan:Management concurred in part with the finding and provided a corrective action plan (B-37).
2022-030 - Noncompliance with Provider Revalidation and Screening RequirementsAward Years: 2021, 2022Award Numbers: 2105LA5021, 2105LA5MAP, 2205LA5021, 2205LA5MAPCompliance Requirement: Special Tests and ProvisionsRepeat Finding: Yes (Prior Year Finding No. 2021-063)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fifth consecutive year, LDH did not perform five-year revalidations; screenings based on categorical risk of fraud, waste, or abuse; and monthly checks of the federal excluded party database, as required by federal regulations for all Medicaid and CHIP fee-for-service providers.Based on information provided by LDH, approximately 71% of providers with claims activity in fiscal year 2022 have not had a risk-based screening with the majority of those providers enrolled more than five years ago.In addition, LDH did not routinely check required federal databases to determine if providers have been excluded from participation in federal programs. Although LDH began checking the System for Award Management (SAM) on a monthly basis beginning March of 2022, a check was not performed for all providers for all months during fiscal year 2022.Criteria:Providers are enrolled by LDH and can provide services to either Medicaid and/or CHIP recipients as applicable.42 CFR 455 Subpart E requires that LDH screen all providers according to the provider?s categorical risk level upon initial enrollment, re-enrollment, or revalidation of enrollment. LDH must complete a revalidation of enrollment for all providers, regardless of type, at least every five years. The required screening procedures for each provider varies based on the risk score ? limited, moderate, or high. For example, a high-risk score requires additional screening procedures including criminal background checks and fingerprinting.LDH submitted and received the Medicaid State Plan approval in 2012 regarding compliance with revalidation and screening requirements.42 CFR 455 Subpart E required LDH to check the List of Excluded Individuals/Entities and SAM on at least a monthly basis. The SAM database includes information on providers excluded from contracting with the federal government.Cause:LDH noted that revalidation and screening of providers was to be performed as part of a new provider management system. After cancellation of the new provider management system contract, the state?s current provider enrollment vendor, Gainwell, began the process of creating a web-based portal for Medicaid and its providers to complete the necessary screenings required by federal regulations.In July 2021, LDH launched the enrollment portal created by Gainwell. Although the enrollment portal was launched in fiscal year 2022, LDH gave providers until December 31, 2022, to enroll. Therefore, LDH did not revalidate and screen all of the providers as required by federal regulations before the fiscal year-end.Effect:Proper enrollment and revalidation, including screening based on categorical risk and monthly checks of required databases, would enable the state to identify ineligible providers that should be rejected or excluded from the program.Recommendation:LDH should ensure all providers are screened based on categorical risk level upon initial enrollment, re-enrollment, and revalidation of enrollment as required by federal regulations. Also, LDH should perform revalidation of enrollment on all providers at least every five years. In addition, LDH should ensure all required databases are checked at least on a frequency required by federal regulations.Management?s Response and Corrective Action Plan:Management partially concurred with the finding and provided a corrective action plan (B-39).
2022-031 - Weakness in Controls over and Noncompliance with Provider OverpaymentsAward Years: 2021, 2022Award Numbers: 2105LA5021, 2105LA5MAP, 2205LA5021, 2205LA5MAPCompliance Requirement: Special Tests and ProvisionsRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:During our review over the LDH?s reconciliations related to the return of the federal share of provider overpayments that have reached the one-year reporting deadline, we noted that one out of four (25%) CMS 64 quarterly reports was reconciled using incorrect data. For the quarterly report ending September 30, 2021, LDH inadvertently pulled the June 2020 report as a starting point instead of the June 2021 report when creating its one-year reconciliation. This resulted in the amount reported on the quarterly report ending September 30, 2021, to be overstated by approximately $20 million. LDH did not identify this error during its review process of the September 30, 2021 report, but did discover this error later and corrected the error on the CMS 64 quarterly report ending December 31, 2021. Therefore, we do not consider the overstatement to be questioned costs.In addition, in a non-statistical sample of 60 provider overpayments from a population of 402,032, we were unable to obtain sufficient appropriate audit evidence to determine if the federal portion of provider overpayment collections were returned to CMS in the appropriate quarter.Criteria:Pursuant to 1903(d)(2)(c) of the Act (42 USC 1396b), states have up to one year from the date of discovery of the overpayment to recover or attempt to recover the overpayment from the provider before the federal share must be refunded to CMS via the CMS 64 quarterly report, regardless of whether recovery is made from the provider. The state must credit the federal share to CMS as outlined under 42 CFR 433.320(a)(2) either in the quarter in which the recovery is made or in the quarter in which the one-year period following discovery ends, whichever is earlier.Cause:LDH?s control over compliance with federal regulations regarding the refunding of provider overpayments to CMS was not operating effectively for all quarters for the fiscal year ending June 30, 2022. In addition, LDH did not provide proper supporting documentation for the auditor to test federal regulations over provider overpayments.Effect:Provider overpayments that reached the one-year deadline in September 2021 were not accurately reported until the December 2021 CMS 64 report was completed, causing them to be late and not in compliance with federal regulations.Recommendation:LDH should strengthen its controls over the preparation of the quarterly CMS 64 reports to ensure compliance with federal regulations. In addition, LDH should ensure it is able to provide supporting documentation timely for amounts reported in the CMS 64 reports for overpayments.Management?s Response and Corrective Action Plan:Management did not concur with the finding noting LDH Fiscal is currently in the process of revising procedures to ensure provisions of the 365-Day Receivable report as supporting documentation for provider overpayments (B-41).
2022-018 - Inadequate Controls over Subrecipient AgreementsAward Years: 2019 - 2022Award Numbers: 2201LATANF, B08TI083018-01, B08TI083450-01, B09SM082603-01, B09SM083804-01, H79SM083477, H79SP081004, H79TI081691, X06SM016019-19, X06SM083694-01Compliance Requirement: Subrecipient MonitoringRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:The Acadiana Area Human Services District (AAHSD) failed to comply with all regulations set forth by 2 CFR 200.332.AAHSD is allocated federal funds from the Louisiana Department of Health (LDH), Office of Behavioral Health (OBH) as interagency transfers, and AAHSD passes these funds to other entities via contracts to perform consulting, social, and professional services. The federal programs involved had awards totaling $3,895,985 and $6,108,836 allocated to AAHSD for fiscal years 2021 and 2022, respectively.We reviewed all 28 agreements identified by AAHSD as subrecipients and determined that for 18 (64%) of the subawards, AAHSD was unable to provide documentation of whether each subrecipient was required to obtain an audit or that the audit was reviewed so that timely and appropriate action could be taken for any findings pertaining to the federal awards, as required by federal regulations. Additionally, for all 28 of the subrecipients, AAHSD could not provide evidence that the required risk assessment was performed to evaluate each subrecipients? risk of noncompliance with federal regulations and the terms of the subaward.Criteria:Federal regulations require AAHSD, as the pass-through entity, to comply with 2 CFR 200.332 when subawards are made to subrecipients.Cause:AAHSD failed to develop adequate policies and procedures to ensure compliance with regulations set forth by 2 CFR 200.332 were performed timely.Effect:AAHSD or the subrecipient may not comply with the award and federal regulations.Recommendation:AAHSD management should strengthen its policies and procedures to ensure that regulations set forth by 2 CFR 200.332 are being addressed timely.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-2).
2022-004 - Inadequate Controls over PayrollAward Year: 2022Award Numbers: 6LA700503, NU50CK000532, NU62PS924522, NU62PS924620, NU90TP922016Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesRepeat Finding: Yes (Prior Year Finding No. 2021-005)See Schedule of Findings and Questioned Costs for chart/tableCondition:The Louisiana Department of Health, Office of Public Health (OPH) did not ensure payroll expenditures were timely certified and approved for the WIC Special Supplemental Nutrition Program for Women, Infants, and Children; the Public Health Emergency Preparedness program; the Epidemiology and Laboratory Capacity for Infectious Diseases program; and the HIV Prevention Activities Health Department Based program. This is the third consecutive year payroll internal control deficiencies have been reported for Public Health Emergency Preparedness program and HIV Prevention Activities Health Department Based program, and the second consecutive year for WIC Special Supplemental Nutrition Program for Women, Infants, and Children and Epidemiology and Laboratory Capacity for Infectious Diseases program. Exceptions for each federal program are as follows:? For the WIC Special Supplemental Nutrition Program for Women, Infants, and Children, a non-statistical sample of 60 payroll transactions was tested from a population of 6,184 transactions totaling $8,970,425. Five (8%) time statements were not timely approved by the employees? supervisor, of which two (3%) were not approved at all, and two (3%) were not certified timely by the employees ranging from 13 to 236 days after the posting date.? For the Public Health Emergency Preparedness program, a non-statistical sample of 60 payroll transactions was tested from a population of 1,394 transactions totaling $3,988,398. Twenty-one (35%) time statements were not timely approved by the employees? supervisors, of which 12 (20%) were approved ranging from 23 days to 447 days after posting date and seven (12%) were not approved at all; two (3%) were not certified by the employees; and two (3%) were approved before certified.? For the Epidemiology and Laboratory Capacity for Infectious Diseases program, a non-statistical sample of 60 payroll transactions was tested from a population of 3,933 transactions totaling $5,190,684. Nine (15%) time statements were not timely approved by the employees? supervisors, of which four (7%) were not approved at all; one (2%) was not certified by the employee; and one (2%) was approved before certified.? For the HIV Prevention Activities Health Department Based program, a non-statistical sample of 60 payroll transactions was tested from a population of 1,024 transactions totaling $386,769. Nine (15%) time statements were not timely approved by the employees? supervisors, of which one (2%) was not approved at all; seven (12%) were approved ranging from one day to 351 days after the posting date; and one (2%) was not certified by the employee.Criteria:2 CFR 200.430(i) requires that records must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Furthermore, the records must comply with the established accounting policies and practices of the non-federal entity.The Division of Administration Personnel Policy No. 99 requires employees and supervisors to certify and/or approve time statements for accuracy by 10:00 p.m. on the Wednesday following the close of the pay period. Time administrators are responsible for reviewing the LaGov ZP241 eCertification report prior to processing to identify any employees who have not certified their time statements and any supervisors who have not approved their staff?s time statements.Cause:OPH lacked sufficient controls to ensure electronic time statements were properly certified and approved prior to the posting date in accordance with federal and state regulations.Effect:Failure to adequately approve program expenditures increases the risk that unallowable costs could be reimbursed by the federal grantor.Recommendation:OPH should ensure employees comply with existing policies and procedures, including certifying and approving electronic time statements in a timely manner.Management?s Response and Corrective Action Plan:Management concurred with the finding and provided a corrective action plan (B-43).
2022-018 - Inadequate Controls over Subrecipient AgreementsAward Years: 2019 - 2022Award Numbers: 2201LATANF, B08TI083018-01, B08TI083450-01, B09SM082603-01, B09SM083804-01, H79SM083477, H79SP081004, H79TI081691, X06SM016019-19, X06SM083694-01Compliance Requirement: Subrecipient MonitoringRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:The Acadiana Area Human Services District (AAHSD) failed to comply with all regulations set forth by 2 CFR 200.332.AAHSD is allocated federal funds from the Louisiana Department of Health (LDH), Office of Behavioral Health (OBH) as interagency transfers, and AAHSD passes these funds to other entities via contracts to perform consulting, social, and professional services. The federal programs involved had awards totaling $3,895,985 and $6,108,836 allocated to AAHSD for fiscal years 2021 and 2022, respectively.We reviewed all 28 agreements identified by AAHSD as subrecipients and determined that for 18 (64%) of the subawards, AAHSD was unable to provide documentation of whether each subrecipient was required to obtain an audit or that the audit was reviewed so that timely and appropriate action could be taken for any findings pertaining to the federal awards, as required by federal regulations. Additionally, for all 28 of the subrecipients, AAHSD could not provide evidence that the required risk assessment was performed to evaluate each subrecipients? risk of noncompliance with federal regulations and the terms of the subaward.Criteria:Federal regulations require AAHSD, as the pass-through entity, to comply with 2 CFR 200.332 when subawards are made to subrecipients.Cause:AAHSD failed to develop adequate policies and procedures to ensure compliance with regulations set forth by 2 CFR 200.332 were performed timely.Effect:AAHSD or the subrecipient may not comply with the award and federal regulations.Recommendation:AAHSD management should strengthen its policies and procedures to ensure that regulations set forth by 2 CFR 200.332 are being addressed timely.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-2).
2022-018 - Inadequate Controls over Subrecipient AgreementsAward Years: 2019 - 2022Award Numbers: 2201LATANF, B08TI083018-01, B08TI083450-01, B09SM082603-01, B09SM083804-01, H79SM083477, H79SP081004, H79TI081691, X06SM016019-19, X06SM083694-01Compliance Requirement: Subrecipient MonitoringRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:The Acadiana Area Human Services District (AAHSD) failed to comply with all regulations set forth by 2 CFR 200.332.AAHSD is allocated federal funds from the Louisiana Department of Health (LDH), Office of Behavioral Health (OBH) as interagency transfers, and AAHSD passes these funds to other entities via contracts to perform consulting, social, and professional services. The federal programs involved had awards totaling $3,895,985 and $6,108,836 allocated to AAHSD for fiscal years 2021 and 2022, respectively.We reviewed all 28 agreements identified by AAHSD as subrecipients and determined that for 18 (64%) of the subawards, AAHSD was unable to provide documentation of whether each subrecipient was required to obtain an audit or that the audit was reviewed so that timely and appropriate action could be taken for any findings pertaining to the federal awards, as required by federal regulations. Additionally, for all 28 of the subrecipients, AAHSD could not provide evidence that the required risk assessment was performed to evaluate each subrecipients? risk of noncompliance with federal regulations and the terms of the subaward.Criteria:Federal regulations require AAHSD, as the pass-through entity, to comply with 2 CFR 200.332 when subawards are made to subrecipients.Cause:AAHSD failed to develop adequate policies and procedures to ensure compliance with regulations set forth by 2 CFR 200.332 were performed timely.Effect:AAHSD or the subrecipient may not comply with the award and federal regulations.Recommendation:AAHSD management should strengthen its policies and procedures to ensure that regulations set forth by 2 CFR 200.332 are being addressed timely.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-2).
2022-005 - Noncompliance with and Weakness in Controls over Federal Research and Development ExpensesAward Years: VariousAward Numbers: VariousCompliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesPass-Through Entities: VariousRepeat Finding: Yes (Prior Year Finding No. 2021-007)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In addition, LSUHSC-S did not ensure that costs charged to federal awards were allowable in accordance with federal regulations and the terms and conditions of the award when requesting reimbursement.In a non-statistical random sample of 50 out of 10,798 expense transactions charged to R&D during the fiscal year ending June 30, 2022, the following exceptions were noted:? Three (6%) purchasing card (P-Card) transactions were not allowable in accordance with federal regulations and the terms and conditions of the award and are considered questioned costs totaling $1,073.? For five (10%) of 50 transactions tested, LSUHSC-S overstated expenses on the Schedule of Expenditures of Federal Awards because the award was fully funded, and expenses in excess of the award amount were not removed from the project used to identify expenditures to federal awards in the accounting records, or the expense was determined not allowable as noted above.? Seven (35%) of 20 time and effort certifications for salary and related benefit expenses tested were completed 119 to 461 days after the end of the quarter.We performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 838 (51%) out of 1,654 adjusting journal entries were made more than 90 days after the end of the quarter from the original transactions. The adjustments were made 97 to 1,026 days after the original transactions were recorded and 96 to 953 days after the end of the quarter.In a non-statistical random sample of 10 out of 1,654 payroll adjusting entries affecting R&D, tested by employee, project id (related to federal award), and journal id, six (60%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. Two of these adjusting entries added costs to the federal award projects and are considered questioned costs totaling $28,324.Criteria:2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity?s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments.Per LSUHSC-S?s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S?s policy, time and effort certifications should be completed within approximately 90 days of the end of the quarter. Management interprets the end of the quarter to be when the time and effort reports are sent to the departments once the last month of the quarter is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the quarterly reporting period, a payroll reallocation must be created within 30 days.Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework? issued by the Committee of Sponsoring Organizations of the Treadway Commission. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions.In addition, the National Institute of Health (NIH) is the grantor for the majority of the LSUHSC-S?s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made ?to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable.2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs.Cause:LSUHSC-S?s approval of P-Card transactions did not provide sufficient review of the allowability of expenses on federal awards. LSUHSC-S has procedures in place to review expenses prior to requesting reimbursement; however, it did not ensure that the necessary adjustments were made to the accounting system in a timely manner for expenses that were not allowed for reimbursement. In addition, training to emphasize accountability and the importance of completing time and effort certifications timely and accurately per policy was not completed as planned during fiscal year 2022 due to staffing shortages.LSUHSC-S is still in the process of implementing the corrective action outlined in the prior year to include documentation of adjusted effort and questions to address justification for the adjustment, errors, and timeliness on a modified Personnel Change form.Effect:Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects.In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor.Recommendation:Management should monitor time and effort certifications completed by the departments and investigate and obtain justification from department personnel for untimely certifications, as well as untimely adjustments and lack of supporting documentation for adjustments to enforce established policies. Management should ensure adequate design and operating effectiveness of controls over expenses, including P-Card expenses, charged to federal awards to verify allowability of costs in accordance with federal requirements and grant terms and conditions prior to requesting reimbursement. Management should also consider implementing other complementary controls such as preventing costs from being charged to projects in the accounting system beyond the approved budget or period of performance.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-52).
2022-035 - Weakness in Controls over Cash Management RequirementsAward Years: VariousAward Numbers: VariousCompliance Requirement: Cash ManagementRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:LSUHSC-S did not follow its prescribed controls over compliance with the cash management requirements of R&D programs. We reviewed a non-statistical sample of 25 federal R&D expense transactions resulting in reimbursement request support for two subaward invoice reconciliations and ten monthly direct award reconciliations, for the fiscal year ending June 30, 2022, from a population of 11,969 expense transactions. We also reviewed the two monthly reconciliations for July and November 2021 that were not selected from the expense transactions. We noted the following:? Four (29%) of 14 reconciliations had no evidence of review or approval by someone other than the preparer.? Ten (71%) of 14 approved reconciliations did not agree to the reimbursement request submitted to the grantor.Criteria:2 CFR 200.303 requires that non-federal entities establish and maintain internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.LSUHSC-S has established controls over cash management requirements, which consist of a monthly reconciliation of reimbursement requests for R&D expenses and includes the review and approval by someone other than the preparer.Cause:LSUHSC-S did not follow its established controls over monthly reconciliations.LSUHSC-S represented that the monthly reconciliations are the starting point in the process and additional determinations of which amounts should be drawn down are made after the reconciliation has been completed. LSUHSC-S did not provide any evidence that additional review and approval was performed prior to the reimbursement request.LSUHSC-S did not perform the drawdowns on a monthly basis when the reconciliations were performed. Drawdowns were performed in March and June 2022, and after fiscal year end in July, August, and October 2022 for expenses incurred during the fiscal year ending June 30, 2022. Management provided additional reconciliations for the draw down amounts, but there was no evidence of review and approval by someone other than the preparer.Effect:Failure to implement sufficient controls over cash management could result in LSUHSC-S requesting reimbursement for expenses not incurred prior to the request and place LSUHSC-S in noncompliance with federal regulations.Recommendation:LSUHSC-S should ensure that a review and approval is performed on the final amounts requested for reimbursement and evidence is maintained. LSUSHC-S should also ensure that established controls are followed to ensure the review and approval is performed by someone other than the preparer.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-55).
2022-005 - Noncompliance with and Weakness in Controls over Federal Research and Development ExpensesAward Years: VariousAward Numbers: VariousCompliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesPass-Through Entities: VariousRepeat Finding: Yes (Prior Year Finding No. 2021-007)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In addition, LSUHSC-S did not ensure that costs charged to federal awards were allowable in accordance with federal regulations and the terms and conditions of the award when requesting reimbursement.In a non-statistical random sample of 50 out of 10,798 expense transactions charged to R&D during the fiscal year ending June 30, 2022, the following exceptions were noted:? Three (6%) purchasing card (P-Card) transactions were not allowable in accordance with federal regulations and the terms and conditions of the award and are considered questioned costs totaling $1,073.? For five (10%) of 50 transactions tested, LSUHSC-S overstated expenses on the Schedule of Expenditures of Federal Awards because the award was fully funded, and expenses in excess of the award amount were not removed from the project used to identify expenditures to federal awards in the accounting records, or the expense was determined not allowable as noted above.? Seven (35%) of 20 time and effort certifications for salary and related benefit expenses tested were completed 119 to 461 days after the end of the quarter.We performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 838 (51%) out of 1,654 adjusting journal entries were made more than 90 days after the end of the quarter from the original transactions. The adjustments were made 97 to 1,026 days after the original transactions were recorded and 96 to 953 days after the end of the quarter.In a non-statistical random sample of 10 out of 1,654 payroll adjusting entries affecting R&D, tested by employee, project id (related to federal award), and journal id, six (60%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. Two of these adjusting entries added costs to the federal award projects and are considered questioned costs totaling $28,324.Criteria:2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity?s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments.Per LSUHSC-S?s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S?s policy, time and effort certifications should be completed within approximately 90 days of the end of the quarter. Management interprets the end of the quarter to be when the time and effort reports are sent to the departments once the last month of the quarter is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the quarterly reporting period, a payroll reallocation must be created within 30 days.Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework? issued by the Committee of Sponsoring Organizations of the Treadway Commission. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions.In addition, the National Institute of Health (NIH) is the grantor for the majority of the LSUHSC-S?s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made ?to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable.2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs.Cause:LSUHSC-S?s approval of P-Card transactions did not provide sufficient review of the allowability of expenses on federal awards. LSUHSC-S has procedures in place to review expenses prior to requesting reimbursement; however, it did not ensure that the necessary adjustments were made to the accounting system in a timely manner for expenses that were not allowed for reimbursement. In addition, training to emphasize accountability and the importance of completing time and effort certifications timely and accurately per policy was not completed as planned during fiscal year 2022 due to staffing shortages.LSUHSC-S is still in the process of implementing the corrective action outlined in the prior year to include documentation of adjusted effort and questions to address justification for the adjustment, errors, and timeliness on a modified Personnel Change form.Effect:Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects.In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor.Recommendation:Management should monitor time and effort certifications completed by the departments and investigate and obtain justification from department personnel for untimely certifications, as well as untimely adjustments and lack of supporting documentation for adjustments to enforce established policies. Management should ensure adequate design and operating effectiveness of controls over expenses, including P-Card expenses, charged to federal awards to verify allowability of costs in accordance with federal requirements and grant terms and conditions prior to requesting reimbursement. Management should also consider implementing other complementary controls such as preventing costs from being charged to projects in the accounting system beyond the approved budget or period of performance.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-52).
2022-033 - Weakness in Controls over Research and Development ProjectCloseouts and Accounting RecordsAward Years: 2021, 2022Award Numbers: 1K01AA024494-01A1, 1R21AA026022-01A1, 1R44DA046300-01, 2R01DK087800-06A1, 2R37AA018282-06, GM104940-17025-HSCNO01, INS151591-2, PO-0000180812, WFUHS 35-101730-117901Compliance Requirement: Period of PerformancePass-Through Entities: Eastern Virginia Medical School, La Jolla Alcohol Research, Inc., Wake Forest University HSCRepeat Finding: Yes (Prior Year Finding No. 2021-006)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the third consecutive year, the Louisiana State University Health Sciences Center in New Orleans (LSUHSC-NO) did not have adequate controls over project closeouts or accounting records for the R&D cluster federal program. We tested a non-statistical sample of 18 R&D projects, plus an additional five projects based on the total transaction amount recorded more than 90 days after the project end date, from a population of 139 projects with end dates between April 1, 2021, and June 30, 2022. Five (27.8%) of the sampled projects and all five of the additional projects included transactions for expenses or correcting entries posted to the project between 120 and 402 days after the project?s period of performance ended. On three of the additional projects, management submitted revised final reports to the grantor, or revised final invoices to the pass-through entity, more than 120 days after the period of performance ended resulting in noncompliance with federal program close-out requirements.Criteria:2 CFR 200.344 requires (a) that the recipient must submit, no later than 120 calendar days (or 90 days for a subrecipient) after the end of the period of performance, all reports required by the terms and conditions of the award, and (b) unless the federal awarding agency or pass-through entity authorizes an extension, a non-federal entity must liquidate all financial obligations incurred under the federal award no later than 120 calendar days after the end date of the period of performance.Additionally, LSUHSC-NO?s Sponsored Agreement Closeout Policy requires that completed sponsored agreements with surplus and/or deficit residual balances remaining in the project be certified and transferred to an appropriate, non-sponsored, departmentally-funded account or another sponsored project within 90 days of the project end date. LSUHSC-NO?s Sponsored Projects Accounting Cost Transfer Policy 011019 cautions that cost transfers will not be processed to cover cost overruns, to avoid restrictions by the Sponsor, to use up unspent funds, or for reasons of convenience or broadly-defined ?errors.?Cause:These exceptions occurred because (1) expenses are charged to projects after their closeout period in anticipation of a forthcoming project renewal, extension, or funding increase that may or may not be received; (2) the accounting system, PeopleSoft Commitment Control, allows certain personnel and other expenses to continue to post to projects after the project has ended unless a form, such as a change in source of funds form, is processed to update account coding in the system; (3) projects are not being closed out properly as they end, which includes submitting all required forms for updating accounting records; and (4) project budgets were not adequately monitored to ensure that expenses in the accounting system were charged to the correct project and any errors or budget overruns were identified and addressed in a timely manner.Effect:Untimely project updates in the accounting system increase the risk that expenses will be charged to the wrong project which hinders management?s ability to effectively monitor the budget and may result in budget overruns that would need to be covered with other funding sources, increase the number of corrections required at year end to ensure accurate financial reporting, and may result in noncompliance with federal program requirements.Recommendation:Management should continue to monitor budgets and ensure that budget overruns and errors are identified and corrected in a timely manner. Management should ensure that projects are effectively closed out including processing all required forms and updating the accounting system in a timely manner. Management should consider implementing a system control to prevent costs from being charged to projects in the accounting system beyond the project close out period. Management should also implement controls to exclude costs from its Schedule of Expenditures of Federal Awards until the awards or extensions are approved.Management?s Response and Corrective Action Plan:Management concurred with the finding and provided a corrective action plan (B-46).
2022-005 - Noncompliance with and Weakness in Controls over Federal Research and Development ExpensesAward Years: VariousAward Numbers: VariousCompliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesPass-Through Entities: VariousRepeat Finding: Yes (Prior Year Finding No. 2021-007)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In addition, LSUHSC-S did not ensure that costs charged to federal awards were allowable in accordance with federal regulations and the terms and conditions of the award when requesting reimbursement.In a non-statistical random sample of 50 out of 10,798 expense transactions charged to R&D during the fiscal year ending June 30, 2022, the following exceptions were noted:? Three (6%) purchasing card (P-Card) transactions were not allowable in accordance with federal regulations and the terms and conditions of the award and are considered questioned costs totaling $1,073.? For five (10%) of 50 transactions tested, LSUHSC-S overstated expenses on the Schedule of Expenditures of Federal Awards because the award was fully funded, and expenses in excess of the award amount were not removed from the project used to identify expenditures to federal awards in the accounting records, or the expense was determined not allowable as noted above.? Seven (35%) of 20 time and effort certifications for salary and related benefit expenses tested were completed 119 to 461 days after the end of the quarter.We performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 838 (51%) out of 1,654 adjusting journal entries were made more than 90 days after the end of the quarter from the original transactions. The adjustments were made 97 to 1,026 days after the original transactions were recorded and 96 to 953 days after the end of the quarter.In a non-statistical random sample of 10 out of 1,654 payroll adjusting entries affecting R&D, tested by employee, project id (related to federal award), and journal id, six (60%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. Two of these adjusting entries added costs to the federal award projects and are considered questioned costs totaling $28,324.Criteria:2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity?s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments.Per LSUHSC-S?s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S?s policy, time and effort certifications should be completed within approximately 90 days of the end of the quarter. Management interprets the end of the quarter to be when the time and effort reports are sent to the departments once the last month of the quarter is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the quarterly reporting period, a payroll reallocation must be created within 30 days.Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework? issued by the Committee of Sponsoring Organizations of the Treadway Commission. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions.In addition, the National Institute of Health (NIH) is the grantor for the majority of the LSUHSC-S?s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made ?to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable.2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs.Cause:LSUHSC-S?s approval of P-Card transactions did not provide sufficient review of the allowability of expenses on federal awards. LSUHSC-S has procedures in place to review expenses prior to requesting reimbursement; however, it did not ensure that the necessary adjustments were made to the accounting system in a timely manner for expenses that were not allowed for reimbursement. In addition, training to emphasize accountability and the importance of completing time and effort certifications timely and accurately per policy was not completed as planned during fiscal year 2022 due to staffing shortages.LSUHSC-S is still in the process of implementing the corrective action outlined in the prior year to include documentation of adjusted effort and questions to address justification for the adjustment, errors, and timeliness on a modified Personnel Change form.Effect:Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects.In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor.Recommendation:Management should monitor time and effort certifications completed by the departments and investigate and obtain justification from department personnel for untimely certifications, as well as untimely adjustments and lack of supporting documentation for adjustments to enforce established policies. Management should ensure adequate design and operating effectiveness of controls over expenses, including P-Card expenses, charged to federal awards to verify allowability of costs in accordance with federal requirements and grant terms and conditions prior to requesting reimbursement. Management should also consider implementing other complementary controls such as preventing costs from being charged to projects in the accounting system beyond the approved budget or period of performance.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-52).
2022-033 - Weakness in Controls over Research and Development ProjectCloseouts and Accounting RecordsAward Years: 2021, 2022Award Numbers: 1K01AA024494-01A1, 1R21AA026022-01A1, 1R44DA046300-01, 2R01DK087800-06A1, 2R37AA018282-06, GM104940-17025-HSCNO01, INS151591-2, PO-0000180812, WFUHS 35-101730-117901Compliance Requirement: Period of PerformancePass-Through Entities: Eastern Virginia Medical School, La Jolla Alcohol Research, Inc., Wake Forest University HSCRepeat Finding: Yes (Prior Year Finding No. 2021-006)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the third consecutive year, the Louisiana State University Health Sciences Center in New Orleans (LSUHSC-NO) did not have adequate controls over project closeouts or accounting records for the R&D cluster federal program. We tested a non-statistical sample of 18 R&D projects, plus an additional five projects based on the total transaction amount recorded more than 90 days after the project end date, from a population of 139 projects with end dates between April 1, 2021, and June 30, 2022. Five (27.8%) of the sampled projects and all five of the additional projects included transactions for expenses or correcting entries posted to the project between 120 and 402 days after the project?s period of performance ended. On three of the additional projects, management submitted revised final reports to the grantor, or revised final invoices to the pass-through entity, more than 120 days after the period of performance ended resulting in noncompliance with federal program close-out requirements.Criteria:2 CFR 200.344 requires (a) that the recipient must submit, no later than 120 calendar days (or 90 days for a subrecipient) after the end of the period of performance, all reports required by the terms and conditions of the award, and (b) unless the federal awarding agency or pass-through entity authorizes an extension, a non-federal entity must liquidate all financial obligations incurred under the federal award no later than 120 calendar days after the end date of the period of performance.Additionally, LSUHSC-NO?s Sponsored Agreement Closeout Policy requires that completed sponsored agreements with surplus and/or deficit residual balances remaining in the project be certified and transferred to an appropriate, non-sponsored, departmentally-funded account or another sponsored project within 90 days of the project end date. LSUHSC-NO?s Sponsored Projects Accounting Cost Transfer Policy 011019 cautions that cost transfers will not be processed to cover cost overruns, to avoid restrictions by the Sponsor, to use up unspent funds, or for reasons of convenience or broadly-defined ?errors.?Cause:These exceptions occurred because (1) expenses are charged to projects after their closeout period in anticipation of a forthcoming project renewal, extension, or funding increase that may or may not be received; (2) the accounting system, PeopleSoft Commitment Control, allows certain personnel and other expenses to continue to post to projects after the project has ended unless a form, such as a change in source of funds form, is processed to update account coding in the system; (3) projects are not being closed out properly as they end, which includes submitting all required forms for updating accounting records; and (4) project budgets were not adequately monitored to ensure that expenses in the accounting system were charged to the correct project and any errors or budget overruns were identified and addressed in a timely manner.Effect:Untimely project updates in the accounting system increase the risk that expenses will be charged to the wrong project which hinders management?s ability to effectively monitor the budget and may result in budget overruns that would need to be covered with other funding sources, increase the number of corrections required at year end to ensure accurate financial reporting, and may result in noncompliance with federal program requirements.Recommendation:Management should continue to monitor budgets and ensure that budget overruns and errors are identified and corrected in a timely manner. Management should ensure that projects are effectively closed out including processing all required forms and updating the accounting system in a timely manner. Management should consider implementing a system control to prevent costs from being charged to projects in the accounting system beyond the project close out period. Management should also implement controls to exclude costs from its Schedule of Expenditures of Federal Awards until the awards or extensions are approved.Management?s Response and Corrective Action Plan:Management concurred with the finding and provided a corrective action plan (B-46).
2022-033 - Weakness in Controls over Research and Development ProjectCloseouts and Accounting RecordsAward Years: 2021, 2022Award Numbers: 1K01AA024494-01A1, 1R21AA026022-01A1, 1R44DA046300-01, 2R01DK087800-06A1, 2R37AA018282-06, GM104940-17025-HSCNO01, INS151591-2, PO-0000180812, WFUHS 35-101730-117901Compliance Requirement: Period of PerformancePass-Through Entities: Eastern Virginia Medical School, La Jolla Alcohol Research, Inc., Wake Forest University HSCRepeat Finding: Yes (Prior Year Finding No. 2021-006)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the third consecutive year, the Louisiana State University Health Sciences Center in New Orleans (LSUHSC-NO) did not have adequate controls over project closeouts or accounting records for the R&D cluster federal program. We tested a non-statistical sample of 18 R&D projects, plus an additional five projects based on the total transaction amount recorded more than 90 days after the project end date, from a population of 139 projects with end dates between April 1, 2021, and June 30, 2022. Five (27.8%) of the sampled projects and all five of the additional projects included transactions for expenses or correcting entries posted to the project between 120 and 402 days after the project?s period of performance ended. On three of the additional projects, management submitted revised final reports to the grantor, or revised final invoices to the pass-through entity, more than 120 days after the period of performance ended resulting in noncompliance with federal program close-out requirements.Criteria:2 CFR 200.344 requires (a) that the recipient must submit, no later than 120 calendar days (or 90 days for a subrecipient) after the end of the period of performance, all reports required by the terms and conditions of the award, and (b) unless the federal awarding agency or pass-through entity authorizes an extension, a non-federal entity must liquidate all financial obligations incurred under the federal award no later than 120 calendar days after the end date of the period of performance.Additionally, LSUHSC-NO?s Sponsored Agreement Closeout Policy requires that completed sponsored agreements with surplus and/or deficit residual balances remaining in the project be certified and transferred to an appropriate, non-sponsored, departmentally-funded account or another sponsored project within 90 days of the project end date. LSUHSC-NO?s Sponsored Projects Accounting Cost Transfer Policy 011019 cautions that cost transfers will not be processed to cover cost overruns, to avoid restrictions by the Sponsor, to use up unspent funds, or for reasons of convenience or broadly-defined ?errors.?Cause:These exceptions occurred because (1) expenses are charged to projects after their closeout period in anticipation of a forthcoming project renewal, extension, or funding increase that may or may not be received; (2) the accounting system, PeopleSoft Commitment Control, allows certain personnel and other expenses to continue to post to projects after the project has ended unless a form, such as a change in source of funds form, is processed to update account coding in the system; (3) projects are not being closed out properly as they end, which includes submitting all required forms for updating accounting records; and (4) project budgets were not adequately monitored to ensure that expenses in the accounting system were charged to the correct project and any errors or budget overruns were identified and addressed in a timely manner.Effect:Untimely project updates in the accounting system increase the risk that expenses will be charged to the wrong project which hinders management?s ability to effectively monitor the budget and may result in budget overruns that would need to be covered with other funding sources, increase the number of corrections required at year end to ensure accurate financial reporting, and may result in noncompliance with federal program requirements.Recommendation:Management should continue to monitor budgets and ensure that budget overruns and errors are identified and corrected in a timely manner. Management should ensure that projects are effectively closed out including processing all required forms and updating the accounting system in a timely manner. Management should consider implementing a system control to prevent costs from being charged to projects in the accounting system beyond the project close out period. Management should also implement controls to exclude costs from its Schedule of Expenditures of Federal Awards until the awards or extensions are approved.Management?s Response and Corrective Action Plan:Management concurred with the finding and provided a corrective action plan (B-46).
2022-035 - Weakness in Controls over Cash Management RequirementsAward Years: VariousAward Numbers: VariousCompliance Requirement: Cash ManagementRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:LSUHSC-S did not follow its prescribed controls over compliance with the cash management requirements of R&D programs. We reviewed a non-statistical sample of 25 federal R&D expense transactions resulting in reimbursement request support for two subaward invoice reconciliations and ten monthly direct award reconciliations, for the fiscal year ending June 30, 2022, from a population of 11,969 expense transactions. We also reviewed the two monthly reconciliations for July and November 2021 that were not selected from the expense transactions. We noted the following:? Four (29%) of 14 reconciliations had no evidence of review or approval by someone other than the preparer.? Ten (71%) of 14 approved reconciliations did not agree to the reimbursement request submitted to the grantor.Criteria:2 CFR 200.303 requires that non-federal entities establish and maintain internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.LSUHSC-S has established controls over cash management requirements, which consist of a monthly reconciliation of reimbursement requests for R&D expenses and includes the review and approval by someone other than the preparer.Cause:LSUHSC-S did not follow its established controls over monthly reconciliations.LSUHSC-S represented that the monthly reconciliations are the starting point in the process and additional determinations of which amounts should be drawn down are made after the reconciliation has been completed. LSUHSC-S did not provide any evidence that additional review and approval was performed prior to the reimbursement request.LSUHSC-S did not perform the drawdowns on a monthly basis when the reconciliations were performed. Drawdowns were performed in March and June 2022, and after fiscal year end in July, August, and October 2022 for expenses incurred during the fiscal year ending June 30, 2022. Management provided additional reconciliations for the draw down amounts, but there was no evidence of review and approval by someone other than the preparer.Effect:Failure to implement sufficient controls over cash management could result in LSUHSC-S requesting reimbursement for expenses not incurred prior to the request and place LSUHSC-S in noncompliance with federal regulations.Recommendation:LSUHSC-S should ensure that a review and approval is performed on the final amounts requested for reimbursement and evidence is maintained. LSUSHC-S should also ensure that established controls are followed to ensure the review and approval is performed by someone other than the preparer.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-55).
2022-033 - Weakness in Controls over Research and Development ProjectCloseouts and Accounting RecordsAward Years: 2021, 2022Award Numbers: 1K01AA024494-01A1, 1R21AA026022-01A1, 1R44DA046300-01, 2R01DK087800-06A1, 2R37AA018282-06, GM104940-17025-HSCNO01, INS151591-2, PO-0000180812, WFUHS 35-101730-117901Compliance Requirement: Period of PerformancePass-Through Entities: Eastern Virginia Medical School, La Jolla Alcohol Research, Inc., Wake Forest University HSCRepeat Finding: Yes (Prior Year Finding No. 2021-006)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the third consecutive year, the Louisiana State University Health Sciences Center in New Orleans (LSUHSC-NO) did not have adequate controls over project closeouts or accounting records for the R&D cluster federal program. We tested a non-statistical sample of 18 R&D projects, plus an additional five projects based on the total transaction amount recorded more than 90 days after the project end date, from a population of 139 projects with end dates between April 1, 2021, and June 30, 2022. Five (27.8%) of the sampled projects and all five of the additional projects included transactions for expenses or correcting entries posted to the project between 120 and 402 days after the project?s period of performance ended. On three of the additional projects, management submitted revised final reports to the grantor, or revised final invoices to the pass-through entity, more than 120 days after the period of performance ended resulting in noncompliance with federal program close-out requirements.Criteria:2 CFR 200.344 requires (a) that the recipient must submit, no later than 120 calendar days (or 90 days for a subrecipient) after the end of the period of performance, all reports required by the terms and conditions of the award, and (b) unless the federal awarding agency or pass-through entity authorizes an extension, a non-federal entity must liquidate all financial obligations incurred under the federal award no later than 120 calendar days after the end date of the period of performance.Additionally, LSUHSC-NO?s Sponsored Agreement Closeout Policy requires that completed sponsored agreements with surplus and/or deficit residual balances remaining in the project be certified and transferred to an appropriate, non-sponsored, departmentally-funded account or another sponsored project within 90 days of the project end date. LSUHSC-NO?s Sponsored Projects Accounting Cost Transfer Policy 011019 cautions that cost transfers will not be processed to cover cost overruns, to avoid restrictions by the Sponsor, to use up unspent funds, or for reasons of convenience or broadly-defined ?errors.?Cause:These exceptions occurred because (1) expenses are charged to projects after their closeout period in anticipation of a forthcoming project renewal, extension, or funding increase that may or may not be received; (2) the accounting system, PeopleSoft Commitment Control, allows certain personnel and other expenses to continue to post to projects after the project has ended unless a form, such as a change in source of funds form, is processed to update account coding in the system; (3) projects are not being closed out properly as they end, which includes submitting all required forms for updating accounting records; and (4) project budgets were not adequately monitored to ensure that expenses in the accounting system were charged to the correct project and any errors or budget overruns were identified and addressed in a timely manner.Effect:Untimely project updates in the accounting system increase the risk that expenses will be charged to the wrong project which hinders management?s ability to effectively monitor the budget and may result in budget overruns that would need to be covered with other funding sources, increase the number of corrections required at year end to ensure accurate financial reporting, and may result in noncompliance with federal program requirements.Recommendation:Management should continue to monitor budgets and ensure that budget overruns and errors are identified and corrected in a timely manner. Management should ensure that projects are effectively closed out including processing all required forms and updating the accounting system in a timely manner. Management should consider implementing a system control to prevent costs from being charged to projects in the accounting system beyond the project close out period. Management should also implement controls to exclude costs from its Schedule of Expenditures of Federal Awards until the awards or extensions are approved.Management?s Response and Corrective Action Plan:Management concurred with the finding and provided a corrective action plan (B-46).
2022-033 - Weakness in Controls over Research and Development ProjectCloseouts and Accounting RecordsAward Years: 2021, 2022Award Numbers: 1K01AA024494-01A1, 1R21AA026022-01A1, 1R44DA046300-01, 2R01DK087800-06A1, 2R37AA018282-06, GM104940-17025-HSCNO01, INS151591-2, PO-0000180812, WFUHS 35-101730-117901Compliance Requirement: Period of PerformancePass-Through Entities: Eastern Virginia Medical School, La Jolla Alcohol Research, Inc., Wake Forest University HSCRepeat Finding: Yes (Prior Year Finding No. 2021-006)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the third consecutive year, the Louisiana State University Health Sciences Center in New Orleans (LSUHSC-NO) did not have adequate controls over project closeouts or accounting records for the R&D cluster federal program. We tested a non-statistical sample of 18 R&D projects, plus an additional five projects based on the total transaction amount recorded more than 90 days after the project end date, from a population of 139 projects with end dates between April 1, 2021, and June 30, 2022. Five (27.8%) of the sampled projects and all five of the additional projects included transactions for expenses or correcting entries posted to the project between 120 and 402 days after the project?s period of performance ended. On three of the additional projects, management submitted revised final reports to the grantor, or revised final invoices to the pass-through entity, more than 120 days after the period of performance ended resulting in noncompliance with federal program close-out requirements.Criteria:2 CFR 200.344 requires (a) that the recipient must submit, no later than 120 calendar days (or 90 days for a subrecipient) after the end of the period of performance, all reports required by the terms and conditions of the award, and (b) unless the federal awarding agency or pass-through entity authorizes an extension, a non-federal entity must liquidate all financial obligations incurred under the federal award no later than 120 calendar days after the end date of the period of performance.Additionally, LSUHSC-NO?s Sponsored Agreement Closeout Policy requires that completed sponsored agreements with surplus and/or deficit residual balances remaining in the project be certified and transferred to an appropriate, non-sponsored, departmentally-funded account or another sponsored project within 90 days of the project end date. LSUHSC-NO?s Sponsored Projects Accounting Cost Transfer Policy 011019 cautions that cost transfers will not be processed to cover cost overruns, to avoid restrictions by the Sponsor, to use up unspent funds, or for reasons of convenience or broadly-defined ?errors.?Cause:These exceptions occurred because (1) expenses are charged to projects after their closeout period in anticipation of a forthcoming project renewal, extension, or funding increase that may or may not be received; (2) the accounting system, PeopleSoft Commitment Control, allows certain personnel and other expenses to continue to post to projects after the project has ended unless a form, such as a change in source of funds form, is processed to update account coding in the system; (3) projects are not being closed out properly as they end, which includes submitting all required forms for updating accounting records; and (4) project budgets were not adequately monitored to ensure that expenses in the accounting system were charged to the correct project and any errors or budget overruns were identified and addressed in a timely manner.Effect:Untimely project updates in the accounting system increase the risk that expenses will be charged to the wrong project which hinders management?s ability to effectively monitor the budget and may result in budget overruns that would need to be covered with other funding sources, increase the number of corrections required at year end to ensure accurate financial reporting, and may result in noncompliance with federal program requirements.Recommendation:Management should continue to monitor budgets and ensure that budget overruns and errors are identified and corrected in a timely manner. Management should ensure that projects are effectively closed out including processing all required forms and updating the accounting system in a timely manner. Management should consider implementing a system control to prevent costs from being charged to projects in the accounting system beyond the project close out period. Management should also implement controls to exclude costs from its Schedule of Expenditures of Federal Awards until the awards or extensions are approved.Management?s Response and Corrective Action Plan:Management concurred with the finding and provided a corrective action plan (B-46).
2022-005 - Noncompliance with and Weakness in Controls over Federal Research and Development ExpensesAward Years: VariousAward Numbers: VariousCompliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesPass-Through Entities: VariousRepeat Finding: Yes (Prior Year Finding No. 2021-007)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In addition, LSUHSC-S did not ensure that costs charged to federal awards were allowable in accordance with federal regulations and the terms and conditions of the award when requesting reimbursement.In a non-statistical random sample of 50 out of 10,798 expense transactions charged to R&D during the fiscal year ending June 30, 2022, the following exceptions were noted:? Three (6%) purchasing card (P-Card) transactions were not allowable in accordance with federal regulations and the terms and conditions of the award and are considered questioned costs totaling $1,073.? For five (10%) of 50 transactions tested, LSUHSC-S overstated expenses on the Schedule of Expenditures of Federal Awards because the award was fully funded, and expenses in excess of the award amount were not removed from the project used to identify expenditures to federal awards in the accounting records, or the expense was determined not allowable as noted above.? Seven (35%) of 20 time and effort certifications for salary and related benefit expenses tested were completed 119 to 461 days after the end of the quarter.We performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 838 (51%) out of 1,654 adjusting journal entries were made more than 90 days after the end of the quarter from the original transactions. The adjustments were made 97 to 1,026 days after the original transactions were recorded and 96 to 953 days after the end of the quarter.In a non-statistical random sample of 10 out of 1,654 payroll adjusting entries affecting R&D, tested by employee, project id (related to federal award), and journal id, six (60%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. Two of these adjusting entries added costs to the federal award projects and are considered questioned costs totaling $28,324.Criteria:2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity?s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments.Per LSUHSC-S?s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S?s policy, time and effort certifications should be completed within approximately 90 days of the end of the quarter. Management interprets the end of the quarter to be when the time and effort reports are sent to the departments once the last month of the quarter is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the quarterly reporting period, a payroll reallocation must be created within 30 days.Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework? issued by the Committee of Sponsoring Organizations of the Treadway Commission. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions.In addition, the National Institute of Health (NIH) is the grantor for the majority of the LSUHSC-S?s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made ?to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable.2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs.Cause:LSUHSC-S?s approval of P-Card transactions did not provide sufficient review of the allowability of expenses on federal awards. LSUHSC-S has procedures in place to review expenses prior to requesting reimbursement; however, it did not ensure that the necessary adjustments were made to the accounting system in a timely manner for expenses that were not allowed for reimbursement. In addition, training to emphasize accountability and the importance of completing time and effort certifications timely and accurately per policy was not completed as planned during fiscal year 2022 due to staffing shortages.LSUHSC-S is still in the process of implementing the corrective action outlined in the prior year to include documentation of adjusted effort and questions to address justification for the adjustment, errors, and timeliness on a modified Personnel Change form.Effect:Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects.In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor.Recommendation:Management should monitor time and effort certifications completed by the departments and investigate and obtain justification from department personnel for untimely certifications, as well as untimely adjustments and lack of supporting documentation for adjustments to enforce established policies. Management should ensure adequate design and operating effectiveness of controls over expenses, including P-Card expenses, charged to federal awards to verify allowability of costs in accordance with federal requirements and grant terms and conditions prior to requesting reimbursement. Management should also consider implementing other complementary controls such as preventing costs from being charged to projects in the accounting system beyond the approved budget or period of performance.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-52).
2022-005 - Noncompliance with and Weakness in Controls over Federal Research and Development ExpensesAward Years: VariousAward Numbers: VariousCompliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesPass-Through Entities: VariousRepeat Finding: Yes (Prior Year Finding No. 2021-007)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In addition, LSUHSC-S did not ensure that costs charged to federal awards were allowable in accordance with federal regulations and the terms and conditions of the award when requesting reimbursement.In a non-statistical random sample of 50 out of 10,798 expense transactions charged to R&D during the fiscal year ending June 30, 2022, the following exceptions were noted:? Three (6%) purchasing card (P-Card) transactions were not allowable in accordance with federal regulations and the terms and conditions of the award and are considered questioned costs totaling $1,073.? For five (10%) of 50 transactions tested, LSUHSC-S overstated expenses on the Schedule of Expenditures of Federal Awards because the award was fully funded, and expenses in excess of the award amount were not removed from the project used to identify expenditures to federal awards in the accounting records, or the expense was determined not allowable as noted above.? Seven (35%) of 20 time and effort certifications for salary and related benefit expenses tested were completed 119 to 461 days after the end of the quarter.We performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 838 (51%) out of 1,654 adjusting journal entries were made more than 90 days after the end of the quarter from the original transactions. The adjustments were made 97 to 1,026 days after the original transactions were recorded and 96 to 953 days after the end of the quarter.In a non-statistical random sample of 10 out of 1,654 payroll adjusting entries affecting R&D, tested by employee, project id (related to federal award), and journal id, six (60%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. Two of these adjusting entries added costs to the federal award projects and are considered questioned costs totaling $28,324.Criteria:2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity?s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments.Per LSUHSC-S?s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S?s policy, time and effort certifications should be completed within approximately 90 days of the end of the quarter. Management interprets the end of the quarter to be when the time and effort reports are sent to the departments once the last month of the quarter is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the quarterly reporting period, a payroll reallocation must be created within 30 days.Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework? issued by the Committee of Sponsoring Organizations of the Treadway Commission. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions.In addition, the National Institute of Health (NIH) is the grantor for the majority of the LSUHSC-S?s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made ?to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable.2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs.Cause:LSUHSC-S?s approval of P-Card transactions did not provide sufficient review of the allowability of expenses on federal awards. LSUHSC-S has procedures in place to review expenses prior to requesting reimbursement; however, it did not ensure that the necessary adjustments were made to the accounting system in a timely manner for expenses that were not allowed for reimbursement. In addition, training to emphasize accountability and the importance of completing time and effort certifications timely and accurately per policy was not completed as planned during fiscal year 2022 due to staffing shortages.LSUHSC-S is still in the process of implementing the corrective action outlined in the prior year to include documentation of adjusted effort and questions to address justification for the adjustment, errors, and timeliness on a modified Personnel Change form.Effect:Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects.In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor.Recommendation:Management should monitor time and effort certifications completed by the departments and investigate and obtain justification from department personnel for untimely certifications, as well as untimely adjustments and lack of supporting documentation for adjustments to enforce established policies. Management should ensure adequate design and operating effectiveness of controls over expenses, including P-Card expenses, charged to federal awards to verify allowability of costs in accordance with federal requirements and grant terms and conditions prior to requesting reimbursement. Management should also consider implementing other complementary controls such as preventing costs from being charged to projects in the accounting system beyond the approved budget or period of performance.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-52).
2022-005 - Noncompliance with and Weakness in Controls over Federal Research and Development ExpensesAward Years: VariousAward Numbers: VariousCompliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesPass-Through Entities: VariousRepeat Finding: Yes (Prior Year Finding No. 2021-007)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In addition, LSUHSC-S did not ensure that costs charged to federal awards were allowable in accordance with federal regulations and the terms and conditions of the award when requesting reimbursement.In a non-statistical random sample of 50 out of 10,798 expense transactions charged to R&D during the fiscal year ending June 30, 2022, the following exceptions were noted:? Three (6%) purchasing card (P-Card) transactions were not allowable in accordance with federal regulations and the terms and conditions of the award and are considered questioned costs totaling $1,073.? For five (10%) of 50 transactions tested, LSUHSC-S overstated expenses on the Schedule of Expenditures of Federal Awards because the award was fully funded, and expenses in excess of the award amount were not removed from the project used to identify expenditures to federal awards in the accounting records, or the expense was determined not allowable as noted above.? Seven (35%) of 20 time and effort certifications for salary and related benefit expenses tested were completed 119 to 461 days after the end of the quarter.We performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 838 (51%) out of 1,654 adjusting journal entries were made more than 90 days after the end of the quarter from the original transactions. The adjustments were made 97 to 1,026 days after the original transactions were recorded and 96 to 953 days after the end of the quarter.In a non-statistical random sample of 10 out of 1,654 payroll adjusting entries affecting R&D, tested by employee, project id (related to federal award), and journal id, six (60%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. Two of these adjusting entries added costs to the federal award projects and are considered questioned costs totaling $28,324.Criteria:2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity?s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments.Per LSUHSC-S?s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S?s policy, time and effort certifications should be completed within approximately 90 days of the end of the quarter. Management interprets the end of the quarter to be when the time and effort reports are sent to the departments once the last month of the quarter is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the quarterly reporting period, a payroll reallocation must be created within 30 days.Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework? issued by the Committee of Sponsoring Organizations of the Treadway Commission. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions.In addition, the National Institute of Health (NIH) is the grantor for the majority of the LSUHSC-S?s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made ?to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable.2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs.Cause:LSUHSC-S?s approval of P-Card transactions did not provide sufficient review of the allowability of expenses on federal awards. LSUHSC-S has procedures in place to review expenses prior to requesting reimbursement; however, it did not ensure that the necessary adjustments were made to the accounting system in a timely manner for expenses that were not allowed for reimbursement. In addition, training to emphasize accountability and the importance of completing time and effort certifications timely and accurately per policy was not completed as planned during fiscal year 2022 due to staffing shortages.LSUHSC-S is still in the process of implementing the corrective action outlined in the prior year to include documentation of adjusted effort and questions to address justification for the adjustment, errors, and timeliness on a modified Personnel Change form.Effect:Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects.In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor.Recommendation:Management should monitor time and effort certifications completed by the departments and investigate and obtain justification from department personnel for untimely certifications, as well as untimely adjustments and lack of supporting documentation for adjustments to enforce established policies. Management should ensure adequate design and operating effectiveness of controls over expenses, including P-Card expenses, charged to federal awards to verify allowability of costs in accordance with federal requirements and grant terms and conditions prior to requesting reimbursement. Management should also consider implementing other complementary controls such as preventing costs from being charged to projects in the accounting system beyond the approved budget or period of performance.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-52).
2022-005 - Noncompliance with and Weakness in Controls over Federal Research and Development ExpensesAward Years: VariousAward Numbers: VariousCompliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesPass-Through Entities: VariousRepeat Finding: Yes (Prior Year Finding No. 2021-007)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In addition, LSUHSC-S did not ensure that costs charged to federal awards were allowable in accordance with federal regulations and the terms and conditions of the award when requesting reimbursement.In a non-statistical random sample of 50 out of 10,798 expense transactions charged to R&D during the fiscal year ending June 30, 2022, the following exceptions were noted:? Three (6%) purchasing card (P-Card) transactions were not allowable in accordance with federal regulations and the terms and conditions of the award and are considered questioned costs totaling $1,073.? For five (10%) of 50 transactions tested, LSUHSC-S overstated expenses on the Schedule of Expenditures of Federal Awards because the award was fully funded, and expenses in excess of the award amount were not removed from the project used to identify expenditures to federal awards in the accounting records, or the expense was determined not allowable as noted above.? Seven (35%) of 20 time and effort certifications for salary and related benefit expenses tested were completed 119 to 461 days after the end of the quarter.We performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 838 (51%) out of 1,654 adjusting journal entries were made more than 90 days after the end of the quarter from the original transactions. The adjustments were made 97 to 1,026 days after the original transactions were recorded and 96 to 953 days after the end of the quarter.In a non-statistical random sample of 10 out of 1,654 payroll adjusting entries affecting R&D, tested by employee, project id (related to federal award), and journal id, six (60%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. Two of these adjusting entries added costs to the federal award projects and are considered questioned costs totaling $28,324.Criteria:2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity?s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments.Per LSUHSC-S?s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S?s policy, time and effort certifications should be completed within approximately 90 days of the end of the quarter. Management interprets the end of the quarter to be when the time and effort reports are sent to the departments once the last month of the quarter is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the quarterly reporting period, a payroll reallocation must be created within 30 days.Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework? issued by the Committee of Sponsoring Organizations of the Treadway Commission. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions.In addition, the National Institute of Health (NIH) is the grantor for the majority of the LSUHSC-S?s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made ?to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable.2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs.Cause:LSUHSC-S?s approval of P-Card transactions did not provide sufficient review of the allowability of expenses on federal awards. LSUHSC-S has procedures in place to review expenses prior to requesting reimbursement; however, it did not ensure that the necessary adjustments were made to the accounting system in a timely manner for expenses that were not allowed for reimbursement. In addition, training to emphasize accountability and the importance of completing time and effort certifications timely and accurately per policy was not completed as planned during fiscal year 2022 due to staffing shortages.LSUHSC-S is still in the process of implementing the corrective action outlined in the prior year to include documentation of adjusted effort and questions to address justification for the adjustment, errors, and timeliness on a modified Personnel Change form.Effect:Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects.In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor.Recommendation:Management should monitor time and effort certifications completed by the departments and investigate and obtain justification from department personnel for untimely certifications, as well as untimely adjustments and lack of supporting documentation for adjustments to enforce established policies. Management should ensure adequate design and operating effectiveness of controls over expenses, including P-Card expenses, charged to federal awards to verify allowability of costs in accordance with federal requirements and grant terms and conditions prior to requesting reimbursement. Management should also consider implementing other complementary controls such as preventing costs from being charged to projects in the accounting system beyond the approved budget or period of performance.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-52).
2022-005 - Noncompliance with and Weakness in Controls over Federal Research and Development ExpensesAward Years: VariousAward Numbers: VariousCompliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesPass-Through Entities: VariousRepeat Finding: Yes (Prior Year Finding No. 2021-007)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In addition, LSUHSC-S did not ensure that costs charged to federal awards were allowable in accordance with federal regulations and the terms and conditions of the award when requesting reimbursement.In a non-statistical random sample of 50 out of 10,798 expense transactions charged to R&D during the fiscal year ending June 30, 2022, the following exceptions were noted:? Three (6%) purchasing card (P-Card) transactions were not allowable in accordance with federal regulations and the terms and conditions of the award and are considered questioned costs totaling $1,073.? For five (10%) of 50 transactions tested, LSUHSC-S overstated expenses on the Schedule of Expenditures of Federal Awards because the award was fully funded, and expenses in excess of the award amount were not removed from the project used to identify expenditures to federal awards in the accounting records, or the expense was determined not allowable as noted above.? Seven (35%) of 20 time and effort certifications for salary and related benefit expenses tested were completed 119 to 461 days after the end of the quarter.We performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 838 (51%) out of 1,654 adjusting journal entries were made more than 90 days after the end of the quarter from the original transactions. The adjustments were made 97 to 1,026 days after the original transactions were recorded and 96 to 953 days after the end of the quarter.In a non-statistical random sample of 10 out of 1,654 payroll adjusting entries affecting R&D, tested by employee, project id (related to federal award), and journal id, six (60%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. Two of these adjusting entries added costs to the federal award projects and are considered questioned costs totaling $28,324.Criteria:2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity?s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments.Per LSUHSC-S?s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S?s policy, time and effort certifications should be completed within approximately 90 days of the end of the quarter. Management interprets the end of the quarter to be when the time and effort reports are sent to the departments once the last month of the quarter is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the quarterly reporting period, a payroll reallocation must be created within 30 days.Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework? issued by the Committee of Sponsoring Organizations of the Treadway Commission. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions.In addition, the National Institute of Health (NIH) is the grantor for the majority of the LSUHSC-S?s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made ?to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable.2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs.Cause:LSUHSC-S?s approval of P-Card transactions did not provide sufficient review of the allowability of expenses on federal awards. LSUHSC-S has procedures in place to review expenses prior to requesting reimbursement; however, it did not ensure that the necessary adjustments were made to the accounting system in a timely manner for expenses that were not allowed for reimbursement. In addition, training to emphasize accountability and the importance of completing time and effort certifications timely and accurately per policy was not completed as planned during fiscal year 2022 due to staffing shortages.LSUHSC-S is still in the process of implementing the corrective action outlined in the prior year to include documentation of adjusted effort and questions to address justification for the adjustment, errors, and timeliness on a modified Personnel Change form.Effect:Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects.In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor.Recommendation:Management should monitor time and effort certifications completed by the departments and investigate and obtain justification from department personnel for untimely certifications, as well as untimely adjustments and lack of supporting documentation for adjustments to enforce established policies. Management should ensure adequate design and operating effectiveness of controls over expenses, including P-Card expenses, charged to federal awards to verify allowability of costs in accordance with federal requirements and grant terms and conditions prior to requesting reimbursement. Management should also consider implementing other complementary controls such as preventing costs from being charged to projects in the accounting system beyond the approved budget or period of performance.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-52).
2022-005 - Noncompliance with and Weakness in Controls over Federal Research and Development ExpensesAward Years: VariousAward Numbers: VariousCompliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesPass-Through Entities: VariousRepeat Finding: Yes (Prior Year Finding No. 2021-007)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In addition, LSUHSC-S did not ensure that costs charged to federal awards were allowable in accordance with federal regulations and the terms and conditions of the award when requesting reimbursement.In a non-statistical random sample of 50 out of 10,798 expense transactions charged to R&D during the fiscal year ending June 30, 2022, the following exceptions were noted:? Three (6%) purchasing card (P-Card) transactions were not allowable in accordance with federal regulations and the terms and conditions of the award and are considered questioned costs totaling $1,073.? For five (10%) of 50 transactions tested, LSUHSC-S overstated expenses on the Schedule of Expenditures of Federal Awards because the award was fully funded, and expenses in excess of the award amount were not removed from the project used to identify expenditures to federal awards in the accounting records, or the expense was determined not allowable as noted above.? Seven (35%) of 20 time and effort certifications for salary and related benefit expenses tested were completed 119 to 461 days after the end of the quarter.We performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 838 (51%) out of 1,654 adjusting journal entries were made more than 90 days after the end of the quarter from the original transactions. The adjustments were made 97 to 1,026 days after the original transactions were recorded and 96 to 953 days after the end of the quarter.In a non-statistical random sample of 10 out of 1,654 payroll adjusting entries affecting R&D, tested by employee, project id (related to federal award), and journal id, six (60%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. Two of these adjusting entries added costs to the federal award projects and are considered questioned costs totaling $28,324.Criteria:2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity?s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments.Per LSUHSC-S?s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S?s policy, time and effort certifications should be completed within approximately 90 days of the end of the quarter. Management interprets the end of the quarter to be when the time and effort reports are sent to the departments once the last month of the quarter is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the quarterly reporting period, a payroll reallocation must be created within 30 days.Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework? issued by the Committee of Sponsoring Organizations of the Treadway Commission. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions.In addition, the National Institute of Health (NIH) is the grantor for the majority of the LSUHSC-S?s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made ?to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable.2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs.Cause:LSUHSC-S?s approval of P-Card transactions did not provide sufficient review of the allowability of expenses on federal awards. LSUHSC-S has procedures in place to review expenses prior to requesting reimbursement; however, it did not ensure that the necessary adjustments were made to the accounting system in a timely manner for expenses that were not allowed for reimbursement. In addition, training to emphasize accountability and the importance of completing time and effort certifications timely and accurately per policy was not completed as planned during fiscal year 2022 due to staffing shortages.LSUHSC-S is still in the process of implementing the corrective action outlined in the prior year to include documentation of adjusted effort and questions to address justification for the adjustment, errors, and timeliness on a modified Personnel Change form.Effect:Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects.In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor.Recommendation:Management should monitor time and effort certifications completed by the departments and investigate and obtain justification from department personnel for untimely certifications, as well as untimely adjustments and lack of supporting documentation for adjustments to enforce established policies. Management should ensure adequate design and operating effectiveness of controls over expenses, including P-Card expenses, charged to federal awards to verify allowability of costs in accordance with federal requirements and grant terms and conditions prior to requesting reimbursement. Management should also consider implementing other complementary controls such as preventing costs from being charged to projects in the accounting system beyond the approved budget or period of performance.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-52).
2022-033 - Weakness in Controls over Research and Development ProjectCloseouts and Accounting RecordsAward Years: 2021, 2022Award Numbers: 1K01AA024494-01A1, 1R21AA026022-01A1, 1R44DA046300-01, 2R01DK087800-06A1, 2R37AA018282-06, GM104940-17025-HSCNO01, INS151591-2, PO-0000180812, WFUHS 35-101730-117901Compliance Requirement: Period of PerformancePass-Through Entities: Eastern Virginia Medical School, La Jolla Alcohol Research, Inc., Wake Forest University HSCRepeat Finding: Yes (Prior Year Finding No. 2021-006)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the third consecutive year, the Louisiana State University Health Sciences Center in New Orleans (LSUHSC-NO) did not have adequate controls over project closeouts or accounting records for the R&D cluster federal program. We tested a non-statistical sample of 18 R&D projects, plus an additional five projects based on the total transaction amount recorded more than 90 days after the project end date, from a population of 139 projects with end dates between April 1, 2021, and June 30, 2022. Five (27.8%) of the sampled projects and all five of the additional projects included transactions for expenses or correcting entries posted to the project between 120 and 402 days after the project?s period of performance ended. On three of the additional projects, management submitted revised final reports to the grantor, or revised final invoices to the pass-through entity, more than 120 days after the period of performance ended resulting in noncompliance with federal program close-out requirements.Criteria:2 CFR 200.344 requires (a) that the recipient must submit, no later than 120 calendar days (or 90 days for a subrecipient) after the end of the period of performance, all reports required by the terms and conditions of the award, and (b) unless the federal awarding agency or pass-through entity authorizes an extension, a non-federal entity must liquidate all financial obligations incurred under the federal award no later than 120 calendar days after the end date of the period of performance.Additionally, LSUHSC-NO?s Sponsored Agreement Closeout Policy requires that completed sponsored agreements with surplus and/or deficit residual balances remaining in the project be certified and transferred to an appropriate, non-sponsored, departmentally-funded account or another sponsored project within 90 days of the project end date. LSUHSC-NO?s Sponsored Projects Accounting Cost Transfer Policy 011019 cautions that cost transfers will not be processed to cover cost overruns, to avoid restrictions by the Sponsor, to use up unspent funds, or for reasons of convenience or broadly-defined ?errors.?Cause:These exceptions occurred because (1) expenses are charged to projects after their closeout period in anticipation of a forthcoming project renewal, extension, or funding increase that may or may not be received; (2) the accounting system, PeopleSoft Commitment Control, allows certain personnel and other expenses to continue to post to projects after the project has ended unless a form, such as a change in source of funds form, is processed to update account coding in the system; (3) projects are not being closed out properly as they end, which includes submitting all required forms for updating accounting records; and (4) project budgets were not adequately monitored to ensure that expenses in the accounting system were charged to the correct project and any errors or budget overruns were identified and addressed in a timely manner.Effect:Untimely project updates in the accounting system increase the risk that expenses will be charged to the wrong project which hinders management?s ability to effectively monitor the budget and may result in budget overruns that would need to be covered with other funding sources, increase the number of corrections required at year end to ensure accurate financial reporting, and may result in noncompliance with federal program requirements.Recommendation:Management should continue to monitor budgets and ensure that budget overruns and errors are identified and corrected in a timely manner. Management should ensure that projects are effectively closed out including processing all required forms and updating the accounting system in a timely manner. Management should consider implementing a system control to prevent costs from being charged to projects in the accounting system beyond the project close out period. Management should also implement controls to exclude costs from its Schedule of Expenditures of Federal Awards until the awards or extensions are approved.Management?s Response and Corrective Action Plan:Management concurred with the finding and provided a corrective action plan (B-46).
2022-035 - Weakness in Controls over Cash Management RequirementsAward Years: VariousAward Numbers: VariousCompliance Requirement: Cash ManagementRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:LSUHSC-S did not follow its prescribed controls over compliance with the cash management requirements of R&D programs. We reviewed a non-statistical sample of 25 federal R&D expense transactions resulting in reimbursement request support for two subaward invoice reconciliations and ten monthly direct award reconciliations, for the fiscal year ending June 30, 2022, from a population of 11,969 expense transactions. We also reviewed the two monthly reconciliations for July and November 2021 that were not selected from the expense transactions. We noted the following:? Four (29%) of 14 reconciliations had no evidence of review or approval by someone other than the preparer.? Ten (71%) of 14 approved reconciliations did not agree to the reimbursement request submitted to the grantor.Criteria:2 CFR 200.303 requires that non-federal entities establish and maintain internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.LSUHSC-S has established controls over cash management requirements, which consist of a monthly reconciliation of reimbursement requests for R&D expenses and includes the review and approval by someone other than the preparer.Cause:LSUHSC-S did not follow its established controls over monthly reconciliations.LSUHSC-S represented that the monthly reconciliations are the starting point in the process and additional determinations of which amounts should be drawn down are made after the reconciliation has been completed. LSUHSC-S did not provide any evidence that additional review and approval was performed prior to the reimbursement request.LSUHSC-S did not perform the drawdowns on a monthly basis when the reconciliations were performed. Drawdowns were performed in March and June 2022, and after fiscal year end in July, August, and October 2022 for expenses incurred during the fiscal year ending June 30, 2022. Management provided additional reconciliations for the draw down amounts, but there was no evidence of review and approval by someone other than the preparer.Effect:Failure to implement sufficient controls over cash management could result in LSUHSC-S requesting reimbursement for expenses not incurred prior to the request and place LSUHSC-S in noncompliance with federal regulations.Recommendation:LSUHSC-S should ensure that a review and approval is performed on the final amounts requested for reimbursement and evidence is maintained. LSUSHC-S should also ensure that established controls are followed to ensure the review and approval is performed by someone other than the preparer.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-55).
2022-005 - Noncompliance with and Weakness in Controls over Federal Research and Development ExpensesAward Years: VariousAward Numbers: VariousCompliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesPass-Through Entities: VariousRepeat Finding: Yes (Prior Year Finding No. 2021-007)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In addition, LSUHSC-S did not ensure that costs charged to federal awards were allowable in accordance with federal regulations and the terms and conditions of the award when requesting reimbursement.In a non-statistical random sample of 50 out of 10,798 expense transactions charged to R&D during the fiscal year ending June 30, 2022, the following exceptions were noted:? Three (6%) purchasing card (P-Card) transactions were not allowable in accordance with federal regulations and the terms and conditions of the award and are considered questioned costs totaling $1,073.? For five (10%) of 50 transactions tested, LSUHSC-S overstated expenses on the Schedule of Expenditures of Federal Awards because the award was fully funded, and expenses in excess of the award amount were not removed from the project used to identify expenditures to federal awards in the accounting records, or the expense was determined not allowable as noted above.? Seven (35%) of 20 time and effort certifications for salary and related benefit expenses tested were completed 119 to 461 days after the end of the quarter.We performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 838 (51%) out of 1,654 adjusting journal entries were made more than 90 days after the end of the quarter from the original transactions. The adjustments were made 97 to 1,026 days after the original transactions were recorded and 96 to 953 days after the end of the quarter.In a non-statistical random sample of 10 out of 1,654 payroll adjusting entries affecting R&D, tested by employee, project id (related to federal award), and journal id, six (60%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. Two of these adjusting entries added costs to the federal award projects and are considered questioned costs totaling $28,324.Criteria:2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity?s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments.Per LSUHSC-S?s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S?s policy, time and effort certifications should be completed within approximately 90 days of the end of the quarter. Management interprets the end of the quarter to be when the time and effort reports are sent to the departments once the last month of the quarter is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the quarterly reporting period, a payroll reallocation must be created within 30 days.Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework? issued by the Committee of Sponsoring Organizations of the Treadway Commission. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions.In addition, the National Institute of Health (NIH) is the grantor for the majority of the LSUHSC-S?s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made ?to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable.2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs.Cause:LSUHSC-S?s approval of P-Card transactions did not provide sufficient review of the allowability of expenses on federal awards. LSUHSC-S has procedures in place to review expenses prior to requesting reimbursement; however, it did not ensure that the necessary adjustments were made to the accounting system in a timely manner for expenses that were not allowed for reimbursement. In addition, training to emphasize accountability and the importance of completing time and effort certifications timely and accurately per policy was not completed as planned during fiscal year 2022 due to staffing shortages.LSUHSC-S is still in the process of implementing the corrective action outlined in the prior year to include documentation of adjusted effort and questions to address justification for the adjustment, errors, and timeliness on a modified Personnel Change form.Effect:Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects.In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor.Recommendation:Management should monitor time and effort certifications completed by the departments and investigate and obtain justification from department personnel for untimely certifications, as well as untimely adjustments and lack of supporting documentation for adjustments to enforce established policies. Management should ensure adequate design and operating effectiveness of controls over expenses, including P-Card expenses, charged to federal awards to verify allowability of costs in accordance with federal requirements and grant terms and conditions prior to requesting reimbursement. Management should also consider implementing other complementary controls such as preventing costs from being charged to projects in the accounting system beyond the approved budget or period of performance.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-52).
2022-005 - Noncompliance with and Weakness in Controls over Federal Research and Development ExpensesAward Years: VariousAward Numbers: VariousCompliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesPass-Through Entities: VariousRepeat Finding: Yes (Prior Year Finding No. 2021-007)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In addition, LSUHSC-S did not ensure that costs charged to federal awards were allowable in accordance with federal regulations and the terms and conditions of the award when requesting reimbursement.In a non-statistical random sample of 50 out of 10,798 expense transactions charged to R&D during the fiscal year ending June 30, 2022, the following exceptions were noted:? Three (6%) purchasing card (P-Card) transactions were not allowable in accordance with federal regulations and the terms and conditions of the award and are considered questioned costs totaling $1,073.? For five (10%) of 50 transactions tested, LSUHSC-S overstated expenses on the Schedule of Expenditures of Federal Awards because the award was fully funded, and expenses in excess of the award amount were not removed from the project used to identify expenditures to federal awards in the accounting records, or the expense was determined not allowable as noted above.? Seven (35%) of 20 time and effort certifications for salary and related benefit expenses tested were completed 119 to 461 days after the end of the quarter.We performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 838 (51%) out of 1,654 adjusting journal entries were made more than 90 days after the end of the quarter from the original transactions. The adjustments were made 97 to 1,026 days after the original transactions were recorded and 96 to 953 days after the end of the quarter.In a non-statistical random sample of 10 out of 1,654 payroll adjusting entries affecting R&D, tested by employee, project id (related to federal award), and journal id, six (60%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. Two of these adjusting entries added costs to the federal award projects and are considered questioned costs totaling $28,324.Criteria:2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity?s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments.Per LSUHSC-S?s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S?s policy, time and effort certifications should be completed within approximately 90 days of the end of the quarter. Management interprets the end of the quarter to be when the time and effort reports are sent to the departments once the last month of the quarter is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the quarterly reporting period, a payroll reallocation must be created within 30 days.Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework? issued by the Committee of Sponsoring Organizations of the Treadway Commission. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions.In addition, the National Institute of Health (NIH) is the grantor for the majority of the LSUHSC-S?s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made ?to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable.2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs.Cause:LSUHSC-S?s approval of P-Card transactions did not provide sufficient review of the allowability of expenses on federal awards. LSUHSC-S has procedures in place to review expenses prior to requesting reimbursement; however, it did not ensure that the necessary adjustments were made to the accounting system in a timely manner for expenses that were not allowed for reimbursement. In addition, training to emphasize accountability and the importance of completing time and effort certifications timely and accurately per policy was not completed as planned during fiscal year 2022 due to staffing shortages.LSUHSC-S is still in the process of implementing the corrective action outlined in the prior year to include documentation of adjusted effort and questions to address justification for the adjustment, errors, and timeliness on a modified Personnel Change form.Effect:Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects.In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor.Recommendation:Management should monitor time and effort certifications completed by the departments and investigate and obtain justification from department personnel for untimely certifications, as well as untimely adjustments and lack of supporting documentation for adjustments to enforce established policies. Management should ensure adequate design and operating effectiveness of controls over expenses, including P-Card expenses, charged to federal awards to verify allowability of costs in accordance with federal requirements and grant terms and conditions prior to requesting reimbursement. Management should also consider implementing other complementary controls such as preventing costs from being charged to projects in the accounting system beyond the approved budget or period of performance.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-52).
2022-035 - Weakness in Controls over Cash Management RequirementsAward Years: VariousAward Numbers: VariousCompliance Requirement: Cash ManagementRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:LSUHSC-S did not follow its prescribed controls over compliance with the cash management requirements of R&D programs. We reviewed a non-statistical sample of 25 federal R&D expense transactions resulting in reimbursement request support for two subaward invoice reconciliations and ten monthly direct award reconciliations, for the fiscal year ending June 30, 2022, from a population of 11,969 expense transactions. We also reviewed the two monthly reconciliations for July and November 2021 that were not selected from the expense transactions. We noted the following:? Four (29%) of 14 reconciliations had no evidence of review or approval by someone other than the preparer.? Ten (71%) of 14 approved reconciliations did not agree to the reimbursement request submitted to the grantor.Criteria:2 CFR 200.303 requires that non-federal entities establish and maintain internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.LSUHSC-S has established controls over cash management requirements, which consist of a monthly reconciliation of reimbursement requests for R&D expenses and includes the review and approval by someone other than the preparer.Cause:LSUHSC-S did not follow its established controls over monthly reconciliations.LSUHSC-S represented that the monthly reconciliations are the starting point in the process and additional determinations of which amounts should be drawn down are made after the reconciliation has been completed. LSUHSC-S did not provide any evidence that additional review and approval was performed prior to the reimbursement request.LSUHSC-S did not perform the drawdowns on a monthly basis when the reconciliations were performed. Drawdowns were performed in March and June 2022, and after fiscal year end in July, August, and October 2022 for expenses incurred during the fiscal year ending June 30, 2022. Management provided additional reconciliations for the draw down amounts, but there was no evidence of review and approval by someone other than the preparer.Effect:Failure to implement sufficient controls over cash management could result in LSUHSC-S requesting reimbursement for expenses not incurred prior to the request and place LSUHSC-S in noncompliance with federal regulations.Recommendation:LSUHSC-S should ensure that a review and approval is performed on the final amounts requested for reimbursement and evidence is maintained. LSUSHC-S should also ensure that established controls are followed to ensure the review and approval is performed by someone other than the preparer.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-55).
2022-033 - Weakness in Controls over Research and Development ProjectCloseouts and Accounting RecordsAward Years: 2021, 2022Award Numbers: 1K01AA024494-01A1, 1R21AA026022-01A1, 1R44DA046300-01, 2R01DK087800-06A1, 2R37AA018282-06, GM104940-17025-HSCNO01, INS151591-2, PO-0000180812, WFUHS 35-101730-117901Compliance Requirement: Period of PerformancePass-Through Entities: Eastern Virginia Medical School, La Jolla Alcohol Research, Inc., Wake Forest University HSCRepeat Finding: Yes (Prior Year Finding No. 2021-006)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the third consecutive year, the Louisiana State University Health Sciences Center in New Orleans (LSUHSC-NO) did not have adequate controls over project closeouts or accounting records for the R&D cluster federal program. We tested a non-statistical sample of 18 R&D projects, plus an additional five projects based on the total transaction amount recorded more than 90 days after the project end date, from a population of 139 projects with end dates between April 1, 2021, and June 30, 2022. Five (27.8%) of the sampled projects and all five of the additional projects included transactions for expenses or correcting entries posted to the project between 120 and 402 days after the project?s period of performance ended. On three of the additional projects, management submitted revised final reports to the grantor, or revised final invoices to the pass-through entity, more than 120 days after the period of performance ended resulting in noncompliance with federal program close-out requirements.Criteria:2 CFR 200.344 requires (a) that the recipient must submit, no later than 120 calendar days (or 90 days for a subrecipient) after the end of the period of performance, all reports required by the terms and conditions of the award, and (b) unless the federal awarding agency or pass-through entity authorizes an extension, a non-federal entity must liquidate all financial obligations incurred under the federal award no later than 120 calendar days after the end date of the period of performance.Additionally, LSUHSC-NO?s Sponsored Agreement Closeout Policy requires that completed sponsored agreements with surplus and/or deficit residual balances remaining in the project be certified and transferred to an appropriate, non-sponsored, departmentally-funded account or another sponsored project within 90 days of the project end date. LSUHSC-NO?s Sponsored Projects Accounting Cost Transfer Policy 011019 cautions that cost transfers will not be processed to cover cost overruns, to avoid restrictions by the Sponsor, to use up unspent funds, or for reasons of convenience or broadly-defined ?errors.?Cause:These exceptions occurred because (1) expenses are charged to projects after their closeout period in anticipation of a forthcoming project renewal, extension, or funding increase that may or may not be received; (2) the accounting system, PeopleSoft Commitment Control, allows certain personnel and other expenses to continue to post to projects after the project has ended unless a form, such as a change in source of funds form, is processed to update account coding in the system; (3) projects are not being closed out properly as they end, which includes submitting all required forms for updating accounting records; and (4) project budgets were not adequately monitored to ensure that expenses in the accounting system were charged to the correct project and any errors or budget overruns were identified and addressed in a timely manner.Effect:Untimely project updates in the accounting system increase the risk that expenses will be charged to the wrong project which hinders management?s ability to effectively monitor the budget and may result in budget overruns that would need to be covered with other funding sources, increase the number of corrections required at year end to ensure accurate financial reporting, and may result in noncompliance with federal program requirements.Recommendation:Management should continue to monitor budgets and ensure that budget overruns and errors are identified and corrected in a timely manner. Management should ensure that projects are effectively closed out including processing all required forms and updating the accounting system in a timely manner. Management should consider implementing a system control to prevent costs from being charged to projects in the accounting system beyond the project close out period. Management should also implement controls to exclude costs from its Schedule of Expenditures of Federal Awards until the awards or extensions are approved.Management?s Response and Corrective Action Plan:Management concurred with the finding and provided a corrective action plan (B-46).
2022-005 - Noncompliance with and Weakness in Controls over Federal Research and Development ExpensesAward Years: VariousAward Numbers: VariousCompliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesPass-Through Entities: VariousRepeat Finding: Yes (Prior Year Finding No. 2021-007)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In addition, LSUHSC-S did not ensure that costs charged to federal awards were allowable in accordance with federal regulations and the terms and conditions of the award when requesting reimbursement.In a non-statistical random sample of 50 out of 10,798 expense transactions charged to R&D during the fiscal year ending June 30, 2022, the following exceptions were noted:? Three (6%) purchasing card (P-Card) transactions were not allowable in accordance with federal regulations and the terms and conditions of the award and are considered questioned costs totaling $1,073.? For five (10%) of 50 transactions tested, LSUHSC-S overstated expenses on the Schedule of Expenditures of Federal Awards because the award was fully funded, and expenses in excess of the award amount were not removed from the project used to identify expenditures to federal awards in the accounting records, or the expense was determined not allowable as noted above.? Seven (35%) of 20 time and effort certifications for salary and related benefit expenses tested were completed 119 to 461 days after the end of the quarter.We performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 838 (51%) out of 1,654 adjusting journal entries were made more than 90 days after the end of the quarter from the original transactions. The adjustments were made 97 to 1,026 days after the original transactions were recorded and 96 to 953 days after the end of the quarter.In a non-statistical random sample of 10 out of 1,654 payroll adjusting entries affecting R&D, tested by employee, project id (related to federal award), and journal id, six (60%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. Two of these adjusting entries added costs to the federal award projects and are considered questioned costs totaling $28,324.Criteria:2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity?s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments.Per LSUHSC-S?s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S?s policy, time and effort certifications should be completed within approximately 90 days of the end of the quarter. Management interprets the end of the quarter to be when the time and effort reports are sent to the departments once the last month of the quarter is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the quarterly reporting period, a payroll reallocation must be created within 30 days.Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework? issued by the Committee of Sponsoring Organizations of the Treadway Commission. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions.In addition, the National Institute of Health (NIH) is the grantor for the majority of the LSUHSC-S?s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made ?to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable.2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs.Cause:LSUHSC-S?s approval of P-Card transactions did not provide sufficient review of the allowability of expenses on federal awards. LSUHSC-S has procedures in place to review expenses prior to requesting reimbursement; however, it did not ensure that the necessary adjustments were made to the accounting system in a timely manner for expenses that were not allowed for reimbursement. In addition, training to emphasize accountability and the importance of completing time and effort certifications timely and accurately per policy was not completed as planned during fiscal year 2022 due to staffing shortages.LSUHSC-S is still in the process of implementing the corrective action outlined in the prior year to include documentation of adjusted effort and questions to address justification for the adjustment, errors, and timeliness on a modified Personnel Change form.Effect:Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects.In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor.Recommendation:Management should monitor time and effort certifications completed by the departments and investigate and obtain justification from department personnel for untimely certifications, as well as untimely adjustments and lack of supporting documentation for adjustments to enforce established policies. Management should ensure adequate design and operating effectiveness of controls over expenses, including P-Card expenses, charged to federal awards to verify allowability of costs in accordance with federal requirements and grant terms and conditions prior to requesting reimbursement. Management should also consider implementing other complementary controls such as preventing costs from being charged to projects in the accounting system beyond the approved budget or period of performance.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-52).
2022-005 - Noncompliance with and Weakness in Controls over Federal Research and Development ExpensesAward Years: VariousAward Numbers: VariousCompliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesPass-Through Entities: VariousRepeat Finding: Yes (Prior Year Finding No. 2021-007)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In addition, LSUHSC-S did not ensure that costs charged to federal awards were allowable in accordance with federal regulations and the terms and conditions of the award when requesting reimbursement.In a non-statistical random sample of 50 out of 10,798 expense transactions charged to R&D during the fiscal year ending June 30, 2022, the following exceptions were noted:? Three (6%) purchasing card (P-Card) transactions were not allowable in accordance with federal regulations and the terms and conditions of the award and are considered questioned costs totaling $1,073.? For five (10%) of 50 transactions tested, LSUHSC-S overstated expenses on the Schedule of Expenditures of Federal Awards because the award was fully funded, and expenses in excess of the award amount were not removed from the project used to identify expenditures to federal awards in the accounting records, or the expense was determined not allowable as noted above.? Seven (35%) of 20 time and effort certifications for salary and related benefit expenses tested were completed 119 to 461 days after the end of the quarter.We performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 838 (51%) out of 1,654 adjusting journal entries were made more than 90 days after the end of the quarter from the original transactions. The adjustments were made 97 to 1,026 days after the original transactions were recorded and 96 to 953 days after the end of the quarter.In a non-statistical random sample of 10 out of 1,654 payroll adjusting entries affecting R&D, tested by employee, project id (related to federal award), and journal id, six (60%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. Two of these adjusting entries added costs to the federal award projects and are considered questioned costs totaling $28,324.Criteria:2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity?s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments.Per LSUHSC-S?s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S?s policy, time and effort certifications should be completed within approximately 90 days of the end of the quarter. Management interprets the end of the quarter to be when the time and effort reports are sent to the departments once the last month of the quarter is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the quarterly reporting period, a payroll reallocation must be created within 30 days.Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework? issued by the Committee of Sponsoring Organizations of the Treadway Commission. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions.In addition, the National Institute of Health (NIH) is the grantor for the majority of the LSUHSC-S?s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made ?to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable.2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs.Cause:LSUHSC-S?s approval of P-Card transactions did not provide sufficient review of the allowability of expenses on federal awards. LSUHSC-S has procedures in place to review expenses prior to requesting reimbursement; however, it did not ensure that the necessary adjustments were made to the accounting system in a timely manner for expenses that were not allowed for reimbursement. In addition, training to emphasize accountability and the importance of completing time and effort certifications timely and accurately per policy was not completed as planned during fiscal year 2022 due to staffing shortages.LSUHSC-S is still in the process of implementing the corrective action outlined in the prior year to include documentation of adjusted effort and questions to address justification for the adjustment, errors, and timeliness on a modified Personnel Change form.Effect:Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects.In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor.Recommendation:Management should monitor time and effort certifications completed by the departments and investigate and obtain justification from department personnel for untimely certifications, as well as untimely adjustments and lack of supporting documentation for adjustments to enforce established policies. Management should ensure adequate design and operating effectiveness of controls over expenses, including P-Card expenses, charged to federal awards to verify allowability of costs in accordance with federal requirements and grant terms and conditions prior to requesting reimbursement. Management should also consider implementing other complementary controls such as preventing costs from being charged to projects in the accounting system beyond the approved budget or period of performance.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-52).
2022-034 - Noncompliance and Weakness in Controls with Special Tests and Provisions RequirementsAward Years: 2018, 2022Award Numbers: P20GM121307, R56NS114272Compliance Requirement: Special Tests and ProvisionsRepeat Finding: Yes (Prior Year Finding No. 2021-069)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, LSUHSC-S did not have adequate controls in place to ensure compliance with Special Tests and Provisions requirements. We reviewed a non-statistical sample of 14 federal R&D Cluster awards, plus two additional awards based on materiality, for the fiscal year ending June 30, 2022, from a population of 54 awards with a total of 28 key personnel. We reviewed the quarterly Time and Effort Certification forms, as applicable, for each key personnel for each award selected.We noted two of 28 (7%) key personnel had documentation of actual effort on the Time and Effort Certification forms that did not agree to the effort reported to the federal grantor, and there was no evidence of prior approval from the federal grantor for a change in key personnel.Criteria:2 CFR 200.308(c) states that for non-construction federal awards, recipients must request prior approvals from federal awarding agencies for one or more of the following program or budget-related reasons: (i) change in the scope or the objective of the project or program (even if there is no associated budget revision requiring prior written approval); (ii) change in a key person specified in the application or the federal award; (iii) the disengagement from the project for more than three months, or a 25% reduction in time devoted to the project, by the approved project director or principal investigator.Cause:During fiscal year 2022, LSUHSC-S was in the process of implementing its corrective action plan. This included review of some time and effort certifications as training was performed, development of an updated Personnel Change (PER-3) form that now includes percentage effort documentation, and defined responsibilities for reporting changes in level of effort and requesting grantor approval as needed.Effect:Failure to implement controls over key personnel requirements could result in noncompliance with Special Tests and Provisions requirements.Recommendation:Management should continue to provide training for time and effort certifications. Management should also utilize the time and effort certifications and updated PER-3 forms to monitor changes in effort for key personnel and verify that prior written approval is obtained from the federal grantor for changes that exceed the thresholds set in federal regulations.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-49).
2022-035 - Weakness in Controls over Cash Management RequirementsAward Years: VariousAward Numbers: VariousCompliance Requirement: Cash ManagementRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:LSUHSC-S did not follow its prescribed controls over compliance with the cash management requirements of R&D programs. We reviewed a non-statistical sample of 25 federal R&D expense transactions resulting in reimbursement request support for two subaward invoice reconciliations and ten monthly direct award reconciliations, for the fiscal year ending June 30, 2022, from a population of 11,969 expense transactions. We also reviewed the two monthly reconciliations for July and November 2021 that were not selected from the expense transactions. We noted the following:? Four (29%) of 14 reconciliations had no evidence of review or approval by someone other than the preparer.? Ten (71%) of 14 approved reconciliations did not agree to the reimbursement request submitted to the grantor.Criteria:2 CFR 200.303 requires that non-federal entities establish and maintain internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.LSUHSC-S has established controls over cash management requirements, which consist of a monthly reconciliation of reimbursement requests for R&D expenses and includes the review and approval by someone other than the preparer.Cause:LSUHSC-S did not follow its established controls over monthly reconciliations.LSUHSC-S represented that the monthly reconciliations are the starting point in the process and additional determinations of which amounts should be drawn down are made after the reconciliation has been completed. LSUHSC-S did not provide any evidence that additional review and approval was performed prior to the reimbursement request.LSUHSC-S did not perform the drawdowns on a monthly basis when the reconciliations were performed. Drawdowns were performed in March and June 2022, and after fiscal year end in July, August, and October 2022 for expenses incurred during the fiscal year ending June 30, 2022. Management provided additional reconciliations for the draw down amounts, but there was no evidence of review and approval by someone other than the preparer.Effect:Failure to implement sufficient controls over cash management could result in LSUHSC-S requesting reimbursement for expenses not incurred prior to the request and place LSUHSC-S in noncompliance with federal regulations.Recommendation:LSUHSC-S should ensure that a review and approval is performed on the final amounts requested for reimbursement and evidence is maintained. LSUSHC-S should also ensure that established controls are followed to ensure the review and approval is performed by someone other than the preparer.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-55).
2022-005 - Noncompliance with and Weakness in Controls over Federal Research and Development ExpensesAward Years: VariousAward Numbers: VariousCompliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesPass-Through Entities: VariousRepeat Finding: Yes (Prior Year Finding No. 2021-007)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In addition, LSUHSC-S did not ensure that costs charged to federal awards were allowable in accordance with federal regulations and the terms and conditions of the award when requesting reimbursement.In a non-statistical random sample of 50 out of 10,798 expense transactions charged to R&D during the fiscal year ending June 30, 2022, the following exceptions were noted:? Three (6%) purchasing card (P-Card) transactions were not allowable in accordance with federal regulations and the terms and conditions of the award and are considered questioned costs totaling $1,073.? For five (10%) of 50 transactions tested, LSUHSC-S overstated expenses on the Schedule of Expenditures of Federal Awards because the award was fully funded, and expenses in excess of the award amount were not removed from the project used to identify expenditures to federal awards in the accounting records, or the expense was determined not allowable as noted above.? Seven (35%) of 20 time and effort certifications for salary and related benefit expenses tested were completed 119 to 461 days after the end of the quarter.We performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 838 (51%) out of 1,654 adjusting journal entries were made more than 90 days after the end of the quarter from the original transactions. The adjustments were made 97 to 1,026 days after the original transactions were recorded and 96 to 953 days after the end of the quarter.In a non-statistical random sample of 10 out of 1,654 payroll adjusting entries affecting R&D, tested by employee, project id (related to federal award), and journal id, six (60%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. Two of these adjusting entries added costs to the federal award projects and are considered questioned costs totaling $28,324.Criteria:2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity?s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments.Per LSUHSC-S?s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S?s policy, time and effort certifications should be completed within approximately 90 days of the end of the quarter. Management interprets the end of the quarter to be when the time and effort reports are sent to the departments once the last month of the quarter is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the quarterly reporting period, a payroll reallocation must be created within 30 days.Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework? issued by the Committee of Sponsoring Organizations of the Treadway Commission. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions.In addition, the National Institute of Health (NIH) is the grantor for the majority of the LSUHSC-S?s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made ?to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable.2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs.Cause:LSUHSC-S?s approval of P-Card transactions did not provide sufficient review of the allowability of expenses on federal awards. LSUHSC-S has procedures in place to review expenses prior to requesting reimbursement; however, it did not ensure that the necessary adjustments were made to the accounting system in a timely manner for expenses that were not allowed for reimbursement. In addition, training to emphasize accountability and the importance of completing time and effort certifications timely and accurately per policy was not completed as planned during fiscal year 2022 due to staffing shortages.LSUHSC-S is still in the process of implementing the corrective action outlined in the prior year to include documentation of adjusted effort and questions to address justification for the adjustment, errors, and timeliness on a modified Personnel Change form.Effect:Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects.In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor.Recommendation:Management should monitor time and effort certifications completed by the departments and investigate and obtain justification from department personnel for untimely certifications, as well as untimely adjustments and lack of supporting documentation for adjustments to enforce established policies. Management should ensure adequate design and operating effectiveness of controls over expenses, including P-Card expenses, charged to federal awards to verify allowability of costs in accordance with federal requirements and grant terms and conditions prior to requesting reimbursement. Management should also consider implementing other complementary controls such as preventing costs from being charged to projects in the accounting system beyond the approved budget or period of performance.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-52).
2022-005 - Noncompliance with and Weakness in Controls over Federal Research and Development ExpensesAward Years: VariousAward Numbers: VariousCompliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesPass-Through Entities: VariousRepeat Finding: Yes (Prior Year Finding No. 2021-007)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In addition, LSUHSC-S did not ensure that costs charged to federal awards were allowable in accordance with federal regulations and the terms and conditions of the award when requesting reimbursement.In a non-statistical random sample of 50 out of 10,798 expense transactions charged to R&D during the fiscal year ending June 30, 2022, the following exceptions were noted:? Three (6%) purchasing card (P-Card) transactions were not allowable in accordance with federal regulations and the terms and conditions of the award and are considered questioned costs totaling $1,073.? For five (10%) of 50 transactions tested, LSUHSC-S overstated expenses on the Schedule of Expenditures of Federal Awards because the award was fully funded, and expenses in excess of the award amount were not removed from the project used to identify expenditures to federal awards in the accounting records, or the expense was determined not allowable as noted above.? Seven (35%) of 20 time and effort certifications for salary and related benefit expenses tested were completed 119 to 461 days after the end of the quarter.We performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 838 (51%) out of 1,654 adjusting journal entries were made more than 90 days after the end of the quarter from the original transactions. The adjustments were made 97 to 1,026 days after the original transactions were recorded and 96 to 953 days after the end of the quarter.In a non-statistical random sample of 10 out of 1,654 payroll adjusting entries affecting R&D, tested by employee, project id (related to federal award), and journal id, six (60%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. Two of these adjusting entries added costs to the federal award projects and are considered questioned costs totaling $28,324.Criteria:2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity?s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments.Per LSUHSC-S?s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S?s policy, time and effort certifications should be completed within approximately 90 days of the end of the quarter. Management interprets the end of the quarter to be when the time and effort reports are sent to the departments once the last month of the quarter is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the quarterly reporting period, a payroll reallocation must be created within 30 days.Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework? issued by the Committee of Sponsoring Organizations of the Treadway Commission. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions.In addition, the National Institute of Health (NIH) is the grantor for the majority of the LSUHSC-S?s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made ?to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable.2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs.Cause:LSUHSC-S?s approval of P-Card transactions did not provide sufficient review of the allowability of expenses on federal awards. LSUHSC-S has procedures in place to review expenses prior to requesting reimbursement; however, it did not ensure that the necessary adjustments were made to the accounting system in a timely manner for expenses that were not allowed for reimbursement. In addition, training to emphasize accountability and the importance of completing time and effort certifications timely and accurately per policy was not completed as planned during fiscal year 2022 due to staffing shortages.LSUHSC-S is still in the process of implementing the corrective action outlined in the prior year to include documentation of adjusted effort and questions to address justification for the adjustment, errors, and timeliness on a modified Personnel Change form.Effect:Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects.In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor.Recommendation:Management should monitor time and effort certifications completed by the departments and investigate and obtain justification from department personnel for untimely certifications, as well as untimely adjustments and lack of supporting documentation for adjustments to enforce established policies. Management should ensure adequate design and operating effectiveness of controls over expenses, including P-Card expenses, charged to federal awards to verify allowability of costs in accordance with federal requirements and grant terms and conditions prior to requesting reimbursement. Management should also consider implementing other complementary controls such as preventing costs from being charged to projects in the accounting system beyond the approved budget or period of performance.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-52).
2022-006 - Control Weakness and Noncompliance with Personnel Expenses Charged to Federal AwardsAward Years: 2018, 2019, 2021, 2022Award Numbers: 2138930, 2000614536, B-18-DP-22-001, EMW-2020-SS-00011-S01, M19AC00015, NR227217XXXXC002, P01AI048240, R21AI165939, R33HD099745, U19AI159840Compliance Requirements: Allowable Costs/Cost Principles, Special Tests and ProvisionsPass-Through Entities: Board of Trustees of the Leland Stanford Junior University, Emory UniversityRepeat Finding: Yes (Prior Year Finding No. 2021-009)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the second consecutive year, the University of Louisiana at Lafayette (UL Lafayette) did not have adequate controls in place to ensure personnel expenses and effort charged to federal R&D awards accurately reflected work performed. From a population of 28,744 payroll and non-payroll expenses charged to R&D grants, a non-statistical sample of 25 transactions was tested. For all 12 (48%) of the payroll transactions, UL Lafayette was unable to provide documentation to show that personnel-related expenses, totaling $4,520, were supported by time and effort certifications to ensure the accuracy of budget estimates charged to federal awards as required by federal regulations. Additionally, because there is no after-the-fact review to ensure the accuracy of personnel costs and effort charged to the awards, UL Lafayette could not ensure compliance with the requirements of special tests and provisions related to key personnel effort.Criteria:2 CFR 200.430(i) specifies the documentation standards for personnel expenses. In order to be allowable, charges to federal awards for personnel expenses must be based on records that accurately reflect the work performed and must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Budget estimates alone do not qualify as support for charges to federal awards, but can be used for interim accounting purposes provided that internal controls include an after-the-fact review to confirm the accuracy of final amounts charged to federal awards.Prior approval requirements related to key personnel effort are contained in 2 CFR 200.308(c) and within grant terms and conditions. A reduction of 25% or greater in time devoted to the project from key personnel requires prior approval.Cause:Management represented that it?s still in the process of implementing the prior-year corrective actions to address the issues noted in the prior-year finding. As a result, time and effort certifications were not completed by employees to support the accuracy of budget estimates charged to federal awards as required by 2 CFR 200.430(i).Effect:Inadequate controls related to federal documentation standards for personnel expenses could result in noncompliance with federal allowable costs and cost principles, as well as noncompliance with special tests and provisions related to key personnel effort.Recommendation:Management should strengthen internal controls to ensure that personnel expenses charged to the federal awards are supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.Management?s Response and Corrective Action Plan:Management did not concur with the finding, noting it did not have sufficient time in fiscal year 2022 for corrective action and provided its progress on addressing the finding (B-82).
2022-006 - Control Weakness and Noncompliance with Personnel Expenses Charged to Federal AwardsAward Years: 2018, 2019, 2021, 2022Award Numbers: 2138930, 2000614536, B-18-DP-22-001, EMW-2020-SS-00011-S01, M19AC00015, NR227217XXXXC002, P01AI048240, R21AI165939, R33HD099745, U19AI159840Compliance Requirements: Allowable Costs/Cost Principles, Special Tests and ProvisionsPass-Through Entities: Board of Trustees of the Leland Stanford Junior University, Emory UniversityRepeat Finding: Yes (Prior Year Finding No. 2021-009)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the second consecutive year, the University of Louisiana at Lafayette (UL Lafayette) did not have adequate controls in place to ensure personnel expenses and effort charged to federal R&D awards accurately reflected work performed. From a population of 28,744 payroll and non-payroll expenses charged to R&D grants, a non-statistical sample of 25 transactions was tested. For all 12 (48%) of the payroll transactions, UL Lafayette was unable to provide documentation to show that personnel-related expenses, totaling $4,520, were supported by time and effort certifications to ensure the accuracy of budget estimates charged to federal awards as required by federal regulations. Additionally, because there is no after-the-fact review to ensure the accuracy of personnel costs and effort charged to the awards, UL Lafayette could not ensure compliance with the requirements of special tests and provisions related to key personnel effort.Criteria:2 CFR 200.430(i) specifies the documentation standards for personnel expenses. In order to be allowable, charges to federal awards for personnel expenses must be based on records that accurately reflect the work performed and must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Budget estimates alone do not qualify as support for charges to federal awards, but can be used for interim accounting purposes provided that internal controls include an after-the-fact review to confirm the accuracy of final amounts charged to federal awards.Prior approval requirements related to key personnel effort are contained in 2 CFR 200.308(c) and within grant terms and conditions. A reduction of 25% or greater in time devoted to the project from key personnel requires prior approval.Cause:Management represented that it?s still in the process of implementing the prior-year corrective actions to address the issues noted in the prior-year finding. As a result, time and effort certifications were not completed by employees to support the accuracy of budget estimates charged to federal awards as required by 2 CFR 200.430(i).Effect:Inadequate controls related to federal documentation standards for personnel expenses could result in noncompliance with federal allowable costs and cost principles, as well as noncompliance with special tests and provisions related to key personnel effort.Recommendation:Management should strengthen internal controls to ensure that personnel expenses charged to the federal awards are supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.Management?s Response and Corrective Action Plan:Management did not concur with the finding, noting it did not have sufficient time in fiscal year 2022 for corrective action and provided its progress on addressing the finding (B-82).
2022-035 - Weakness in Controls over Cash Management RequirementsAward Years: VariousAward Numbers: VariousCompliance Requirement: Cash ManagementRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:LSUHSC-S did not follow its prescribed controls over compliance with the cash management requirements of R&D programs. We reviewed a non-statistical sample of 25 federal R&D expense transactions resulting in reimbursement request support for two subaward invoice reconciliations and ten monthly direct award reconciliations, for the fiscal year ending June 30, 2022, from a population of 11,969 expense transactions. We also reviewed the two monthly reconciliations for July and November 2021 that were not selected from the expense transactions. We noted the following:? Four (29%) of 14 reconciliations had no evidence of review or approval by someone other than the preparer.? Ten (71%) of 14 approved reconciliations did not agree to the reimbursement request submitted to the grantor.Criteria:2 CFR 200.303 requires that non-federal entities establish and maintain internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.LSUHSC-S has established controls over cash management requirements, which consist of a monthly reconciliation of reimbursement requests for R&D expenses and includes the review and approval by someone other than the preparer.Cause:LSUHSC-S did not follow its established controls over monthly reconciliations.LSUHSC-S represented that the monthly reconciliations are the starting point in the process and additional determinations of which amounts should be drawn down are made after the reconciliation has been completed. LSUHSC-S did not provide any evidence that additional review and approval was performed prior to the reimbursement request.LSUHSC-S did not perform the drawdowns on a monthly basis when the reconciliations were performed. Drawdowns were performed in March and June 2022, and after fiscal year end in July, August, and October 2022 for expenses incurred during the fiscal year ending June 30, 2022. Management provided additional reconciliations for the draw down amounts, but there was no evidence of review and approval by someone other than the preparer.Effect:Failure to implement sufficient controls over cash management could result in LSUHSC-S requesting reimbursement for expenses not incurred prior to the request and place LSUHSC-S in noncompliance with federal regulations.Recommendation:LSUHSC-S should ensure that a review and approval is performed on the final amounts requested for reimbursement and evidence is maintained. LSUSHC-S should also ensure that established controls are followed to ensure the review and approval is performed by someone other than the preparer.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-55).
2022-005 - Noncompliance with and Weakness in Controls over Federal Research and Development ExpensesAward Years: VariousAward Numbers: VariousCompliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesPass-Through Entities: VariousRepeat Finding: Yes (Prior Year Finding No. 2021-007)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In addition, LSUHSC-S did not ensure that costs charged to federal awards were allowable in accordance with federal regulations and the terms and conditions of the award when requesting reimbursement.In a non-statistical random sample of 50 out of 10,798 expense transactions charged to R&D during the fiscal year ending June 30, 2022, the following exceptions were noted:? Three (6%) purchasing card (P-Card) transactions were not allowable in accordance with federal regulations and the terms and conditions of the award and are considered questioned costs totaling $1,073.? For five (10%) of 50 transactions tested, LSUHSC-S overstated expenses on the Schedule of Expenditures of Federal Awards because the award was fully funded, and expenses in excess of the award amount were not removed from the project used to identify expenditures to federal awards in the accounting records, or the expense was determined not allowable as noted above.? Seven (35%) of 20 time and effort certifications for salary and related benefit expenses tested were completed 119 to 461 days after the end of the quarter.We performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 838 (51%) out of 1,654 adjusting journal entries were made more than 90 days after the end of the quarter from the original transactions. The adjustments were made 97 to 1,026 days after the original transactions were recorded and 96 to 953 days after the end of the quarter.In a non-statistical random sample of 10 out of 1,654 payroll adjusting entries affecting R&D, tested by employee, project id (related to federal award), and journal id, six (60%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. Two of these adjusting entries added costs to the federal award projects and are considered questioned costs totaling $28,324.Criteria:2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity?s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments.Per LSUHSC-S?s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S?s policy, time and effort certifications should be completed within approximately 90 days of the end of the quarter. Management interprets the end of the quarter to be when the time and effort reports are sent to the departments once the last month of the quarter is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the quarterly reporting period, a payroll reallocation must be created within 30 days.Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework? issued by the Committee of Sponsoring Organizations of the Treadway Commission. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions.In addition, the National Institute of Health (NIH) is the grantor for the majority of the LSUHSC-S?s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made ?to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable.2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs.Cause:LSUHSC-S?s approval of P-Card transactions did not provide sufficient review of the allowability of expenses on federal awards. LSUHSC-S has procedures in place to review expenses prior to requesting reimbursement; however, it did not ensure that the necessary adjustments were made to the accounting system in a timely manner for expenses that were not allowed for reimbursement. In addition, training to emphasize accountability and the importance of completing time and effort certifications timely and accurately per policy was not completed as planned during fiscal year 2022 due to staffing shortages.LSUHSC-S is still in the process of implementing the corrective action outlined in the prior year to include documentation of adjusted effort and questions to address justification for the adjustment, errors, and timeliness on a modified Personnel Change form.Effect:Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects.In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor.Recommendation:Management should monitor time and effort certifications completed by the departments and investigate and obtain justification from department personnel for untimely certifications, as well as untimely adjustments and lack of supporting documentation for adjustments to enforce established policies. Management should ensure adequate design and operating effectiveness of controls over expenses, including P-Card expenses, charged to federal awards to verify allowability of costs in accordance with federal requirements and grant terms and conditions prior to requesting reimbursement. Management should also consider implementing other complementary controls such as preventing costs from being charged to projects in the accounting system beyond the approved budget or period of performance.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-52).
2022-005 - Noncompliance with and Weakness in Controls over Federal Research and Development ExpensesAward Years: VariousAward Numbers: VariousCompliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesPass-Through Entities: VariousRepeat Finding: Yes (Prior Year Finding No. 2021-007)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In addition, LSUHSC-S did not ensure that costs charged to federal awards were allowable in accordance with federal regulations and the terms and conditions of the award when requesting reimbursement.In a non-statistical random sample of 50 out of 10,798 expense transactions charged to R&D during the fiscal year ending June 30, 2022, the following exceptions were noted:? Three (6%) purchasing card (P-Card) transactions were not allowable in accordance with federal regulations and the terms and conditions of the award and are considered questioned costs totaling $1,073.? For five (10%) of 50 transactions tested, LSUHSC-S overstated expenses on the Schedule of Expenditures of Federal Awards because the award was fully funded, and expenses in excess of the award amount were not removed from the project used to identify expenditures to federal awards in the accounting records, or the expense was determined not allowable as noted above.? Seven (35%) of 20 time and effort certifications for salary and related benefit expenses tested were completed 119 to 461 days after the end of the quarter.We performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 838 (51%) out of 1,654 adjusting journal entries were made more than 90 days after the end of the quarter from the original transactions. The adjustments were made 97 to 1,026 days after the original transactions were recorded and 96 to 953 days after the end of the quarter.In a non-statistical random sample of 10 out of 1,654 payroll adjusting entries affecting R&D, tested by employee, project id (related to federal award), and journal id, six (60%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. Two of these adjusting entries added costs to the federal award projects and are considered questioned costs totaling $28,324.Criteria:2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity?s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments.Per LSUHSC-S?s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S?s policy, time and effort certifications should be completed within approximately 90 days of the end of the quarter. Management interprets the end of the quarter to be when the time and effort reports are sent to the departments once the last month of the quarter is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the quarterly reporting period, a payroll reallocation must be created within 30 days.Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework? issued by the Committee of Sponsoring Organizations of the Treadway Commission. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions.In addition, the National Institute of Health (NIH) is the grantor for the majority of the LSUHSC-S?s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made ?to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable.2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs.Cause:LSUHSC-S?s approval of P-Card transactions did not provide sufficient review of the allowability of expenses on federal awards. LSUHSC-S has procedures in place to review expenses prior to requesting reimbursement; however, it did not ensure that the necessary adjustments were made to the accounting system in a timely manner for expenses that were not allowed for reimbursement. In addition, training to emphasize accountability and the importance of completing time and effort certifications timely and accurately per policy was not completed as planned during fiscal year 2022 due to staffing shortages.LSUHSC-S is still in the process of implementing the corrective action outlined in the prior year to include documentation of adjusted effort and questions to address justification for the adjustment, errors, and timeliness on a modified Personnel Change form.Effect:Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects.In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor.Recommendation:Management should monitor time and effort certifications completed by the departments and investigate and obtain justification from department personnel for untimely certifications, as well as untimely adjustments and lack of supporting documentation for adjustments to enforce established policies. Management should ensure adequate design and operating effectiveness of controls over expenses, including P-Card expenses, charged to federal awards to verify allowability of costs in accordance with federal requirements and grant terms and conditions prior to requesting reimbursement. Management should also consider implementing other complementary controls such as preventing costs from being charged to projects in the accounting system beyond the approved budget or period of performance.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-52).
2022-033 - Weakness in Controls over Research and Development ProjectCloseouts and Accounting RecordsAward Years: 2021, 2022Award Numbers: 1K01AA024494-01A1, 1R21AA026022-01A1, 1R44DA046300-01, 2R01DK087800-06A1, 2R37AA018282-06, GM104940-17025-HSCNO01, INS151591-2, PO-0000180812, WFUHS 35-101730-117901Compliance Requirement: Period of PerformancePass-Through Entities: Eastern Virginia Medical School, La Jolla Alcohol Research, Inc., Wake Forest University HSCRepeat Finding: Yes (Prior Year Finding No. 2021-006)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the third consecutive year, the Louisiana State University Health Sciences Center in New Orleans (LSUHSC-NO) did not have adequate controls over project closeouts or accounting records for the R&D cluster federal program. We tested a non-statistical sample of 18 R&D projects, plus an additional five projects based on the total transaction amount recorded more than 90 days after the project end date, from a population of 139 projects with end dates between April 1, 2021, and June 30, 2022. Five (27.8%) of the sampled projects and all five of the additional projects included transactions for expenses or correcting entries posted to the project between 120 and 402 days after the project?s period of performance ended. On three of the additional projects, management submitted revised final reports to the grantor, or revised final invoices to the pass-through entity, more than 120 days after the period of performance ended resulting in noncompliance with federal program close-out requirements.Criteria:2 CFR 200.344 requires (a) that the recipient must submit, no later than 120 calendar days (or 90 days for a subrecipient) after the end of the period of performance, all reports required by the terms and conditions of the award, and (b) unless the federal awarding agency or pass-through entity authorizes an extension, a non-federal entity must liquidate all financial obligations incurred under the federal award no later than 120 calendar days after the end date of the period of performance.Additionally, LSUHSC-NO?s Sponsored Agreement Closeout Policy requires that completed sponsored agreements with surplus and/or deficit residual balances remaining in the project be certified and transferred to an appropriate, non-sponsored, departmentally-funded account or another sponsored project within 90 days of the project end date. LSUHSC-NO?s Sponsored Projects Accounting Cost Transfer Policy 011019 cautions that cost transfers will not be processed to cover cost overruns, to avoid restrictions by the Sponsor, to use up unspent funds, or for reasons of convenience or broadly-defined ?errors.?Cause:These exceptions occurred because (1) expenses are charged to projects after their closeout period in anticipation of a forthcoming project renewal, extension, or funding increase that may or may not be received; (2) the accounting system, PeopleSoft Commitment Control, allows certain personnel and other expenses to continue to post to projects after the project has ended unless a form, such as a change in source of funds form, is processed to update account coding in the system; (3) projects are not being closed out properly as they end, which includes submitting all required forms for updating accounting records; and (4) project budgets were not adequately monitored to ensure that expenses in the accounting system were charged to the correct project and any errors or budget overruns were identified and addressed in a timely manner.Effect:Untimely project updates in the accounting system increase the risk that expenses will be charged to the wrong project which hinders management?s ability to effectively monitor the budget and may result in budget overruns that would need to be covered with other funding sources, increase the number of corrections required at year end to ensure accurate financial reporting, and may result in noncompliance with federal program requirements.Recommendation:Management should continue to monitor budgets and ensure that budget overruns and errors are identified and corrected in a timely manner. Management should ensure that projects are effectively closed out including processing all required forms and updating the accounting system in a timely manner. Management should consider implementing a system control to prevent costs from being charged to projects in the accounting system beyond the project close out period. Management should also implement controls to exclude costs from its Schedule of Expenditures of Federal Awards until the awards or extensions are approved.Management?s Response and Corrective Action Plan:Management concurred with the finding and provided a corrective action plan (B-46).
2022-033 - Weakness in Controls over Research and Development ProjectCloseouts and Accounting RecordsAward Years: 2021, 2022Award Numbers: 1K01AA024494-01A1, 1R21AA026022-01A1, 1R44DA046300-01, 2R01DK087800-06A1, 2R37AA018282-06, GM104940-17025-HSCNO01, INS151591-2, PO-0000180812, WFUHS 35-101730-117901Compliance Requirement: Period of PerformancePass-Through Entities: Eastern Virginia Medical School, La Jolla Alcohol Research, Inc., Wake Forest University HSCRepeat Finding: Yes (Prior Year Finding No. 2021-006)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the third consecutive year, the Louisiana State University Health Sciences Center in New Orleans (LSUHSC-NO) did not have adequate controls over project closeouts or accounting records for the R&D cluster federal program. We tested a non-statistical sample of 18 R&D projects, plus an additional five projects based on the total transaction amount recorded more than 90 days after the project end date, from a population of 139 projects with end dates between April 1, 2021, and June 30, 2022. Five (27.8%) of the sampled projects and all five of the additional projects included transactions for expenses or correcting entries posted to the project between 120 and 402 days after the project?s period of performance ended. On three of the additional projects, management submitted revised final reports to the grantor, or revised final invoices to the pass-through entity, more than 120 days after the period of performance ended resulting in noncompliance with federal program close-out requirements.Criteria:2 CFR 200.344 requires (a) that the recipient must submit, no later than 120 calendar days (or 90 days for a subrecipient) after the end of the period of performance, all reports required by the terms and conditions of the award, and (b) unless the federal awarding agency or pass-through entity authorizes an extension, a non-federal entity must liquidate all financial obligations incurred under the federal award no later than 120 calendar days after the end date of the period of performance.Additionally, LSUHSC-NO?s Sponsored Agreement Closeout Policy requires that completed sponsored agreements with surplus and/or deficit residual balances remaining in the project be certified and transferred to an appropriate, non-sponsored, departmentally-funded account or another sponsored project within 90 days of the project end date. LSUHSC-NO?s Sponsored Projects Accounting Cost Transfer Policy 011019 cautions that cost transfers will not be processed to cover cost overruns, to avoid restrictions by the Sponsor, to use up unspent funds, or for reasons of convenience or broadly-defined ?errors.?Cause:These exceptions occurred because (1) expenses are charged to projects after their closeout period in anticipation of a forthcoming project renewal, extension, or funding increase that may or may not be received; (2) the accounting system, PeopleSoft Commitment Control, allows certain personnel and other expenses to continue to post to projects after the project has ended unless a form, such as a change in source of funds form, is processed to update account coding in the system; (3) projects are not being closed out properly as they end, which includes submitting all required forms for updating accounting records; and (4) project budgets were not adequately monitored to ensure that expenses in the accounting system were charged to the correct project and any errors or budget overruns were identified and addressed in a timely manner.Effect:Untimely project updates in the accounting system increase the risk that expenses will be charged to the wrong project which hinders management?s ability to effectively monitor the budget and may result in budget overruns that would need to be covered with other funding sources, increase the number of corrections required at year end to ensure accurate financial reporting, and may result in noncompliance with federal program requirements.Recommendation:Management should continue to monitor budgets and ensure that budget overruns and errors are identified and corrected in a timely manner. Management should ensure that projects are effectively closed out including processing all required forms and updating the accounting system in a timely manner. Management should consider implementing a system control to prevent costs from being charged to projects in the accounting system beyond the project close out period. Management should also implement controls to exclude costs from its Schedule of Expenditures of Federal Awards until the awards or extensions are approved.Management?s Response and Corrective Action Plan:Management concurred with the finding and provided a corrective action plan (B-46).
2022-034 - Noncompliance and Weakness in Controls with Special Tests and Provisions RequirementsAward Years: 2018, 2022Award Numbers: P20GM121307, R56NS114272Compliance Requirement: Special Tests and ProvisionsRepeat Finding: Yes (Prior Year Finding No. 2021-069)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, LSUHSC-S did not have adequate controls in place to ensure compliance with Special Tests and Provisions requirements. We reviewed a non-statistical sample of 14 federal R&D Cluster awards, plus two additional awards based on materiality, for the fiscal year ending June 30, 2022, from a population of 54 awards with a total of 28 key personnel. We reviewed the quarterly Time and Effort Certification forms, as applicable, for each key personnel for each award selected.We noted two of 28 (7%) key personnel had documentation of actual effort on the Time and Effort Certification forms that did not agree to the effort reported to the federal grantor, and there was no evidence of prior approval from the federal grantor for a change in key personnel.Criteria:2 CFR 200.308(c) states that for non-construction federal awards, recipients must request prior approvals from federal awarding agencies for one or more of the following program or budget-related reasons: (i) change in the scope or the objective of the project or program (even if there is no associated budget revision requiring prior written approval); (ii) change in a key person specified in the application or the federal award; (iii) the disengagement from the project for more than three months, or a 25% reduction in time devoted to the project, by the approved project director or principal investigator.Cause:During fiscal year 2022, LSUHSC-S was in the process of implementing its corrective action plan. This included review of some time and effort certifications as training was performed, development of an updated Personnel Change (PER-3) form that now includes percentage effort documentation, and defined responsibilities for reporting changes in level of effort and requesting grantor approval as needed.Effect:Failure to implement controls over key personnel requirements could result in noncompliance with Special Tests and Provisions requirements.Recommendation:Management should continue to provide training for time and effort certifications. Management should also utilize the time and effort certifications and updated PER-3 forms to monitor changes in effort for key personnel and verify that prior written approval is obtained from the federal grantor for changes that exceed the thresholds set in federal regulations.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-49).
2022-035 - Weakness in Controls over Cash Management RequirementsAward Years: VariousAward Numbers: VariousCompliance Requirement: Cash ManagementRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:LSUHSC-S did not follow its prescribed controls over compliance with the cash management requirements of R&D programs. We reviewed a non-statistical sample of 25 federal R&D expense transactions resulting in reimbursement request support for two subaward invoice reconciliations and ten monthly direct award reconciliations, for the fiscal year ending June 30, 2022, from a population of 11,969 expense transactions. We also reviewed the two monthly reconciliations for July and November 2021 that were not selected from the expense transactions. We noted the following:? Four (29%) of 14 reconciliations had no evidence of review or approval by someone other than the preparer.? Ten (71%) of 14 approved reconciliations did not agree to the reimbursement request submitted to the grantor.Criteria:2 CFR 200.303 requires that non-federal entities establish and maintain internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.LSUHSC-S has established controls over cash management requirements, which consist of a monthly reconciliation of reimbursement requests for R&D expenses and includes the review and approval by someone other than the preparer.Cause:LSUHSC-S did not follow its established controls over monthly reconciliations.LSUHSC-S represented that the monthly reconciliations are the starting point in the process and additional determinations of which amounts should be drawn down are made after the reconciliation has been completed. LSUHSC-S did not provide any evidence that additional review and approval was performed prior to the reimbursement request.LSUHSC-S did not perform the drawdowns on a monthly basis when the reconciliations were performed. Drawdowns were performed in March and June 2022, and after fiscal year end in July, August, and October 2022 for expenses incurred during the fiscal year ending June 30, 2022. Management provided additional reconciliations for the draw down amounts, but there was no evidence of review and approval by someone other than the preparer.Effect:Failure to implement sufficient controls over cash management could result in LSUHSC-S requesting reimbursement for expenses not incurred prior to the request and place LSUHSC-S in noncompliance with federal regulations.Recommendation:LSUHSC-S should ensure that a review and approval is performed on the final amounts requested for reimbursement and evidence is maintained. LSUSHC-S should also ensure that established controls are followed to ensure the review and approval is performed by someone other than the preparer.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-55).
2022-006 - Control Weakness and Noncompliance with Personnel Expenses Charged to Federal AwardsAward Years: 2018, 2019, 2021, 2022Award Numbers: 2138930, 2000614536, B-18-DP-22-001, EMW-2020-SS-00011-S01, M19AC00015, NR227217XXXXC002, P01AI048240, R21AI165939, R33HD099745, U19AI159840Compliance Requirements: Allowable Costs/Cost Principles, Special Tests and ProvisionsPass-Through Entities: Board of Trustees of the Leland Stanford Junior University, Emory UniversityRepeat Finding: Yes (Prior Year Finding No. 2021-009)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the second consecutive year, the University of Louisiana at Lafayette (UL Lafayette) did not have adequate controls in place to ensure personnel expenses and effort charged to federal R&D awards accurately reflected work performed. From a population of 28,744 payroll and non-payroll expenses charged to R&D grants, a non-statistical sample of 25 transactions was tested. For all 12 (48%) of the payroll transactions, UL Lafayette was unable to provide documentation to show that personnel-related expenses, totaling $4,520, were supported by time and effort certifications to ensure the accuracy of budget estimates charged to federal awards as required by federal regulations. Additionally, because there is no after-the-fact review to ensure the accuracy of personnel costs and effort charged to the awards, UL Lafayette could not ensure compliance with the requirements of special tests and provisions related to key personnel effort.Criteria:2 CFR 200.430(i) specifies the documentation standards for personnel expenses. In order to be allowable, charges to federal awards for personnel expenses must be based on records that accurately reflect the work performed and must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Budget estimates alone do not qualify as support for charges to federal awards, but can be used for interim accounting purposes provided that internal controls include an after-the-fact review to confirm the accuracy of final amounts charged to federal awards.Prior approval requirements related to key personnel effort are contained in 2 CFR 200.308(c) and within grant terms and conditions. A reduction of 25% or greater in time devoted to the project from key personnel requires prior approval.Cause:Management represented that it?s still in the process of implementing the prior-year corrective actions to address the issues noted in the prior-year finding. As a result, time and effort certifications were not completed by employees to support the accuracy of budget estimates charged to federal awards as required by 2 CFR 200.430(i).Effect:Inadequate controls related to federal documentation standards for personnel expenses could result in noncompliance with federal allowable costs and cost principles, as well as noncompliance with special tests and provisions related to key personnel effort.Recommendation:Management should strengthen internal controls to ensure that personnel expenses charged to the federal awards are supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.Management?s Response and Corrective Action Plan:Management did not concur with the finding, noting it did not have sufficient time in fiscal year 2022 for corrective action and provided its progress on addressing the finding (B-82).
2022-005 - Noncompliance with and Weakness in Controls over Federal Research and Development ExpensesAward Years: VariousAward Numbers: VariousCompliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesPass-Through Entities: VariousRepeat Finding: Yes (Prior Year Finding No. 2021-007)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In addition, LSUHSC-S did not ensure that costs charged to federal awards were allowable in accordance with federal regulations and the terms and conditions of the award when requesting reimbursement.In a non-statistical random sample of 50 out of 10,798 expense transactions charged to R&D during the fiscal year ending June 30, 2022, the following exceptions were noted:? Three (6%) purchasing card (P-Card) transactions were not allowable in accordance with federal regulations and the terms and conditions of the award and are considered questioned costs totaling $1,073.? For five (10%) of 50 transactions tested, LSUHSC-S overstated expenses on the Schedule of Expenditures of Federal Awards because the award was fully funded, and expenses in excess of the award amount were not removed from the project used to identify expenditures to federal awards in the accounting records, or the expense was determined not allowable as noted above.? Seven (35%) of 20 time and effort certifications for salary and related benefit expenses tested were completed 119 to 461 days after the end of the quarter.We performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 838 (51%) out of 1,654 adjusting journal entries were made more than 90 days after the end of the quarter from the original transactions. The adjustments were made 97 to 1,026 days after the original transactions were recorded and 96 to 953 days after the end of the quarter.In a non-statistical random sample of 10 out of 1,654 payroll adjusting entries affecting R&D, tested by employee, project id (related to federal award), and journal id, six (60%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. Two of these adjusting entries added costs to the federal award projects and are considered questioned costs totaling $28,324.Criteria:2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity?s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments.Per LSUHSC-S?s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S?s policy, time and effort certifications should be completed within approximately 90 days of the end of the quarter. Management interprets the end of the quarter to be when the time and effort reports are sent to the departments once the last month of the quarter is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the quarterly reporting period, a payroll reallocation must be created within 30 days.Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework? issued by the Committee of Sponsoring Organizations of the Treadway Commission. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions.In addition, the National Institute of Health (NIH) is the grantor for the majority of the LSUHSC-S?s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made ?to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable.2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs.Cause:LSUHSC-S?s approval of P-Card transactions did not provide sufficient review of the allowability of expenses on federal awards. LSUHSC-S has procedures in place to review expenses prior to requesting reimbursement; however, it did not ensure that the necessary adjustments were made to the accounting system in a timely manner for expenses that were not allowed for reimbursement. In addition, training to emphasize accountability and the importance of completing time and effort certifications timely and accurately per policy was not completed as planned during fiscal year 2022 due to staffing shortages.LSUHSC-S is still in the process of implementing the corrective action outlined in the prior year to include documentation of adjusted effort and questions to address justification for the adjustment, errors, and timeliness on a modified Personnel Change form.Effect:Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects.In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor.Recommendation:Management should monitor time and effort certifications completed by the departments and investigate and obtain justification from department personnel for untimely certifications, as well as untimely adjustments and lack of supporting documentation for adjustments to enforce established policies. Management should ensure adequate design and operating effectiveness of controls over expenses, including P-Card expenses, charged to federal awards to verify allowability of costs in accordance with federal requirements and grant terms and conditions prior to requesting reimbursement. Management should also consider implementing other complementary controls such as preventing costs from being charged to projects in the accounting system beyond the approved budget or period of performance.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-52).
2022-005 - Noncompliance with and Weakness in Controls over Federal Research and Development ExpensesAward Years: VariousAward Numbers: VariousCompliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesPass-Through Entities: VariousRepeat Finding: Yes (Prior Year Finding No. 2021-007)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In addition, LSUHSC-S did not ensure that costs charged to federal awards were allowable in accordance with federal regulations and the terms and conditions of the award when requesting reimbursement.In a non-statistical random sample of 50 out of 10,798 expense transactions charged to R&D during the fiscal year ending June 30, 2022, the following exceptions were noted:? Three (6%) purchasing card (P-Card) transactions were not allowable in accordance with federal regulations and the terms and conditions of the award and are considered questioned costs totaling $1,073.? For five (10%) of 50 transactions tested, LSUHSC-S overstated expenses on the Schedule of Expenditures of Federal Awards because the award was fully funded, and expenses in excess of the award amount were not removed from the project used to identify expenditures to federal awards in the accounting records, or the expense was determined not allowable as noted above.? Seven (35%) of 20 time and effort certifications for salary and related benefit expenses tested were completed 119 to 461 days after the end of the quarter.We performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 838 (51%) out of 1,654 adjusting journal entries were made more than 90 days after the end of the quarter from the original transactions. The adjustments were made 97 to 1,026 days after the original transactions were recorded and 96 to 953 days after the end of the quarter.In a non-statistical random sample of 10 out of 1,654 payroll adjusting entries affecting R&D, tested by employee, project id (related to federal award), and journal id, six (60%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. Two of these adjusting entries added costs to the federal award projects and are considered questioned costs totaling $28,324.Criteria:2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity?s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments.Per LSUHSC-S?s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S?s policy, time and effort certifications should be completed within approximately 90 days of the end of the quarter. Management interprets the end of the quarter to be when the time and effort reports are sent to the departments once the last month of the quarter is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the quarterly reporting period, a payroll reallocation must be created within 30 days.Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework? issued by the Committee of Sponsoring Organizations of the Treadway Commission. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions.In addition, the National Institute of Health (NIH) is the grantor for the majority of the LSUHSC-S?s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made ?to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable.2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs.Cause:LSUHSC-S?s approval of P-Card transactions did not provide sufficient review of the allowability of expenses on federal awards. LSUHSC-S has procedures in place to review expenses prior to requesting reimbursement; however, it did not ensure that the necessary adjustments were made to the accounting system in a timely manner for expenses that were not allowed for reimbursement. In addition, training to emphasize accountability and the importance of completing time and effort certifications timely and accurately per policy was not completed as planned during fiscal year 2022 due to staffing shortages.LSUHSC-S is still in the process of implementing the corrective action outlined in the prior year to include documentation of adjusted effort and questions to address justification for the adjustment, errors, and timeliness on a modified Personnel Change form.Effect:Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects.In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor.Recommendation:Management should monitor time and effort certifications completed by the departments and investigate and obtain justification from department personnel for untimely certifications, as well as untimely adjustments and lack of supporting documentation for adjustments to enforce established policies. Management should ensure adequate design and operating effectiveness of controls over expenses, including P-Card expenses, charged to federal awards to verify allowability of costs in accordance with federal requirements and grant terms and conditions prior to requesting reimbursement. Management should also consider implementing other complementary controls such as preventing costs from being charged to projects in the accounting system beyond the approved budget or period of performance.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-52).
2022-022 - Weaknesses in Controls over Child Care and Development Fund GrantsAward Year: 2021Award Numbers: 2101LACCC5, 2101LACSC6Compliance Requirements: Activities Allowed or Unallowed, EligibilityRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:DOE overpaid child care providers who received grants funded with child care stabilization funds from the Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act and the American Rescue Plan (ARP) Act during fiscal year 2022. Our procedures disclosed the following:? DOE overpaid six child care providers who received ARP child care stabilization funds by a total of $59,063. DOE?s internal controls did not detect the overpayments.? During DOE?s review of payments to child care providers who received grant payments funded with CRRSA and ARP funds, DOE identified overpayments to 11 child care providers totaling $887,212. DOE recovered and repaid $856,139 of the overpayments to the U.S. Department of Health and Human Services, and is in the process of recovering the remaining $31,073.Criteria:DOE received CRRSA and ARP funds through the Child Care and Development Block Grant. These funds were distributed as grants to child care providers to support child care access and to provide financial support to child care providers during and/or after the COVID-19 public health emergency. The CRRSA and ARP Acts specify that payments must be made to eligible providers. In addition, good internal controls include adequate procedures to ensure payment amounts are calculated correctly and eligibility requirements are met prior to payments being made.Cause:The overpayments occurred because of a formula error in the spreadsheet DOE used to calculate the amount of funds certain providers were eligible to receive, system processing errors, incorrect eligibility determinations, and duplicate payments that were made in error.Effect:Failure to ensure the accuracy of all formulas and data in the payment calculation spreadsheet prior to payments being made increases the risk that child care providers will receive more or less funds than they are eligible to receive. Failure to ensure payment amounts are accurate and providers are eligible prior to payments being made increases the risk that funds will not be used in accordance with federal requirements.Recommendation:DOE management should strengthen internal controls to ensure that spreadsheets used to calculate payment amounts are accurate and providers meet eligibility requirements before payments are made. In addition, DOE should continue to take steps to recover the remaining overpayments.Management?s Response and Corrective Action Plan:Management concurred in part with the finding and provided a plan of corrective action (B-11).
2022-023 - Inadequate Controls and Noncompliance over ADP Risk Analysis and System Security ReviewAward Years: 2021, 2022Award Numbers: 2105LA5021, 2105LA5MAP, 2205LA5021, 2205LA5MAPCompliance Requirement: Special Tests and ProvisionsRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:The Louisiana Department of Health (LDH) did not have adequate controls in place to ensure that the Magellan Medicaid Administration (Magellan) Service Organization Control (SOC) 1 type 2 report was reviewed in accordance with the Automated Data Processing (ADP) Risk Analysis and System Security Review federal requirements for the year ending June 30, 2022. LDH contracted with Magellan in fiscal year 2022 to provide services that include maintaining system controls related to the drug rebates program.Criteria:According to 45 CFR 95.621, the state shall maintain reports on its biennial ADP system security reviews, together with pertinent supporting documentation, for on-site reviews. Good internal controls require that policies and procedures are established and followed to ensure compliance with federal requirements.Cause:LDH received the required SOC 1 type 2 report from Magellan but was unable to provide any evidence to support its review and did not have written procedures regarding the review of the SOC report.Effect:Proper review of the required SOC report is critical to ensuring the controls utilized by Magellan are adequate and operating effectively.Recommendation:LDH should design and implement procedures to document and support its review of all ADP system security reports.Management?s Response and Corrective Action Plan:Management partially concurred with the finding and provided a corrective action plan (B-19).
2022-024 - Inadequate Controls over and Noncompliance with National Correct Coding Initiative RequirementsAward Years: 2021, 2022Award Numbers: 2105LA5MAP, 2205LA5MAPCompliance Requirement: Special Tests and ProvisionsRepeat Finding: Yes (Prior Year Finding No. 2021-054)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the second consecutive year, LDH failed to properly implement and monitor National Correct Coding Initiative Requirements (NCCI) for Medically Unlikely edits (MUE) and Procedure-to-Procedure (PTP) edits for the Medical Assistance Program (Medicaid) Fee-for-Service (FFS) claims. MUE is an edit on claims in which the number of units billed on the claim are more than what is considered necessary/allowed for a particular procedure code and PTP is an edit on claims in which one specific procedure code is not allowed to be billed with a different specific procedure code on the same recipient on the same day by the same provider.Our testing of NCCI edits included all FFS claims for Durable Medical Equipment (DME), Outpatient Hospital Service (OP), and practitioner and ambulatory surgical center (PRA) paid in state fiscal year 2022. These claims were subject to two edit types: MUE and PTP.In a test of 10,115,246 paid claims to determine if the proper NCCI MUE and PTP edits had been implemented, the following was noted:? 19,683 claims for DME, OP, and PRA were paid but should have been evaluated by an NCCI MUE and denied. These NCCI MUE edit errors resulted in questioned costs of $732,101 in federal funds. LDH noted that required NCCI MUE edits have not been applied to OP and DME FFS claims due to system constraints.? 269 claims for DME, OP, and PRA were paid but should have been evaluated by an NCCI PTP edit and denied. These NCCI PTP edit errors resulted in questioned costs of $33,463 in federal funds.Criteria:Section 1903(r) of the Social Security Act requires State Medicaid agencies to incorporate NCCI methodologies into State Medicaid programs. Federal regulations and the NCCI Medicaid Technical Guidance Manual contains requirements for implementation of the NCCI methodologies.Cause:The errors noted occurred due to inadequate NCCI edit monitoring procedures by LDH and instances of noncompliance with the federal regulations and NCCI Medicaid Technical Guidance.Effect:Failure to properly implement and enforce all required NCCI edits increases the likelihood that FFS claims, which should be denied, could potentially be paid.Recommendation:Management should ensure all required NCCI edits are properly applied to FFS claims.Management?s Response and Corrective Action Plan:Management partially concurred with the finding and provided a corrective action plan (B-21).Auditor?s Additional Comments:Management?s response stated, ?The data pull does not consider the final adjudication of claims.? However, LLA data analysis included final adjudication for FFS claims paid in state fiscal year ended June 30, 2022.
2022-025 - Inadequate Controls over Billing for Behavioral Health ServicesAward Years: 2021, 2022Award Numbers: 2105LA5021, 2105LA5MAP, 2205LA5021, 2205LA5MAPCompliance Requirement: Activities Allowed or UnallowedRepeat Finding: Yes (Prior Year Finding No. 2021-055)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, LDH, the managed care organizations (MCOs), and Magellan Health Services (Magellan) did not have adequate controls in place to ensure that behavioral health services in the Medical Assistance Program (Medicaid) and Children?s Health Insurance Program (CHIP) were properly billed and that improper encounters were denied. For fiscal year 2022, we identified approximately $8.8 million in encounters for services between July 1, 2021, and June 30, 2022, that were paid by the MCOs and Magellan even though the encounters do not appear to comply with LDH?s encounter coding requirements and/or approved fee schedules.Our analysis identified the following instances of billing errors:? Providers were paid $8,329,594 for 125,734 encounters that were billed using incorrect procedure and modifier codes.? Providers were paid $489,342 more than indicated on approved fee schedules for 13,019 encounters for behavioral health services.Criteria:LDH?s fee schedule outlines procedure codes for services and the applicable billing rates. Some services require that procedure codes also contain modifier codes which indicate information such as the age of the recipient, location where the service was provided, the educational background of the person providing the service, and the license(s) they have obtained.The approved fee schedules outline different rates depending on the procedure code and modifier codes. The MCOs can optionally pay more than the minimum LDH fee schedule.Cause:The billing errors could be avoided by LDH, the MCOs, and Magellan applying system edits that would flag encounters for further review when encounter coding and/or fee schedule requirements are not followed.Effect:Without the required modifiers, the encounter does not contain enough information to determine that the billing was appropriate.Because LDH does not currently maintain a list of providers in which the MCO pays more than the minimum fee schedule, LDH cannot determine if an encounter paid at an excessive rate was improperly billed.It is important that encounter data is accurate because LDH and other stakeholders, such as the Medicaid Fraud Control Unit within the Attorney General?s Office, use this data to identify improper payments and potential fraud. LDH also uses this encounter data to establish per member per month rates for the MCOs.Recommendation:LDH should implement adequate internal controls to ensure that encounters are coded correctly, which could include edit checks to flag potential improper billings for further review.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-25).
2022-026 - Inadequate Controls over Drug Rebate CollectionsAward Years: 2021, 2022Award Numbers: 2105LA5MAP, 2205LA5MAPCompliance Requirement: Allowable Costs/Cost PrinciplesRepeat Finding: Yes (Prior Year Finding No. 2021-056)See Schedule of Findings and Questioned Costs for chart/tableCondition:In a non-statistical sample of 60 drug rebate invoices from a population of 9,014, three tested (5%) revealed only a partial payment had been collected and no disputes have been made by the manufacturer. Magellan Medicaid Administration, Inc. (Magellan) personnel also confirmed that a dunning notice was not sent to these manufacturers for the unpaid balances. This is the second consecutive year LDH did not have adequate controls related to drug rebate collections.LDH contracted with Magellan for support in performing the federal and supplemental drug rebates processing for the LDH Medicaid program, including but not limited to invoicing, reconciliation, dispute resolution, and follow up on drug manufacturer (manufacturer) non-payment and aged balances for all of LDH?s Medicaid drug rebate programs. The contract sets a frequency in which a written delinquency notice (dunning notice) should be sent to manufacturers with unpaid invoices, but does not address manufacturers who make partial payments towards their quarterly invoice. Magellan personnel confirmed that for fiscal year 2022 these dunning notices are only sent to manufacturers who have not made any payments towards an invoice.Criteria:42 USC 1396r-8 requires manufacturers that wish to have their covered outpatient drugs covered by Medicaid to enter into an agreement under which the manufacturers agree to pay rebates for drugs dispensed and paid for by state Medicaid agencies under the state plan. Those rebates are shared between the state and federal government. Drug rebates are to be paid by the drug manufacturers no later than 30 days after the date of receipt of the utilization data from the state or provide notice of disputed items not paid because of discrepancies found. The state should perform follow up procedures to attempt to collect any unpaid balances in a timely manner.Cause:LDH did not have adequate controls in place to monitor its contract with Magellan and was unable to identify a control that would address the timely collection of partially-paid drug rebates invoices.In following its corrective action plan from fiscal year 2021, LDH began the process of implementing new controls to improve the outstanding balances process for all drug rebate invoices that have not been fully collected or disputed in a timely manner. Specifically, Magellan is in the process of changing its Dunning Notices process as part of the RxLink implementation to include manufacturers that only made partial payments. This process was not implemented during fiscal year 2022 though, and is expected to go live in fiscal year 2023.Effect:Without procedures to address manufacturers that do not pay the entire quarterly balance, there is a risk that appropriate rebates will not be collected.Recommendation:LDH should ensure that agency personnel are adequately monitoring contract provisions for the drug rebate program and follow up procedures are performed for all drug rebate invoices that have not been fully collected or disputed in a timely manner.Management?s Response and Corrective Action Plan:Management did not concur with the finding noting it did not have sufficient time in fiscal year 2022 for corrective action and provided its progress on addressing the finding (B-29).
2022-027 - Inadequate Controls over Monitoring of Abortion ClaimsAward Years: 2021, 2022Award Numbers: 2105LA5021, 2105LA5MAP, 2205LA5021, 2205LA5MAPCompliance Requirement: Activities Allowed or UnallowedRepeat Finding: Yes (Prior Year Finding No. 2021-057)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, LDH did not have adequate controls to ensure compliance with federal regulations prohibiting the use of federal funding for abortion claims.Criteria:42 CFR 441 Subpart E and 42 USC 1397ee(c) prohibit Medicaid and CHIP funding for abortion services except in instances where abortion is necessary to save the mother?s life or if the pregnancy is the result of an act of rape or incest.Cause:Under managed care, LDH pays the health plans monthly premiums for enrolled recipients. The health plans pay provider claims for services provided to enrolled recipients and submit the claims to LDH as encounter claims.LDH included provisions in the Healthy Louisiana managed care contracts requiring the health plans to comply with the federal regulations regarding funding of prohibited abortion services, but LDH did not have adequate procedures in place to monitor the health plans? compliance with the federal regulations. While LDH received monthly self-reported information from the health plans, LDH was not comparing or validating the self-reported information to ensure the reporting was accurate and complete for the entire year. In addition, the instructions provided to the health plans concerning how to complete the reports are not detailed and could potentially lead to all five health plans reporting different information.In fiscal year 2022, LDH began the process of implementing new controls to validate the health plans self-reported information in order to ensure compliance with federal regulations regarding the funding of prohibited abortion claims. Specifically, in July of 2022 LDH began a spot check review of the health plans self-reported encounter claims information and reviewed data retroactively for the third and fourth quarter of fiscal year 2022 (January 2022 to June 2022). However, this process was not fully implemented during fiscal year 2022, nor did it cover the first two quarters of the audit period of July 1, 2021, to December 31, 2021. It is expected this process will cover all four quarters beginning in fiscal year 2023.Effect:Claims paid by the managed care health plans for abortion services that do not meet exceptions noted in federal regulations may go undetected, and LDH may accept these improper claims as encounter claims. Encounter claims are considered in future premium rate setting and are used for reporting and monitoring of the Medicaid and CHIP programs.Recommendation:LDH should continue its process to validate self-reported information from the health plans and ensure its process is operating effectively to ensure compliance with federal regulations regarding funding of prohibited abortions claims.Management?s Response and Corrective Action Plan:Management concurred in part with the finding and provided a corrective action plan (B-32).
2022-028 - Inadequate Internal Controls over Eligibility DeterminationsAward Years: 2020 - 2022Award Numbers: 2005LA5MAP, 2105LA5021, 2105LA5MAP, 2205LA5021, 2205LA5MAPCompliance Requirement: EligibilityRepeat Finding: Yes (Prior Year Finding No. 2021-060)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the third consecutive year, LDH lacked adequate internal controls over eligibility determinations in the Medicaid and CHIP programs for the state fiscal year ending June 30, 2022.From a population of 1,919,113 Medicaid recipients, a non-statistical sample of 60 recipients was tested. Five (8.3%) out of 60 Medicaid recipients tested did not have adequate documentation to support the eligibility determination or redetermination within the recipient?s case record.The following errors were noted for Medicaid:? For one recipient, LDH personnel did not discontinue coverage on a beneficiary that was invalidly enrolled prior to the start of the public health emergency (PHE).? For one recipient, LDH personnel did not discontinue coverage on a recipient who moved out of state.? For three recipients, renewals were not performed during the state fiscal year as required by federal regulations.During our testing of Medicaid managed care premiums, we identified an additional recipient with eligibility not supported by the case record. The recipient?s case record did not reflect timely transition into an appropriate case type based on the recipient?s age.In addition, from a population of 212,933 CHIP eligibility recipients, a non-statistical sample of 60 recipients was tested. For two (3.3%) out of 60 CHIP recipients tested, LDH did not perform renewals during the state fiscal year as required by federal regulations.Criteria:42 CFR 431, 42 CFR 435, and 42 CFR 457 require that in order to be considered eligible, a recipient must meet eligibility factors and the recipient case record must include facts to support agency eligibility decision. 42 CFR 435 and 457 also require annual renewal of eligibility.42 CFR 433.400 also states in order to claim the temporary increase in the federal medical assistance percentage (FMAP), states must maintain the Medicaid enrollment of ?validly enrolled beneficiaries? in one of three tiers of coverage. States may terminate individuals not validly enrolled.LDH has outlined eligibility criteria and documentation to support determinations and renewals in its Medicaid eligibility manual.Cause:LDH did not adhere to established control procedures to ensure case records support eligibility decisions, including performance of annual renewals, per federal regulations, and the Medicaid Eligibility Manual.Effect:Proper eligibility determination and renewals are critical to ensuring appropriate service eligibility, appropriate premium payments, and appropriate federal match rate on expenditures.We noted questioned costs totaling $77,983 in federal funds in relation to the two Medicaid recipients whose coverage was not discontinued. We did not note any questioned costs related to the other errors due to certain restrictions on eligibility actions during the PHE.Recommendation:LDH should ensure its employees follow procedures relating to eligibility determinations and renewals in the Medicaid and CHIP programs to ensure the case records support the eligibility decisions.Management?s Response and Corrective Action Plan:Management did not concur with the finding and noted that the Center for Medicare and Medicaid Services (CMS) provided certain flexibilities in meeting the timeliness of renewals in accordance with 42 CFR 435.912(e)(2), and LDH used this flexibility to suspend renewals during the PHE. LDH also indicated, while there was no particular documentation in the ?case note? section of the Louisiana Medicaid Eligibility Determination System (LaMEDS), LDH provided audit staff with LaMEDS log tables which documented system jobs called ?data fixes? that were completed which set certain renewals to a future date per the approved flexibility.In addition, on the one instance of coverage that was not discontinued on a beneficiary invalidly enrolled prior to the start of the PHE, LDH noted that in November 2020 CMS issued an Interim Final Rule (CMS-9912-IFC) which provided additional information concerning the continuous enrollment period and allowable terminations and transitions during the PHE for beneficiaries invalidly enrolled. LDH?s opinion is the Interim Final Rule nor the FAQ guidance that followed provided any instruction to review or take action on cases that were prevented from termination prior to its release; therefore, LDH applied the clarification of ?validly enrolled? on decisions going forward (B-34).Auditor?s Additional Comments:The LaMEDS log tables were considered during testing by the auditor. For the exceptions related to renewals above, there was no evidence of any systems being checked with the data logs provided by LDH during state fiscal year 2022. Although CMS granted flexibilities for completing the renewals at a future date, it did not appear that CMS was granting approval for suspension of renewals. CMS also notified LDH that federal regulation requires the agency to document the reason for the delay in each case record, but there was no evidence of this in the exceptions noted above.In reference to the one beneficiary invalidly enrolled prior to the start of the PHE, LDH should have implemented the CMS Interim Final Rule (CMS-9912-IFC) to include all months during the PHE in order to discontinue coverage on a beneficiary that was invalidly enrolled prior to the start of the PHE or during the PHE.
2022-029 - Noncompliance with Managed Care Provider Enrollment and Screening RequirementAward Years: 2021, 2022Award Numbers: 2105LA5021, 2105LA5MAP, 2205LA5021, 2205LA5MAPCompliance Requirement: Special Tests and ProvisionsRepeat Finding: Yes (Prior Year Finding No. 2021-061)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fifth consecutive year, LDH did not enroll and screen Healthy Louisiana managed care providers and dental managed care providers as required by federal regulations. During fiscal year 2022, the managed care plans continued to enroll and screen some managed care providers, in violation of federal regulations.Criteria:42 CFR 438.602 (2016 Managed Care Final Rule) and Section 5005 of the 21st Century Cures Act require that the enrollment process include providing the Medicaid agency with the provider?s identifying information including the name, specialty, date of birth, Social Security number, national provider identifier, federal taxpayer identification number, and state license or certification number of the provider. Additionally, the state agency is required to screen enrolled providers, require certain disclosures, provide enhanced oversight of certain providers, and comply with reporting of adverse provider actions and provider terminations. By using the federally required process, managed care providers must participate in the same screening and enrollment process as Medicaid and CHIP fee-for-service providers.Cause:LDH noted that enrollment and screening of managed care providers was to be performed as part of a new provider management system. After cancellation of the new provider management system contract, the state?s current provider enrollment vendor, Gainwell Technologies Inc. (Gainwell), began the process of creating a web-based portal for Medicaid and its providers to complete the necessary screenings required by federal regulations.In July 2021, LDH launched the enrollment portal created by Gainwell. Although the enrollment portal was launched in fiscal year 2022, LDH gave providers until December 31, 2022, to enroll. Therefore, LDH did not enroll and screen all of the Healthy Louisiana managed care providers and dental managed care providers as required by federal regulations before the fiscal year-end.Effect:LDH cannot ensure the accuracy of provider information obtained from the Louisiana Medicaid managed care plans and cannot ensure compliance with enrollment requirements defined by law and the Medicaid and CHIP state plan. LDH accepted 96 million Healthy Louisiana encounter claims totaling $7.5 billion and 2.8 million dental encounter claims totaling $125.8 million in fiscal year 2022 from the managed care plans and paid $14.7 billion in Healthy Louisiana premiums and $375.8 million in dental premiums.Recommendation:LDH should ensure all providers are screened and enrolled as required by federal regulations.Management?s Response and Corrective Action Plan:Management concurred in part with the finding and provided a corrective action plan (B-37).
2022-030 - Noncompliance with Provider Revalidation and Screening RequirementsAward Years: 2021, 2022Award Numbers: 2105LA5021, 2105LA5MAP, 2205LA5021, 2205LA5MAPCompliance Requirement: Special Tests and ProvisionsRepeat Finding: Yes (Prior Year Finding No. 2021-063)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fifth consecutive year, LDH did not perform five-year revalidations; screenings based on categorical risk of fraud, waste, or abuse; and monthly checks of the federal excluded party database, as required by federal regulations for all Medicaid and CHIP fee-for-service providers.Based on information provided by LDH, approximately 71% of providers with claims activity in fiscal year 2022 have not had a risk-based screening with the majority of those providers enrolled more than five years ago.In addition, LDH did not routinely check required federal databases to determine if providers have been excluded from participation in federal programs. Although LDH began checking the System for Award Management (SAM) on a monthly basis beginning March of 2022, a check was not performed for all providers for all months during fiscal year 2022.Criteria:Providers are enrolled by LDH and can provide services to either Medicaid and/or CHIP recipients as applicable.42 CFR 455 Subpart E requires that LDH screen all providers according to the provider?s categorical risk level upon initial enrollment, re-enrollment, or revalidation of enrollment. LDH must complete a revalidation of enrollment for all providers, regardless of type, at least every five years. The required screening procedures for each provider varies based on the risk score ? limited, moderate, or high. For example, a high-risk score requires additional screening procedures including criminal background checks and fingerprinting.LDH submitted and received the Medicaid State Plan approval in 2012 regarding compliance with revalidation and screening requirements.42 CFR 455 Subpart E required LDH to check the List of Excluded Individuals/Entities and SAM on at least a monthly basis. The SAM database includes information on providers excluded from contracting with the federal government.Cause:LDH noted that revalidation and screening of providers was to be performed as part of a new provider management system. After cancellation of the new provider management system contract, the state?s current provider enrollment vendor, Gainwell, began the process of creating a web-based portal for Medicaid and its providers to complete the necessary screenings required by federal regulations.In July 2021, LDH launched the enrollment portal created by Gainwell. Although the enrollment portal was launched in fiscal year 2022, LDH gave providers until December 31, 2022, to enroll. Therefore, LDH did not revalidate and screen all of the providers as required by federal regulations before the fiscal year-end.Effect:Proper enrollment and revalidation, including screening based on categorical risk and monthly checks of required databases, would enable the state to identify ineligible providers that should be rejected or excluded from the program.Recommendation:LDH should ensure all providers are screened based on categorical risk level upon initial enrollment, re-enrollment, and revalidation of enrollment as required by federal regulations. Also, LDH should perform revalidation of enrollment on all providers at least every five years. In addition, LDH should ensure all required databases are checked at least on a frequency required by federal regulations.Management?s Response and Corrective Action Plan:Management partially concurred with the finding and provided a corrective action plan (B-39).
2022-031 - Weakness in Controls over and Noncompliance with Provider OverpaymentsAward Years: 2021, 2022Award Numbers: 2105LA5021, 2105LA5MAP, 2205LA5021, 2205LA5MAPCompliance Requirement: Special Tests and ProvisionsRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:During our review over the LDH?s reconciliations related to the return of the federal share of provider overpayments that have reached the one-year reporting deadline, we noted that one out of four (25%) CMS 64 quarterly reports was reconciled using incorrect data. For the quarterly report ending September 30, 2021, LDH inadvertently pulled the June 2020 report as a starting point instead of the June 2021 report when creating its one-year reconciliation. This resulted in the amount reported on the quarterly report ending September 30, 2021, to be overstated by approximately $20 million. LDH did not identify this error during its review process of the September 30, 2021 report, but did discover this error later and corrected the error on the CMS 64 quarterly report ending December 31, 2021. Therefore, we do not consider the overstatement to be questioned costs.In addition, in a non-statistical sample of 60 provider overpayments from a population of 402,032, we were unable to obtain sufficient appropriate audit evidence to determine if the federal portion of provider overpayment collections were returned to CMS in the appropriate quarter.Criteria:Pursuant to 1903(d)(2)(c) of the Act (42 USC 1396b), states have up to one year from the date of discovery of the overpayment to recover or attempt to recover the overpayment from the provider before the federal share must be refunded to CMS via the CMS 64 quarterly report, regardless of whether recovery is made from the provider. The state must credit the federal share to CMS as outlined under 42 CFR 433.320(a)(2) either in the quarter in which the recovery is made or in the quarter in which the one-year period following discovery ends, whichever is earlier.Cause:LDH?s control over compliance with federal regulations regarding the refunding of provider overpayments to CMS was not operating effectively for all quarters for the fiscal year ending June 30, 2022. In addition, LDH did not provide proper supporting documentation for the auditor to test federal regulations over provider overpayments.Effect:Provider overpayments that reached the one-year deadline in September 2021 were not accurately reported until the December 2021 CMS 64 report was completed, causing them to be late and not in compliance with federal regulations.Recommendation:LDH should strengthen its controls over the preparation of the quarterly CMS 64 reports to ensure compliance with federal regulations. In addition, LDH should ensure it is able to provide supporting documentation timely for amounts reported in the CMS 64 reports for overpayments.Management?s Response and Corrective Action Plan:Management did not concur with the finding noting LDH Fiscal is currently in the process of revising procedures to ensure provisions of the 365-Day Receivable report as supporting documentation for provider overpayments (B-41).
2022-023 - Inadequate Controls and Noncompliance over ADP Risk Analysis and System Security ReviewAward Years: 2021, 2022Award Numbers: 2105LA5021, 2105LA5MAP, 2205LA5021, 2205LA5MAPCompliance Requirement: Special Tests and ProvisionsRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:The Louisiana Department of Health (LDH) did not have adequate controls in place to ensure that the Magellan Medicaid Administration (Magellan) Service Organization Control (SOC) 1 type 2 report was reviewed in accordance with the Automated Data Processing (ADP) Risk Analysis and System Security Review federal requirements for the year ending June 30, 2022. LDH contracted with Magellan in fiscal year 2022 to provide services that include maintaining system controls related to the drug rebates program.Criteria:According to 45 CFR 95.621, the state shall maintain reports on its biennial ADP system security reviews, together with pertinent supporting documentation, for on-site reviews. Good internal controls require that policies and procedures are established and followed to ensure compliance with federal requirements.Cause:LDH received the required SOC 1 type 2 report from Magellan but was unable to provide any evidence to support its review and did not have written procedures regarding the review of the SOC report.Effect:Proper review of the required SOC report is critical to ensuring the controls utilized by Magellan are adequate and operating effectively.Recommendation:LDH should design and implement procedures to document and support its review of all ADP system security reports.Management?s Response and Corrective Action Plan:Management partially concurred with the finding and provided a corrective action plan (B-19).
2022-024 - Inadequate Controls over and Noncompliance with National Correct Coding Initiative RequirementsAward Years: 2021, 2022Award Numbers: 2105LA5MAP, 2205LA5MAPCompliance Requirement: Special Tests and ProvisionsRepeat Finding: Yes (Prior Year Finding No. 2021-054)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the second consecutive year, LDH failed to properly implement and monitor National Correct Coding Initiative Requirements (NCCI) for Medically Unlikely edits (MUE) and Procedure-to-Procedure (PTP) edits for the Medical Assistance Program (Medicaid) Fee-for-Service (FFS) claims. MUE is an edit on claims in which the number of units billed on the claim are more than what is considered necessary/allowed for a particular procedure code and PTP is an edit on claims in which one specific procedure code is not allowed to be billed with a different specific procedure code on the same recipient on the same day by the same provider.Our testing of NCCI edits included all FFS claims for Durable Medical Equipment (DME), Outpatient Hospital Service (OP), and practitioner and ambulatory surgical center (PRA) paid in state fiscal year 2022. These claims were subject to two edit types: MUE and PTP.In a test of 10,115,246 paid claims to determine if the proper NCCI MUE and PTP edits had been implemented, the following was noted:? 19,683 claims for DME, OP, and PRA were paid but should have been evaluated by an NCCI MUE and denied. These NCCI MUE edit errors resulted in questioned costs of $732,101 in federal funds. LDH noted that required NCCI MUE edits have not been applied to OP and DME FFS claims due to system constraints.? 269 claims for DME, OP, and PRA were paid but should have been evaluated by an NCCI PTP edit and denied. These NCCI PTP edit errors resulted in questioned costs of $33,463 in federal funds.Criteria:Section 1903(r) of the Social Security Act requires State Medicaid agencies to incorporate NCCI methodologies into State Medicaid programs. Federal regulations and the NCCI Medicaid Technical Guidance Manual contains requirements for implementation of the NCCI methodologies.Cause:The errors noted occurred due to inadequate NCCI edit monitoring procedures by LDH and instances of noncompliance with the federal regulations and NCCI Medicaid Technical Guidance.Effect:Failure to properly implement and enforce all required NCCI edits increases the likelihood that FFS claims, which should be denied, could potentially be paid.Recommendation:Management should ensure all required NCCI edits are properly applied to FFS claims.Management?s Response and Corrective Action Plan:Management partially concurred with the finding and provided a corrective action plan (B-21).Auditor?s Additional Comments:Management?s response stated, ?The data pull does not consider the final adjudication of claims.? However, LLA data analysis included final adjudication for FFS claims paid in state fiscal year ended June 30, 2022.
2022-025 - Inadequate Controls over Billing for Behavioral Health ServicesAward Years: 2021, 2022Award Numbers: 2105LA5021, 2105LA5MAP, 2205LA5021, 2205LA5MAPCompliance Requirement: Activities Allowed or UnallowedRepeat Finding: Yes (Prior Year Finding No. 2021-055)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, LDH, the managed care organizations (MCOs), and Magellan Health Services (Magellan) did not have adequate controls in place to ensure that behavioral health services in the Medical Assistance Program (Medicaid) and Children?s Health Insurance Program (CHIP) were properly billed and that improper encounters were denied. For fiscal year 2022, we identified approximately $8.8 million in encounters for services between July 1, 2021, and June 30, 2022, that were paid by the MCOs and Magellan even though the encounters do not appear to comply with LDH?s encounter coding requirements and/or approved fee schedules.Our analysis identified the following instances of billing errors:? Providers were paid $8,329,594 for 125,734 encounters that were billed using incorrect procedure and modifier codes.? Providers were paid $489,342 more than indicated on approved fee schedules for 13,019 encounters for behavioral health services.Criteria:LDH?s fee schedule outlines procedure codes for services and the applicable billing rates. Some services require that procedure codes also contain modifier codes which indicate information such as the age of the recipient, location where the service was provided, the educational background of the person providing the service, and the license(s) they have obtained.The approved fee schedules outline different rates depending on the procedure code and modifier codes. The MCOs can optionally pay more than the minimum LDH fee schedule.Cause:The billing errors could be avoided by LDH, the MCOs, and Magellan applying system edits that would flag encounters for further review when encounter coding and/or fee schedule requirements are not followed.Effect:Without the required modifiers, the encounter does not contain enough information to determine that the billing was appropriate.Because LDH does not currently maintain a list of providers in which the MCO pays more than the minimum fee schedule, LDH cannot determine if an encounter paid at an excessive rate was improperly billed.It is important that encounter data is accurate because LDH and other stakeholders, such as the Medicaid Fraud Control Unit within the Attorney General?s Office, use this data to identify improper payments and potential fraud. LDH also uses this encounter data to establish per member per month rates for the MCOs.Recommendation:LDH should implement adequate internal controls to ensure that encounters are coded correctly, which could include edit checks to flag potential improper billings for further review.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-25).
2022-026 - Inadequate Controls over Drug Rebate CollectionsAward Years: 2021, 2022Award Numbers: 2105LA5MAP, 2205LA5MAPCompliance Requirement: Allowable Costs/Cost PrinciplesRepeat Finding: Yes (Prior Year Finding No. 2021-056)See Schedule of Findings and Questioned Costs for chart/tableCondition:In a non-statistical sample of 60 drug rebate invoices from a population of 9,014, three tested (5%) revealed only a partial payment had been collected and no disputes have been made by the manufacturer. Magellan Medicaid Administration, Inc. (Magellan) personnel also confirmed that a dunning notice was not sent to these manufacturers for the unpaid balances. This is the second consecutive year LDH did not have adequate controls related to drug rebate collections.LDH contracted with Magellan for support in performing the federal and supplemental drug rebates processing for the LDH Medicaid program, including but not limited to invoicing, reconciliation, dispute resolution, and follow up on drug manufacturer (manufacturer) non-payment and aged balances for all of LDH?s Medicaid drug rebate programs. The contract sets a frequency in which a written delinquency notice (dunning notice) should be sent to manufacturers with unpaid invoices, but does not address manufacturers who make partial payments towards their quarterly invoice. Magellan personnel confirmed that for fiscal year 2022 these dunning notices are only sent to manufacturers who have not made any payments towards an invoice.Criteria:42 USC 1396r-8 requires manufacturers that wish to have their covered outpatient drugs covered by Medicaid to enter into an agreement under which the manufacturers agree to pay rebates for drugs dispensed and paid for by state Medicaid agencies under the state plan. Those rebates are shared between the state and federal government. Drug rebates are to be paid by the drug manufacturers no later than 30 days after the date of receipt of the utilization data from the state or provide notice of disputed items not paid because of discrepancies found. The state should perform follow up procedures to attempt to collect any unpaid balances in a timely manner.Cause:LDH did not have adequate controls in place to monitor its contract with Magellan and was unable to identify a control that would address the timely collection of partially-paid drug rebates invoices.In following its corrective action plan from fiscal year 2021, LDH began the process of implementing new controls to improve the outstanding balances process for all drug rebate invoices that have not been fully collected or disputed in a timely manner. Specifically, Magellan is in the process of changing its Dunning Notices process as part of the RxLink implementation to include manufacturers that only made partial payments. This process was not implemented during fiscal year 2022 though, and is expected to go live in fiscal year 2023.Effect:Without procedures to address manufacturers that do not pay the entire quarterly balance, there is a risk that appropriate rebates will not be collected.Recommendation:LDH should ensure that agency personnel are adequately monitoring contract provisions for the drug rebate program and follow up procedures are performed for all drug rebate invoices that have not been fully collected or disputed in a timely manner.Management?s Response and Corrective Action Plan:Management did not concur with the finding noting it did not have sufficient time in fiscal year 2022 for corrective action and provided its progress on addressing the finding (B-29).
2022-027 - Inadequate Controls over Monitoring of Abortion ClaimsAward Years: 2021, 2022Award Numbers: 2105LA5021, 2105LA5MAP, 2205LA5021, 2205LA5MAPCompliance Requirement: Activities Allowed or UnallowedRepeat Finding: Yes (Prior Year Finding No. 2021-057)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, LDH did not have adequate controls to ensure compliance with federal regulations prohibiting the use of federal funding for abortion claims.Criteria:42 CFR 441 Subpart E and 42 USC 1397ee(c) prohibit Medicaid and CHIP funding for abortion services except in instances where abortion is necessary to save the mother?s life or if the pregnancy is the result of an act of rape or incest.Cause:Under managed care, LDH pays the health plans monthly premiums for enrolled recipients. The health plans pay provider claims for services provided to enrolled recipients and submit the claims to LDH as encounter claims.LDH included provisions in the Healthy Louisiana managed care contracts requiring the health plans to comply with the federal regulations regarding funding of prohibited abortion services, but LDH did not have adequate procedures in place to monitor the health plans? compliance with the federal regulations. While LDH received monthly self-reported information from the health plans, LDH was not comparing or validating the self-reported information to ensure the reporting was accurate and complete for the entire year. In addition, the instructions provided to the health plans concerning how to complete the reports are not detailed and could potentially lead to all five health plans reporting different information.In fiscal year 2022, LDH began the process of implementing new controls to validate the health plans self-reported information in order to ensure compliance with federal regulations regarding the funding of prohibited abortion claims. Specifically, in July of 2022 LDH began a spot check review of the health plans self-reported encounter claims information and reviewed data retroactively for the third and fourth quarter of fiscal year 2022 (January 2022 to June 2022). However, this process was not fully implemented during fiscal year 2022, nor did it cover the first two quarters of the audit period of July 1, 2021, to December 31, 2021. It is expected this process will cover all four quarters beginning in fiscal year 2023.Effect:Claims paid by the managed care health plans for abortion services that do not meet exceptions noted in federal regulations may go undetected, and LDH may accept these improper claims as encounter claims. Encounter claims are considered in future premium rate setting and are used for reporting and monitoring of the Medicaid and CHIP programs.Recommendation:LDH should continue its process to validate self-reported information from the health plans and ensure its process is operating effectively to ensure compliance with federal regulations regarding funding of prohibited abortions claims.Management?s Response and Corrective Action Plan:Management concurred in part with the finding and provided a corrective action plan (B-32).
2022-028 - Inadequate Internal Controls over Eligibility DeterminationsAward Years: 2020 - 2022Award Numbers: 2005LA5MAP, 2105LA5021, 2105LA5MAP, 2205LA5021, 2205LA5MAPCompliance Requirement: EligibilityRepeat Finding: Yes (Prior Year Finding No. 2021-060)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the third consecutive year, LDH lacked adequate internal controls over eligibility determinations in the Medicaid and CHIP programs for the state fiscal year ending June 30, 2022.From a population of 1,919,113 Medicaid recipients, a non-statistical sample of 60 recipients was tested. Five (8.3%) out of 60 Medicaid recipients tested did not have adequate documentation to support the eligibility determination or redetermination within the recipient?s case record.The following errors were noted for Medicaid:? For one recipient, LDH personnel did not discontinue coverage on a beneficiary that was invalidly enrolled prior to the start of the public health emergency (PHE).? For one recipient, LDH personnel did not discontinue coverage on a recipient who moved out of state.? For three recipients, renewals were not performed during the state fiscal year as required by federal regulations.During our testing of Medicaid managed care premiums, we identified an additional recipient with eligibility not supported by the case record. The recipient?s case record did not reflect timely transition into an appropriate case type based on the recipient?s age.In addition, from a population of 212,933 CHIP eligibility recipients, a non-statistical sample of 60 recipients was tested. For two (3.3%) out of 60 CHIP recipients tested, LDH did not perform renewals during the state fiscal year as required by federal regulations.Criteria:42 CFR 431, 42 CFR 435, and 42 CFR 457 require that in order to be considered eligible, a recipient must meet eligibility factors and the recipient case record must include facts to support agency eligibility decision. 42 CFR 435 and 457 also require annual renewal of eligibility.42 CFR 433.400 also states in order to claim the temporary increase in the federal medical assistance percentage (FMAP), states must maintain the Medicaid enrollment of ?validly enrolled beneficiaries? in one of three tiers of coverage. States may terminate individuals not validly enrolled.LDH has outlined eligibility criteria and documentation to support determinations and renewals in its Medicaid eligibility manual.Cause:LDH did not adhere to established control procedures to ensure case records support eligibility decisions, including performance of annual renewals, per federal regulations, and the Medicaid Eligibility Manual.Effect:Proper eligibility determination and renewals are critical to ensuring appropriate service eligibility, appropriate premium payments, and appropriate federal match rate on expenditures.We noted questioned costs totaling $77,983 in federal funds in relation to the two Medicaid recipients whose coverage was not discontinued. We did not note any questioned costs related to the other errors due to certain restrictions on eligibility actions during the PHE.Recommendation:LDH should ensure its employees follow procedures relating to eligibility determinations and renewals in the Medicaid and CHIP programs to ensure the case records support the eligibility decisions.Management?s Response and Corrective Action Plan:Management did not concur with the finding and noted that the Center for Medicare and Medicaid Services (CMS) provided certain flexibilities in meeting the timeliness of renewals in accordance with 42 CFR 435.912(e)(2), and LDH used this flexibility to suspend renewals during the PHE. LDH also indicated, while there was no particular documentation in the ?case note? section of the Louisiana Medicaid Eligibility Determination System (LaMEDS), LDH provided audit staff with LaMEDS log tables which documented system jobs called ?data fixes? that were completed which set certain renewals to a future date per the approved flexibility.In addition, on the one instance of coverage that was not discontinued on a beneficiary invalidly enrolled prior to the start of the PHE, LDH noted that in November 2020 CMS issued an Interim Final Rule (CMS-9912-IFC) which provided additional information concerning the continuous enrollment period and allowable terminations and transitions during the PHE for beneficiaries invalidly enrolled. LDH?s opinion is the Interim Final Rule nor the FAQ guidance that followed provided any instruction to review or take action on cases that were prevented from termination prior to its release; therefore, LDH applied the clarification of ?validly enrolled? on decisions going forward (B-34).Auditor?s Additional Comments:The LaMEDS log tables were considered during testing by the auditor. For the exceptions related to renewals above, there was no evidence of any systems being checked with the data logs provided by LDH during state fiscal year 2022. Although CMS granted flexibilities for completing the renewals at a future date, it did not appear that CMS was granting approval for suspension of renewals. CMS also notified LDH that federal regulation requires the agency to document the reason for the delay in each case record, but there was no evidence of this in the exceptions noted above.In reference to the one beneficiary invalidly enrolled prior to the start of the PHE, LDH should have implemented the CMS Interim Final Rule (CMS-9912-IFC) to include all months during the PHE in order to discontinue coverage on a beneficiary that was invalidly enrolled prior to the start of the PHE or during the PHE.
2022-029 - Noncompliance with Managed Care Provider Enrollment and Screening RequirementAward Years: 2021, 2022Award Numbers: 2105LA5021, 2105LA5MAP, 2205LA5021, 2205LA5MAPCompliance Requirement: Special Tests and ProvisionsRepeat Finding: Yes (Prior Year Finding No. 2021-061)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fifth consecutive year, LDH did not enroll and screen Healthy Louisiana managed care providers and dental managed care providers as required by federal regulations. During fiscal year 2022, the managed care plans continued to enroll and screen some managed care providers, in violation of federal regulations.Criteria:42 CFR 438.602 (2016 Managed Care Final Rule) and Section 5005 of the 21st Century Cures Act require that the enrollment process include providing the Medicaid agency with the provider?s identifying information including the name, specialty, date of birth, Social Security number, national provider identifier, federal taxpayer identification number, and state license or certification number of the provider. Additionally, the state agency is required to screen enrolled providers, require certain disclosures, provide enhanced oversight of certain providers, and comply with reporting of adverse provider actions and provider terminations. By using the federally required process, managed care providers must participate in the same screening and enrollment process as Medicaid and CHIP fee-for-service providers.Cause:LDH noted that enrollment and screening of managed care providers was to be performed as part of a new provider management system. After cancellation of the new provider management system contract, the state?s current provider enrollment vendor, Gainwell Technologies Inc. (Gainwell), began the process of creating a web-based portal for Medicaid and its providers to complete the necessary screenings required by federal regulations.In July 2021, LDH launched the enrollment portal created by Gainwell. Although the enrollment portal was launched in fiscal year 2022, LDH gave providers until December 31, 2022, to enroll. Therefore, LDH did not enroll and screen all of the Healthy Louisiana managed care providers and dental managed care providers as required by federal regulations before the fiscal year-end.Effect:LDH cannot ensure the accuracy of provider information obtained from the Louisiana Medicaid managed care plans and cannot ensure compliance with enrollment requirements defined by law and the Medicaid and CHIP state plan. LDH accepted 96 million Healthy Louisiana encounter claims totaling $7.5 billion and 2.8 million dental encounter claims totaling $125.8 million in fiscal year 2022 from the managed care plans and paid $14.7 billion in Healthy Louisiana premiums and $375.8 million in dental premiums.Recommendation:LDH should ensure all providers are screened and enrolled as required by federal regulations.Management?s Response and Corrective Action Plan:Management concurred in part with the finding and provided a corrective action plan (B-37).
2022-030 - Noncompliance with Provider Revalidation and Screening RequirementsAward Years: 2021, 2022Award Numbers: 2105LA5021, 2105LA5MAP, 2205LA5021, 2205LA5MAPCompliance Requirement: Special Tests and ProvisionsRepeat Finding: Yes (Prior Year Finding No. 2021-063)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fifth consecutive year, LDH did not perform five-year revalidations; screenings based on categorical risk of fraud, waste, or abuse; and monthly checks of the federal excluded party database, as required by federal regulations for all Medicaid and CHIP fee-for-service providers.Based on information provided by LDH, approximately 71% of providers with claims activity in fiscal year 2022 have not had a risk-based screening with the majority of those providers enrolled more than five years ago.In addition, LDH did not routinely check required federal databases to determine if providers have been excluded from participation in federal programs. Although LDH began checking the System for Award Management (SAM) on a monthly basis beginning March of 2022, a check was not performed for all providers for all months during fiscal year 2022.Criteria:Providers are enrolled by LDH and can provide services to either Medicaid and/or CHIP recipients as applicable.42 CFR 455 Subpart E requires that LDH screen all providers according to the provider?s categorical risk level upon initial enrollment, re-enrollment, or revalidation of enrollment. LDH must complete a revalidation of enrollment for all providers, regardless of type, at least every five years. The required screening procedures for each provider varies based on the risk score ? limited, moderate, or high. For example, a high-risk score requires additional screening procedures including criminal background checks and fingerprinting.LDH submitted and received the Medicaid State Plan approval in 2012 regarding compliance with revalidation and screening requirements.42 CFR 455 Subpart E required LDH to check the List of Excluded Individuals/Entities and SAM on at least a monthly basis. The SAM database includes information on providers excluded from contracting with the federal government.Cause:LDH noted that revalidation and screening of providers was to be performed as part of a new provider management system. After cancellation of the new provider management system contract, the state?s current provider enrollment vendor, Gainwell, began the process of creating a web-based portal for Medicaid and its providers to complete the necessary screenings required by federal regulations.In July 2021, LDH launched the enrollment portal created by Gainwell. Although the enrollment portal was launched in fiscal year 2022, LDH gave providers until December 31, 2022, to enroll. Therefore, LDH did not revalidate and screen all of the providers as required by federal regulations before the fiscal year-end.Effect:Proper enrollment and revalidation, including screening based on categorical risk and monthly checks of required databases, would enable the state to identify ineligible providers that should be rejected or excluded from the program.Recommendation:LDH should ensure all providers are screened based on categorical risk level upon initial enrollment, re-enrollment, and revalidation of enrollment as required by federal regulations. Also, LDH should perform revalidation of enrollment on all providers at least every five years. In addition, LDH should ensure all required databases are checked at least on a frequency required by federal regulations.Management?s Response and Corrective Action Plan:Management partially concurred with the finding and provided a corrective action plan (B-39).
2022-031 - Weakness in Controls over and Noncompliance with Provider OverpaymentsAward Years: 2021, 2022Award Numbers: 2105LA5021, 2105LA5MAP, 2205LA5021, 2205LA5MAPCompliance Requirement: Special Tests and ProvisionsRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:During our review over the LDH?s reconciliations related to the return of the federal share of provider overpayments that have reached the one-year reporting deadline, we noted that one out of four (25%) CMS 64 quarterly reports was reconciled using incorrect data. For the quarterly report ending September 30, 2021, LDH inadvertently pulled the June 2020 report as a starting point instead of the June 2021 report when creating its one-year reconciliation. This resulted in the amount reported on the quarterly report ending September 30, 2021, to be overstated by approximately $20 million. LDH did not identify this error during its review process of the September 30, 2021 report, but did discover this error later and corrected the error on the CMS 64 quarterly report ending December 31, 2021. Therefore, we do not consider the overstatement to be questioned costs.In addition, in a non-statistical sample of 60 provider overpayments from a population of 402,032, we were unable to obtain sufficient appropriate audit evidence to determine if the federal portion of provider overpayment collections were returned to CMS in the appropriate quarter.Criteria:Pursuant to 1903(d)(2)(c) of the Act (42 USC 1396b), states have up to one year from the date of discovery of the overpayment to recover or attempt to recover the overpayment from the provider before the federal share must be refunded to CMS via the CMS 64 quarterly report, regardless of whether recovery is made from the provider. The state must credit the federal share to CMS as outlined under 42 CFR 433.320(a)(2) either in the quarter in which the recovery is made or in the quarter in which the one-year period following discovery ends, whichever is earlier.Cause:LDH?s control over compliance with federal regulations regarding the refunding of provider overpayments to CMS was not operating effectively for all quarters for the fiscal year ending June 30, 2022. In addition, LDH did not provide proper supporting documentation for the auditor to test federal regulations over provider overpayments.Effect:Provider overpayments that reached the one-year deadline in September 2021 were not accurately reported until the December 2021 CMS 64 report was completed, causing them to be late and not in compliance with federal regulations.Recommendation:LDH should strengthen its controls over the preparation of the quarterly CMS 64 reports to ensure compliance with federal regulations. In addition, LDH should ensure it is able to provide supporting documentation timely for amounts reported in the CMS 64 reports for overpayments.Management?s Response and Corrective Action Plan:Management did not concur with the finding noting LDH Fiscal is currently in the process of revising procedures to ensure provisions of the 365-Day Receivable report as supporting documentation for provider overpayments (B-41).
2022-006 - Control Weakness and Noncompliance with Personnel Expenses Charged to Federal AwardsAward Years: 2018, 2019, 2021, 2022Award Numbers: 2138930, 2000614536, B-18-DP-22-001, EMW-2020-SS-00011-S01, M19AC00015, NR227217XXXXC002, P01AI048240, R21AI165939, R33HD099745, U19AI159840Compliance Requirements: Allowable Costs/Cost Principles, Special Tests and ProvisionsPass-Through Entities: Board of Trustees of the Leland Stanford Junior University, Emory UniversityRepeat Finding: Yes (Prior Year Finding No. 2021-009)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the second consecutive year, the University of Louisiana at Lafayette (UL Lafayette) did not have adequate controls in place to ensure personnel expenses and effort charged to federal R&D awards accurately reflected work performed. From a population of 28,744 payroll and non-payroll expenses charged to R&D grants, a non-statistical sample of 25 transactions was tested. For all 12 (48%) of the payroll transactions, UL Lafayette was unable to provide documentation to show that personnel-related expenses, totaling $4,520, were supported by time and effort certifications to ensure the accuracy of budget estimates charged to federal awards as required by federal regulations. Additionally, because there is no after-the-fact review to ensure the accuracy of personnel costs and effort charged to the awards, UL Lafayette could not ensure compliance with the requirements of special tests and provisions related to key personnel effort.Criteria:2 CFR 200.430(i) specifies the documentation standards for personnel expenses. In order to be allowable, charges to federal awards for personnel expenses must be based on records that accurately reflect the work performed and must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Budget estimates alone do not qualify as support for charges to federal awards, but can be used for interim accounting purposes provided that internal controls include an after-the-fact review to confirm the accuracy of final amounts charged to federal awards.Prior approval requirements related to key personnel effort are contained in 2 CFR 200.308(c) and within grant terms and conditions. A reduction of 25% or greater in time devoted to the project from key personnel requires prior approval.Cause:Management represented that it?s still in the process of implementing the prior-year corrective actions to address the issues noted in the prior-year finding. As a result, time and effort certifications were not completed by employees to support the accuracy of budget estimates charged to federal awards as required by 2 CFR 200.430(i).Effect:Inadequate controls related to federal documentation standards for personnel expenses could result in noncompliance with federal allowable costs and cost principles, as well as noncompliance with special tests and provisions related to key personnel effort.Recommendation:Management should strengthen internal controls to ensure that personnel expenses charged to the federal awards are supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.Management?s Response and Corrective Action Plan:Management did not concur with the finding, noting it did not have sufficient time in fiscal year 2022 for corrective action and provided its progress on addressing the finding (B-82).
2022-004 - Inadequate Controls over PayrollAward Year: 2022Award Numbers: 6LA700503, NU50CK000532, NU62PS924522, NU62PS924620, NU90TP922016Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesRepeat Finding: Yes (Prior Year Finding No. 2021-005)See Schedule of Findings and Questioned Costs for chart/tableCondition:The Louisiana Department of Health, Office of Public Health (OPH) did not ensure payroll expenditures were timely certified and approved for the WIC Special Supplemental Nutrition Program for Women, Infants, and Children; the Public Health Emergency Preparedness program; the Epidemiology and Laboratory Capacity for Infectious Diseases program; and the HIV Prevention Activities Health Department Based program. This is the third consecutive year payroll internal control deficiencies have been reported for Public Health Emergency Preparedness program and HIV Prevention Activities Health Department Based program, and the second consecutive year for WIC Special Supplemental Nutrition Program for Women, Infants, and Children and Epidemiology and Laboratory Capacity for Infectious Diseases program. Exceptions for each federal program are as follows:? For the WIC Special Supplemental Nutrition Program for Women, Infants, and Children, a non-statistical sample of 60 payroll transactions was tested from a population of 6,184 transactions totaling $8,970,425. Five (8%) time statements were not timely approved by the employees? supervisor, of which two (3%) were not approved at all, and two (3%) were not certified timely by the employees ranging from 13 to 236 days after the posting date.? For the Public Health Emergency Preparedness program, a non-statistical sample of 60 payroll transactions was tested from a population of 1,394 transactions totaling $3,988,398. Twenty-one (35%) time statements were not timely approved by the employees? supervisors, of which 12 (20%) were approved ranging from 23 days to 447 days after posting date and seven (12%) were not approved at all; two (3%) were not certified by the employees; and two (3%) were approved before certified.? For the Epidemiology and Laboratory Capacity for Infectious Diseases program, a non-statistical sample of 60 payroll transactions was tested from a population of 3,933 transactions totaling $5,190,684. Nine (15%) time statements were not timely approved by the employees? supervisors, of which four (7%) were not approved at all; one (2%) was not certified by the employee; and one (2%) was approved before certified.? For the HIV Prevention Activities Health Department Based program, a non-statistical sample of 60 payroll transactions was tested from a population of 1,024 transactions totaling $386,769. Nine (15%) time statements were not timely approved by the employees? supervisors, of which one (2%) was not approved at all; seven (12%) were approved ranging from one day to 351 days after the posting date; and one (2%) was not certified by the employee.Criteria:2 CFR 200.430(i) requires that records must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Furthermore, the records must comply with the established accounting policies and practices of the non-federal entity.The Division of Administration Personnel Policy No. 99 requires employees and supervisors to certify and/or approve time statements for accuracy by 10:00 p.m. on the Wednesday following the close of the pay period. Time administrators are responsible for reviewing the LaGov ZP241 eCertification report prior to processing to identify any employees who have not certified their time statements and any supervisors who have not approved their staff?s time statements.Cause:OPH lacked sufficient controls to ensure electronic time statements were properly certified and approved prior to the posting date in accordance with federal and state regulations.Effect:Failure to adequately approve program expenditures increases the risk that unallowable costs could be reimbursed by the federal grantor.Recommendation:OPH should ensure employees comply with existing policies and procedures, including certifying and approving electronic time statements in a timely manner.Management?s Response and Corrective Action Plan:Management concurred with the finding and provided a corrective action plan (B-43).
2022-005 - Noncompliance with and Weakness in Controls over Federal Research and Development ExpensesAward Years: VariousAward Numbers: VariousCompliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesPass-Through Entities: VariousRepeat Finding: Yes (Prior Year Finding No. 2021-007)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In addition, LSUHSC-S did not ensure that costs charged to federal awards were allowable in accordance with federal regulations and the terms and conditions of the award when requesting reimbursement.In a non-statistical random sample of 50 out of 10,798 expense transactions charged to R&D during the fiscal year ending June 30, 2022, the following exceptions were noted:? Three (6%) purchasing card (P-Card) transactions were not allowable in accordance with federal regulations and the terms and conditions of the award and are considered questioned costs totaling $1,073.? For five (10%) of 50 transactions tested, LSUHSC-S overstated expenses on the Schedule of Expenditures of Federal Awards because the award was fully funded, and expenses in excess of the award amount were not removed from the project used to identify expenditures to federal awards in the accounting records, or the expense was determined not allowable as noted above.? Seven (35%) of 20 time and effort certifications for salary and related benefit expenses tested were completed 119 to 461 days after the end of the quarter.We performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 838 (51%) out of 1,654 adjusting journal entries were made more than 90 days after the end of the quarter from the original transactions. The adjustments were made 97 to 1,026 days after the original transactions were recorded and 96 to 953 days after the end of the quarter.In a non-statistical random sample of 10 out of 1,654 payroll adjusting entries affecting R&D, tested by employee, project id (related to federal award), and journal id, six (60%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. Two of these adjusting entries added costs to the federal award projects and are considered questioned costs totaling $28,324.Criteria:2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity?s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments.Per LSUHSC-S?s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S?s policy, time and effort certifications should be completed within approximately 90 days of the end of the quarter. Management interprets the end of the quarter to be when the time and effort reports are sent to the departments once the last month of the quarter is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the quarterly reporting period, a payroll reallocation must be created within 30 days.Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework? issued by the Committee of Sponsoring Organizations of the Treadway Commission. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions.In addition, the National Institute of Health (NIH) is the grantor for the majority of the LSUHSC-S?s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made ?to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable.2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs.Cause:LSUHSC-S?s approval of P-Card transactions did not provide sufficient review of the allowability of expenses on federal awards. LSUHSC-S has procedures in place to review expenses prior to requesting reimbursement; however, it did not ensure that the necessary adjustments were made to the accounting system in a timely manner for expenses that were not allowed for reimbursement. In addition, training to emphasize accountability and the importance of completing time and effort certifications timely and accurately per policy was not completed as planned during fiscal year 2022 due to staffing shortages.LSUHSC-S is still in the process of implementing the corrective action outlined in the prior year to include documentation of adjusted effort and questions to address justification for the adjustment, errors, and timeliness on a modified Personnel Change form.Effect:Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects.In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor.Recommendation:Management should monitor time and effort certifications completed by the departments and investigate and obtain justification from department personnel for untimely certifications, as well as untimely adjustments and lack of supporting documentation for adjustments to enforce established policies. Management should ensure adequate design and operating effectiveness of controls over expenses, including P-Card expenses, charged to federal awards to verify allowability of costs in accordance with federal requirements and grant terms and conditions prior to requesting reimbursement. Management should also consider implementing other complementary controls such as preventing costs from being charged to projects in the accounting system beyond the approved budget or period of performance.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-52).
2022-006 - Control Weakness and Noncompliance with Personnel Expenses Charged to Federal AwardsAward Years: 2018, 2019, 2021, 2022Award Numbers: 2138930, 2000614536, B-18-DP-22-001, EMW-2020-SS-00011-S01, M19AC00015, NR227217XXXXC002, P01AI048240, R21AI165939, R33HD099745, U19AI159840Compliance Requirements: Allowable Costs/Cost Principles, Special Tests and ProvisionsPass-Through Entities: Board of Trustees of the Leland Stanford Junior University, Emory UniversityRepeat Finding: Yes (Prior Year Finding No. 2021-009)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the second consecutive year, the University of Louisiana at Lafayette (UL Lafayette) did not have adequate controls in place to ensure personnel expenses and effort charged to federal R&D awards accurately reflected work performed. From a population of 28,744 payroll and non-payroll expenses charged to R&D grants, a non-statistical sample of 25 transactions was tested. For all 12 (48%) of the payroll transactions, UL Lafayette was unable to provide documentation to show that personnel-related expenses, totaling $4,520, were supported by time and effort certifications to ensure the accuracy of budget estimates charged to federal awards as required by federal regulations. Additionally, because there is no after-the-fact review to ensure the accuracy of personnel costs and effort charged to the awards, UL Lafayette could not ensure compliance with the requirements of special tests and provisions related to key personnel effort.Criteria:2 CFR 200.430(i) specifies the documentation standards for personnel expenses. In order to be allowable, charges to federal awards for personnel expenses must be based on records that accurately reflect the work performed and must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Budget estimates alone do not qualify as support for charges to federal awards, but can be used for interim accounting purposes provided that internal controls include an after-the-fact review to confirm the accuracy of final amounts charged to federal awards.Prior approval requirements related to key personnel effort are contained in 2 CFR 200.308(c) and within grant terms and conditions. A reduction of 25% or greater in time devoted to the project from key personnel requires prior approval.Cause:Management represented that it?s still in the process of implementing the prior-year corrective actions to address the issues noted in the prior-year finding. As a result, time and effort certifications were not completed by employees to support the accuracy of budget estimates charged to federal awards as required by 2 CFR 200.430(i).Effect:Inadequate controls related to federal documentation standards for personnel expenses could result in noncompliance with federal allowable costs and cost principles, as well as noncompliance with special tests and provisions related to key personnel effort.Recommendation:Management should strengthen internal controls to ensure that personnel expenses charged to the federal awards are supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.Management?s Response and Corrective Action Plan:Management did not concur with the finding, noting it did not have sufficient time in fiscal year 2022 for corrective action and provided its progress on addressing the finding (B-82).
2022-008 ? Improper Employee Activity in Federal ProgramsAward Years: 2016 - 2022Award Number: 6LA400102Compliance Requirements: Allowable Costs/Cost Principles, EligibilityRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:The Department of Children and Family Services (DCFS), Fraud and Recovery Unit, identified improper activity by one employee who received benefits under the Supplemental Nutrition Assistance Program (SNAP) and by two employees who violated department policy as well as state law related to payroll.Three employees were cited for program or department policy violations as follows:? One former employee did not accurately report household members and accessed their own records in the DCFS system, resulting in improperly receiving $3,968 in SNAP benefits. The employee was cited for an intentional program violation and resigned in December 2022.? One former employee received wages from DCFS and another employer for the same hours worked during the period August 2016 through September 2020, resulting in a loss of $5,116 impacting various federal programs. The employee was terminated in July 2022.? One employee received wages from DCFS and another employer for the same hours worked during the period August 2021 through September 2022, resulting in a loss of $11,349 impacting various federal programs. DCFS is pursing disciplinary action against the employee.Criteria:DCFS Policy G-310 states that falsification of records consists of any deliberate act of annotating an activity which in fact differs factually from the activity that actually transpired.DCFS Policy 6-1 states that all staff members (state employees and contractors) are prohibited from taking any action on their personal case or on a case involving an immediate family member, friend, or social acquaintance of him/herself or his supervisor.7 CFR 273.16(c) defines intentional program violations as intentionally making a false or misleading statement; misrepresenting, concealing, or withholding facts; or committing any act that constitutes a violation of SNAP, SNAP regulations, or any state statute for the purpose of using, presenting, transferring, acquiring, receiving, possessing, or trafficking of SNAP benefits or Electronic Benefits Transfer (EBT) cards.DCFS Policy 4-2 states that Civil Service Rule 15.2 requires certification of payroll and attendance records by both an employee and his/her appointing authority or designee of hours actually worked and leave taken during a payroll period.Cause:The employees did not adhere to department policy and federal award requirements.Effect:Amounts not recouped by DCFS as of June 30, 2022, totaled $20,433 and represent questioned costs.Recommendation:Management should continue to investigate improper employee activities and emphasize the criminal consequences of such activities.Management?s Response and Corrective Action Plan:Management concurred with the finding and provided a corrective action plan (B-6).
2022-008 ? Improper Employee Activity in Federal ProgramsAward Years: 2016 - 2022Award Number: 6LA400102Compliance Requirements: Allowable Costs/Cost Principles, EligibilityRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:The Department of Children and Family Services (DCFS), Fraud and Recovery Unit, identified improper activity by one employee who received benefits under the Supplemental Nutrition Assistance Program (SNAP) and by two employees who violated department policy as well as state law related to payroll.Three employees were cited for program or department policy violations as follows:? One former employee did not accurately report household members and accessed their own records in the DCFS system, resulting in improperly receiving $3,968 in SNAP benefits. The employee was cited for an intentional program violation and resigned in December 2022.? One former employee received wages from DCFS and another employer for the same hours worked during the period August 2016 through September 2020, resulting in a loss of $5,116 impacting various federal programs. The employee was terminated in July 2022.? One employee received wages from DCFS and another employer for the same hours worked during the period August 2021 through September 2022, resulting in a loss of $11,349 impacting various federal programs. DCFS is pursing disciplinary action against the employee.Criteria:DCFS Policy G-310 states that falsification of records consists of any deliberate act of annotating an activity which in fact differs factually from the activity that actually transpired.DCFS Policy 6-1 states that all staff members (state employees and contractors) are prohibited from taking any action on their personal case or on a case involving an immediate family member, friend, or social acquaintance of him/herself or his supervisor.7 CFR 273.16(c) defines intentional program violations as intentionally making a false or misleading statement; misrepresenting, concealing, or withholding facts; or committing any act that constitutes a violation of SNAP, SNAP regulations, or any state statute for the purpose of using, presenting, transferring, acquiring, receiving, possessing, or trafficking of SNAP benefits or Electronic Benefits Transfer (EBT) cards.DCFS Policy 4-2 states that Civil Service Rule 15.2 requires certification of payroll and attendance records by both an employee and his/her appointing authority or designee of hours actually worked and leave taken during a payroll period.Cause:The employees did not adhere to department policy and federal award requirements.Effect:Amounts not recouped by DCFS as of June 30, 2022, totaled $20,433 and represent questioned costs.Recommendation:Management should continue to investigate improper employee activities and emphasize the criminal consequences of such activities.Management?s Response and Corrective Action Plan:Management concurred with the finding and provided a corrective action plan (B-6).
2022-008 ? Improper Employee Activity in Federal ProgramsAward Years: 2016 - 2022Award Number: 6LA400102Compliance Requirements: Allowable Costs/Cost Principles, EligibilityRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:The Department of Children and Family Services (DCFS), Fraud and Recovery Unit, identified improper activity by one employee who received benefits under the Supplemental Nutrition Assistance Program (SNAP) and by two employees who violated department policy as well as state law related to payroll.Three employees were cited for program or department policy violations as follows:? One former employee did not accurately report household members and accessed their own records in the DCFS system, resulting in improperly receiving $3,968 in SNAP benefits. The employee was cited for an intentional program violation and resigned in December 2022.? One former employee received wages from DCFS and another employer for the same hours worked during the period August 2016 through September 2020, resulting in a loss of $5,116 impacting various federal programs. The employee was terminated in July 2022.? One employee received wages from DCFS and another employer for the same hours worked during the period August 2021 through September 2022, resulting in a loss of $11,349 impacting various federal programs. DCFS is pursing disciplinary action against the employee.Criteria:DCFS Policy G-310 states that falsification of records consists of any deliberate act of annotating an activity which in fact differs factually from the activity that actually transpired.DCFS Policy 6-1 states that all staff members (state employees and contractors) are prohibited from taking any action on their personal case or on a case involving an immediate family member, friend, or social acquaintance of him/herself or his supervisor.7 CFR 273.16(c) defines intentional program violations as intentionally making a false or misleading statement; misrepresenting, concealing, or withholding facts; or committing any act that constitutes a violation of SNAP, SNAP regulations, or any state statute for the purpose of using, presenting, transferring, acquiring, receiving, possessing, or trafficking of SNAP benefits or Electronic Benefits Transfer (EBT) cards.DCFS Policy 4-2 states that Civil Service Rule 15.2 requires certification of payroll and attendance records by both an employee and his/her appointing authority or designee of hours actually worked and leave taken during a payroll period.Cause:The employees did not adhere to department policy and federal award requirements.Effect:Amounts not recouped by DCFS as of June 30, 2022, totaled $20,433 and represent questioned costs.Recommendation:Management should continue to investigate improper employee activities and emphasize the criminal consequences of such activities.Management?s Response and Corrective Action Plan:Management concurred with the finding and provided a corrective action plan (B-6).
2022-007 - Noncompliance with Subrecipient Monitoring RequirementsAward Years: 2018, 2020 - 2022Award Numbers: DUE-2044358, NA18OAR4170098, OIA-2019511, OIA-2119688Compliance Requirement: Subrecipient MonitoringRepeat Finding: Yes (Prior Year Finding No. 2021-010)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the second consecutive year, UL Lafayette did not adequately monitor subrecipients of the R&D Cluster programs. In a non-statistical sample of five subawards out of a population of 49 subawards, it was noted that for four (80%) of the subrecipients evaluated UL Lafayette was unable to provide documentation that ensured each subrecipient obtained the required audit or that the audit was reviewed so that timely and appropriate action could be taken for any findings pertaining to the federal awards. Additionally, for all five (100%) of the subrecipients evaluated, UL Lafayette could not provide evidence that the required risk analyses were performed to evaluate each subrecipients? risk of noncompliance with federal regulations and the terms of the subaward.Criteria:2 CFR 200.332(b) requires pass-through entities to evaluate each subrecipient's risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring.Per 2 CFR 200.332(f), pass-through entities are responsible for verifying that every subrecipient is audited as required by 2 CFR Part 200, subpart F when it is expected that the subrecipient's federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in CFR 200.501 of $750,000 or more in federal awards during the subrecipient?s fiscal year.2 CFR 200.332(d)(2) requires that pass-through entities follow-up and ensure that the subrecipient takes timely and appropriate action on all deficiencies provided to the subrecipient from the pass-through entities detected through audits, on-site reviews, and written confirmation from the subrecipient.2 CFR 200.332(d)(2) and (3) require pass-through entities to issue a management decision on applicable audit findings in accordance with 2 CFR 200.521, within six months after acceptance of the subrecipient?s audit report by the Federal Audit Clearinghouse, and ensure that the subrecipient takes timely and appropriate corrective action on all findings.Cause:UL Lafayette management indicated that it was working on internal procedures to adequately monitor subrecipients as result of the prior-year finding. However, management has yet to finalize and apply these procedures on all active subrecipients.Effect:Failure to properly monitor subrecipients results in noncompliance with federal regulations and increases the likelihood of improper payments which may have to be returned to the federal awarding agency.Recommendation:UL Lafayette should strengthen controls to ensure the timely review of all required subrecipient audit reports in order to evaluate the impact of any findings noted in the audits and issue management decision letters, if applicable. In addition, UL Lafayette should strengthen controls to ensure risk assessments are performed and documented on all subrecipients in accordance with federal regulations.Management?s Response and Corrective Action Plan:Management did not concur with the finding, noting it did not have sufficient time in fiscal year 2022 for corrective action and provided its progress on addressing the finding (B-83).
2022-009 ? Inadequate Recovery of Small Rental Property Program LoansAward Years: 2006, 2007Award Numbers: B-06-DG-22-0001, B-06-DG-22-0002Compliance Requirement: EligibilityRepeat Finding: Yes (Prior Year Finding No. 2021-012)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fiscal year ended June 30, 2022, the Division of Administration, Louisiana Office of Community Development (LOCD) identified $2,635,609 in Small Rental Property Program (SRPP) loans for nine property owners under the Community Development Block Grant/State?s Program (CDBG) who failed to comply with one or more of their loan agreement requirements and were assigned to loan recovery status. Since LOCD has not recovered these loans, we consider these amounts totaling $2,635,609 to be questioned costs. In addition, 1,147 noncompliant loans identified in previous years totaling $104.5 million remain outstanding.As of June 30, 2022, of the 4,480 outstanding SRPP loans totaling $436.3 million, 993 noncompliant loans totaling $92.4 million are in active recovery status, and LOCD represented that current recovery efforts are to either recoup the loan funds or work with the applicants to bring them into compliance with the state?s continuing requirements of the program. The remaining 163 noncompliant loans totaling $14.7 million have been determined by LOCD to be uncollectable for various reasons such as foreclosure, property seizure, or legal dispute.Criteria:OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal Governments (now located in 2 CFR 225) stipulates that the state assume responsibility for administering federal awards in a manner consistent with underlying agreements, program objectives, and the terms and conditions of the federal award. In response to hurricanes Katrina and Rita, the state was awarded and has allocated approximately $653 million to the SRPP, as part of the Road Home program. In accordance with the state?s U.S. Department of Housing and Urban Development (HUD)-approved Action Plan Amendment 24, the SRPP offers forgivable loans to qualified property owners who agree to offer rental properties at affordable rents to be occupied by lower-income households. In exchange for accepting loans ranging between $10,000 and $100,000 per rental unit, property owners are required to accept limitations on rents and incomes of renters during an ?affordability period,? a specified period of time based on the amount of funding received and the type of work being done (renovation or full construction) ranging between three and 20 years. The loan amounts are determined based on location of property, number of bedrooms, and the poverty level of the renter. In addition to accepting limitations on rents and income of renters, property owners also agree to maintain property insurance and maintain flood insurance, if necessary. These requirements become effective one year after the closing date and remain until the expiration of the ?affordability period.? According to the loan agreements, failure to comply with any of the loan requirements shall constitute default and mandatory repayment. Good internal controls would ensure that policies and procedures are in place with an established timeline to monitor compliance with the loan agreements and provide for specific actions (i.e., loan modification, foreclosure, or repayment) if a property owner fails to comply with the loan agreement or does not provide evidence of compliance as required by the loan agreement.Cause:In June 2016, HUD issued a monitoring review report with a finding that the SRPP design lacked sufficient fiscal accounting controls and procedures to ensure that CDBG funds identified as ineligible expenses are able to be recaptured and repurposed for eligible uses. Since that time, there have been several monitoring reports indicating progression in this area. In its July 2021 monitoring report, HUD stated that LOCD continued to make gradual progression through its current recapture and reclassification efforts to reduce its overall repayment amount. In its response to that report, LOCD provided an update on the status of the remaining noncompliant properties as it continues to work with HUD to identify a solution for these properties.Effect:Ultimately, LOCD?s failure to recover loans from noncompliant property owners could result in disallowed costs. The state could be liable for noncompliant awards if disallowed by the federal grantor; however, it is unknown whether the federal government would demand repayment of the awards.Recommendation:LOCD should continue its monitoring to identify awards to be placed in recovery and continue the corrective actions as recommended by HUD to recover funds from noncompliant property owners.Management?s Response and Corrective Action Plan:LOCD stated in its response that it will continue the efforts to recover ineligible awards and will continue to work with rental property owners to become compliant and resolve loan compliance issues to reduce or eliminate the need to recapture funds from rental property owners (B-13).
2022-010 ? Restore Louisiana Homeowner Assistance Program Awards Identified for Grant RecoveryAward Year: 2016Award Number: B-16-DL-22-0001Compliance Requirement: EligibilityRepeat Finding: Yes (Prior Year Finding No. 2021-014)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fiscal year ended June 30, 2022, LOCD identified $121,650 in noncompliant Restore Louisiana Homeowner Assistance Program (RLHAP) awards for eight homeowners through established program implementation and monitoring procedures for the CDBG Program. Since LOCD has not recovered these noncompliant awards at year-end, we consider these amounts to be questioned costs. In addition, 36 noncompliant files totaling $644,913 identified in the previous years are still outstanding. LOCD is actively pursuing collections on the files.As of June 30, 2022, $666,587,500 in total RLHAP awards have been disbursed to 17,254 homeowners. LOCD is actively reviewing 38 files totaling $715,592 to make final determinations of the homeowner?s noncompliant status. At year-end, LOCD reported that 269 homeowner files totaling approximately $4.4 million have been reviewed through its monitoring procedures. Of the 269 homeowners, LOCD reported 82 homeowners were placed in recapture status, 148 homeowners were cleared through the review process, 15 homeowners returned their grant award, in whole or in part, and 24 homeowners entered into repayment plans.Criteria:2 CFR 200, Subpart E, Cost Principles, stipulates that the state assumes responsibility for administering federal funds in a manner consistent with underlying agreements, program objectives, and the terms and conditions of the federal award.In response to the March and August Floods of 2016, the state was awarded approximately $1.07 billion to administer RLHAP. In accordance with the state?s HUD-approved Action Plan, eligible homeowners must enter into grant agreements with the state which require homeowners to comply with program requirements in exchange for compensation to rehabilitate or reconstruct their damaged property. Homeowners have three program options to choose from based on their progress in the rebuilding process and their capacity to complete their home repair or reconstruction. Eligibility and grant award calculations are determined based on information provided by the homeowner, the results of field inspections, and available third-party datasets. Once eligibility has been established and award amounts have been calculated, funds are awarded to the homeowner upon the effective date of signing the grant agreement, which is referred to as the closing date. Should homeowners experience a change in the circumstances after grant determination or if additional information becomes available after closing, homeowners? grant calculation or program eligibility may change. In the event the change reduces their amount of eligible funding, RLHAP may require that a homeowner return all or a portion of their award.Cause:Circumstances that may result in homeowners being required to repay all or a portion of the award include: duplicative benefits received but not included in initial grant award calculation, information discovered identifying the homeowner as ineligible for the award received, failure to complete construction per program requirements, substantial noncompliance with requirements of grant agreements, voluntary withdrawal from the program, or discovery that the homeowner provided false or misleading information during the grant award process.Effect:If LOCD is unable to recover benefits from noncompliant homeowners, disallowed costs could result. The state could be liable for noncompliant awards if disallowed by the federal grantor; however, it is unknown whether the federal government would demand repayment of these awards.Recommendation:LOCD should continue its monitoring to identify awards to be placed in recovery and continue recovery efforts to collect those awards determined to be noncompliant.Management?s Response and Corrective Action Plan:LOCD agreed that the identified files have been placed in recapture and stated it will continue to follow the established recapture procedures for these grant awards to ensure ultimate compliance (B-15).
2022-006 - Control Weakness and Noncompliance with Personnel Expenses Charged to Federal AwardsAward Years: 2018, 2019, 2021, 2022Award Numbers: 2138930, 2000614536, B-18-DP-22-001, EMW-2020-SS-00011-S01, M19AC00015, NR227217XXXXC002, P01AI048240, R21AI165939, R33HD099745, U19AI159840Compliance Requirements: Allowable Costs/Cost Principles, Special Tests and ProvisionsPass-Through Entities: Board of Trustees of the Leland Stanford Junior University, Emory UniversityRepeat Finding: Yes (Prior Year Finding No. 2021-009)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the second consecutive year, the University of Louisiana at Lafayette (UL Lafayette) did not have adequate controls in place to ensure personnel expenses and effort charged to federal R&D awards accurately reflected work performed. From a population of 28,744 payroll and non-payroll expenses charged to R&D grants, a non-statistical sample of 25 transactions was tested. For all 12 (48%) of the payroll transactions, UL Lafayette was unable to provide documentation to show that personnel-related expenses, totaling $4,520, were supported by time and effort certifications to ensure the accuracy of budget estimates charged to federal awards as required by federal regulations. Additionally, because there is no after-the-fact review to ensure the accuracy of personnel costs and effort charged to the awards, UL Lafayette could not ensure compliance with the requirements of special tests and provisions related to key personnel effort.Criteria:2 CFR 200.430(i) specifies the documentation standards for personnel expenses. In order to be allowable, charges to federal awards for personnel expenses must be based on records that accurately reflect the work performed and must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Budget estimates alone do not qualify as support for charges to federal awards, but can be used for interim accounting purposes provided that internal controls include an after-the-fact review to confirm the accuracy of final amounts charged to federal awards.Prior approval requirements related to key personnel effort are contained in 2 CFR 200.308(c) and within grant terms and conditions. A reduction of 25% or greater in time devoted to the project from key personnel requires prior approval.Cause:Management represented that it?s still in the process of implementing the prior-year corrective actions to address the issues noted in the prior-year finding. As a result, time and effort certifications were not completed by employees to support the accuracy of budget estimates charged to federal awards as required by 2 CFR 200.430(i).Effect:Inadequate controls related to federal documentation standards for personnel expenses could result in noncompliance with federal allowable costs and cost principles, as well as noncompliance with special tests and provisions related to key personnel effort.Recommendation:Management should strengthen internal controls to ensure that personnel expenses charged to the federal awards are supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.Management?s Response and Corrective Action Plan:Management did not concur with the finding, noting it did not have sufficient time in fiscal year 2022 for corrective action and provided its progress on addressing the finding (B-82).
2022-006 - Control Weakness and Noncompliance with Personnel Expenses Charged to Federal AwardsAward Years: 2018, 2019, 2021, 2022Award Numbers: 2138930, 2000614536, B-18-DP-22-001, EMW-2020-SS-00011-S01, M19AC00015, NR227217XXXXC002, P01AI048240, R21AI165939, R33HD099745, U19AI159840Compliance Requirements: Allowable Costs/Cost Principles, Special Tests and ProvisionsPass-Through Entities: Board of Trustees of the Leland Stanford Junior University, Emory UniversityRepeat Finding: Yes (Prior Year Finding No. 2021-009)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the second consecutive year, the University of Louisiana at Lafayette (UL Lafayette) did not have adequate controls in place to ensure personnel expenses and effort charged to federal R&D awards accurately reflected work performed. From a population of 28,744 payroll and non-payroll expenses charged to R&D grants, a non-statistical sample of 25 transactions was tested. For all 12 (48%) of the payroll transactions, UL Lafayette was unable to provide documentation to show that personnel-related expenses, totaling $4,520, were supported by time and effort certifications to ensure the accuracy of budget estimates charged to federal awards as required by federal regulations. Additionally, because there is no after-the-fact review to ensure the accuracy of personnel costs and effort charged to the awards, UL Lafayette could not ensure compliance with the requirements of special tests and provisions related to key personnel effort.Criteria:2 CFR 200.430(i) specifies the documentation standards for personnel expenses. In order to be allowable, charges to federal awards for personnel expenses must be based on records that accurately reflect the work performed and must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Budget estimates alone do not qualify as support for charges to federal awards, but can be used for interim accounting purposes provided that internal controls include an after-the-fact review to confirm the accuracy of final amounts charged to federal awards.Prior approval requirements related to key personnel effort are contained in 2 CFR 200.308(c) and within grant terms and conditions. A reduction of 25% or greater in time devoted to the project from key personnel requires prior approval.Cause:Management represented that it?s still in the process of implementing the prior-year corrective actions to address the issues noted in the prior-year finding. As a result, time and effort certifications were not completed by employees to support the accuracy of budget estimates charged to federal awards as required by 2 CFR 200.430(i).Effect:Inadequate controls related to federal documentation standards for personnel expenses could result in noncompliance with federal allowable costs and cost principles, as well as noncompliance with special tests and provisions related to key personnel effort.Recommendation:Management should strengthen internal controls to ensure that personnel expenses charged to the federal awards are supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.Management?s Response and Corrective Action Plan:Management did not concur with the finding, noting it did not have sufficient time in fiscal year 2022 for corrective action and provided its progress on addressing the finding (B-82).
2022-012 - Inadequate Controls over and Noncompliance with Unemployment Insurance Benefits RequirementsAward Year: Not ApplicableAward Number: Not ApplicableCompliance Requirements: Activities Allowed or Unallowed, EligibilityRepeat Finding: Yes (Prior Year Finding No. 2021-008)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the third consecutive year, LWC did not have adequate internal controls and did not comply with requirements of the Unemployment Insurance (UI) federal program. LWC issued more than $681 million in benefit payments to more than 260,000 claimants during fiscal year 2022.In December 2020, Congress passed the Continued Assistance for Unemployed Workers Act of 2020 (CAA), which extended many of the UI-related provisions in the Coronavirus Aid, Relief, and Economic Security (CARES) Act and also required claimants to provide supporting documents to verify income and identity, if receiving Pandemic Unemployment Assistance (PUA). Federal funding for the pandemic benefits ended after July 2021.In a non-statistical random sample of 60 claimants who were paid $188,180 in unemployment benefits in fiscal year 2022, we identified errors for 16 claimants, which resulted in questioned costs totaling $30,704. One claimant file contained multiple errors.For 13 (22%) out of 60 UI claimants, claimant files did not support monetary eligibility.? 12 claimant files did not have required wage documentation. CAA required all claimants receiving federal assistance payments after December 27, 2020, to provide evidence of self-employment earnings in order to remain eligible for PUA. According to LWC, a waiver has been requested from the U.S. Department of Labor from this requirement; as of March 21, 2023, LWC has not received a waiver.? One claimant file did not have evidence of child support payments properly withheld from the benefit payment by LWC as instructed by the child support order in the claimant file.For four (7%) out of 60 UI claimants, claimant files did not support non-monetary eligibility.? Four claimant files did not include required claimant identification. CAA requires states to verify the identity of PUA applicants whose identities were not previously verified on an Unemployment Compensation (UC), Extended Benefits (EB), or Pandemic Emergency Unemployment Compensation (PEUC) claim within the last 12 months.Criteria:Claimant files are required to contain certain information, including wage documentation and claimant identification to support eligibility for benefits paid under the PUA program. Upon notification from DCFS, child support court orders must be followed. Louisiana Revised Statute 23:1693 requires child support to be deducted from unemployment compensation when notified by DCFS.2 CFR 200.303(a) requires that non-federal entities receiving federal awards establish and maintain effective internal control designed to reasonably ensure compliance with federal statutes, regulations, and the terms and conditions of the federal awards.Cause:LWC failed to obtain needed documentation.Effect:Failure to obtain personal identifying information and wage documents results in noncompliance with federal program requirements and increases the risk of overpayments. Failure to properly withhold child support payments as ordered by a court results in noncompliance with state laws.Recommendation:LWC should strengthen controls to ensure all required documentation is obtained. In addition, LWC should take the necessary actions to ensure court ordered child support deductions are setup timely to ensure compliance with applicable laws.Management?s Response and Corrective Action Plan:Management concurred in part with the finding and provided a corrective action plan (B-72).Auditor?s Additional Comments:LWC noted in its response that a blanket waiver of overpayments resulting from the implementation of the proof of employment requirement has been requested; however, as noted in the finding and LWC?s response, the waiver has not yet been approved. LWC disagrees with the LLA?s interpretation of the identity verification requirements. The CAA provisions for identification verification noted above should be applied unless specific guidance is received from the federal grantor stating otherwise. Per CAA, states that previously verified an individual?s identity on a UC, EB, or PEUC claim within the last 12 months are not required to re-verify identity on the PUA claim. There was no evidence of verified identification in the claimant files for the errors noted. LWC remains responsible for administering the UI program with adequate internal controls to ensure compliance with federal requirements.
2022-012 - Inadequate Controls over and Noncompliance with Unemployment Insurance Benefits RequirementsAward Year: Not ApplicableAward Number: Not ApplicableCompliance Requirements: Activities Allowed or Unallowed, EligibilityRepeat Finding: Yes (Prior Year Finding No. 2021-008)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the third consecutive year, LWC did not have adequate internal controls and did not comply with requirements of the Unemployment Insurance (UI) federal program. LWC issued more than $681 million in benefit payments to more than 260,000 claimants during fiscal year 2022.In December 2020, Congress passed the Continued Assistance for Unemployed Workers Act of 2020 (CAA), which extended many of the UI-related provisions in the Coronavirus Aid, Relief, and Economic Security (CARES) Act and also required claimants to provide supporting documents to verify income and identity, if receiving Pandemic Unemployment Assistance (PUA). Federal funding for the pandemic benefits ended after July 2021.In a non-statistical random sample of 60 claimants who were paid $188,180 in unemployment benefits in fiscal year 2022, we identified errors for 16 claimants, which resulted in questioned costs totaling $30,704. One claimant file contained multiple errors.For 13 (22%) out of 60 UI claimants, claimant files did not support monetary eligibility.? 12 claimant files did not have required wage documentation. CAA required all claimants receiving federal assistance payments after December 27, 2020, to provide evidence of self-employment earnings in order to remain eligible for PUA. According to LWC, a waiver has been requested from the U.S. Department of Labor from this requirement; as of March 21, 2023, LWC has not received a waiver.? One claimant file did not have evidence of child support payments properly withheld from the benefit payment by LWC as instructed by the child support order in the claimant file.For four (7%) out of 60 UI claimants, claimant files did not support non-monetary eligibility.? Four claimant files did not include required claimant identification. CAA requires states to verify the identity of PUA applicants whose identities were not previously verified on an Unemployment Compensation (UC), Extended Benefits (EB), or Pandemic Emergency Unemployment Compensation (PEUC) claim within the last 12 months.Criteria:Claimant files are required to contain certain information, including wage documentation and claimant identification to support eligibility for benefits paid under the PUA program. Upon notification from DCFS, child support court orders must be followed. Louisiana Revised Statute 23:1693 requires child support to be deducted from unemployment compensation when notified by DCFS.2 CFR 200.303(a) requires that non-federal entities receiving federal awards establish and maintain effective internal control designed to reasonably ensure compliance with federal statutes, regulations, and the terms and conditions of the federal awards.Cause:LWC failed to obtain needed documentation.Effect:Failure to obtain personal identifying information and wage documents results in noncompliance with federal program requirements and increases the risk of overpayments. Failure to properly withhold child support payments as ordered by a court results in noncompliance with state laws.Recommendation:LWC should strengthen controls to ensure all required documentation is obtained. In addition, LWC should take the necessary actions to ensure court ordered child support deductions are setup timely to ensure compliance with applicable laws.Management?s Response and Corrective Action Plan:Management concurred in part with the finding and provided a corrective action plan (B-72).Auditor?s Additional Comments:LWC noted in its response that a blanket waiver of overpayments resulting from the implementation of the proof of employment requirement has been requested; however, as noted in the finding and LWC?s response, the waiver has not yet been approved. LWC disagrees with the LLA?s interpretation of the identity verification requirements. The CAA provisions for identification verification noted above should be applied unless specific guidance is received from the federal grantor stating otherwise. Per CAA, states that previously verified an individual?s identity on a UC, EB, or PEUC claim within the last 12 months are not required to re-verify identity on the PUA claim. There was no evidence of verified identification in the claimant files for the errors noted. LWC remains responsible for administering the UI program with adequate internal controls to ensure compliance with federal requirements.
2022-011 - Inadequate Controls over and Noncompliance with Subrecipient Monitoring RequirementsAward Years: 2019 - 2021Award Numbers: AA332321955A22, AA347712055A22, AA363222155A22Compliance Requirements: Activities Allowed or Unallowed, Subrecipient MonitoringRepeat Finding: Yes (Prior Year Finding No. 2021-019)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, the Louisiana Workforce Commission (LWC) did not adequately follow-up on subrecipient monitoring reports under the Workforce Innovation and Opportunity Act (WIOA) Cluster programs.Our review of LWC?s fiscal year 2022 monitoring reports, of fiscal year 2020, for all 15 of LWC?s subrecipients, disclosed the following:? Two monitoring reports were not issued timely by LWC. The monitoring reports were issued 74 and 75 days after the completion of the monitoring review. LWC?s policy requires monitoring review reports to be issued 60 days after the completion of the monitoring review.? For four monitoring reports, close out letters were issued 145 to 191 days after monitoring report issuance. For six monitoring reports, close out letters were not issued as of January 2023, while the monitoring reports for these reviews were issued more than 200 days prior. The monitoring reports include findings with possible questioned costs totaling $3.1 million. LWC policy does not specifically address timeliness requirements for close out letters.In a non-statistical random sample of five of 15 subrecipient working papers, we noted the following:? Three subrecipients had findings on the monitoring reports stemming from a lack of documentation supporting the subrecipients? drawdowns of WIOA funds, and drawdowns of federal funds could not be reconciled by LWC to the subrecipients accounting records. The monitoring reports noted potential questioned costs associated with these drawdowns. These reviews are included in the six monitoring reports not issued as of January 2023, noted in the bullet above. Timely resolution would allow LWC to quickly address any compliance issues at the subrecipient level. According to LWC, it is working with the subrecipients to reconcile the federal funds drawdowns and close out the reports.Criteria:2 CFR 200.332(d) requires that pass-through entities monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals.2 CFR 200.332(d)(2) requires that pass-through entities follow-up and ensure that the subrecipient takes timely and appropriate action on all deficiencies provided to the subrecipient from the pass-through entities detected through reviews.Annual monitoring reviews are required on all subrecipients for compliance with federal requirements. The review includes a review of LWC federal drawdowns for subrecipient expenditures. LWC fiscal relies on the monitoring section to review the drawdown documentation at the subrecipient to ensure that drawdowns are adequately supported.20 CFR 683.410 requires pass-through entities to issue management decisions (reports) on applicable findings and follow-up to ensure subrecipients take prompt and appropriate action on all audit findings.LWC?s Policy Number OWD 4-12 requires monitoring reviews to be issued within 60 days of completion of the monitoring review.Cause:LWC did not follow established policy for timely issuance of monitoring reports. LWC policy does not specifically address timeliness requirements for issuing close out letters.Effect:Failure to timely resolve documentation and questioned costs impairs LWC?s ability to ensure that program funds passed through to its subrecipients were spent in accordance with program regulations and increases the risk of improper payments, which LWC may have to repay to the federal grantor. WIOA program expenditures totaled $56.5 million during state fiscal year 2022, with approximately $46 million provided to subrecipients.Recommendation:LWC management should ensure that subrecipient monitoring reports are issued in a timely manner in accordance with LWC policy. LWC management should develop and implement policy ensuring timely and adequate close out of monitoring reviews.Management?s Response and Corrective Action Plan:Management concurred in part with the finding and provided a corrective action plan (B-59).
2022-011 - Inadequate Controls over and Noncompliance with Subrecipient Monitoring RequirementsAward Years: 2019 - 2021Award Numbers: AA332321955A22, AA347712055A22, AA363222155A22Compliance Requirements: Activities Allowed or Unallowed, Subrecipient MonitoringRepeat Finding: Yes (Prior Year Finding No. 2021-019)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, the Louisiana Workforce Commission (LWC) did not adequately follow-up on subrecipient monitoring reports under the Workforce Innovation and Opportunity Act (WIOA) Cluster programs.Our review of LWC?s fiscal year 2022 monitoring reports, of fiscal year 2020, for all 15 of LWC?s subrecipients, disclosed the following:? Two monitoring reports were not issued timely by LWC. The monitoring reports were issued 74 and 75 days after the completion of the monitoring review. LWC?s policy requires monitoring review reports to be issued 60 days after the completion of the monitoring review.? For four monitoring reports, close out letters were issued 145 to 191 days after monitoring report issuance. For six monitoring reports, close out letters were not issued as of January 2023, while the monitoring reports for these reviews were issued more than 200 days prior. The monitoring reports include findings with possible questioned costs totaling $3.1 million. LWC policy does not specifically address timeliness requirements for close out letters.In a non-statistical random sample of five of 15 subrecipient working papers, we noted the following:? Three subrecipients had findings on the monitoring reports stemming from a lack of documentation supporting the subrecipients? drawdowns of WIOA funds, and drawdowns of federal funds could not be reconciled by LWC to the subrecipients accounting records. The monitoring reports noted potential questioned costs associated with these drawdowns. These reviews are included in the six monitoring reports not issued as of January 2023, noted in the bullet above. Timely resolution would allow LWC to quickly address any compliance issues at the subrecipient level. According to LWC, it is working with the subrecipients to reconcile the federal funds drawdowns and close out the reports.Criteria:2 CFR 200.332(d) requires that pass-through entities monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals.2 CFR 200.332(d)(2) requires that pass-through entities follow-up and ensure that the subrecipient takes timely and appropriate action on all deficiencies provided to the subrecipient from the pass-through entities detected through reviews.Annual monitoring reviews are required on all subrecipients for compliance with federal requirements. The review includes a review of LWC federal drawdowns for subrecipient expenditures. LWC fiscal relies on the monitoring section to review the drawdown documentation at the subrecipient to ensure that drawdowns are adequately supported.20 CFR 683.410 requires pass-through entities to issue management decisions (reports) on applicable findings and follow-up to ensure subrecipients take prompt and appropriate action on all audit findings.LWC?s Policy Number OWD 4-12 requires monitoring reviews to be issued within 60 days of completion of the monitoring review.Cause:LWC did not follow established policy for timely issuance of monitoring reports. LWC policy does not specifically address timeliness requirements for issuing close out letters.Effect:Failure to timely resolve documentation and questioned costs impairs LWC?s ability to ensure that program funds passed through to its subrecipients were spent in accordance with program regulations and increases the risk of improper payments, which LWC may have to repay to the federal grantor. WIOA program expenditures totaled $56.5 million during state fiscal year 2022, with approximately $46 million provided to subrecipients.Recommendation:LWC management should ensure that subrecipient monitoring reports are issued in a timely manner in accordance with LWC policy. LWC management should develop and implement policy ensuring timely and adequate close out of monitoring reviews.Management?s Response and Corrective Action Plan:Management concurred in part with the finding and provided a corrective action plan (B-59).
2022-011 - Inadequate Controls over and Noncompliance with Subrecipient Monitoring RequirementsAward Years: 2019 - 2021Award Numbers: AA332321955A22, AA347712055A22, AA363222155A22Compliance Requirements: Activities Allowed or Unallowed, Subrecipient MonitoringRepeat Finding: Yes (Prior Year Finding No. 2021-019)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, the Louisiana Workforce Commission (LWC) did not adequately follow-up on subrecipient monitoring reports under the Workforce Innovation and Opportunity Act (WIOA) Cluster programs.Our review of LWC?s fiscal year 2022 monitoring reports, of fiscal year 2020, for all 15 of LWC?s subrecipients, disclosed the following:? Two monitoring reports were not issued timely by LWC. The monitoring reports were issued 74 and 75 days after the completion of the monitoring review. LWC?s policy requires monitoring review reports to be issued 60 days after the completion of the monitoring review.? For four monitoring reports, close out letters were issued 145 to 191 days after monitoring report issuance. For six monitoring reports, close out letters were not issued as of January 2023, while the monitoring reports for these reviews were issued more than 200 days prior. The monitoring reports include findings with possible questioned costs totaling $3.1 million. LWC policy does not specifically address timeliness requirements for close out letters.In a non-statistical random sample of five of 15 subrecipient working papers, we noted the following:? Three subrecipients had findings on the monitoring reports stemming from a lack of documentation supporting the subrecipients? drawdowns of WIOA funds, and drawdowns of federal funds could not be reconciled by LWC to the subrecipients accounting records. The monitoring reports noted potential questioned costs associated with these drawdowns. These reviews are included in the six monitoring reports not issued as of January 2023, noted in the bullet above. Timely resolution would allow LWC to quickly address any compliance issues at the subrecipient level. According to LWC, it is working with the subrecipients to reconcile the federal funds drawdowns and close out the reports.Criteria:2 CFR 200.332(d) requires that pass-through entities monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals.2 CFR 200.332(d)(2) requires that pass-through entities follow-up and ensure that the subrecipient takes timely and appropriate action on all deficiencies provided to the subrecipient from the pass-through entities detected through reviews.Annual monitoring reviews are required on all subrecipients for compliance with federal requirements. The review includes a review of LWC federal drawdowns for subrecipient expenditures. LWC fiscal relies on the monitoring section to review the drawdown documentation at the subrecipient to ensure that drawdowns are adequately supported.20 CFR 683.410 requires pass-through entities to issue management decisions (reports) on applicable findings and follow-up to ensure subrecipients take prompt and appropriate action on all audit findings.LWC?s Policy Number OWD 4-12 requires monitoring reviews to be issued within 60 days of completion of the monitoring review.Cause:LWC did not follow established policy for timely issuance of monitoring reports. LWC policy does not specifically address timeliness requirements for issuing close out letters.Effect:Failure to timely resolve documentation and questioned costs impairs LWC?s ability to ensure that program funds passed through to its subrecipients were spent in accordance with program regulations and increases the risk of improper payments, which LWC may have to repay to the federal grantor. WIOA program expenditures totaled $56.5 million during state fiscal year 2022, with approximately $46 million provided to subrecipients.Recommendation:LWC management should ensure that subrecipient monitoring reports are issued in a timely manner in accordance with LWC policy. LWC management should develop and implement policy ensuring timely and adequate close out of monitoring reviews.Management?s Response and Corrective Action Plan:Management concurred in part with the finding and provided a corrective action plan (B-59).
2022-005 - Noncompliance with and Weakness in Controls over Federal Research and Development ExpensesAward Years: VariousAward Numbers: VariousCompliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesPass-Through Entities: VariousRepeat Finding: Yes (Prior Year Finding No. 2021-007)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In addition, LSUHSC-S did not ensure that costs charged to federal awards were allowable in accordance with federal regulations and the terms and conditions of the award when requesting reimbursement.In a non-statistical random sample of 50 out of 10,798 expense transactions charged to R&D during the fiscal year ending June 30, 2022, the following exceptions were noted:? Three (6%) purchasing card (P-Card) transactions were not allowable in accordance with federal regulations and the terms and conditions of the award and are considered questioned costs totaling $1,073.? For five (10%) of 50 transactions tested, LSUHSC-S overstated expenses on the Schedule of Expenditures of Federal Awards because the award was fully funded, and expenses in excess of the award amount were not removed from the project used to identify expenditures to federal awards in the accounting records, or the expense was determined not allowable as noted above.? Seven (35%) of 20 time and effort certifications for salary and related benefit expenses tested were completed 119 to 461 days after the end of the quarter.We performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 838 (51%) out of 1,654 adjusting journal entries were made more than 90 days after the end of the quarter from the original transactions. The adjustments were made 97 to 1,026 days after the original transactions were recorded and 96 to 953 days after the end of the quarter.In a non-statistical random sample of 10 out of 1,654 payroll adjusting entries affecting R&D, tested by employee, project id (related to federal award), and journal id, six (60%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. Two of these adjusting entries added costs to the federal award projects and are considered questioned costs totaling $28,324.Criteria:2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity?s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments.Per LSUHSC-S?s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S?s policy, time and effort certifications should be completed within approximately 90 days of the end of the quarter. Management interprets the end of the quarter to be when the time and effort reports are sent to the departments once the last month of the quarter is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the quarterly reporting period, a payroll reallocation must be created within 30 days.Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework? issued by the Committee of Sponsoring Organizations of the Treadway Commission. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions.In addition, the National Institute of Health (NIH) is the grantor for the majority of the LSUHSC-S?s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made ?to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable.2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs.Cause:LSUHSC-S?s approval of P-Card transactions did not provide sufficient review of the allowability of expenses on federal awards. LSUHSC-S has procedures in place to review expenses prior to requesting reimbursement; however, it did not ensure that the necessary adjustments were made to the accounting system in a timely manner for expenses that were not allowed for reimbursement. In addition, training to emphasize accountability and the importance of completing time and effort certifications timely and accurately per policy was not completed as planned during fiscal year 2022 due to staffing shortages.LSUHSC-S is still in the process of implementing the corrective action outlined in the prior year to include documentation of adjusted effort and questions to address justification for the adjustment, errors, and timeliness on a modified Personnel Change form.Effect:Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects.In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor.Recommendation:Management should monitor time and effort certifications completed by the departments and investigate and obtain justification from department personnel for untimely certifications, as well as untimely adjustments and lack of supporting documentation for adjustments to enforce established policies. Management should ensure adequate design and operating effectiveness of controls over expenses, including P-Card expenses, charged to federal awards to verify allowability of costs in accordance with federal requirements and grant terms and conditions prior to requesting reimbursement. Management should also consider implementing other complementary controls such as preventing costs from being charged to projects in the accounting system beyond the approved budget or period of performance.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-52).
2022-006 - Control Weakness and Noncompliance with Personnel Expenses Charged to Federal AwardsAward Years: 2018, 2019, 2021, 2022Award Numbers: 2138930, 2000614536, B-18-DP-22-001, EMW-2020-SS-00011-S01, M19AC00015, NR227217XXXXC002, P01AI048240, R21AI165939, R33HD099745, U19AI159840Compliance Requirements: Allowable Costs/Cost Principles, Special Tests and ProvisionsPass-Through Entities: Board of Trustees of the Leland Stanford Junior University, Emory UniversityRepeat Finding: Yes (Prior Year Finding No. 2021-009)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the second consecutive year, the University of Louisiana at Lafayette (UL Lafayette) did not have adequate controls in place to ensure personnel expenses and effort charged to federal R&D awards accurately reflected work performed. From a population of 28,744 payroll and non-payroll expenses charged to R&D grants, a non-statistical sample of 25 transactions was tested. For all 12 (48%) of the payroll transactions, UL Lafayette was unable to provide documentation to show that personnel-related expenses, totaling $4,520, were supported by time and effort certifications to ensure the accuracy of budget estimates charged to federal awards as required by federal regulations. Additionally, because there is no after-the-fact review to ensure the accuracy of personnel costs and effort charged to the awards, UL Lafayette could not ensure compliance with the requirements of special tests and provisions related to key personnel effort.Criteria:2 CFR 200.430(i) specifies the documentation standards for personnel expenses. In order to be allowable, charges to federal awards for personnel expenses must be based on records that accurately reflect the work performed and must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Budget estimates alone do not qualify as support for charges to federal awards, but can be used for interim accounting purposes provided that internal controls include an after-the-fact review to confirm the accuracy of final amounts charged to federal awards.Prior approval requirements related to key personnel effort are contained in 2 CFR 200.308(c) and within grant terms and conditions. A reduction of 25% or greater in time devoted to the project from key personnel requires prior approval.Cause:Management represented that it?s still in the process of implementing the prior-year corrective actions to address the issues noted in the prior-year finding. As a result, time and effort certifications were not completed by employees to support the accuracy of budget estimates charged to federal awards as required by 2 CFR 200.430(i).Effect:Inadequate controls related to federal documentation standards for personnel expenses could result in noncompliance with federal allowable costs and cost principles, as well as noncompliance with special tests and provisions related to key personnel effort.Recommendation:Management should strengthen internal controls to ensure that personnel expenses charged to the federal awards are supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.Management?s Response and Corrective Action Plan:Management did not concur with the finding, noting it did not have sufficient time in fiscal year 2022 for corrective action and provided its progress on addressing the finding (B-82).
2022-007 - Noncompliance with Subrecipient Monitoring RequirementsAward Years: 2018, 2020 - 2022Award Numbers: DUE-2044358, NA18OAR4170098, OIA-2019511, OIA-2119688Compliance Requirement: Subrecipient MonitoringRepeat Finding: Yes (Prior Year Finding No. 2021-010)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the second consecutive year, UL Lafayette did not adequately monitor subrecipients of the R&D Cluster programs. In a non-statistical sample of five subawards out of a population of 49 subawards, it was noted that for four (80%) of the subrecipients evaluated UL Lafayette was unable to provide documentation that ensured each subrecipient obtained the required audit or that the audit was reviewed so that timely and appropriate action could be taken for any findings pertaining to the federal awards. Additionally, for all five (100%) of the subrecipients evaluated, UL Lafayette could not provide evidence that the required risk analyses were performed to evaluate each subrecipients? risk of noncompliance with federal regulations and the terms of the subaward.Criteria:2 CFR 200.332(b) requires pass-through entities to evaluate each subrecipient's risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring.Per 2 CFR 200.332(f), pass-through entities are responsible for verifying that every subrecipient is audited as required by 2 CFR Part 200, subpart F when it is expected that the subrecipient's federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in CFR 200.501 of $750,000 or more in federal awards during the subrecipient?s fiscal year.2 CFR 200.332(d)(2) requires that pass-through entities follow-up and ensure that the subrecipient takes timely and appropriate action on all deficiencies provided to the subrecipient from the pass-through entities detected through audits, on-site reviews, and written confirmation from the subrecipient.2 CFR 200.332(d)(2) and (3) require pass-through entities to issue a management decision on applicable audit findings in accordance with 2 CFR 200.521, within six months after acceptance of the subrecipient?s audit report by the Federal Audit Clearinghouse, and ensure that the subrecipient takes timely and appropriate corrective action on all findings.Cause:UL Lafayette management indicated that it was working on internal procedures to adequately monitor subrecipients as result of the prior-year finding. However, management has yet to finalize and apply these procedures on all active subrecipients.Effect:Failure to properly monitor subrecipients results in noncompliance with federal regulations and increases the likelihood of improper payments which may have to be returned to the federal awarding agency.Recommendation:UL Lafayette should strengthen controls to ensure the timely review of all required subrecipient audit reports in order to evaluate the impact of any findings noted in the audits and issue management decision letters, if applicable. In addition, UL Lafayette should strengthen controls to ensure risk assessments are performed and documented on all subrecipients in accordance with federal regulations.Management?s Response and Corrective Action Plan:Management did not concur with the finding, noting it did not have sufficient time in fiscal year 2022 for corrective action and provided its progress on addressing the finding (B-83).
2022-007 - Noncompliance with Subrecipient Monitoring RequirementsAward Years: 2018, 2020 - 2022Award Numbers: DUE-2044358, NA18OAR4170098, OIA-2019511, OIA-2119688Compliance Requirement: Subrecipient MonitoringRepeat Finding: Yes (Prior Year Finding No. 2021-010)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the second consecutive year, UL Lafayette did not adequately monitor subrecipients of the R&D Cluster programs. In a non-statistical sample of five subawards out of a population of 49 subawards, it was noted that for four (80%) of the subrecipients evaluated UL Lafayette was unable to provide documentation that ensured each subrecipient obtained the required audit or that the audit was reviewed so that timely and appropriate action could be taken for any findings pertaining to the federal awards. Additionally, for all five (100%) of the subrecipients evaluated, UL Lafayette could not provide evidence that the required risk analyses were performed to evaluate each subrecipients? risk of noncompliance with federal regulations and the terms of the subaward.Criteria:2 CFR 200.332(b) requires pass-through entities to evaluate each subrecipient's risk of noncompliance with federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring.Per 2 CFR 200.332(f), pass-through entities are responsible for verifying that every subrecipient is audited as required by 2 CFR Part 200, subpart F when it is expected that the subrecipient's federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in CFR 200.501 of $750,000 or more in federal awards during the subrecipient?s fiscal year.2 CFR 200.332(d)(2) requires that pass-through entities follow-up and ensure that the subrecipient takes timely and appropriate action on all deficiencies provided to the subrecipient from the pass-through entities detected through audits, on-site reviews, and written confirmation from the subrecipient.2 CFR 200.332(d)(2) and (3) require pass-through entities to issue a management decision on applicable audit findings in accordance with 2 CFR 200.521, within six months after acceptance of the subrecipient?s audit report by the Federal Audit Clearinghouse, and ensure that the subrecipient takes timely and appropriate corrective action on all findings.Cause:UL Lafayette management indicated that it was working on internal procedures to adequately monitor subrecipients as result of the prior-year finding. However, management has yet to finalize and apply these procedures on all active subrecipients.Effect:Failure to properly monitor subrecipients results in noncompliance with federal regulations and increases the likelihood of improper payments which may have to be returned to the federal awarding agency.Recommendation:UL Lafayette should strengthen controls to ensure the timely review of all required subrecipient audit reports in order to evaluate the impact of any findings noted in the audits and issue management decision letters, if applicable. In addition, UL Lafayette should strengthen controls to ensure risk assessments are performed and documented on all subrecipients in accordance with federal regulations.Management?s Response and Corrective Action Plan:Management did not concur with the finding, noting it did not have sufficient time in fiscal year 2022 for corrective action and provided its progress on addressing the finding (B-83).
2022-017 - Improper Payments to Southern University Law Center EmployeeAward Year: 2022Award Number: P031K190024Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:Southern University (SU) Human Resources identified improper payments to a former Southern University Law Center (SULC) professor totaling $77,896. In addition, $31,898 in related benefits were paid on behalf of the professor.The SULC employee resigned from a full-time position in June 2021, while continuing to teach as an adjunct professor during the Fall 2021 semester. SU Human Resources and SULC did not terminate the full-time position in the Banner system. This allowed the employee to complete time statements and be paid for both the adjunct and the full-time position. In June 2022, SU Human Resources discovered the overpayments and requested restitution.Criteria:2 CFR 200.430(i) requires that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed, and these records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.The SU handbook for university personnel, federal statutes, the Louisiana Department of Civil Service, and other Louisiana laws require that the university maintain accurate accounting of hours worked on every employee. In addition, the university processes payroll electronically through Banner Web Time, which requires employees to enter time worked, leave taken, and supervisors to approve the time sheets online.Cause:This overpayment occurred due to a failure of internal controls to ensure employment status changes were updated in the Banner system and that time sheet approvals were for actual hours worked.Effect:The overpayment of $109,794 was not recouped by SULC as of June 30, 2022. Of the total overpayment, $105,567 was charged to the Higher Education Institutional Aid federal program, including $30,670 in benefits, and is considered questioned costs.Recommendation:Management should strengthen internal controls to ensure terminated employee positions are deactivated in the Banner system timely and that timesheet approvals are for hours worked.Management?s Response and Corrective Action Plan:Management concurred with the finding and provided a corrective action plan (B-81).
2022-014 - Noncompliance with Reporting Requirements for the Federal Funding Accountability and Transparency ActAward Years: 2018 - 2021Award Numbers: S367A180017, S367A190017, S367A200017, S367A210017, S425B200042, S425D210003, S425U210003, S425W210019Compliance Requirement: ReportingRepeat Finding: Yes (Prior Year Finding No. 2021-027)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the second consecutive audit, the Department of Education (DOE) did not comply with Federal Funding Accountability and Transparency Act (FFATA) reporting requirements.Our procedures disclosed the following:? For the Supporting Effective Instruction State Grants (formerly Improving Teacher Quality State Grants) (Title II) program, no subaward information was entered into the FFATA Subaward Reporting System (FSRS) for 594 subawards of $30,000 or more totaling $167,969,408, related to four separate federal awards that were open during our audit period.See Schedule of Findings and Questioned Costs for chart/table? For the Education Stabilization Fund (ESF) program, we tested a total of 270 subawards and noted subawards that were not reported, reports not submitted timely, duplicated subawards, incorrect subaward amounts, and incorrect obligations dates.See Schedule of Findings and Questioned Costs for chart/tableCriteria:2 CFR Part 170 Appendix A(I)(a) requires the non-federal entity to report certain information about each obligating action that equals or exceeds $30,000 in federal funds for a subaward to a non-federal entity into the FSRS no later than the end of the month following the month in which the obligation was made.Cause:DOE management indicated that this noncompliance occurred due to a weakness in internal controls over FFATA reporting, not adequately maintaining a list of federal grants for which FFATA reporting was required, and staff turnover contributing to the incomplete knowledge of FFATA reporting. Management?s response to the prior-year finding indicated it would implement corrective action by September 30, 2022, and management was in the process of implementing the additional controls during fiscal year 2022 when our audit procedures were being performed.Effect:Not reporting obligating actions to FSRS or reporting inaccurate information to FSRS prevents the public from having access to accurate information on how DOE is obligating federal funds.Recommendation:DOE should continue to strengthen internal controls to ensure accurate information is reported and ensure that appropriate personnel are aware of the federal programs that are subject to FFATA reporting. In addition, DOE should correct all amounts previously reported incorrectly.Management?s Response and Corrective Action Plan:Management concurred with the finding and provided a plan of corrective action (B-9).
2022-014 - Noncompliance with Reporting Requirements for the Federal Funding Accountability and Transparency ActAward Years: 2018 - 2021Award Numbers: S367A180017, S367A190017, S367A200017, S367A210017, S425B200042, S425D210003, S425U210003, S425W210019Compliance Requirement: ReportingRepeat Finding: Yes (Prior Year Finding No. 2021-027)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the second consecutive audit, the Department of Education (DOE) did not comply with Federal Funding Accountability and Transparency Act (FFATA) reporting requirements.Our procedures disclosed the following:? For the Supporting Effective Instruction State Grants (formerly Improving Teacher Quality State Grants) (Title II) program, no subaward information was entered into the FFATA Subaward Reporting System (FSRS) for 594 subawards of $30,000 or more totaling $167,969,408, related to four separate federal awards that were open during our audit period.See Schedule of Findings and Questioned Costs for chart/table? For the Education Stabilization Fund (ESF) program, we tested a total of 270 subawards and noted subawards that were not reported, reports not submitted timely, duplicated subawards, incorrect subaward amounts, and incorrect obligations dates.See Schedule of Findings and Questioned Costs for chart/tableCriteria:2 CFR Part 170 Appendix A(I)(a) requires the non-federal entity to report certain information about each obligating action that equals or exceeds $30,000 in federal funds for a subaward to a non-federal entity into the FSRS no later than the end of the month following the month in which the obligation was made.Cause:DOE management indicated that this noncompliance occurred due to a weakness in internal controls over FFATA reporting, not adequately maintaining a list of federal grants for which FFATA reporting was required, and staff turnover contributing to the incomplete knowledge of FFATA reporting. Management?s response to the prior-year finding indicated it would implement corrective action by September 30, 2022, and management was in the process of implementing the additional controls during fiscal year 2022 when our audit procedures were being performed.Effect:Not reporting obligating actions to FSRS or reporting inaccurate information to FSRS prevents the public from having access to accurate information on how DOE is obligating federal funds.Recommendation:DOE should continue to strengthen internal controls to ensure accurate information is reported and ensure that appropriate personnel are aware of the federal programs that are subject to FFATA reporting. In addition, DOE should correct all amounts previously reported incorrectly.Management?s Response and Corrective Action Plan:Management concurred with the finding and provided a plan of corrective action (B-9).
2022-014 - Noncompliance with Reporting Requirements for the Federal Funding Accountability and Transparency ActAward Years: 2018 - 2021Award Numbers: S367A180017, S367A190017, S367A200017, S367A210017, S425B200042, S425D210003, S425U210003, S425W210019Compliance Requirement: ReportingRepeat Finding: Yes (Prior Year Finding No. 2021-027)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the second consecutive audit, the Department of Education (DOE) did not comply with Federal Funding Accountability and Transparency Act (FFATA) reporting requirements.Our procedures disclosed the following:? For the Supporting Effective Instruction State Grants (formerly Improving Teacher Quality State Grants) (Title II) program, no subaward information was entered into the FFATA Subaward Reporting System (FSRS) for 594 subawards of $30,000 or more totaling $167,969,408, related to four separate federal awards that were open during our audit period.See Schedule of Findings and Questioned Costs for chart/table? For the Education Stabilization Fund (ESF) program, we tested a total of 270 subawards and noted subawards that were not reported, reports not submitted timely, duplicated subawards, incorrect subaward amounts, and incorrect obligations dates.See Schedule of Findings and Questioned Costs for chart/tableCriteria:2 CFR Part 170 Appendix A(I)(a) requires the non-federal entity to report certain information about each obligating action that equals or exceeds $30,000 in federal funds for a subaward to a non-federal entity into the FSRS no later than the end of the month following the month in which the obligation was made.Cause:DOE management indicated that this noncompliance occurred due to a weakness in internal controls over FFATA reporting, not adequately maintaining a list of federal grants for which FFATA reporting was required, and staff turnover contributing to the incomplete knowledge of FFATA reporting. Management?s response to the prior-year finding indicated it would implement corrective action by September 30, 2022, and management was in the process of implementing the additional controls during fiscal year 2022 when our audit procedures were being performed.Effect:Not reporting obligating actions to FSRS or reporting inaccurate information to FSRS prevents the public from having access to accurate information on how DOE is obligating federal funds.Recommendation:DOE should continue to strengthen internal controls to ensure accurate information is reported and ensure that appropriate personnel are aware of the federal programs that are subject to FFATA reporting. In addition, DOE should correct all amounts previously reported incorrectly.Management?s Response and Corrective Action Plan:Management concurred with the finding and provided a plan of corrective action (B-9).
2022-013 - Higher Education Emergency Relief Fund Reporting WeaknessesAward Year: 2022Award Numbers: P425E201230, P425F201239, P425L200162Compliance Requirement: ReportingRepeat Finding: Yes (Prior Year Finding No. 2021-023)See Schedule of Findings and Questioned Costs for chart/tableCondition:Baton Rouge Community College (BRCC) did not ensure compliance with certain reporting requirements as established by the U.S. Department of Education (USDOE) for the Higher Education Emergency Relief Fund (HEERF) program.Based on our review of the four quarterly reports and the annual report, the following errors in reporting were identified:? BRCC incorrectly publicly posted the Quarterly Public Reporting for Institutional and Minority Serving Institutions (MSI) portions for the quarter ending September 30, 2021, as the report for the quarter ending December 31, 2021. BRCC subsequently publicly posted the correct report after auditor inquiry, 289 days after the required due date.? The Quarterly Public Reporting for Student Aid Portion for the quarters ending September 30, 2021, and December 31, 2021, were publicly posted 117 and 25 days, respectively, after the required due dates.? The Annual Report for the calendar year ending December 31, 2021, did not accurately report the number of students that received HEERF emergency financial aid grants and the amount disbursed directly to students as emergency financial aid grants.Criteria:The Coronavirus Aid, Relief, and Economic Security (CARES) Act Section 18004(e), the Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act Section 314(e), and the American Rescue Plan (ARP) Act Section 2003 require an institution receiving funds under HEERF I, HEERF II, and HEERF III to submit a report to the secretary, at such time in such a manner as the secretary may require. Per USDOE form instructions, BRCC must post the Quarterly Public Reporting for Institutional and MSI portions no later than 10 days after the end of each quarter on its website. Per the May 13, 2021, Federal Register, institutions must post the Quarterly Public Reporting for Student Aid portions no later than 10 days after the end of each calendar quarter.Cause:BRCC did not have adequate controls in place to ensure the accurate preparation of the reports or to ensure that the reports were publicly posted by the required deadlines. This is the second consecutive year we have reported weaknesses over HEERF reporting. Management's response to the prior-year finding indicated it would implement corrective action by June 30, 2022, and were in the process of implementing the additional controls during the fiscal year under audit.Effect:Failure to ensure the accuracy of quarterly and annual reports for the HEERF program and to ensure the reports were publicly posted by the required deadlines resulted in noncompliance with federal regulations.Recommendation:Management should strengthen its procedures over the preparation and public posting of quarterly and annual reports for the HEERF program to ensure compliance with reporting requirements.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-4).
2022-013 - Higher Education Emergency Relief Fund Reporting WeaknessesAward Year: 2022Award Numbers: P425E201230, P425F201239, P425L200162Compliance Requirement: ReportingRepeat Finding: Yes (Prior Year Finding No. 2021-023)See Schedule of Findings and Questioned Costs for chart/tableCondition:Baton Rouge Community College (BRCC) did not ensure compliance with certain reporting requirements as established by the U.S. Department of Education (USDOE) for the Higher Education Emergency Relief Fund (HEERF) program.Based on our review of the four quarterly reports and the annual report, the following errors in reporting were identified:? BRCC incorrectly publicly posted the Quarterly Public Reporting for Institutional and Minority Serving Institutions (MSI) portions for the quarter ending September 30, 2021, as the report for the quarter ending December 31, 2021. BRCC subsequently publicly posted the correct report after auditor inquiry, 289 days after the required due date.? The Quarterly Public Reporting for Student Aid Portion for the quarters ending September 30, 2021, and December 31, 2021, were publicly posted 117 and 25 days, respectively, after the required due dates.? The Annual Report for the calendar year ending December 31, 2021, did not accurately report the number of students that received HEERF emergency financial aid grants and the amount disbursed directly to students as emergency financial aid grants.Criteria:The Coronavirus Aid, Relief, and Economic Security (CARES) Act Section 18004(e), the Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act Section 314(e), and the American Rescue Plan (ARP) Act Section 2003 require an institution receiving funds under HEERF I, HEERF II, and HEERF III to submit a report to the secretary, at such time in such a manner as the secretary may require. Per USDOE form instructions, BRCC must post the Quarterly Public Reporting for Institutional and MSI portions no later than 10 days after the end of each quarter on its website. Per the May 13, 2021, Federal Register, institutions must post the Quarterly Public Reporting for Student Aid portions no later than 10 days after the end of each calendar quarter.Cause:BRCC did not have adequate controls in place to ensure the accurate preparation of the reports or to ensure that the reports were publicly posted by the required deadlines. This is the second consecutive year we have reported weaknesses over HEERF reporting. Management's response to the prior-year finding indicated it would implement corrective action by June 30, 2022, and were in the process of implementing the additional controls during the fiscal year under audit.Effect:Failure to ensure the accuracy of quarterly and annual reports for the HEERF program and to ensure the reports were publicly posted by the required deadlines resulted in noncompliance with federal regulations.Recommendation:Management should strengthen its procedures over the preparation and public posting of quarterly and annual reports for the HEERF program to ensure compliance with reporting requirements.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-4).
2022-015 - Control Weakness over Higher Education Emergency Relief Fund ReportingAward Year: 2022Award Numbers: P425F201887, P425J200055Compliance Requirement: ReportingRepeat Finding: Yes (Prior Year Finding No. 2021-041)See Schedule of Findings and Questioned Costs for chart/tableCondition:Southern University at Baton Rouge (SUBR) did not ensure the accuracy of the quarterly and annual reports for the HEERF program.Based on our procedures, the following errors in reporting were identified:? In a non-statistical sample of two quarters from a population of four quarters, the Institutional and Historically Black Colleges and Universities (HBCU) amounts reported on the Quarterly Budget and Expenditure Reporting Form did not agree to supporting documentation. Total expenditures for quarterly reports ending September 30, 2021, and March 31, 2022, were understated by $1,089,860 and $126,584, respectively.? Annual report amounts did not agree to supporting documentation for certain items. Annual institutional expenditures for each program was understated by $2,142,639 for the Institutional program and overstated by $467,662 for the HBCU program, which resulted in a total understatement of institutional annual expenditures of $1,674,977. Also, for emergency grants, gender and age was misclassified by 145 students between categories ages 25 and older and ages 24 and younger.Criteria:The Coronavirus Aid, Relief, and Economic Security (CARES) Act Section 18004(e), the Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act Section 314(e), and the American Rescue Plan (ARP) Act Section 2003 require an institution receiving funds under HEERF I, HEERF II, and HEERF III to submit a report to the secretary, at such time in such a manner as the secretary may require.Cause:SUBR did not have an effective review process in place to ensure accurate preparation of the reports. This is the third consecutive year we have reported weaknesses over HEERF reporting.Effect:Failure to ensure the accuracy of quarterly and annual reports for the HEERF program resulted in noncompliance with federal regulations.Recommendation:Management should strengthen its procedures over the preparation and review of information reported for HEERF to ensure compliance with reporting requirements.Management?s Response and Corrective Action Plan:Management concurred in part with the finding and outlined a plan of corrective action. Management stated that it does not concur that this is the third consecutive year to have the same reported weaknesses (B-78).Auditor?s Additional Comments:While errors reported in the current-year finding may not be exactly the same as those reported in prior years, this finding is considered a repeat finding due to internal control weaknesses related to HEERF reporting requirements being reported for three consecutive audits.
2022-016 - Control Weakness over Higher Education Emergency Relief Fund RequirementsAward Year: 2022Award Number: P425F201887Compliance Requirement: Activities Allowed or UnallowedRepeat Finding: Yes (Prior Year Finding No. 2021-044)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the second consecutive year, SUBR?s calculation of lost revenue under the HEERF was not consistent with guidance provided by the USDOE. SUBR calculated lost revenue using a four-year average of fiscal years 2016 through 2019 data as the baseline revenue, instead of a five-year average of fiscal years 2015 through 2019, as was used in the corrected fiscal year 2021 lost revenue calculation. In addition, SUBR did not include the correct amount of fiscal year 2022 revenue transactions as its current-year comparison.Criteria:Per the American Rescue Plan Act, the same terms and conditions of the Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act apply. Per the CRRSA Act, Section 314(c)(1), an institution of higher education may use HEERF to defray expenses associated with coronavirus (including lost revenue).On March 19, 2021, the USDOE published a HEERF I, II, and III Lost Revenue Frequently Asked Questions (FAQ) to provide further clarification regarding the calculation of lost revenue. Listed in the FAQ under Question No. 9, an institution?s calculation of lost revenue must be consistent with the cost principles of the Uniform Guidance (2 CFR Part 200 subpart E): must be accorded consistent treatment (e.g., if using the institution?s fiscal year as a baseline, the institution must estimate lost revenue over the course of a fiscal year) and be consistent with policies and procedures that apply uniformly to federally-financed and other activities of the institution.Cause:SUBR did not have an effective review process to ensure that guidance provided by the USDOE for the calculation of lost revenues was followed.Effect:Failure to adequately review and follow lost revenue guidance provided by the USDOE caused SUBR to overdraw funds in fiscal year 2022 by $1.9 million; however, SUBR had a $2.5 million under draw from fiscal year 2021 to offset this, resulting in a net under draw of approximately $600,000.Recommendation:Management should strengthen its review process and follow guidance provided by the USDOE for the calculation of lost revenues. SUBR should also revise its lost revenue calculation and return any funds overdrawn from the HEERF grant.Management?s Response and Corrective Action Plan:Management concurred in part with the finding and outlined a plan of corrective action. Management stated that it does not concur that this is the second consecutive year to have the same reported weaknesses (B-80).Auditor?s Additional Comments:Although corrections have been made for some of the issues noted in the prior-year audit finding, the results of our audit procedures indicate control weaknesses continue to exist over the related federal requirements.
2022-015 - Control Weakness over Higher Education Emergency Relief Fund ReportingAward Year: 2022Award Numbers: P425F201887, P425J200055Compliance Requirement: ReportingRepeat Finding: Yes (Prior Year Finding No. 2021-041)See Schedule of Findings and Questioned Costs for chart/tableCondition:Southern University at Baton Rouge (SUBR) did not ensure the accuracy of the quarterly and annual reports for the HEERF program.Based on our procedures, the following errors in reporting were identified:? In a non-statistical sample of two quarters from a population of four quarters, the Institutional and Historically Black Colleges and Universities (HBCU) amounts reported on the Quarterly Budget and Expenditure Reporting Form did not agree to supporting documentation. Total expenditures for quarterly reports ending September 30, 2021, and March 31, 2022, were understated by $1,089,860 and $126,584, respectively.? Annual report amounts did not agree to supporting documentation for certain items. Annual institutional expenditures for each program was understated by $2,142,639 for the Institutional program and overstated by $467,662 for the HBCU program, which resulted in a total understatement of institutional annual expenditures of $1,674,977. Also, for emergency grants, gender and age was misclassified by 145 students between categories ages 25 and older and ages 24 and younger.Criteria:The Coronavirus Aid, Relief, and Economic Security (CARES) Act Section 18004(e), the Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act Section 314(e), and the American Rescue Plan (ARP) Act Section 2003 require an institution receiving funds under HEERF I, HEERF II, and HEERF III to submit a report to the secretary, at such time in such a manner as the secretary may require.Cause:SUBR did not have an effective review process in place to ensure accurate preparation of the reports. This is the third consecutive year we have reported weaknesses over HEERF reporting.Effect:Failure to ensure the accuracy of quarterly and annual reports for the HEERF program resulted in noncompliance with federal regulations.Recommendation:Management should strengthen its procedures over the preparation and review of information reported for HEERF to ensure compliance with reporting requirements.Management?s Response and Corrective Action Plan:Management concurred in part with the finding and outlined a plan of corrective action. Management stated that it does not concur that this is the third consecutive year to have the same reported weaknesses (B-78).Auditor?s Additional Comments:While errors reported in the current-year finding may not be exactly the same as those reported in prior years, this finding is considered a repeat finding due to internal control weaknesses related to HEERF reporting requirements being reported for three consecutive audits.
2022-013 - Higher Education Emergency Relief Fund Reporting WeaknessesAward Year: 2022Award Numbers: P425E201230, P425F201239, P425L200162Compliance Requirement: ReportingRepeat Finding: Yes (Prior Year Finding No. 2021-023)See Schedule of Findings and Questioned Costs for chart/tableCondition:Baton Rouge Community College (BRCC) did not ensure compliance with certain reporting requirements as established by the U.S. Department of Education (USDOE) for the Higher Education Emergency Relief Fund (HEERF) program.Based on our review of the four quarterly reports and the annual report, the following errors in reporting were identified:? BRCC incorrectly publicly posted the Quarterly Public Reporting for Institutional and Minority Serving Institutions (MSI) portions for the quarter ending September 30, 2021, as the report for the quarter ending December 31, 2021. BRCC subsequently publicly posted the correct report after auditor inquiry, 289 days after the required due date.? The Quarterly Public Reporting for Student Aid Portion for the quarters ending September 30, 2021, and December 31, 2021, were publicly posted 117 and 25 days, respectively, after the required due dates.? The Annual Report for the calendar year ending December 31, 2021, did not accurately report the number of students that received HEERF emergency financial aid grants and the amount disbursed directly to students as emergency financial aid grants.Criteria:The Coronavirus Aid, Relief, and Economic Security (CARES) Act Section 18004(e), the Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act Section 314(e), and the American Rescue Plan (ARP) Act Section 2003 require an institution receiving funds under HEERF I, HEERF II, and HEERF III to submit a report to the secretary, at such time in such a manner as the secretary may require. Per USDOE form instructions, BRCC must post the Quarterly Public Reporting for Institutional and MSI portions no later than 10 days after the end of each quarter on its website. Per the May 13, 2021, Federal Register, institutions must post the Quarterly Public Reporting for Student Aid portions no later than 10 days after the end of each calendar quarter.Cause:BRCC did not have adequate controls in place to ensure the accurate preparation of the reports or to ensure that the reports were publicly posted by the required deadlines. This is the second consecutive year we have reported weaknesses over HEERF reporting. Management's response to the prior-year finding indicated it would implement corrective action by June 30, 2022, and were in the process of implementing the additional controls during the fiscal year under audit.Effect:Failure to ensure the accuracy of quarterly and annual reports for the HEERF program and to ensure the reports were publicly posted by the required deadlines resulted in noncompliance with federal regulations.Recommendation:Management should strengthen its procedures over the preparation and public posting of quarterly and annual reports for the HEERF program to ensure compliance with reporting requirements.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-4).
2022-014 - Noncompliance with Reporting Requirements for the Federal Funding Accountability and Transparency ActAward Years: 2018 - 2021Award Numbers: S367A180017, S367A190017, S367A200017, S367A210017, S425B200042, S425D210003, S425U210003, S425W210019Compliance Requirement: ReportingRepeat Finding: Yes (Prior Year Finding No. 2021-027)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the second consecutive audit, the Department of Education (DOE) did not comply with Federal Funding Accountability and Transparency Act (FFATA) reporting requirements.Our procedures disclosed the following:? For the Supporting Effective Instruction State Grants (formerly Improving Teacher Quality State Grants) (Title II) program, no subaward information was entered into the FFATA Subaward Reporting System (FSRS) for 594 subawards of $30,000 or more totaling $167,969,408, related to four separate federal awards that were open during our audit period.See Schedule of Findings and Questioned Costs for chart/table? For the Education Stabilization Fund (ESF) program, we tested a total of 270 subawards and noted subawards that were not reported, reports not submitted timely, duplicated subawards, incorrect subaward amounts, and incorrect obligations dates.See Schedule of Findings and Questioned Costs for chart/tableCriteria:2 CFR Part 170 Appendix A(I)(a) requires the non-federal entity to report certain information about each obligating action that equals or exceeds $30,000 in federal funds for a subaward to a non-federal entity into the FSRS no later than the end of the month following the month in which the obligation was made.Cause:DOE management indicated that this noncompliance occurred due to a weakness in internal controls over FFATA reporting, not adequately maintaining a list of federal grants for which FFATA reporting was required, and staff turnover contributing to the incomplete knowledge of FFATA reporting. Management?s response to the prior-year finding indicated it would implement corrective action by September 30, 2022, and management was in the process of implementing the additional controls during fiscal year 2022 when our audit procedures were being performed.Effect:Not reporting obligating actions to FSRS or reporting inaccurate information to FSRS prevents the public from having access to accurate information on how DOE is obligating federal funds.Recommendation:DOE should continue to strengthen internal controls to ensure accurate information is reported and ensure that appropriate personnel are aware of the federal programs that are subject to FFATA reporting. In addition, DOE should correct all amounts previously reported incorrectly.Management?s Response and Corrective Action Plan:Management concurred with the finding and provided a plan of corrective action (B-9).
2022-014 - Noncompliance with Reporting Requirements for the Federal Funding Accountability and Transparency ActAward Years: 2018 - 2021Award Numbers: S367A180017, S367A190017, S367A200017, S367A210017, S425B200042, S425D210003, S425U210003, S425W210019Compliance Requirement: ReportingRepeat Finding: Yes (Prior Year Finding No. 2021-027)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the second consecutive audit, the Department of Education (DOE) did not comply with Federal Funding Accountability and Transparency Act (FFATA) reporting requirements.Our procedures disclosed the following:? For the Supporting Effective Instruction State Grants (formerly Improving Teacher Quality State Grants) (Title II) program, no subaward information was entered into the FFATA Subaward Reporting System (FSRS) for 594 subawards of $30,000 or more totaling $167,969,408, related to four separate federal awards that were open during our audit period.See Schedule of Findings and Questioned Costs for chart/table? For the Education Stabilization Fund (ESF) program, we tested a total of 270 subawards and noted subawards that were not reported, reports not submitted timely, duplicated subawards, incorrect subaward amounts, and incorrect obligations dates.See Schedule of Findings and Questioned Costs for chart/tableCriteria:2 CFR Part 170 Appendix A(I)(a) requires the non-federal entity to report certain information about each obligating action that equals or exceeds $30,000 in federal funds for a subaward to a non-federal entity into the FSRS no later than the end of the month following the month in which the obligation was made.Cause:DOE management indicated that this noncompliance occurred due to a weakness in internal controls over FFATA reporting, not adequately maintaining a list of federal grants for which FFATA reporting was required, and staff turnover contributing to the incomplete knowledge of FFATA reporting. Management?s response to the prior-year finding indicated it would implement corrective action by September 30, 2022, and management was in the process of implementing the additional controls during fiscal year 2022 when our audit procedures were being performed.Effect:Not reporting obligating actions to FSRS or reporting inaccurate information to FSRS prevents the public from having access to accurate information on how DOE is obligating federal funds.Recommendation:DOE should continue to strengthen internal controls to ensure accurate information is reported and ensure that appropriate personnel are aware of the federal programs that are subject to FFATA reporting. In addition, DOE should correct all amounts previously reported incorrectly.Management?s Response and Corrective Action Plan:Management concurred with the finding and provided a plan of corrective action (B-9).
2022-004 - Inadequate Controls over PayrollAward Year: 2022Award Numbers: 6LA700503, NU50CK000532, NU62PS924522, NU62PS924620, NU90TP922016Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesRepeat Finding: Yes (Prior Year Finding No. 2021-005)See Schedule of Findings and Questioned Costs for chart/tableCondition:The Louisiana Department of Health, Office of Public Health (OPH) did not ensure payroll expenditures were timely certified and approved for the WIC Special Supplemental Nutrition Program for Women, Infants, and Children; the Public Health Emergency Preparedness program; the Epidemiology and Laboratory Capacity for Infectious Diseases program; and the HIV Prevention Activities Health Department Based program. This is the third consecutive year payroll internal control deficiencies have been reported for Public Health Emergency Preparedness program and HIV Prevention Activities Health Department Based program, and the second consecutive year for WIC Special Supplemental Nutrition Program for Women, Infants, and Children and Epidemiology and Laboratory Capacity for Infectious Diseases program. Exceptions for each federal program are as follows:? For the WIC Special Supplemental Nutrition Program for Women, Infants, and Children, a non-statistical sample of 60 payroll transactions was tested from a population of 6,184 transactions totaling $8,970,425. Five (8%) time statements were not timely approved by the employees? supervisor, of which two (3%) were not approved at all, and two (3%) were not certified timely by the employees ranging from 13 to 236 days after the posting date.? For the Public Health Emergency Preparedness program, a non-statistical sample of 60 payroll transactions was tested from a population of 1,394 transactions totaling $3,988,398. Twenty-one (35%) time statements were not timely approved by the employees? supervisors, of which 12 (20%) were approved ranging from 23 days to 447 days after posting date and seven (12%) were not approved at all; two (3%) were not certified by the employees; and two (3%) were approved before certified.? For the Epidemiology and Laboratory Capacity for Infectious Diseases program, a non-statistical sample of 60 payroll transactions was tested from a population of 3,933 transactions totaling $5,190,684. Nine (15%) time statements were not timely approved by the employees? supervisors, of which four (7%) were not approved at all; one (2%) was not certified by the employee; and one (2%) was approved before certified.? For the HIV Prevention Activities Health Department Based program, a non-statistical sample of 60 payroll transactions was tested from a population of 1,024 transactions totaling $386,769. Nine (15%) time statements were not timely approved by the employees? supervisors, of which one (2%) was not approved at all; seven (12%) were approved ranging from one day to 351 days after the posting date; and one (2%) was not certified by the employee.Criteria:2 CFR 200.430(i) requires that records must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Furthermore, the records must comply with the established accounting policies and practices of the non-federal entity.The Division of Administration Personnel Policy No. 99 requires employees and supervisors to certify and/or approve time statements for accuracy by 10:00 p.m. on the Wednesday following the close of the pay period. Time administrators are responsible for reviewing the LaGov ZP241 eCertification report prior to processing to identify any employees who have not certified their time statements and any supervisors who have not approved their staff?s time statements.Cause:OPH lacked sufficient controls to ensure electronic time statements were properly certified and approved prior to the posting date in accordance with federal and state regulations.Effect:Failure to adequately approve program expenditures increases the risk that unallowable costs could be reimbursed by the federal grantor.Recommendation:OPH should ensure employees comply with existing policies and procedures, including certifying and approving electronic time statements in a timely manner.Management?s Response and Corrective Action Plan:Management concurred with the finding and provided a corrective action plan (B-43).
2022-004 - Inadequate Controls over PayrollAward Year: 2022Award Numbers: 6LA700503, NU50CK000532, NU62PS924522, NU62PS924620, NU90TP922016Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesRepeat Finding: Yes (Prior Year Finding No. 2021-005)See Schedule of Findings and Questioned Costs for chart/tableCondition:The Louisiana Department of Health, Office of Public Health (OPH) did not ensure payroll expenditures were timely certified and approved for the WIC Special Supplemental Nutrition Program for Women, Infants, and Children; the Public Health Emergency Preparedness program; the Epidemiology and Laboratory Capacity for Infectious Diseases program; and the HIV Prevention Activities Health Department Based program. This is the third consecutive year payroll internal control deficiencies have been reported for Public Health Emergency Preparedness program and HIV Prevention Activities Health Department Based program, and the second consecutive year for WIC Special Supplemental Nutrition Program for Women, Infants, and Children and Epidemiology and Laboratory Capacity for Infectious Diseases program. Exceptions for each federal program are as follows:? For the WIC Special Supplemental Nutrition Program for Women, Infants, and Children, a non-statistical sample of 60 payroll transactions was tested from a population of 6,184 transactions totaling $8,970,425. Five (8%) time statements were not timely approved by the employees? supervisor, of which two (3%) were not approved at all, and two (3%) were not certified timely by the employees ranging from 13 to 236 days after the posting date.? For the Public Health Emergency Preparedness program, a non-statistical sample of 60 payroll transactions was tested from a population of 1,394 transactions totaling $3,988,398. Twenty-one (35%) time statements were not timely approved by the employees? supervisors, of which 12 (20%) were approved ranging from 23 days to 447 days after posting date and seven (12%) were not approved at all; two (3%) were not certified by the employees; and two (3%) were approved before certified.? For the Epidemiology and Laboratory Capacity for Infectious Diseases program, a non-statistical sample of 60 payroll transactions was tested from a population of 3,933 transactions totaling $5,190,684. Nine (15%) time statements were not timely approved by the employees? supervisors, of which four (7%) were not approved at all; one (2%) was not certified by the employee; and one (2%) was approved before certified.? For the HIV Prevention Activities Health Department Based program, a non-statistical sample of 60 payroll transactions was tested from a population of 1,024 transactions totaling $386,769. Nine (15%) time statements were not timely approved by the employees? supervisors, of which one (2%) was not approved at all; seven (12%) were approved ranging from one day to 351 days after the posting date; and one (2%) was not certified by the employee.Criteria:2 CFR 200.430(i) requires that records must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Furthermore, the records must comply with the established accounting policies and practices of the non-federal entity.The Division of Administration Personnel Policy No. 99 requires employees and supervisors to certify and/or approve time statements for accuracy by 10:00 p.m. on the Wednesday following the close of the pay period. Time administrators are responsible for reviewing the LaGov ZP241 eCertification report prior to processing to identify any employees who have not certified their time statements and any supervisors who have not approved their staff?s time statements.Cause:OPH lacked sufficient controls to ensure electronic time statements were properly certified and approved prior to the posting date in accordance with federal and state regulations.Effect:Failure to adequately approve program expenditures increases the risk that unallowable costs could be reimbursed by the federal grantor.Recommendation:OPH should ensure employees comply with existing policies and procedures, including certifying and approving electronic time statements in a timely manner.Management?s Response and Corrective Action Plan:Management concurred with the finding and provided a corrective action plan (B-43).
2022-018 - Inadequate Controls over Subrecipient AgreementsAward Years: 2019 - 2022Award Numbers: 2201LATANF, B08TI083018-01, B08TI083450-01, B09SM082603-01, B09SM083804-01, H79SM083477, H79SP081004, H79TI081691, X06SM016019-19, X06SM083694-01Compliance Requirement: Subrecipient MonitoringRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:The Acadiana Area Human Services District (AAHSD) failed to comply with all regulations set forth by 2 CFR 200.332.AAHSD is allocated federal funds from the Louisiana Department of Health (LDH), Office of Behavioral Health (OBH) as interagency transfers, and AAHSD passes these funds to other entities via contracts to perform consulting, social, and professional services. The federal programs involved had awards totaling $3,895,985 and $6,108,836 allocated to AAHSD for fiscal years 2021 and 2022, respectively.We reviewed all 28 agreements identified by AAHSD as subrecipients and determined that for 18 (64%) of the subawards, AAHSD was unable to provide documentation of whether each subrecipient was required to obtain an audit or that the audit was reviewed so that timely and appropriate action could be taken for any findings pertaining to the federal awards, as required by federal regulations. Additionally, for all 28 of the subrecipients, AAHSD could not provide evidence that the required risk assessment was performed to evaluate each subrecipients? risk of noncompliance with federal regulations and the terms of the subaward.Criteria:Federal regulations require AAHSD, as the pass-through entity, to comply with 2 CFR 200.332 when subawards are made to subrecipients.Cause:AAHSD failed to develop adequate policies and procedures to ensure compliance with regulations set forth by 2 CFR 200.332 were performed timely.Effect:AAHSD or the subrecipient may not comply with the award and federal regulations.Recommendation:AAHSD management should strengthen its policies and procedures to ensure that regulations set forth by 2 CFR 200.332 are being addressed timely.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-2).
2022-018 - Inadequate Controls over Subrecipient AgreementsAward Years: 2019 - 2022Award Numbers: 2201LATANF, B08TI083018-01, B08TI083450-01, B09SM082603-01, B09SM083804-01, H79SM083477, H79SP081004, H79TI081691, X06SM016019-19, X06SM083694-01Compliance Requirement: Subrecipient MonitoringRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:The Acadiana Area Human Services District (AAHSD) failed to comply with all regulations set forth by 2 CFR 200.332.AAHSD is allocated federal funds from the Louisiana Department of Health (LDH), Office of Behavioral Health (OBH) as interagency transfers, and AAHSD passes these funds to other entities via contracts to perform consulting, social, and professional services. The federal programs involved had awards totaling $3,895,985 and $6,108,836 allocated to AAHSD for fiscal years 2021 and 2022, respectively.We reviewed all 28 agreements identified by AAHSD as subrecipients and determined that for 18 (64%) of the subawards, AAHSD was unable to provide documentation of whether each subrecipient was required to obtain an audit or that the audit was reviewed so that timely and appropriate action could be taken for any findings pertaining to the federal awards, as required by federal regulations. Additionally, for all 28 of the subrecipients, AAHSD could not provide evidence that the required risk assessment was performed to evaluate each subrecipients? risk of noncompliance with federal regulations and the terms of the subaward.Criteria:Federal regulations require AAHSD, as the pass-through entity, to comply with 2 CFR 200.332 when subawards are made to subrecipients.Cause:AAHSD failed to develop adequate policies and procedures to ensure compliance with regulations set forth by 2 CFR 200.332 were performed timely.Effect:AAHSD or the subrecipient may not comply with the award and federal regulations.Recommendation:AAHSD management should strengthen its policies and procedures to ensure that regulations set forth by 2 CFR 200.332 are being addressed timely.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-2).
2022-004 - Inadequate Controls over PayrollAward Year: 2022Award Numbers: 6LA700503, NU50CK000532, NU62PS924522, NU62PS924620, NU90TP922016Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesRepeat Finding: Yes (Prior Year Finding No. 2021-005)See Schedule of Findings and Questioned Costs for chart/tableCondition:The Louisiana Department of Health, Office of Public Health (OPH) did not ensure payroll expenditures were timely certified and approved for the WIC Special Supplemental Nutrition Program for Women, Infants, and Children; the Public Health Emergency Preparedness program; the Epidemiology and Laboratory Capacity for Infectious Diseases program; and the HIV Prevention Activities Health Department Based program. This is the third consecutive year payroll internal control deficiencies have been reported for Public Health Emergency Preparedness program and HIV Prevention Activities Health Department Based program, and the second consecutive year for WIC Special Supplemental Nutrition Program for Women, Infants, and Children and Epidemiology and Laboratory Capacity for Infectious Diseases program. Exceptions for each federal program are as follows:? For the WIC Special Supplemental Nutrition Program for Women, Infants, and Children, a non-statistical sample of 60 payroll transactions was tested from a population of 6,184 transactions totaling $8,970,425. Five (8%) time statements were not timely approved by the employees? supervisor, of which two (3%) were not approved at all, and two (3%) were not certified timely by the employees ranging from 13 to 236 days after the posting date.? For the Public Health Emergency Preparedness program, a non-statistical sample of 60 payroll transactions was tested from a population of 1,394 transactions totaling $3,988,398. Twenty-one (35%) time statements were not timely approved by the employees? supervisors, of which 12 (20%) were approved ranging from 23 days to 447 days after posting date and seven (12%) were not approved at all; two (3%) were not certified by the employees; and two (3%) were approved before certified.? For the Epidemiology and Laboratory Capacity for Infectious Diseases program, a non-statistical sample of 60 payroll transactions was tested from a population of 3,933 transactions totaling $5,190,684. Nine (15%) time statements were not timely approved by the employees? supervisors, of which four (7%) were not approved at all; one (2%) was not certified by the employee; and one (2%) was approved before certified.? For the HIV Prevention Activities Health Department Based program, a non-statistical sample of 60 payroll transactions was tested from a population of 1,024 transactions totaling $386,769. Nine (15%) time statements were not timely approved by the employees? supervisors, of which one (2%) was not approved at all; seven (12%) were approved ranging from one day to 351 days after the posting date; and one (2%) was not certified by the employee.Criteria:2 CFR 200.430(i) requires that records must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Furthermore, the records must comply with the established accounting policies and practices of the non-federal entity.The Division of Administration Personnel Policy No. 99 requires employees and supervisors to certify and/or approve time statements for accuracy by 10:00 p.m. on the Wednesday following the close of the pay period. Time administrators are responsible for reviewing the LaGov ZP241 eCertification report prior to processing to identify any employees who have not certified their time statements and any supervisors who have not approved their staff?s time statements.Cause:OPH lacked sufficient controls to ensure electronic time statements were properly certified and approved prior to the posting date in accordance with federal and state regulations.Effect:Failure to adequately approve program expenditures increases the risk that unallowable costs could be reimbursed by the federal grantor.Recommendation:OPH should ensure employees comply with existing policies and procedures, including certifying and approving electronic time statements in a timely manner.Management?s Response and Corrective Action Plan:Management concurred with the finding and provided a corrective action plan (B-43).
2022-004 - Inadequate Controls over PayrollAward Year: 2022Award Numbers: 6LA700503, NU50CK000532, NU62PS924522, NU62PS924620, NU90TP922016Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesRepeat Finding: Yes (Prior Year Finding No. 2021-005)See Schedule of Findings and Questioned Costs for chart/tableCondition:The Louisiana Department of Health, Office of Public Health (OPH) did not ensure payroll expenditures were timely certified and approved for the WIC Special Supplemental Nutrition Program for Women, Infants, and Children; the Public Health Emergency Preparedness program; the Epidemiology and Laboratory Capacity for Infectious Diseases program; and the HIV Prevention Activities Health Department Based program. This is the third consecutive year payroll internal control deficiencies have been reported for Public Health Emergency Preparedness program and HIV Prevention Activities Health Department Based program, and the second consecutive year for WIC Special Supplemental Nutrition Program for Women, Infants, and Children and Epidemiology and Laboratory Capacity for Infectious Diseases program. Exceptions for each federal program are as follows:? For the WIC Special Supplemental Nutrition Program for Women, Infants, and Children, a non-statistical sample of 60 payroll transactions was tested from a population of 6,184 transactions totaling $8,970,425. Five (8%) time statements were not timely approved by the employees? supervisor, of which two (3%) were not approved at all, and two (3%) were not certified timely by the employees ranging from 13 to 236 days after the posting date.? For the Public Health Emergency Preparedness program, a non-statistical sample of 60 payroll transactions was tested from a population of 1,394 transactions totaling $3,988,398. Twenty-one (35%) time statements were not timely approved by the employees? supervisors, of which 12 (20%) were approved ranging from 23 days to 447 days after posting date and seven (12%) were not approved at all; two (3%) were not certified by the employees; and two (3%) were approved before certified.? For the Epidemiology and Laboratory Capacity for Infectious Diseases program, a non-statistical sample of 60 payroll transactions was tested from a population of 3,933 transactions totaling $5,190,684. Nine (15%) time statements were not timely approved by the employees? supervisors, of which four (7%) were not approved at all; one (2%) was not certified by the employee; and one (2%) was approved before certified.? For the HIV Prevention Activities Health Department Based program, a non-statistical sample of 60 payroll transactions was tested from a population of 1,024 transactions totaling $386,769. Nine (15%) time statements were not timely approved by the employees? supervisors, of which one (2%) was not approved at all; seven (12%) were approved ranging from one day to 351 days after the posting date; and one (2%) was not certified by the employee.Criteria:2 CFR 200.430(i) requires that records must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Furthermore, the records must comply with the established accounting policies and practices of the non-federal entity.The Division of Administration Personnel Policy No. 99 requires employees and supervisors to certify and/or approve time statements for accuracy by 10:00 p.m. on the Wednesday following the close of the pay period. Time administrators are responsible for reviewing the LaGov ZP241 eCertification report prior to processing to identify any employees who have not certified their time statements and any supervisors who have not approved their staff?s time statements.Cause:OPH lacked sufficient controls to ensure electronic time statements were properly certified and approved prior to the posting date in accordance with federal and state regulations.Effect:Failure to adequately approve program expenditures increases the risk that unallowable costs could be reimbursed by the federal grantor.Recommendation:OPH should ensure employees comply with existing policies and procedures, including certifying and approving electronic time statements in a timely manner.Management?s Response and Corrective Action Plan:Management concurred with the finding and provided a corrective action plan (B-43).
2022-020 - Noncompliance and Control Weakness Related to the Temporary Assistance for Needy Families Work Verification PlanAward Years: 2021, 2022Award Numbers: 2101LATANF, 2201LATANFCompliance Requirement: Special Tests and ProvisionsRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:DCFS did not ensure that all work activity supporting documentation for cash assistance recipients was accurate and maintained for hours worked under the Temporary Assistance for Needy Families (TANF) program.In a non-statistical sample of 60 out of 12,851 work activity records in the job-tracking system for approximately 1,000 clients per month, 13 (22%) work-eligible participant?s hours either did not agree to supporting documentation or supporting documentation of work activities was not maintained, and one of the 13 was not engaged in work activities, as required by federal regulations.Criteria:Per 45 CFR 261.61(a), a state must support each individual?s hours of participation through documentation in accordance with its Work Verification Plan.45 CFR 261.10(a)(1) states, in part, a parent or caretaker receiving assistance must engage in work activities when the state has determined that the individual is ready to engage in work.Per 45 CFR 261.65(a)(2) and 45 CFR 262.1(a)(15), if determined that the state has not maintained adequate documentation, verification, or internal control procedures to ensure the accuracy of the data used in calculating the work participation rates, the federal grantor could impose a penalty to the state of not less than one percent and not more than five percent of the adjusted state Family Assistance Grant.Cause:DCFS employees did not adhere to requirements in the state?s work verification plan pertaining to maintaining and verifying supporting documentation for the hours worked by clients and did not ensure individuals were engaged in work activities.Effect:This is the eleventh consecutive year we have reported to DCFS management exceptions with internal controls and compliance related to this TANF requirement. Noncompliance could result in penalties assessed on the state by the federal grantor.Recommendation:DCFS management should ensure DCFS employees comply with existing policies and procedures regarding the state?s work verification plan.Management?s Response and Corrective Action Plan:Management concurred with the finding and provided a corrective action plan (B-7).
2022-021 - Noncompliance with Reporting Requirements for the Federal Funding Accountability and Transparency ActAward Years: 2021, 2022Award Numbers: 2101LAFOST, 2101LATANF, 2201LAFOST, 2201LATANFCompliance Requirement: ReportingRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:DCFS did not report subawards in compliance with the Federal Funding Accountability and Transparency Act (FFATA) in the FFATA Subaward Reporting System (FSRS) during fiscal year 2022 for the following federal programs:? For the Foster Care program, DCFS disbursed approximately $8.8 million in subawards to eight different subrecipients, four of which were state entities, during fiscal year 2022. These subawards account for approximately 18% of the programs? fiscal year expenditures.? For the TANF program, DCFS disbursed approximately $76.6 million in subawards to 41 different subrecipients, of which eight were state entities, during fiscal year 2022. These subawards account for approximately 48% of the programs? fiscal year expenditures.Criteria:2 CFR 170 Appendix A(I)(a) requires the non-federal entity to report to FSRS each obligating action equal to or exceeding $30,000 in federal funds for a subaward to a non-federal entity.Cause:Management represented there were no procedures in place to ensure compliance with FFATA requirements.Effect:Not reporting obligating actions to the FSRS prevents the public from having access to accurate information on how DCFS is obligating federal funds.Recommendation:DCFS should strengthen internal controls to ensure that appropriate personnel are aware of the federal programs that are subject to FFATA reporting and assign appropriate personnel to complete the FFATA reporting in accordance with federal requirements.Management?s Response and Corrective Action Plan:Management concurred with the finding and provided a corrective action plan (B-8).
2022-018 - Inadequate Controls over Subrecipient AgreementsAward Years: 2019 - 2022Award Numbers: 2201LATANF, B08TI083018-01, B08TI083450-01, B09SM082603-01, B09SM083804-01, H79SM083477, H79SP081004, H79TI081691, X06SM016019-19, X06SM083694-01Compliance Requirement: Subrecipient MonitoringRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:The Acadiana Area Human Services District (AAHSD) failed to comply with all regulations set forth by 2 CFR 200.332.AAHSD is allocated federal funds from the Louisiana Department of Health (LDH), Office of Behavioral Health (OBH) as interagency transfers, and AAHSD passes these funds to other entities via contracts to perform consulting, social, and professional services. The federal programs involved had awards totaling $3,895,985 and $6,108,836 allocated to AAHSD for fiscal years 2021 and 2022, respectively.We reviewed all 28 agreements identified by AAHSD as subrecipients and determined that for 18 (64%) of the subawards, AAHSD was unable to provide documentation of whether each subrecipient was required to obtain an audit or that the audit was reviewed so that timely and appropriate action could be taken for any findings pertaining to the federal awards, as required by federal regulations. Additionally, for all 28 of the subrecipients, AAHSD could not provide evidence that the required risk assessment was performed to evaluate each subrecipients? risk of noncompliance with federal regulations and the terms of the subaward.Criteria:Federal regulations require AAHSD, as the pass-through entity, to comply with 2 CFR 200.332 when subawards are made to subrecipients.Cause:AAHSD failed to develop adequate policies and procedures to ensure compliance with regulations set forth by 2 CFR 200.332 were performed timely.Effect:AAHSD or the subrecipient may not comply with the award and federal regulations.Recommendation:AAHSD management should strengthen its policies and procedures to ensure that regulations set forth by 2 CFR 200.332 are being addressed timely.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-2).
2022-020 - Noncompliance and Control Weakness Related to the Temporary Assistance for Needy Families Work Verification PlanAward Years: 2021, 2022Award Numbers: 2101LATANF, 2201LATANFCompliance Requirement: Special Tests and ProvisionsRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:DCFS did not ensure that all work activity supporting documentation for cash assistance recipients was accurate and maintained for hours worked under the Temporary Assistance for Needy Families (TANF) program.In a non-statistical sample of 60 out of 12,851 work activity records in the job-tracking system for approximately 1,000 clients per month, 13 (22%) work-eligible participant?s hours either did not agree to supporting documentation or supporting documentation of work activities was not maintained, and one of the 13 was not engaged in work activities, as required by federal regulations.Criteria:Per 45 CFR 261.61(a), a state must support each individual?s hours of participation through documentation in accordance with its Work Verification Plan.45 CFR 261.10(a)(1) states, in part, a parent or caretaker receiving assistance must engage in work activities when the state has determined that the individual is ready to engage in work.Per 45 CFR 261.65(a)(2) and 45 CFR 262.1(a)(15), if determined that the state has not maintained adequate documentation, verification, or internal control procedures to ensure the accuracy of the data used in calculating the work participation rates, the federal grantor could impose a penalty to the state of not less than one percent and not more than five percent of the adjusted state Family Assistance Grant.Cause:DCFS employees did not adhere to requirements in the state?s work verification plan pertaining to maintaining and verifying supporting documentation for the hours worked by clients and did not ensure individuals were engaged in work activities.Effect:This is the eleventh consecutive year we have reported to DCFS management exceptions with internal controls and compliance related to this TANF requirement. Noncompliance could result in penalties assessed on the state by the federal grantor.Recommendation:DCFS management should ensure DCFS employees comply with existing policies and procedures regarding the state?s work verification plan.Management?s Response and Corrective Action Plan:Management concurred with the finding and provided a corrective action plan (B-7).
2022-021 - Noncompliance with Reporting Requirements for the Federal Funding Accountability and Transparency ActAward Years: 2021, 2022Award Numbers: 2101LAFOST, 2101LATANF, 2201LAFOST, 2201LATANFCompliance Requirement: ReportingRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:DCFS did not report subawards in compliance with the Federal Funding Accountability and Transparency Act (FFATA) in the FFATA Subaward Reporting System (FSRS) during fiscal year 2022 for the following federal programs:? For the Foster Care program, DCFS disbursed approximately $8.8 million in subawards to eight different subrecipients, four of which were state entities, during fiscal year 2022. These subawards account for approximately 18% of the programs? fiscal year expenditures.? For the TANF program, DCFS disbursed approximately $76.6 million in subawards to 41 different subrecipients, of which eight were state entities, during fiscal year 2022. These subawards account for approximately 48% of the programs? fiscal year expenditures.Criteria:2 CFR 170 Appendix A(I)(a) requires the non-federal entity to report to FSRS each obligating action equal to or exceeding $30,000 in federal funds for a subaward to a non-federal entity.Cause:Management represented there were no procedures in place to ensure compliance with FFATA requirements.Effect:Not reporting obligating actions to the FSRS prevents the public from having access to accurate information on how DCFS is obligating federal funds.Recommendation:DCFS should strengthen internal controls to ensure that appropriate personnel are aware of the federal programs that are subject to FFATA reporting and assign appropriate personnel to complete the FFATA reporting in accordance with federal requirements.Management?s Response and Corrective Action Plan:Management concurred with the finding and provided a corrective action plan (B-8).
2022-019 - Control Weakness Relating to Foster Care Subrecipient MonitoringAward Year: 2022Award Number: 2201LAFOSTCompliance Requirement: Subrecipient MonitoringRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:The Department of Children and Family Services (DCFS) did not adequately review subrecipient Foster Care Title IV-E (Foster Care) invoices submitted by the Department of Public Safety and Corrections ? Youth Services ? Office of Juvenile Justice (OJJ) for reimbursement of administrative expenditures to ensure billings were accurately calculated.During our procedures performed at OJJ, which was in addition to our testing conducted through sampling at DCFS, it came to our attention that on the administrative invoice for the quarter ending December 2021, there were errors due to OJJ using incorrect expenditure data, resulting in billing errors that were not detected by DCFS.Criteria:2 CFR 200.332(d) requires that pass-through entities monitor the activities of subrecipients as necessary to ensure that the subaward complies with the terms and conditions of the subaward.Per DCFS?s contract with OJJ related to the Foster Care program, DCFS agrees to receive, review, and certify expenditure reports for Foster Care expenditures.Cause:These conditions occurred because of a weakness in controls in monitoring Foster Care administrative invoices.Effect:Failure to properly review invoices resulted in an over reimbursement and could result in disallowed costs by the federal grantor. Based on the methodology used, there was $128,236 in overpayments considered questioned costs.Recommendation:DCFS should strengthen controls over review to ensure administrative invoices submitted by OJJ are calculated accurately.Management?s Response and Corrective Action Plan:Management concurred with the finding and provided a corrective action plan (B-5).
2022-021 - Noncompliance with Reporting Requirements for the Federal Funding Accountability and Transparency ActAward Years: 2021, 2022Award Numbers: 2101LAFOST, 2101LATANF, 2201LAFOST, 2201LATANFCompliance Requirement: ReportingRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:DCFS did not report subawards in compliance with the Federal Funding Accountability and Transparency Act (FFATA) in the FFATA Subaward Reporting System (FSRS) during fiscal year 2022 for the following federal programs:? For the Foster Care program, DCFS disbursed approximately $8.8 million in subawards to eight different subrecipients, four of which were state entities, during fiscal year 2022. These subawards account for approximately 18% of the programs? fiscal year expenditures.? For the TANF program, DCFS disbursed approximately $76.6 million in subawards to 41 different subrecipients, of which eight were state entities, during fiscal year 2022. These subawards account for approximately 48% of the programs? fiscal year expenditures.Criteria:2 CFR 170 Appendix A(I)(a) requires the non-federal entity to report to FSRS each obligating action equal to or exceeding $30,000 in federal funds for a subaward to a non-federal entity.Cause:Management represented there were no procedures in place to ensure compliance with FFATA requirements.Effect:Not reporting obligating actions to the FSRS prevents the public from having access to accurate information on how DCFS is obligating federal funds.Recommendation:DCFS should strengthen internal controls to ensure that appropriate personnel are aware of the federal programs that are subject to FFATA reporting and assign appropriate personnel to complete the FFATA reporting in accordance with federal requirements.Management?s Response and Corrective Action Plan:Management concurred with the finding and provided a corrective action plan (B-8).
2022-032 - Control Weakness Related to Foster Care BillingsAward Year: 2022Award Number: 2201LAFOSTCompliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:OJJ did not adequately review Foster Care invoices submitted to DCFS for reimbursement to ensure billings were accurately calculated.In a non-statistical sample of two quarterly administrative invoices billed to DCFS totaling $831,311 from a population of four quarterly administrative invoices totaling $1,708,503, one (50%) invoice for the quarter ending December 2021 was calculated using incorrect expenditure data, resulting in billing errors.Criteria:2 CFR 200.303(a) requires that non-federal entities receiving federal awards establish and maintain effective internal control designed to reasonably ensure compliance with federal statutes, regulations, and the terms and conditions of the federal award.Per OJJ?s contract with DCFS for reimbursement of Foster Care expenditures, OJJ must submit quarterly administrative billing reports to DCFS and monitor and track allowable administrative claim information.Cause:These conditions occurred because of a weakness in controls in the review of Foster Care administrative invoices.Effect:Failure to properly review invoices resulted in over billings and could result in disallowed costs by the federal grantor. Based on the methodology used, there was $128,236 in overpayments considered questioned costs.Recommendation:OJJ should strengthen controls to ensure administrative invoices submitted to DCFS are calculated accurately.Management?s Response and Corrective Action Plan:Management concurred with the finding and provided a corrective action plan (B-45).
2022-023 - Inadequate Controls and Noncompliance over ADP Risk Analysis and System Security ReviewAward Years: 2021, 2022Award Numbers: 2105LA5021, 2105LA5MAP, 2205LA5021, 2205LA5MAPCompliance Requirement: Special Tests and ProvisionsRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:The Louisiana Department of Health (LDH) did not have adequate controls in place to ensure that the Magellan Medicaid Administration (Magellan) Service Organization Control (SOC) 1 type 2 report was reviewed in accordance with the Automated Data Processing (ADP) Risk Analysis and System Security Review federal requirements for the year ending June 30, 2022. LDH contracted with Magellan in fiscal year 2022 to provide services that include maintaining system controls related to the drug rebates program.Criteria:According to 45 CFR 95.621, the state shall maintain reports on its biennial ADP system security reviews, together with pertinent supporting documentation, for on-site reviews. Good internal controls require that policies and procedures are established and followed to ensure compliance with federal requirements.Cause:LDH received the required SOC 1 type 2 report from Magellan but was unable to provide any evidence to support its review and did not have written procedures regarding the review of the SOC report.Effect:Proper review of the required SOC report is critical to ensuring the controls utilized by Magellan are adequate and operating effectively.Recommendation:LDH should design and implement procedures to document and support its review of all ADP system security reports.Management?s Response and Corrective Action Plan:Management partially concurred with the finding and provided a corrective action plan (B-19).
2022-025 - Inadequate Controls over Billing for Behavioral Health ServicesAward Years: 2021, 2022Award Numbers: 2105LA5021, 2105LA5MAP, 2205LA5021, 2205LA5MAPCompliance Requirement: Activities Allowed or UnallowedRepeat Finding: Yes (Prior Year Finding No. 2021-055)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, LDH, the managed care organizations (MCOs), and Magellan Health Services (Magellan) did not have adequate controls in place to ensure that behavioral health services in the Medical Assistance Program (Medicaid) and Children?s Health Insurance Program (CHIP) were properly billed and that improper encounters were denied. For fiscal year 2022, we identified approximately $8.8 million in encounters for services between July 1, 2021, and June 30, 2022, that were paid by the MCOs and Magellan even though the encounters do not appear to comply with LDH?s encounter coding requirements and/or approved fee schedules.Our analysis identified the following instances of billing errors:? Providers were paid $8,329,594 for 125,734 encounters that were billed using incorrect procedure and modifier codes.? Providers were paid $489,342 more than indicated on approved fee schedules for 13,019 encounters for behavioral health services.Criteria:LDH?s fee schedule outlines procedure codes for services and the applicable billing rates. Some services require that procedure codes also contain modifier codes which indicate information such as the age of the recipient, location where the service was provided, the educational background of the person providing the service, and the license(s) they have obtained.The approved fee schedules outline different rates depending on the procedure code and modifier codes. The MCOs can optionally pay more than the minimum LDH fee schedule.Cause:The billing errors could be avoided by LDH, the MCOs, and Magellan applying system edits that would flag encounters for further review when encounter coding and/or fee schedule requirements are not followed.Effect:Without the required modifiers, the encounter does not contain enough information to determine that the billing was appropriate.Because LDH does not currently maintain a list of providers in which the MCO pays more than the minimum fee schedule, LDH cannot determine if an encounter paid at an excessive rate was improperly billed.It is important that encounter data is accurate because LDH and other stakeholders, such as the Medicaid Fraud Control Unit within the Attorney General?s Office, use this data to identify improper payments and potential fraud. LDH also uses this encounter data to establish per member per month rates for the MCOs.Recommendation:LDH should implement adequate internal controls to ensure that encounters are coded correctly, which could include edit checks to flag potential improper billings for further review.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-25).
2022-027 - Inadequate Controls over Monitoring of Abortion ClaimsAward Years: 2021, 2022Award Numbers: 2105LA5021, 2105LA5MAP, 2205LA5021, 2205LA5MAPCompliance Requirement: Activities Allowed or UnallowedRepeat Finding: Yes (Prior Year Finding No. 2021-057)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, LDH did not have adequate controls to ensure compliance with federal regulations prohibiting the use of federal funding for abortion claims.Criteria:42 CFR 441 Subpart E and 42 USC 1397ee(c) prohibit Medicaid and CHIP funding for abortion services except in instances where abortion is necessary to save the mother?s life or if the pregnancy is the result of an act of rape or incest.Cause:Under managed care, LDH pays the health plans monthly premiums for enrolled recipients. The health plans pay provider claims for services provided to enrolled recipients and submit the claims to LDH as encounter claims.LDH included provisions in the Healthy Louisiana managed care contracts requiring the health plans to comply with the federal regulations regarding funding of prohibited abortion services, but LDH did not have adequate procedures in place to monitor the health plans? compliance with the federal regulations. While LDH received monthly self-reported information from the health plans, LDH was not comparing or validating the self-reported information to ensure the reporting was accurate and complete for the entire year. In addition, the instructions provided to the health plans concerning how to complete the reports are not detailed and could potentially lead to all five health plans reporting different information.In fiscal year 2022, LDH began the process of implementing new controls to validate the health plans self-reported information in order to ensure compliance with federal regulations regarding the funding of prohibited abortion claims. Specifically, in July of 2022 LDH began a spot check review of the health plans self-reported encounter claims information and reviewed data retroactively for the third and fourth quarter of fiscal year 2022 (January 2022 to June 2022). However, this process was not fully implemented during fiscal year 2022, nor did it cover the first two quarters of the audit period of July 1, 2021, to December 31, 2021. It is expected this process will cover all four quarters beginning in fiscal year 2023.Effect:Claims paid by the managed care health plans for abortion services that do not meet exceptions noted in federal regulations may go undetected, and LDH may accept these improper claims as encounter claims. Encounter claims are considered in future premium rate setting and are used for reporting and monitoring of the Medicaid and CHIP programs.Recommendation:LDH should continue its process to validate self-reported information from the health plans and ensure its process is operating effectively to ensure compliance with federal regulations regarding funding of prohibited abortions claims.Management?s Response and Corrective Action Plan:Management concurred in part with the finding and provided a corrective action plan (B-32).
2022-028 - Inadequate Internal Controls over Eligibility DeterminationsAward Years: 2020 - 2022Award Numbers: 2005LA5MAP, 2105LA5021, 2105LA5MAP, 2205LA5021, 2205LA5MAPCompliance Requirement: EligibilityRepeat Finding: Yes (Prior Year Finding No. 2021-060)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the third consecutive year, LDH lacked adequate internal controls over eligibility determinations in the Medicaid and CHIP programs for the state fiscal year ending June 30, 2022.From a population of 1,919,113 Medicaid recipients, a non-statistical sample of 60 recipients was tested. Five (8.3%) out of 60 Medicaid recipients tested did not have adequate documentation to support the eligibility determination or redetermination within the recipient?s case record.The following errors were noted for Medicaid:? For one recipient, LDH personnel did not discontinue coverage on a beneficiary that was invalidly enrolled prior to the start of the public health emergency (PHE).? For one recipient, LDH personnel did not discontinue coverage on a recipient who moved out of state.? For three recipients, renewals were not performed during the state fiscal year as required by federal regulations.During our testing of Medicaid managed care premiums, we identified an additional recipient with eligibility not supported by the case record. The recipient?s case record did not reflect timely transition into an appropriate case type based on the recipient?s age.In addition, from a population of 212,933 CHIP eligibility recipients, a non-statistical sample of 60 recipients was tested. For two (3.3%) out of 60 CHIP recipients tested, LDH did not perform renewals during the state fiscal year as required by federal regulations.Criteria:42 CFR 431, 42 CFR 435, and 42 CFR 457 require that in order to be considered eligible, a recipient must meet eligibility factors and the recipient case record must include facts to support agency eligibility decision. 42 CFR 435 and 457 also require annual renewal of eligibility.42 CFR 433.400 also states in order to claim the temporary increase in the federal medical assistance percentage (FMAP), states must maintain the Medicaid enrollment of ?validly enrolled beneficiaries? in one of three tiers of coverage. States may terminate individuals not validly enrolled.LDH has outlined eligibility criteria and documentation to support determinations and renewals in its Medicaid eligibility manual.Cause:LDH did not adhere to established control procedures to ensure case records support eligibility decisions, including performance of annual renewals, per federal regulations, and the Medicaid Eligibility Manual.Effect:Proper eligibility determination and renewals are critical to ensuring appropriate service eligibility, appropriate premium payments, and appropriate federal match rate on expenditures.We noted questioned costs totaling $77,983 in federal funds in relation to the two Medicaid recipients whose coverage was not discontinued. We did not note any questioned costs related to the other errors due to certain restrictions on eligibility actions during the PHE.Recommendation:LDH should ensure its employees follow procedures relating to eligibility determinations and renewals in the Medicaid and CHIP programs to ensure the case records support the eligibility decisions.Management?s Response and Corrective Action Plan:Management did not concur with the finding and noted that the Center for Medicare and Medicaid Services (CMS) provided certain flexibilities in meeting the timeliness of renewals in accordance with 42 CFR 435.912(e)(2), and LDH used this flexibility to suspend renewals during the PHE. LDH also indicated, while there was no particular documentation in the ?case note? section of the Louisiana Medicaid Eligibility Determination System (LaMEDS), LDH provided audit staff with LaMEDS log tables which documented system jobs called ?data fixes? that were completed which set certain renewals to a future date per the approved flexibility.In addition, on the one instance of coverage that was not discontinued on a beneficiary invalidly enrolled prior to the start of the PHE, LDH noted that in November 2020 CMS issued an Interim Final Rule (CMS-9912-IFC) which provided additional information concerning the continuous enrollment period and allowable terminations and transitions during the PHE for beneficiaries invalidly enrolled. LDH?s opinion is the Interim Final Rule nor the FAQ guidance that followed provided any instruction to review or take action on cases that were prevented from termination prior to its release; therefore, LDH applied the clarification of ?validly enrolled? on decisions going forward (B-34).Auditor?s Additional Comments:The LaMEDS log tables were considered during testing by the auditor. For the exceptions related to renewals above, there was no evidence of any systems being checked with the data logs provided by LDH during state fiscal year 2022. Although CMS granted flexibilities for completing the renewals at a future date, it did not appear that CMS was granting approval for suspension of renewals. CMS also notified LDH that federal regulation requires the agency to document the reason for the delay in each case record, but there was no evidence of this in the exceptions noted above.In reference to the one beneficiary invalidly enrolled prior to the start of the PHE, LDH should have implemented the CMS Interim Final Rule (CMS-9912-IFC) to include all months during the PHE in order to discontinue coverage on a beneficiary that was invalidly enrolled prior to the start of the PHE or during the PHE.
2022-029 - Noncompliance with Managed Care Provider Enrollment and Screening RequirementAward Years: 2021, 2022Award Numbers: 2105LA5021, 2105LA5MAP, 2205LA5021, 2205LA5MAPCompliance Requirement: Special Tests and ProvisionsRepeat Finding: Yes (Prior Year Finding No. 2021-061)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fifth consecutive year, LDH did not enroll and screen Healthy Louisiana managed care providers and dental managed care providers as required by federal regulations. During fiscal year 2022, the managed care plans continued to enroll and screen some managed care providers, in violation of federal regulations.Criteria:42 CFR 438.602 (2016 Managed Care Final Rule) and Section 5005 of the 21st Century Cures Act require that the enrollment process include providing the Medicaid agency with the provider?s identifying information including the name, specialty, date of birth, Social Security number, national provider identifier, federal taxpayer identification number, and state license or certification number of the provider. Additionally, the state agency is required to screen enrolled providers, require certain disclosures, provide enhanced oversight of certain providers, and comply with reporting of adverse provider actions and provider terminations. By using the federally required process, managed care providers must participate in the same screening and enrollment process as Medicaid and CHIP fee-for-service providers.Cause:LDH noted that enrollment and screening of managed care providers was to be performed as part of a new provider management system. After cancellation of the new provider management system contract, the state?s current provider enrollment vendor, Gainwell Technologies Inc. (Gainwell), began the process of creating a web-based portal for Medicaid and its providers to complete the necessary screenings required by federal regulations.In July 2021, LDH launched the enrollment portal created by Gainwell. Although the enrollment portal was launched in fiscal year 2022, LDH gave providers until December 31, 2022, to enroll. Therefore, LDH did not enroll and screen all of the Healthy Louisiana managed care providers and dental managed care providers as required by federal regulations before the fiscal year-end.Effect:LDH cannot ensure the accuracy of provider information obtained from the Louisiana Medicaid managed care plans and cannot ensure compliance with enrollment requirements defined by law and the Medicaid and CHIP state plan. LDH accepted 96 million Healthy Louisiana encounter claims totaling $7.5 billion and 2.8 million dental encounter claims totaling $125.8 million in fiscal year 2022 from the managed care plans and paid $14.7 billion in Healthy Louisiana premiums and $375.8 million in dental premiums.Recommendation:LDH should ensure all providers are screened and enrolled as required by federal regulations.Management?s Response and Corrective Action Plan:Management concurred in part with the finding and provided a corrective action plan (B-37).
2022-030 - Noncompliance with Provider Revalidation and Screening RequirementsAward Years: 2021, 2022Award Numbers: 2105LA5021, 2105LA5MAP, 2205LA5021, 2205LA5MAPCompliance Requirement: Special Tests and ProvisionsRepeat Finding: Yes (Prior Year Finding No. 2021-063)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fifth consecutive year, LDH did not perform five-year revalidations; screenings based on categorical risk of fraud, waste, or abuse; and monthly checks of the federal excluded party database, as required by federal regulations for all Medicaid and CHIP fee-for-service providers.Based on information provided by LDH, approximately 71% of providers with claims activity in fiscal year 2022 have not had a risk-based screening with the majority of those providers enrolled more than five years ago.In addition, LDH did not routinely check required federal databases to determine if providers have been excluded from participation in federal programs. Although LDH began checking the System for Award Management (SAM) on a monthly basis beginning March of 2022, a check was not performed for all providers for all months during fiscal year 2022.Criteria:Providers are enrolled by LDH and can provide services to either Medicaid and/or CHIP recipients as applicable.42 CFR 455 Subpart E requires that LDH screen all providers according to the provider?s categorical risk level upon initial enrollment, re-enrollment, or revalidation of enrollment. LDH must complete a revalidation of enrollment for all providers, regardless of type, at least every five years. The required screening procedures for each provider varies based on the risk score ? limited, moderate, or high. For example, a high-risk score requires additional screening procedures including criminal background checks and fingerprinting.LDH submitted and received the Medicaid State Plan approval in 2012 regarding compliance with revalidation and screening requirements.42 CFR 455 Subpart E required LDH to check the List of Excluded Individuals/Entities and SAM on at least a monthly basis. The SAM database includes information on providers excluded from contracting with the federal government.Cause:LDH noted that revalidation and screening of providers was to be performed as part of a new provider management system. After cancellation of the new provider management system contract, the state?s current provider enrollment vendor, Gainwell, began the process of creating a web-based portal for Medicaid and its providers to complete the necessary screenings required by federal regulations.In July 2021, LDH launched the enrollment portal created by Gainwell. Although the enrollment portal was launched in fiscal year 2022, LDH gave providers until December 31, 2022, to enroll. Therefore, LDH did not revalidate and screen all of the providers as required by federal regulations before the fiscal year-end.Effect:Proper enrollment and revalidation, including screening based on categorical risk and monthly checks of required databases, would enable the state to identify ineligible providers that should be rejected or excluded from the program.Recommendation:LDH should ensure all providers are screened based on categorical risk level upon initial enrollment, re-enrollment, and revalidation of enrollment as required by federal regulations. Also, LDH should perform revalidation of enrollment on all providers at least every five years. In addition, LDH should ensure all required databases are checked at least on a frequency required by federal regulations.Management?s Response and Corrective Action Plan:Management partially concurred with the finding and provided a corrective action plan (B-39).
2022-031 - Weakness in Controls over and Noncompliance with Provider OverpaymentsAward Years: 2021, 2022Award Numbers: 2105LA5021, 2105LA5MAP, 2205LA5021, 2205LA5MAPCompliance Requirement: Special Tests and ProvisionsRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:During our review over the LDH?s reconciliations related to the return of the federal share of provider overpayments that have reached the one-year reporting deadline, we noted that one out of four (25%) CMS 64 quarterly reports was reconciled using incorrect data. For the quarterly report ending September 30, 2021, LDH inadvertently pulled the June 2020 report as a starting point instead of the June 2021 report when creating its one-year reconciliation. This resulted in the amount reported on the quarterly report ending September 30, 2021, to be overstated by approximately $20 million. LDH did not identify this error during its review process of the September 30, 2021 report, but did discover this error later and corrected the error on the CMS 64 quarterly report ending December 31, 2021. Therefore, we do not consider the overstatement to be questioned costs.In addition, in a non-statistical sample of 60 provider overpayments from a population of 402,032, we were unable to obtain sufficient appropriate audit evidence to determine if the federal portion of provider overpayment collections were returned to CMS in the appropriate quarter.Criteria:Pursuant to 1903(d)(2)(c) of the Act (42 USC 1396b), states have up to one year from the date of discovery of the overpayment to recover or attempt to recover the overpayment from the provider before the federal share must be refunded to CMS via the CMS 64 quarterly report, regardless of whether recovery is made from the provider. The state must credit the federal share to CMS as outlined under 42 CFR 433.320(a)(2) either in the quarter in which the recovery is made or in the quarter in which the one-year period following discovery ends, whichever is earlier.Cause:LDH?s control over compliance with federal regulations regarding the refunding of provider overpayments to CMS was not operating effectively for all quarters for the fiscal year ending June 30, 2022. In addition, LDH did not provide proper supporting documentation for the auditor to test federal regulations over provider overpayments.Effect:Provider overpayments that reached the one-year deadline in September 2021 were not accurately reported until the December 2021 CMS 64 report was completed, causing them to be late and not in compliance with federal regulations.Recommendation:LDH should strengthen its controls over the preparation of the quarterly CMS 64 reports to ensure compliance with federal regulations. In addition, LDH should ensure it is able to provide supporting documentation timely for amounts reported in the CMS 64 reports for overpayments.Management?s Response and Corrective Action Plan:Management did not concur with the finding noting LDH Fiscal is currently in the process of revising procedures to ensure provisions of the 365-Day Receivable report as supporting documentation for provider overpayments (B-41).
2022-018 - Inadequate Controls over Subrecipient AgreementsAward Years: 2019 - 2022Award Numbers: 2201LATANF, B08TI083018-01, B08TI083450-01, B09SM082603-01, B09SM083804-01, H79SM083477, H79SP081004, H79TI081691, X06SM016019-19, X06SM083694-01Compliance Requirement: Subrecipient MonitoringRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:The Acadiana Area Human Services District (AAHSD) failed to comply with all regulations set forth by 2 CFR 200.332.AAHSD is allocated federal funds from the Louisiana Department of Health (LDH), Office of Behavioral Health (OBH) as interagency transfers, and AAHSD passes these funds to other entities via contracts to perform consulting, social, and professional services. The federal programs involved had awards totaling $3,895,985 and $6,108,836 allocated to AAHSD for fiscal years 2021 and 2022, respectively.We reviewed all 28 agreements identified by AAHSD as subrecipients and determined that for 18 (64%) of the subawards, AAHSD was unable to provide documentation of whether each subrecipient was required to obtain an audit or that the audit was reviewed so that timely and appropriate action could be taken for any findings pertaining to the federal awards, as required by federal regulations. Additionally, for all 28 of the subrecipients, AAHSD could not provide evidence that the required risk assessment was performed to evaluate each subrecipients? risk of noncompliance with federal regulations and the terms of the subaward.Criteria:Federal regulations require AAHSD, as the pass-through entity, to comply with 2 CFR 200.332 when subawards are made to subrecipients.Cause:AAHSD failed to develop adequate policies and procedures to ensure compliance with regulations set forth by 2 CFR 200.332 were performed timely.Effect:AAHSD or the subrecipient may not comply with the award and federal regulations.Recommendation:AAHSD management should strengthen its policies and procedures to ensure that regulations set forth by 2 CFR 200.332 are being addressed timely.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-2).
2022-004 - Inadequate Controls over PayrollAward Year: 2022Award Numbers: 6LA700503, NU50CK000532, NU62PS924522, NU62PS924620, NU90TP922016Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesRepeat Finding: Yes (Prior Year Finding No. 2021-005)See Schedule of Findings and Questioned Costs for chart/tableCondition:The Louisiana Department of Health, Office of Public Health (OPH) did not ensure payroll expenditures were timely certified and approved for the WIC Special Supplemental Nutrition Program for Women, Infants, and Children; the Public Health Emergency Preparedness program; the Epidemiology and Laboratory Capacity for Infectious Diseases program; and the HIV Prevention Activities Health Department Based program. This is the third consecutive year payroll internal control deficiencies have been reported for Public Health Emergency Preparedness program and HIV Prevention Activities Health Department Based program, and the second consecutive year for WIC Special Supplemental Nutrition Program for Women, Infants, and Children and Epidemiology and Laboratory Capacity for Infectious Diseases program. Exceptions for each federal program are as follows:? For the WIC Special Supplemental Nutrition Program for Women, Infants, and Children, a non-statistical sample of 60 payroll transactions was tested from a population of 6,184 transactions totaling $8,970,425. Five (8%) time statements were not timely approved by the employees? supervisor, of which two (3%) were not approved at all, and two (3%) were not certified timely by the employees ranging from 13 to 236 days after the posting date.? For the Public Health Emergency Preparedness program, a non-statistical sample of 60 payroll transactions was tested from a population of 1,394 transactions totaling $3,988,398. Twenty-one (35%) time statements were not timely approved by the employees? supervisors, of which 12 (20%) were approved ranging from 23 days to 447 days after posting date and seven (12%) were not approved at all; two (3%) were not certified by the employees; and two (3%) were approved before certified.? For the Epidemiology and Laboratory Capacity for Infectious Diseases program, a non-statistical sample of 60 payroll transactions was tested from a population of 3,933 transactions totaling $5,190,684. Nine (15%) time statements were not timely approved by the employees? supervisors, of which four (7%) were not approved at all; one (2%) was not certified by the employee; and one (2%) was approved before certified.? For the HIV Prevention Activities Health Department Based program, a non-statistical sample of 60 payroll transactions was tested from a population of 1,024 transactions totaling $386,769. Nine (15%) time statements were not timely approved by the employees? supervisors, of which one (2%) was not approved at all; seven (12%) were approved ranging from one day to 351 days after the posting date; and one (2%) was not certified by the employee.Criteria:2 CFR 200.430(i) requires that records must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Furthermore, the records must comply with the established accounting policies and practices of the non-federal entity.The Division of Administration Personnel Policy No. 99 requires employees and supervisors to certify and/or approve time statements for accuracy by 10:00 p.m. on the Wednesday following the close of the pay period. Time administrators are responsible for reviewing the LaGov ZP241 eCertification report prior to processing to identify any employees who have not certified their time statements and any supervisors who have not approved their staff?s time statements.Cause:OPH lacked sufficient controls to ensure electronic time statements were properly certified and approved prior to the posting date in accordance with federal and state regulations.Effect:Failure to adequately approve program expenditures increases the risk that unallowable costs could be reimbursed by the federal grantor.Recommendation:OPH should ensure employees comply with existing policies and procedures, including certifying and approving electronic time statements in a timely manner.Management?s Response and Corrective Action Plan:Management concurred with the finding and provided a corrective action plan (B-43).
2022-018 - Inadequate Controls over Subrecipient AgreementsAward Years: 2019 - 2022Award Numbers: 2201LATANF, B08TI083018-01, B08TI083450-01, B09SM082603-01, B09SM083804-01, H79SM083477, H79SP081004, H79TI081691, X06SM016019-19, X06SM083694-01Compliance Requirement: Subrecipient MonitoringRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:The Acadiana Area Human Services District (AAHSD) failed to comply with all regulations set forth by 2 CFR 200.332.AAHSD is allocated federal funds from the Louisiana Department of Health (LDH), Office of Behavioral Health (OBH) as interagency transfers, and AAHSD passes these funds to other entities via contracts to perform consulting, social, and professional services. The federal programs involved had awards totaling $3,895,985 and $6,108,836 allocated to AAHSD for fiscal years 2021 and 2022, respectively.We reviewed all 28 agreements identified by AAHSD as subrecipients and determined that for 18 (64%) of the subawards, AAHSD was unable to provide documentation of whether each subrecipient was required to obtain an audit or that the audit was reviewed so that timely and appropriate action could be taken for any findings pertaining to the federal awards, as required by federal regulations. Additionally, for all 28 of the subrecipients, AAHSD could not provide evidence that the required risk assessment was performed to evaluate each subrecipients? risk of noncompliance with federal regulations and the terms of the subaward.Criteria:Federal regulations require AAHSD, as the pass-through entity, to comply with 2 CFR 200.332 when subawards are made to subrecipients.Cause:AAHSD failed to develop adequate policies and procedures to ensure compliance with regulations set forth by 2 CFR 200.332 were performed timely.Effect:AAHSD or the subrecipient may not comply with the award and federal regulations.Recommendation:AAHSD management should strengthen its policies and procedures to ensure that regulations set forth by 2 CFR 200.332 are being addressed timely.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-2).
2022-018 - Inadequate Controls over Subrecipient AgreementsAward Years: 2019 - 2022Award Numbers: 2201LATANF, B08TI083018-01, B08TI083450-01, B09SM082603-01, B09SM083804-01, H79SM083477, H79SP081004, H79TI081691, X06SM016019-19, X06SM083694-01Compliance Requirement: Subrecipient MonitoringRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:The Acadiana Area Human Services District (AAHSD) failed to comply with all regulations set forth by 2 CFR 200.332.AAHSD is allocated federal funds from the Louisiana Department of Health (LDH), Office of Behavioral Health (OBH) as interagency transfers, and AAHSD passes these funds to other entities via contracts to perform consulting, social, and professional services. The federal programs involved had awards totaling $3,895,985 and $6,108,836 allocated to AAHSD for fiscal years 2021 and 2022, respectively.We reviewed all 28 agreements identified by AAHSD as subrecipients and determined that for 18 (64%) of the subawards, AAHSD was unable to provide documentation of whether each subrecipient was required to obtain an audit or that the audit was reviewed so that timely and appropriate action could be taken for any findings pertaining to the federal awards, as required by federal regulations. Additionally, for all 28 of the subrecipients, AAHSD could not provide evidence that the required risk assessment was performed to evaluate each subrecipients? risk of noncompliance with federal regulations and the terms of the subaward.Criteria:Federal regulations require AAHSD, as the pass-through entity, to comply with 2 CFR 200.332 when subawards are made to subrecipients.Cause:AAHSD failed to develop adequate policies and procedures to ensure compliance with regulations set forth by 2 CFR 200.332 were performed timely.Effect:AAHSD or the subrecipient may not comply with the award and federal regulations.Recommendation:AAHSD management should strengthen its policies and procedures to ensure that regulations set forth by 2 CFR 200.332 are being addressed timely.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-2).
2022-005 - Noncompliance with and Weakness in Controls over Federal Research and Development ExpensesAward Years: VariousAward Numbers: VariousCompliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesPass-Through Entities: VariousRepeat Finding: Yes (Prior Year Finding No. 2021-007)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In addition, LSUHSC-S did not ensure that costs charged to federal awards were allowable in accordance with federal regulations and the terms and conditions of the award when requesting reimbursement.In a non-statistical random sample of 50 out of 10,798 expense transactions charged to R&D during the fiscal year ending June 30, 2022, the following exceptions were noted:? Three (6%) purchasing card (P-Card) transactions were not allowable in accordance with federal regulations and the terms and conditions of the award and are considered questioned costs totaling $1,073.? For five (10%) of 50 transactions tested, LSUHSC-S overstated expenses on the Schedule of Expenditures of Federal Awards because the award was fully funded, and expenses in excess of the award amount were not removed from the project used to identify expenditures to federal awards in the accounting records, or the expense was determined not allowable as noted above.? Seven (35%) of 20 time and effort certifications for salary and related benefit expenses tested were completed 119 to 461 days after the end of the quarter.We performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 838 (51%) out of 1,654 adjusting journal entries were made more than 90 days after the end of the quarter from the original transactions. The adjustments were made 97 to 1,026 days after the original transactions were recorded and 96 to 953 days after the end of the quarter.In a non-statistical random sample of 10 out of 1,654 payroll adjusting entries affecting R&D, tested by employee, project id (related to federal award), and journal id, six (60%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. Two of these adjusting entries added costs to the federal award projects and are considered questioned costs totaling $28,324.Criteria:2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity?s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments.Per LSUHSC-S?s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S?s policy, time and effort certifications should be completed within approximately 90 days of the end of the quarter. Management interprets the end of the quarter to be when the time and effort reports are sent to the departments once the last month of the quarter is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the quarterly reporting period, a payroll reallocation must be created within 30 days.Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework? issued by the Committee of Sponsoring Organizations of the Treadway Commission. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions.In addition, the National Institute of Health (NIH) is the grantor for the majority of the LSUHSC-S?s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made ?to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable.2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs.Cause:LSUHSC-S?s approval of P-Card transactions did not provide sufficient review of the allowability of expenses on federal awards. LSUHSC-S has procedures in place to review expenses prior to requesting reimbursement; however, it did not ensure that the necessary adjustments were made to the accounting system in a timely manner for expenses that were not allowed for reimbursement. In addition, training to emphasize accountability and the importance of completing time and effort certifications timely and accurately per policy was not completed as planned during fiscal year 2022 due to staffing shortages.LSUHSC-S is still in the process of implementing the corrective action outlined in the prior year to include documentation of adjusted effort and questions to address justification for the adjustment, errors, and timeliness on a modified Personnel Change form.Effect:Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects.In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor.Recommendation:Management should monitor time and effort certifications completed by the departments and investigate and obtain justification from department personnel for untimely certifications, as well as untimely adjustments and lack of supporting documentation for adjustments to enforce established policies. Management should ensure adequate design and operating effectiveness of controls over expenses, including P-Card expenses, charged to federal awards to verify allowability of costs in accordance with federal requirements and grant terms and conditions prior to requesting reimbursement. Management should also consider implementing other complementary controls such as preventing costs from being charged to projects in the accounting system beyond the approved budget or period of performance.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-52).
2022-035 - Weakness in Controls over Cash Management RequirementsAward Years: VariousAward Numbers: VariousCompliance Requirement: Cash ManagementRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:LSUHSC-S did not follow its prescribed controls over compliance with the cash management requirements of R&D programs. We reviewed a non-statistical sample of 25 federal R&D expense transactions resulting in reimbursement request support for two subaward invoice reconciliations and ten monthly direct award reconciliations, for the fiscal year ending June 30, 2022, from a population of 11,969 expense transactions. We also reviewed the two monthly reconciliations for July and November 2021 that were not selected from the expense transactions. We noted the following:? Four (29%) of 14 reconciliations had no evidence of review or approval by someone other than the preparer.? Ten (71%) of 14 approved reconciliations did not agree to the reimbursement request submitted to the grantor.Criteria:2 CFR 200.303 requires that non-federal entities establish and maintain internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.LSUHSC-S has established controls over cash management requirements, which consist of a monthly reconciliation of reimbursement requests for R&D expenses and includes the review and approval by someone other than the preparer.Cause:LSUHSC-S did not follow its established controls over monthly reconciliations.LSUHSC-S represented that the monthly reconciliations are the starting point in the process and additional determinations of which amounts should be drawn down are made after the reconciliation has been completed. LSUHSC-S did not provide any evidence that additional review and approval was performed prior to the reimbursement request.LSUHSC-S did not perform the drawdowns on a monthly basis when the reconciliations were performed. Drawdowns were performed in March and June 2022, and after fiscal year end in July, August, and October 2022 for expenses incurred during the fiscal year ending June 30, 2022. Management provided additional reconciliations for the draw down amounts, but there was no evidence of review and approval by someone other than the preparer.Effect:Failure to implement sufficient controls over cash management could result in LSUHSC-S requesting reimbursement for expenses not incurred prior to the request and place LSUHSC-S in noncompliance with federal regulations.Recommendation:LSUHSC-S should ensure that a review and approval is performed on the final amounts requested for reimbursement and evidence is maintained. LSUSHC-S should also ensure that established controls are followed to ensure the review and approval is performed by someone other than the preparer.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-55).
2022-005 - Noncompliance with and Weakness in Controls over Federal Research and Development ExpensesAward Years: VariousAward Numbers: VariousCompliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesPass-Through Entities: VariousRepeat Finding: Yes (Prior Year Finding No. 2021-007)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In addition, LSUHSC-S did not ensure that costs charged to federal awards were allowable in accordance with federal regulations and the terms and conditions of the award when requesting reimbursement.In a non-statistical random sample of 50 out of 10,798 expense transactions charged to R&D during the fiscal year ending June 30, 2022, the following exceptions were noted:? Three (6%) purchasing card (P-Card) transactions were not allowable in accordance with federal regulations and the terms and conditions of the award and are considered questioned costs totaling $1,073.? For five (10%) of 50 transactions tested, LSUHSC-S overstated expenses on the Schedule of Expenditures of Federal Awards because the award was fully funded, and expenses in excess of the award amount were not removed from the project used to identify expenditures to federal awards in the accounting records, or the expense was determined not allowable as noted above.? Seven (35%) of 20 time and effort certifications for salary and related benefit expenses tested were completed 119 to 461 days after the end of the quarter.We performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 838 (51%) out of 1,654 adjusting journal entries were made more than 90 days after the end of the quarter from the original transactions. The adjustments were made 97 to 1,026 days after the original transactions were recorded and 96 to 953 days after the end of the quarter.In a non-statistical random sample of 10 out of 1,654 payroll adjusting entries affecting R&D, tested by employee, project id (related to federal award), and journal id, six (60%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. Two of these adjusting entries added costs to the federal award projects and are considered questioned costs totaling $28,324.Criteria:2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity?s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments.Per LSUHSC-S?s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S?s policy, time and effort certifications should be completed within approximately 90 days of the end of the quarter. Management interprets the end of the quarter to be when the time and effort reports are sent to the departments once the last month of the quarter is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the quarterly reporting period, a payroll reallocation must be created within 30 days.Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework? issued by the Committee of Sponsoring Organizations of the Treadway Commission. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions.In addition, the National Institute of Health (NIH) is the grantor for the majority of the LSUHSC-S?s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made ?to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable.2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs.Cause:LSUHSC-S?s approval of P-Card transactions did not provide sufficient review of the allowability of expenses on federal awards. LSUHSC-S has procedures in place to review expenses prior to requesting reimbursement; however, it did not ensure that the necessary adjustments were made to the accounting system in a timely manner for expenses that were not allowed for reimbursement. In addition, training to emphasize accountability and the importance of completing time and effort certifications timely and accurately per policy was not completed as planned during fiscal year 2022 due to staffing shortages.LSUHSC-S is still in the process of implementing the corrective action outlined in the prior year to include documentation of adjusted effort and questions to address justification for the adjustment, errors, and timeliness on a modified Personnel Change form.Effect:Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects.In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor.Recommendation:Management should monitor time and effort certifications completed by the departments and investigate and obtain justification from department personnel for untimely certifications, as well as untimely adjustments and lack of supporting documentation for adjustments to enforce established policies. Management should ensure adequate design and operating effectiveness of controls over expenses, including P-Card expenses, charged to federal awards to verify allowability of costs in accordance with federal requirements and grant terms and conditions prior to requesting reimbursement. Management should also consider implementing other complementary controls such as preventing costs from being charged to projects in the accounting system beyond the approved budget or period of performance.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-52).
2022-033 - Weakness in Controls over Research and Development ProjectCloseouts and Accounting RecordsAward Years: 2021, 2022Award Numbers: 1K01AA024494-01A1, 1R21AA026022-01A1, 1R44DA046300-01, 2R01DK087800-06A1, 2R37AA018282-06, GM104940-17025-HSCNO01, INS151591-2, PO-0000180812, WFUHS 35-101730-117901Compliance Requirement: Period of PerformancePass-Through Entities: Eastern Virginia Medical School, La Jolla Alcohol Research, Inc., Wake Forest University HSCRepeat Finding: Yes (Prior Year Finding No. 2021-006)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the third consecutive year, the Louisiana State University Health Sciences Center in New Orleans (LSUHSC-NO) did not have adequate controls over project closeouts or accounting records for the R&D cluster federal program. We tested a non-statistical sample of 18 R&D projects, plus an additional five projects based on the total transaction amount recorded more than 90 days after the project end date, from a population of 139 projects with end dates between April 1, 2021, and June 30, 2022. Five (27.8%) of the sampled projects and all five of the additional projects included transactions for expenses or correcting entries posted to the project between 120 and 402 days after the project?s period of performance ended. On three of the additional projects, management submitted revised final reports to the grantor, or revised final invoices to the pass-through entity, more than 120 days after the period of performance ended resulting in noncompliance with federal program close-out requirements.Criteria:2 CFR 200.344 requires (a) that the recipient must submit, no later than 120 calendar days (or 90 days for a subrecipient) after the end of the period of performance, all reports required by the terms and conditions of the award, and (b) unless the federal awarding agency or pass-through entity authorizes an extension, a non-federal entity must liquidate all financial obligations incurred under the federal award no later than 120 calendar days after the end date of the period of performance.Additionally, LSUHSC-NO?s Sponsored Agreement Closeout Policy requires that completed sponsored agreements with surplus and/or deficit residual balances remaining in the project be certified and transferred to an appropriate, non-sponsored, departmentally-funded account or another sponsored project within 90 days of the project end date. LSUHSC-NO?s Sponsored Projects Accounting Cost Transfer Policy 011019 cautions that cost transfers will not be processed to cover cost overruns, to avoid restrictions by the Sponsor, to use up unspent funds, or for reasons of convenience or broadly-defined ?errors.?Cause:These exceptions occurred because (1) expenses are charged to projects after their closeout period in anticipation of a forthcoming project renewal, extension, or funding increase that may or may not be received; (2) the accounting system, PeopleSoft Commitment Control, allows certain personnel and other expenses to continue to post to projects after the project has ended unless a form, such as a change in source of funds form, is processed to update account coding in the system; (3) projects are not being closed out properly as they end, which includes submitting all required forms for updating accounting records; and (4) project budgets were not adequately monitored to ensure that expenses in the accounting system were charged to the correct project and any errors or budget overruns were identified and addressed in a timely manner.Effect:Untimely project updates in the accounting system increase the risk that expenses will be charged to the wrong project which hinders management?s ability to effectively monitor the budget and may result in budget overruns that would need to be covered with other funding sources, increase the number of corrections required at year end to ensure accurate financial reporting, and may result in noncompliance with federal program requirements.Recommendation:Management should continue to monitor budgets and ensure that budget overruns and errors are identified and corrected in a timely manner. Management should ensure that projects are effectively closed out including processing all required forms and updating the accounting system in a timely manner. Management should consider implementing a system control to prevent costs from being charged to projects in the accounting system beyond the project close out period. Management should also implement controls to exclude costs from its Schedule of Expenditures of Federal Awards until the awards or extensions are approved.Management?s Response and Corrective Action Plan:Management concurred with the finding and provided a corrective action plan (B-46).
2022-005 - Noncompliance with and Weakness in Controls over Federal Research and Development ExpensesAward Years: VariousAward Numbers: VariousCompliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesPass-Through Entities: VariousRepeat Finding: Yes (Prior Year Finding No. 2021-007)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In addition, LSUHSC-S did not ensure that costs charged to federal awards were allowable in accordance with federal regulations and the terms and conditions of the award when requesting reimbursement.In a non-statistical random sample of 50 out of 10,798 expense transactions charged to R&D during the fiscal year ending June 30, 2022, the following exceptions were noted:? Three (6%) purchasing card (P-Card) transactions were not allowable in accordance with federal regulations and the terms and conditions of the award and are considered questioned costs totaling $1,073.? For five (10%) of 50 transactions tested, LSUHSC-S overstated expenses on the Schedule of Expenditures of Federal Awards because the award was fully funded, and expenses in excess of the award amount were not removed from the project used to identify expenditures to federal awards in the accounting records, or the expense was determined not allowable as noted above.? Seven (35%) of 20 time and effort certifications for salary and related benefit expenses tested were completed 119 to 461 days after the end of the quarter.We performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 838 (51%) out of 1,654 adjusting journal entries were made more than 90 days after the end of the quarter from the original transactions. The adjustments were made 97 to 1,026 days after the original transactions were recorded and 96 to 953 days after the end of the quarter.In a non-statistical random sample of 10 out of 1,654 payroll adjusting entries affecting R&D, tested by employee, project id (related to federal award), and journal id, six (60%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. Two of these adjusting entries added costs to the federal award projects and are considered questioned costs totaling $28,324.Criteria:2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity?s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments.Per LSUHSC-S?s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S?s policy, time and effort certifications should be completed within approximately 90 days of the end of the quarter. Management interprets the end of the quarter to be when the time and effort reports are sent to the departments once the last month of the quarter is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the quarterly reporting period, a payroll reallocation must be created within 30 days.Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework? issued by the Committee of Sponsoring Organizations of the Treadway Commission. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions.In addition, the National Institute of Health (NIH) is the grantor for the majority of the LSUHSC-S?s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made ?to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable.2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs.Cause:LSUHSC-S?s approval of P-Card transactions did not provide sufficient review of the allowability of expenses on federal awards. LSUHSC-S has procedures in place to review expenses prior to requesting reimbursement; however, it did not ensure that the necessary adjustments were made to the accounting system in a timely manner for expenses that were not allowed for reimbursement. In addition, training to emphasize accountability and the importance of completing time and effort certifications timely and accurately per policy was not completed as planned during fiscal year 2022 due to staffing shortages.LSUHSC-S is still in the process of implementing the corrective action outlined in the prior year to include documentation of adjusted effort and questions to address justification for the adjustment, errors, and timeliness on a modified Personnel Change form.Effect:Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects.In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor.Recommendation:Management should monitor time and effort certifications completed by the departments and investigate and obtain justification from department personnel for untimely certifications, as well as untimely adjustments and lack of supporting documentation for adjustments to enforce established policies. Management should ensure adequate design and operating effectiveness of controls over expenses, including P-Card expenses, charged to federal awards to verify allowability of costs in accordance with federal requirements and grant terms and conditions prior to requesting reimbursement. Management should also consider implementing other complementary controls such as preventing costs from being charged to projects in the accounting system beyond the approved budget or period of performance.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-52).
2022-033 - Weakness in Controls over Research and Development ProjectCloseouts and Accounting RecordsAward Years: 2021, 2022Award Numbers: 1K01AA024494-01A1, 1R21AA026022-01A1, 1R44DA046300-01, 2R01DK087800-06A1, 2R37AA018282-06, GM104940-17025-HSCNO01, INS151591-2, PO-0000180812, WFUHS 35-101730-117901Compliance Requirement: Period of PerformancePass-Through Entities: Eastern Virginia Medical School, La Jolla Alcohol Research, Inc., Wake Forest University HSCRepeat Finding: Yes (Prior Year Finding No. 2021-006)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the third consecutive year, the Louisiana State University Health Sciences Center in New Orleans (LSUHSC-NO) did not have adequate controls over project closeouts or accounting records for the R&D cluster federal program. We tested a non-statistical sample of 18 R&D projects, plus an additional five projects based on the total transaction amount recorded more than 90 days after the project end date, from a population of 139 projects with end dates between April 1, 2021, and June 30, 2022. Five (27.8%) of the sampled projects and all five of the additional projects included transactions for expenses or correcting entries posted to the project between 120 and 402 days after the project?s period of performance ended. On three of the additional projects, management submitted revised final reports to the grantor, or revised final invoices to the pass-through entity, more than 120 days after the period of performance ended resulting in noncompliance with federal program close-out requirements.Criteria:2 CFR 200.344 requires (a) that the recipient must submit, no later than 120 calendar days (or 90 days for a subrecipient) after the end of the period of performance, all reports required by the terms and conditions of the award, and (b) unless the federal awarding agency or pass-through entity authorizes an extension, a non-federal entity must liquidate all financial obligations incurred under the federal award no later than 120 calendar days after the end date of the period of performance.Additionally, LSUHSC-NO?s Sponsored Agreement Closeout Policy requires that completed sponsored agreements with surplus and/or deficit residual balances remaining in the project be certified and transferred to an appropriate, non-sponsored, departmentally-funded account or another sponsored project within 90 days of the project end date. LSUHSC-NO?s Sponsored Projects Accounting Cost Transfer Policy 011019 cautions that cost transfers will not be processed to cover cost overruns, to avoid restrictions by the Sponsor, to use up unspent funds, or for reasons of convenience or broadly-defined ?errors.?Cause:These exceptions occurred because (1) expenses are charged to projects after their closeout period in anticipation of a forthcoming project renewal, extension, or funding increase that may or may not be received; (2) the accounting system, PeopleSoft Commitment Control, allows certain personnel and other expenses to continue to post to projects after the project has ended unless a form, such as a change in source of funds form, is processed to update account coding in the system; (3) projects are not being closed out properly as they end, which includes submitting all required forms for updating accounting records; and (4) project budgets were not adequately monitored to ensure that expenses in the accounting system were charged to the correct project and any errors or budget overruns were identified and addressed in a timely manner.Effect:Untimely project updates in the accounting system increase the risk that expenses will be charged to the wrong project which hinders management?s ability to effectively monitor the budget and may result in budget overruns that would need to be covered with other funding sources, increase the number of corrections required at year end to ensure accurate financial reporting, and may result in noncompliance with federal program requirements.Recommendation:Management should continue to monitor budgets and ensure that budget overruns and errors are identified and corrected in a timely manner. Management should ensure that projects are effectively closed out including processing all required forms and updating the accounting system in a timely manner. Management should consider implementing a system control to prevent costs from being charged to projects in the accounting system beyond the project close out period. Management should also implement controls to exclude costs from its Schedule of Expenditures of Federal Awards until the awards or extensions are approved.Management?s Response and Corrective Action Plan:Management concurred with the finding and provided a corrective action plan (B-46).
2022-033 - Weakness in Controls over Research and Development ProjectCloseouts and Accounting RecordsAward Years: 2021, 2022Award Numbers: 1K01AA024494-01A1, 1R21AA026022-01A1, 1R44DA046300-01, 2R01DK087800-06A1, 2R37AA018282-06, GM104940-17025-HSCNO01, INS151591-2, PO-0000180812, WFUHS 35-101730-117901Compliance Requirement: Period of PerformancePass-Through Entities: Eastern Virginia Medical School, La Jolla Alcohol Research, Inc., Wake Forest University HSCRepeat Finding: Yes (Prior Year Finding No. 2021-006)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the third consecutive year, the Louisiana State University Health Sciences Center in New Orleans (LSUHSC-NO) did not have adequate controls over project closeouts or accounting records for the R&D cluster federal program. We tested a non-statistical sample of 18 R&D projects, plus an additional five projects based on the total transaction amount recorded more than 90 days after the project end date, from a population of 139 projects with end dates between April 1, 2021, and June 30, 2022. Five (27.8%) of the sampled projects and all five of the additional projects included transactions for expenses or correcting entries posted to the project between 120 and 402 days after the project?s period of performance ended. On three of the additional projects, management submitted revised final reports to the grantor, or revised final invoices to the pass-through entity, more than 120 days after the period of performance ended resulting in noncompliance with federal program close-out requirements.Criteria:2 CFR 200.344 requires (a) that the recipient must submit, no later than 120 calendar days (or 90 days for a subrecipient) after the end of the period of performance, all reports required by the terms and conditions of the award, and (b) unless the federal awarding agency or pass-through entity authorizes an extension, a non-federal entity must liquidate all financial obligations incurred under the federal award no later than 120 calendar days after the end date of the period of performance.Additionally, LSUHSC-NO?s Sponsored Agreement Closeout Policy requires that completed sponsored agreements with surplus and/or deficit residual balances remaining in the project be certified and transferred to an appropriate, non-sponsored, departmentally-funded account or another sponsored project within 90 days of the project end date. LSUHSC-NO?s Sponsored Projects Accounting Cost Transfer Policy 011019 cautions that cost transfers will not be processed to cover cost overruns, to avoid restrictions by the Sponsor, to use up unspent funds, or for reasons of convenience or broadly-defined ?errors.?Cause:These exceptions occurred because (1) expenses are charged to projects after their closeout period in anticipation of a forthcoming project renewal, extension, or funding increase that may or may not be received; (2) the accounting system, PeopleSoft Commitment Control, allows certain personnel and other expenses to continue to post to projects after the project has ended unless a form, such as a change in source of funds form, is processed to update account coding in the system; (3) projects are not being closed out properly as they end, which includes submitting all required forms for updating accounting records; and (4) project budgets were not adequately monitored to ensure that expenses in the accounting system were charged to the correct project and any errors or budget overruns were identified and addressed in a timely manner.Effect:Untimely project updates in the accounting system increase the risk that expenses will be charged to the wrong project which hinders management?s ability to effectively monitor the budget and may result in budget overruns that would need to be covered with other funding sources, increase the number of corrections required at year end to ensure accurate financial reporting, and may result in noncompliance with federal program requirements.Recommendation:Management should continue to monitor budgets and ensure that budget overruns and errors are identified and corrected in a timely manner. Management should ensure that projects are effectively closed out including processing all required forms and updating the accounting system in a timely manner. Management should consider implementing a system control to prevent costs from being charged to projects in the accounting system beyond the project close out period. Management should also implement controls to exclude costs from its Schedule of Expenditures of Federal Awards until the awards or extensions are approved.Management?s Response and Corrective Action Plan:Management concurred with the finding and provided a corrective action plan (B-46).
2022-035 - Weakness in Controls over Cash Management RequirementsAward Years: VariousAward Numbers: VariousCompliance Requirement: Cash ManagementRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:LSUHSC-S did not follow its prescribed controls over compliance with the cash management requirements of R&D programs. We reviewed a non-statistical sample of 25 federal R&D expense transactions resulting in reimbursement request support for two subaward invoice reconciliations and ten monthly direct award reconciliations, for the fiscal year ending June 30, 2022, from a population of 11,969 expense transactions. We also reviewed the two monthly reconciliations for July and November 2021 that were not selected from the expense transactions. We noted the following:? Four (29%) of 14 reconciliations had no evidence of review or approval by someone other than the preparer.? Ten (71%) of 14 approved reconciliations did not agree to the reimbursement request submitted to the grantor.Criteria:2 CFR 200.303 requires that non-federal entities establish and maintain internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.LSUHSC-S has established controls over cash management requirements, which consist of a monthly reconciliation of reimbursement requests for R&D expenses and includes the review and approval by someone other than the preparer.Cause:LSUHSC-S did not follow its established controls over monthly reconciliations.LSUHSC-S represented that the monthly reconciliations are the starting point in the process and additional determinations of which amounts should be drawn down are made after the reconciliation has been completed. LSUHSC-S did not provide any evidence that additional review and approval was performed prior to the reimbursement request.LSUHSC-S did not perform the drawdowns on a monthly basis when the reconciliations were performed. Drawdowns were performed in March and June 2022, and after fiscal year end in July, August, and October 2022 for expenses incurred during the fiscal year ending June 30, 2022. Management provided additional reconciliations for the draw down amounts, but there was no evidence of review and approval by someone other than the preparer.Effect:Failure to implement sufficient controls over cash management could result in LSUHSC-S requesting reimbursement for expenses not incurred prior to the request and place LSUHSC-S in noncompliance with federal regulations.Recommendation:LSUHSC-S should ensure that a review and approval is performed on the final amounts requested for reimbursement and evidence is maintained. LSUSHC-S should also ensure that established controls are followed to ensure the review and approval is performed by someone other than the preparer.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-55).
2022-033 - Weakness in Controls over Research and Development ProjectCloseouts and Accounting RecordsAward Years: 2021, 2022Award Numbers: 1K01AA024494-01A1, 1R21AA026022-01A1, 1R44DA046300-01, 2R01DK087800-06A1, 2R37AA018282-06, GM104940-17025-HSCNO01, INS151591-2, PO-0000180812, WFUHS 35-101730-117901Compliance Requirement: Period of PerformancePass-Through Entities: Eastern Virginia Medical School, La Jolla Alcohol Research, Inc., Wake Forest University HSCRepeat Finding: Yes (Prior Year Finding No. 2021-006)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the third consecutive year, the Louisiana State University Health Sciences Center in New Orleans (LSUHSC-NO) did not have adequate controls over project closeouts or accounting records for the R&D cluster federal program. We tested a non-statistical sample of 18 R&D projects, plus an additional five projects based on the total transaction amount recorded more than 90 days after the project end date, from a population of 139 projects with end dates between April 1, 2021, and June 30, 2022. Five (27.8%) of the sampled projects and all five of the additional projects included transactions for expenses or correcting entries posted to the project between 120 and 402 days after the project?s period of performance ended. On three of the additional projects, management submitted revised final reports to the grantor, or revised final invoices to the pass-through entity, more than 120 days after the period of performance ended resulting in noncompliance with federal program close-out requirements.Criteria:2 CFR 200.344 requires (a) that the recipient must submit, no later than 120 calendar days (or 90 days for a subrecipient) after the end of the period of performance, all reports required by the terms and conditions of the award, and (b) unless the federal awarding agency or pass-through entity authorizes an extension, a non-federal entity must liquidate all financial obligations incurred under the federal award no later than 120 calendar days after the end date of the period of performance.Additionally, LSUHSC-NO?s Sponsored Agreement Closeout Policy requires that completed sponsored agreements with surplus and/or deficit residual balances remaining in the project be certified and transferred to an appropriate, non-sponsored, departmentally-funded account or another sponsored project within 90 days of the project end date. LSUHSC-NO?s Sponsored Projects Accounting Cost Transfer Policy 011019 cautions that cost transfers will not be processed to cover cost overruns, to avoid restrictions by the Sponsor, to use up unspent funds, or for reasons of convenience or broadly-defined ?errors.?Cause:These exceptions occurred because (1) expenses are charged to projects after their closeout period in anticipation of a forthcoming project renewal, extension, or funding increase that may or may not be received; (2) the accounting system, PeopleSoft Commitment Control, allows certain personnel and other expenses to continue to post to projects after the project has ended unless a form, such as a change in source of funds form, is processed to update account coding in the system; (3) projects are not being closed out properly as they end, which includes submitting all required forms for updating accounting records; and (4) project budgets were not adequately monitored to ensure that expenses in the accounting system were charged to the correct project and any errors or budget overruns were identified and addressed in a timely manner.Effect:Untimely project updates in the accounting system increase the risk that expenses will be charged to the wrong project which hinders management?s ability to effectively monitor the budget and may result in budget overruns that would need to be covered with other funding sources, increase the number of corrections required at year end to ensure accurate financial reporting, and may result in noncompliance with federal program requirements.Recommendation:Management should continue to monitor budgets and ensure that budget overruns and errors are identified and corrected in a timely manner. Management should ensure that projects are effectively closed out including processing all required forms and updating the accounting system in a timely manner. Management should consider implementing a system control to prevent costs from being charged to projects in the accounting system beyond the project close out period. Management should also implement controls to exclude costs from its Schedule of Expenditures of Federal Awards until the awards or extensions are approved.Management?s Response and Corrective Action Plan:Management concurred with the finding and provided a corrective action plan (B-46).
2022-033 - Weakness in Controls over Research and Development ProjectCloseouts and Accounting RecordsAward Years: 2021, 2022Award Numbers: 1K01AA024494-01A1, 1R21AA026022-01A1, 1R44DA046300-01, 2R01DK087800-06A1, 2R37AA018282-06, GM104940-17025-HSCNO01, INS151591-2, PO-0000180812, WFUHS 35-101730-117901Compliance Requirement: Period of PerformancePass-Through Entities: Eastern Virginia Medical School, La Jolla Alcohol Research, Inc., Wake Forest University HSCRepeat Finding: Yes (Prior Year Finding No. 2021-006)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the third consecutive year, the Louisiana State University Health Sciences Center in New Orleans (LSUHSC-NO) did not have adequate controls over project closeouts or accounting records for the R&D cluster federal program. We tested a non-statistical sample of 18 R&D projects, plus an additional five projects based on the total transaction amount recorded more than 90 days after the project end date, from a population of 139 projects with end dates between April 1, 2021, and June 30, 2022. Five (27.8%) of the sampled projects and all five of the additional projects included transactions for expenses or correcting entries posted to the project between 120 and 402 days after the project?s period of performance ended. On three of the additional projects, management submitted revised final reports to the grantor, or revised final invoices to the pass-through entity, more than 120 days after the period of performance ended resulting in noncompliance with federal program close-out requirements.Criteria:2 CFR 200.344 requires (a) that the recipient must submit, no later than 120 calendar days (or 90 days for a subrecipient) after the end of the period of performance, all reports required by the terms and conditions of the award, and (b) unless the federal awarding agency or pass-through entity authorizes an extension, a non-federal entity must liquidate all financial obligations incurred under the federal award no later than 120 calendar days after the end date of the period of performance.Additionally, LSUHSC-NO?s Sponsored Agreement Closeout Policy requires that completed sponsored agreements with surplus and/or deficit residual balances remaining in the project be certified and transferred to an appropriate, non-sponsored, departmentally-funded account or another sponsored project within 90 days of the project end date. LSUHSC-NO?s Sponsored Projects Accounting Cost Transfer Policy 011019 cautions that cost transfers will not be processed to cover cost overruns, to avoid restrictions by the Sponsor, to use up unspent funds, or for reasons of convenience or broadly-defined ?errors.?Cause:These exceptions occurred because (1) expenses are charged to projects after their closeout period in anticipation of a forthcoming project renewal, extension, or funding increase that may or may not be received; (2) the accounting system, PeopleSoft Commitment Control, allows certain personnel and other expenses to continue to post to projects after the project has ended unless a form, such as a change in source of funds form, is processed to update account coding in the system; (3) projects are not being closed out properly as they end, which includes submitting all required forms for updating accounting records; and (4) project budgets were not adequately monitored to ensure that expenses in the accounting system were charged to the correct project and any errors or budget overruns were identified and addressed in a timely manner.Effect:Untimely project updates in the accounting system increase the risk that expenses will be charged to the wrong project which hinders management?s ability to effectively monitor the budget and may result in budget overruns that would need to be covered with other funding sources, increase the number of corrections required at year end to ensure accurate financial reporting, and may result in noncompliance with federal program requirements.Recommendation:Management should continue to monitor budgets and ensure that budget overruns and errors are identified and corrected in a timely manner. Management should ensure that projects are effectively closed out including processing all required forms and updating the accounting system in a timely manner. Management should consider implementing a system control to prevent costs from being charged to projects in the accounting system beyond the project close out period. Management should also implement controls to exclude costs from its Schedule of Expenditures of Federal Awards until the awards or extensions are approved.Management?s Response and Corrective Action Plan:Management concurred with the finding and provided a corrective action plan (B-46).
2022-005 - Noncompliance with and Weakness in Controls over Federal Research and Development ExpensesAward Years: VariousAward Numbers: VariousCompliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesPass-Through Entities: VariousRepeat Finding: Yes (Prior Year Finding No. 2021-007)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In addition, LSUHSC-S did not ensure that costs charged to federal awards were allowable in accordance with federal regulations and the terms and conditions of the award when requesting reimbursement.In a non-statistical random sample of 50 out of 10,798 expense transactions charged to R&D during the fiscal year ending June 30, 2022, the following exceptions were noted:? Three (6%) purchasing card (P-Card) transactions were not allowable in accordance with federal regulations and the terms and conditions of the award and are considered questioned costs totaling $1,073.? For five (10%) of 50 transactions tested, LSUHSC-S overstated expenses on the Schedule of Expenditures of Federal Awards because the award was fully funded, and expenses in excess of the award amount were not removed from the project used to identify expenditures to federal awards in the accounting records, or the expense was determined not allowable as noted above.? Seven (35%) of 20 time and effort certifications for salary and related benefit expenses tested were completed 119 to 461 days after the end of the quarter.We performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 838 (51%) out of 1,654 adjusting journal entries were made more than 90 days after the end of the quarter from the original transactions. The adjustments were made 97 to 1,026 days after the original transactions were recorded and 96 to 953 days after the end of the quarter.In a non-statistical random sample of 10 out of 1,654 payroll adjusting entries affecting R&D, tested by employee, project id (related to federal award), and journal id, six (60%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. Two of these adjusting entries added costs to the federal award projects and are considered questioned costs totaling $28,324.Criteria:2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity?s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments.Per LSUHSC-S?s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S?s policy, time and effort certifications should be completed within approximately 90 days of the end of the quarter. Management interprets the end of the quarter to be when the time and effort reports are sent to the departments once the last month of the quarter is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the quarterly reporting period, a payroll reallocation must be created within 30 days.Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework? issued by the Committee of Sponsoring Organizations of the Treadway Commission. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions.In addition, the National Institute of Health (NIH) is the grantor for the majority of the LSUHSC-S?s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made ?to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable.2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs.Cause:LSUHSC-S?s approval of P-Card transactions did not provide sufficient review of the allowability of expenses on federal awards. LSUHSC-S has procedures in place to review expenses prior to requesting reimbursement; however, it did not ensure that the necessary adjustments were made to the accounting system in a timely manner for expenses that were not allowed for reimbursement. In addition, training to emphasize accountability and the importance of completing time and effort certifications timely and accurately per policy was not completed as planned during fiscal year 2022 due to staffing shortages.LSUHSC-S is still in the process of implementing the corrective action outlined in the prior year to include documentation of adjusted effort and questions to address justification for the adjustment, errors, and timeliness on a modified Personnel Change form.Effect:Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects.In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor.Recommendation:Management should monitor time and effort certifications completed by the departments and investigate and obtain justification from department personnel for untimely certifications, as well as untimely adjustments and lack of supporting documentation for adjustments to enforce established policies. Management should ensure adequate design and operating effectiveness of controls over expenses, including P-Card expenses, charged to federal awards to verify allowability of costs in accordance with federal requirements and grant terms and conditions prior to requesting reimbursement. Management should also consider implementing other complementary controls such as preventing costs from being charged to projects in the accounting system beyond the approved budget or period of performance.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-52).
2022-005 - Noncompliance with and Weakness in Controls over Federal Research and Development ExpensesAward Years: VariousAward Numbers: VariousCompliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesPass-Through Entities: VariousRepeat Finding: Yes (Prior Year Finding No. 2021-007)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In addition, LSUHSC-S did not ensure that costs charged to federal awards were allowable in accordance with federal regulations and the terms and conditions of the award when requesting reimbursement.In a non-statistical random sample of 50 out of 10,798 expense transactions charged to R&D during the fiscal year ending June 30, 2022, the following exceptions were noted:? Three (6%) purchasing card (P-Card) transactions were not allowable in accordance with federal regulations and the terms and conditions of the award and are considered questioned costs totaling $1,073.? For five (10%) of 50 transactions tested, LSUHSC-S overstated expenses on the Schedule of Expenditures of Federal Awards because the award was fully funded, and expenses in excess of the award amount were not removed from the project used to identify expenditures to federal awards in the accounting records, or the expense was determined not allowable as noted above.? Seven (35%) of 20 time and effort certifications for salary and related benefit expenses tested were completed 119 to 461 days after the end of the quarter.We performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 838 (51%) out of 1,654 adjusting journal entries were made more than 90 days after the end of the quarter from the original transactions. The adjustments were made 97 to 1,026 days after the original transactions were recorded and 96 to 953 days after the end of the quarter.In a non-statistical random sample of 10 out of 1,654 payroll adjusting entries affecting R&D, tested by employee, project id (related to federal award), and journal id, six (60%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. Two of these adjusting entries added costs to the federal award projects and are considered questioned costs totaling $28,324.Criteria:2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity?s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments.Per LSUHSC-S?s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S?s policy, time and effort certifications should be completed within approximately 90 days of the end of the quarter. Management interprets the end of the quarter to be when the time and effort reports are sent to the departments once the last month of the quarter is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the quarterly reporting period, a payroll reallocation must be created within 30 days.Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework? issued by the Committee of Sponsoring Organizations of the Treadway Commission. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions.In addition, the National Institute of Health (NIH) is the grantor for the majority of the LSUHSC-S?s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made ?to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable.2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs.Cause:LSUHSC-S?s approval of P-Card transactions did not provide sufficient review of the allowability of expenses on federal awards. LSUHSC-S has procedures in place to review expenses prior to requesting reimbursement; however, it did not ensure that the necessary adjustments were made to the accounting system in a timely manner for expenses that were not allowed for reimbursement. In addition, training to emphasize accountability and the importance of completing time and effort certifications timely and accurately per policy was not completed as planned during fiscal year 2022 due to staffing shortages.LSUHSC-S is still in the process of implementing the corrective action outlined in the prior year to include documentation of adjusted effort and questions to address justification for the adjustment, errors, and timeliness on a modified Personnel Change form.Effect:Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects.In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor.Recommendation:Management should monitor time and effort certifications completed by the departments and investigate and obtain justification from department personnel for untimely certifications, as well as untimely adjustments and lack of supporting documentation for adjustments to enforce established policies. Management should ensure adequate design and operating effectiveness of controls over expenses, including P-Card expenses, charged to federal awards to verify allowability of costs in accordance with federal requirements and grant terms and conditions prior to requesting reimbursement. Management should also consider implementing other complementary controls such as preventing costs from being charged to projects in the accounting system beyond the approved budget or period of performance.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-52).
2022-005 - Noncompliance with and Weakness in Controls over Federal Research and Development ExpensesAward Years: VariousAward Numbers: VariousCompliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesPass-Through Entities: VariousRepeat Finding: Yes (Prior Year Finding No. 2021-007)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In addition, LSUHSC-S did not ensure that costs charged to federal awards were allowable in accordance with federal regulations and the terms and conditions of the award when requesting reimbursement.In a non-statistical random sample of 50 out of 10,798 expense transactions charged to R&D during the fiscal year ending June 30, 2022, the following exceptions were noted:? Three (6%) purchasing card (P-Card) transactions were not allowable in accordance with federal regulations and the terms and conditions of the award and are considered questioned costs totaling $1,073.? For five (10%) of 50 transactions tested, LSUHSC-S overstated expenses on the Schedule of Expenditures of Federal Awards because the award was fully funded, and expenses in excess of the award amount were not removed from the project used to identify expenditures to federal awards in the accounting records, or the expense was determined not allowable as noted above.? Seven (35%) of 20 time and effort certifications for salary and related benefit expenses tested were completed 119 to 461 days after the end of the quarter.We performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 838 (51%) out of 1,654 adjusting journal entries were made more than 90 days after the end of the quarter from the original transactions. The adjustments were made 97 to 1,026 days after the original transactions were recorded and 96 to 953 days after the end of the quarter.In a non-statistical random sample of 10 out of 1,654 payroll adjusting entries affecting R&D, tested by employee, project id (related to federal award), and journal id, six (60%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. Two of these adjusting entries added costs to the federal award projects and are considered questioned costs totaling $28,324.Criteria:2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity?s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments.Per LSUHSC-S?s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S?s policy, time and effort certifications should be completed within approximately 90 days of the end of the quarter. Management interprets the end of the quarter to be when the time and effort reports are sent to the departments once the last month of the quarter is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the quarterly reporting period, a payroll reallocation must be created within 30 days.Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework? issued by the Committee of Sponsoring Organizations of the Treadway Commission. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions.In addition, the National Institute of Health (NIH) is the grantor for the majority of the LSUHSC-S?s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made ?to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable.2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs.Cause:LSUHSC-S?s approval of P-Card transactions did not provide sufficient review of the allowability of expenses on federal awards. LSUHSC-S has procedures in place to review expenses prior to requesting reimbursement; however, it did not ensure that the necessary adjustments were made to the accounting system in a timely manner for expenses that were not allowed for reimbursement. In addition, training to emphasize accountability and the importance of completing time and effort certifications timely and accurately per policy was not completed as planned during fiscal year 2022 due to staffing shortages.LSUHSC-S is still in the process of implementing the corrective action outlined in the prior year to include documentation of adjusted effort and questions to address justification for the adjustment, errors, and timeliness on a modified Personnel Change form.Effect:Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects.In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor.Recommendation:Management should monitor time and effort certifications completed by the departments and investigate and obtain justification from department personnel for untimely certifications, as well as untimely adjustments and lack of supporting documentation for adjustments to enforce established policies. Management should ensure adequate design and operating effectiveness of controls over expenses, including P-Card expenses, charged to federal awards to verify allowability of costs in accordance with federal requirements and grant terms and conditions prior to requesting reimbursement. Management should also consider implementing other complementary controls such as preventing costs from being charged to projects in the accounting system beyond the approved budget or period of performance.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-52).
2022-005 - Noncompliance with and Weakness in Controls over Federal Research and Development ExpensesAward Years: VariousAward Numbers: VariousCompliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesPass-Through Entities: VariousRepeat Finding: Yes (Prior Year Finding No. 2021-007)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In addition, LSUHSC-S did not ensure that costs charged to federal awards were allowable in accordance with federal regulations and the terms and conditions of the award when requesting reimbursement.In a non-statistical random sample of 50 out of 10,798 expense transactions charged to R&D during the fiscal year ending June 30, 2022, the following exceptions were noted:? Three (6%) purchasing card (P-Card) transactions were not allowable in accordance with federal regulations and the terms and conditions of the award and are considered questioned costs totaling $1,073.? For five (10%) of 50 transactions tested, LSUHSC-S overstated expenses on the Schedule of Expenditures of Federal Awards because the award was fully funded, and expenses in excess of the award amount were not removed from the project used to identify expenditures to federal awards in the accounting records, or the expense was determined not allowable as noted above.? Seven (35%) of 20 time and effort certifications for salary and related benefit expenses tested were completed 119 to 461 days after the end of the quarter.We performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 838 (51%) out of 1,654 adjusting journal entries were made more than 90 days after the end of the quarter from the original transactions. The adjustments were made 97 to 1,026 days after the original transactions were recorded and 96 to 953 days after the end of the quarter.In a non-statistical random sample of 10 out of 1,654 payroll adjusting entries affecting R&D, tested by employee, project id (related to federal award), and journal id, six (60%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. Two of these adjusting entries added costs to the federal award projects and are considered questioned costs totaling $28,324.Criteria:2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity?s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments.Per LSUHSC-S?s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S?s policy, time and effort certifications should be completed within approximately 90 days of the end of the quarter. Management interprets the end of the quarter to be when the time and effort reports are sent to the departments once the last month of the quarter is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the quarterly reporting period, a payroll reallocation must be created within 30 days.Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework? issued by the Committee of Sponsoring Organizations of the Treadway Commission. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions.In addition, the National Institute of Health (NIH) is the grantor for the majority of the LSUHSC-S?s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made ?to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable.2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs.Cause:LSUHSC-S?s approval of P-Card transactions did not provide sufficient review of the allowability of expenses on federal awards. LSUHSC-S has procedures in place to review expenses prior to requesting reimbursement; however, it did not ensure that the necessary adjustments were made to the accounting system in a timely manner for expenses that were not allowed for reimbursement. In addition, training to emphasize accountability and the importance of completing time and effort certifications timely and accurately per policy was not completed as planned during fiscal year 2022 due to staffing shortages.LSUHSC-S is still in the process of implementing the corrective action outlined in the prior year to include documentation of adjusted effort and questions to address justification for the adjustment, errors, and timeliness on a modified Personnel Change form.Effect:Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects.In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor.Recommendation:Management should monitor time and effort certifications completed by the departments and investigate and obtain justification from department personnel for untimely certifications, as well as untimely adjustments and lack of supporting documentation for adjustments to enforce established policies. Management should ensure adequate design and operating effectiveness of controls over expenses, including P-Card expenses, charged to federal awards to verify allowability of costs in accordance with federal requirements and grant terms and conditions prior to requesting reimbursement. Management should also consider implementing other complementary controls such as preventing costs from being charged to projects in the accounting system beyond the approved budget or period of performance.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-52).
2022-005 - Noncompliance with and Weakness in Controls over Federal Research and Development ExpensesAward Years: VariousAward Numbers: VariousCompliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesPass-Through Entities: VariousRepeat Finding: Yes (Prior Year Finding No. 2021-007)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In addition, LSUHSC-S did not ensure that costs charged to federal awards were allowable in accordance with federal regulations and the terms and conditions of the award when requesting reimbursement.In a non-statistical random sample of 50 out of 10,798 expense transactions charged to R&D during the fiscal year ending June 30, 2022, the following exceptions were noted:? Three (6%) purchasing card (P-Card) transactions were not allowable in accordance with federal regulations and the terms and conditions of the award and are considered questioned costs totaling $1,073.? For five (10%) of 50 transactions tested, LSUHSC-S overstated expenses on the Schedule of Expenditures of Federal Awards because the award was fully funded, and expenses in excess of the award amount were not removed from the project used to identify expenditures to federal awards in the accounting records, or the expense was determined not allowable as noted above.? Seven (35%) of 20 time and effort certifications for salary and related benefit expenses tested were completed 119 to 461 days after the end of the quarter.We performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 838 (51%) out of 1,654 adjusting journal entries were made more than 90 days after the end of the quarter from the original transactions. The adjustments were made 97 to 1,026 days after the original transactions were recorded and 96 to 953 days after the end of the quarter.In a non-statistical random sample of 10 out of 1,654 payroll adjusting entries affecting R&D, tested by employee, project id (related to federal award), and journal id, six (60%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. Two of these adjusting entries added costs to the federal award projects and are considered questioned costs totaling $28,324.Criteria:2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity?s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments.Per LSUHSC-S?s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S?s policy, time and effort certifications should be completed within approximately 90 days of the end of the quarter. Management interprets the end of the quarter to be when the time and effort reports are sent to the departments once the last month of the quarter is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the quarterly reporting period, a payroll reallocation must be created within 30 days.Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework? issued by the Committee of Sponsoring Organizations of the Treadway Commission. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions.In addition, the National Institute of Health (NIH) is the grantor for the majority of the LSUHSC-S?s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made ?to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable.2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs.Cause:LSUHSC-S?s approval of P-Card transactions did not provide sufficient review of the allowability of expenses on federal awards. LSUHSC-S has procedures in place to review expenses prior to requesting reimbursement; however, it did not ensure that the necessary adjustments were made to the accounting system in a timely manner for expenses that were not allowed for reimbursement. In addition, training to emphasize accountability and the importance of completing time and effort certifications timely and accurately per policy was not completed as planned during fiscal year 2022 due to staffing shortages.LSUHSC-S is still in the process of implementing the corrective action outlined in the prior year to include documentation of adjusted effort and questions to address justification for the adjustment, errors, and timeliness on a modified Personnel Change form.Effect:Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects.In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor.Recommendation:Management should monitor time and effort certifications completed by the departments and investigate and obtain justification from department personnel for untimely certifications, as well as untimely adjustments and lack of supporting documentation for adjustments to enforce established policies. Management should ensure adequate design and operating effectiveness of controls over expenses, including P-Card expenses, charged to federal awards to verify allowability of costs in accordance with federal requirements and grant terms and conditions prior to requesting reimbursement. Management should also consider implementing other complementary controls such as preventing costs from being charged to projects in the accounting system beyond the approved budget or period of performance.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-52).
2022-005 - Noncompliance with and Weakness in Controls over Federal Research and Development ExpensesAward Years: VariousAward Numbers: VariousCompliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesPass-Through Entities: VariousRepeat Finding: Yes (Prior Year Finding No. 2021-007)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In addition, LSUHSC-S did not ensure that costs charged to federal awards were allowable in accordance with federal regulations and the terms and conditions of the award when requesting reimbursement.In a non-statistical random sample of 50 out of 10,798 expense transactions charged to R&D during the fiscal year ending June 30, 2022, the following exceptions were noted:? Three (6%) purchasing card (P-Card) transactions were not allowable in accordance with federal regulations and the terms and conditions of the award and are considered questioned costs totaling $1,073.? For five (10%) of 50 transactions tested, LSUHSC-S overstated expenses on the Schedule of Expenditures of Federal Awards because the award was fully funded, and expenses in excess of the award amount were not removed from the project used to identify expenditures to federal awards in the accounting records, or the expense was determined not allowable as noted above.? Seven (35%) of 20 time and effort certifications for salary and related benefit expenses tested were completed 119 to 461 days after the end of the quarter.We performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 838 (51%) out of 1,654 adjusting journal entries were made more than 90 days after the end of the quarter from the original transactions. The adjustments were made 97 to 1,026 days after the original transactions were recorded and 96 to 953 days after the end of the quarter.In a non-statistical random sample of 10 out of 1,654 payroll adjusting entries affecting R&D, tested by employee, project id (related to federal award), and journal id, six (60%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. Two of these adjusting entries added costs to the federal award projects and are considered questioned costs totaling $28,324.Criteria:2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity?s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments.Per LSUHSC-S?s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S?s policy, time and effort certifications should be completed within approximately 90 days of the end of the quarter. Management interprets the end of the quarter to be when the time and effort reports are sent to the departments once the last month of the quarter is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the quarterly reporting period, a payroll reallocation must be created within 30 days.Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework? issued by the Committee of Sponsoring Organizations of the Treadway Commission. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions.In addition, the National Institute of Health (NIH) is the grantor for the majority of the LSUHSC-S?s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made ?to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable.2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs.Cause:LSUHSC-S?s approval of P-Card transactions did not provide sufficient review of the allowability of expenses on federal awards. LSUHSC-S has procedures in place to review expenses prior to requesting reimbursement; however, it did not ensure that the necessary adjustments were made to the accounting system in a timely manner for expenses that were not allowed for reimbursement. In addition, training to emphasize accountability and the importance of completing time and effort certifications timely and accurately per policy was not completed as planned during fiscal year 2022 due to staffing shortages.LSUHSC-S is still in the process of implementing the corrective action outlined in the prior year to include documentation of adjusted effort and questions to address justification for the adjustment, errors, and timeliness on a modified Personnel Change form.Effect:Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects.In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor.Recommendation:Management should monitor time and effort certifications completed by the departments and investigate and obtain justification from department personnel for untimely certifications, as well as untimely adjustments and lack of supporting documentation for adjustments to enforce established policies. Management should ensure adequate design and operating effectiveness of controls over expenses, including P-Card expenses, charged to federal awards to verify allowability of costs in accordance with federal requirements and grant terms and conditions prior to requesting reimbursement. Management should also consider implementing other complementary controls such as preventing costs from being charged to projects in the accounting system beyond the approved budget or period of performance.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-52).
2022-033 - Weakness in Controls over Research and Development ProjectCloseouts and Accounting RecordsAward Years: 2021, 2022Award Numbers: 1K01AA024494-01A1, 1R21AA026022-01A1, 1R44DA046300-01, 2R01DK087800-06A1, 2R37AA018282-06, GM104940-17025-HSCNO01, INS151591-2, PO-0000180812, WFUHS 35-101730-117901Compliance Requirement: Period of PerformancePass-Through Entities: Eastern Virginia Medical School, La Jolla Alcohol Research, Inc., Wake Forest University HSCRepeat Finding: Yes (Prior Year Finding No. 2021-006)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the third consecutive year, the Louisiana State University Health Sciences Center in New Orleans (LSUHSC-NO) did not have adequate controls over project closeouts or accounting records for the R&D cluster federal program. We tested a non-statistical sample of 18 R&D projects, plus an additional five projects based on the total transaction amount recorded more than 90 days after the project end date, from a population of 139 projects with end dates between April 1, 2021, and June 30, 2022. Five (27.8%) of the sampled projects and all five of the additional projects included transactions for expenses or correcting entries posted to the project between 120 and 402 days after the project?s period of performance ended. On three of the additional projects, management submitted revised final reports to the grantor, or revised final invoices to the pass-through entity, more than 120 days after the period of performance ended resulting in noncompliance with federal program close-out requirements.Criteria:2 CFR 200.344 requires (a) that the recipient must submit, no later than 120 calendar days (or 90 days for a subrecipient) after the end of the period of performance, all reports required by the terms and conditions of the award, and (b) unless the federal awarding agency or pass-through entity authorizes an extension, a non-federal entity must liquidate all financial obligations incurred under the federal award no later than 120 calendar days after the end date of the period of performance.Additionally, LSUHSC-NO?s Sponsored Agreement Closeout Policy requires that completed sponsored agreements with surplus and/or deficit residual balances remaining in the project be certified and transferred to an appropriate, non-sponsored, departmentally-funded account or another sponsored project within 90 days of the project end date. LSUHSC-NO?s Sponsored Projects Accounting Cost Transfer Policy 011019 cautions that cost transfers will not be processed to cover cost overruns, to avoid restrictions by the Sponsor, to use up unspent funds, or for reasons of convenience or broadly-defined ?errors.?Cause:These exceptions occurred because (1) expenses are charged to projects after their closeout period in anticipation of a forthcoming project renewal, extension, or funding increase that may or may not be received; (2) the accounting system, PeopleSoft Commitment Control, allows certain personnel and other expenses to continue to post to projects after the project has ended unless a form, such as a change in source of funds form, is processed to update account coding in the system; (3) projects are not being closed out properly as they end, which includes submitting all required forms for updating accounting records; and (4) project budgets were not adequately monitored to ensure that expenses in the accounting system were charged to the correct project and any errors or budget overruns were identified and addressed in a timely manner.Effect:Untimely project updates in the accounting system increase the risk that expenses will be charged to the wrong project which hinders management?s ability to effectively monitor the budget and may result in budget overruns that would need to be covered with other funding sources, increase the number of corrections required at year end to ensure accurate financial reporting, and may result in noncompliance with federal program requirements.Recommendation:Management should continue to monitor budgets and ensure that budget overruns and errors are identified and corrected in a timely manner. Management should ensure that projects are effectively closed out including processing all required forms and updating the accounting system in a timely manner. Management should consider implementing a system control to prevent costs from being charged to projects in the accounting system beyond the project close out period. Management should also implement controls to exclude costs from its Schedule of Expenditures of Federal Awards until the awards or extensions are approved.Management?s Response and Corrective Action Plan:Management concurred with the finding and provided a corrective action plan (B-46).
2022-035 - Weakness in Controls over Cash Management RequirementsAward Years: VariousAward Numbers: VariousCompliance Requirement: Cash ManagementRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:LSUHSC-S did not follow its prescribed controls over compliance with the cash management requirements of R&D programs. We reviewed a non-statistical sample of 25 federal R&D expense transactions resulting in reimbursement request support for two subaward invoice reconciliations and ten monthly direct award reconciliations, for the fiscal year ending June 30, 2022, from a population of 11,969 expense transactions. We also reviewed the two monthly reconciliations for July and November 2021 that were not selected from the expense transactions. We noted the following:? Four (29%) of 14 reconciliations had no evidence of review or approval by someone other than the preparer.? Ten (71%) of 14 approved reconciliations did not agree to the reimbursement request submitted to the grantor.Criteria:2 CFR 200.303 requires that non-federal entities establish and maintain internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.LSUHSC-S has established controls over cash management requirements, which consist of a monthly reconciliation of reimbursement requests for R&D expenses and includes the review and approval by someone other than the preparer.Cause:LSUHSC-S did not follow its established controls over monthly reconciliations.LSUHSC-S represented that the monthly reconciliations are the starting point in the process and additional determinations of which amounts should be drawn down are made after the reconciliation has been completed. LSUHSC-S did not provide any evidence that additional review and approval was performed prior to the reimbursement request.LSUHSC-S did not perform the drawdowns on a monthly basis when the reconciliations were performed. Drawdowns were performed in March and June 2022, and after fiscal year end in July, August, and October 2022 for expenses incurred during the fiscal year ending June 30, 2022. Management provided additional reconciliations for the draw down amounts, but there was no evidence of review and approval by someone other than the preparer.Effect:Failure to implement sufficient controls over cash management could result in LSUHSC-S requesting reimbursement for expenses not incurred prior to the request and place LSUHSC-S in noncompliance with federal regulations.Recommendation:LSUHSC-S should ensure that a review and approval is performed on the final amounts requested for reimbursement and evidence is maintained. LSUSHC-S should also ensure that established controls are followed to ensure the review and approval is performed by someone other than the preparer.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-55).
2022-005 - Noncompliance with and Weakness in Controls over Federal Research and Development ExpensesAward Years: VariousAward Numbers: VariousCompliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesPass-Through Entities: VariousRepeat Finding: Yes (Prior Year Finding No. 2021-007)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In addition, LSUHSC-S did not ensure that costs charged to federal awards were allowable in accordance with federal regulations and the terms and conditions of the award when requesting reimbursement.In a non-statistical random sample of 50 out of 10,798 expense transactions charged to R&D during the fiscal year ending June 30, 2022, the following exceptions were noted:? Three (6%) purchasing card (P-Card) transactions were not allowable in accordance with federal regulations and the terms and conditions of the award and are considered questioned costs totaling $1,073.? For five (10%) of 50 transactions tested, LSUHSC-S overstated expenses on the Schedule of Expenditures of Federal Awards because the award was fully funded, and expenses in excess of the award amount were not removed from the project used to identify expenditures to federal awards in the accounting records, or the expense was determined not allowable as noted above.? Seven (35%) of 20 time and effort certifications for salary and related benefit expenses tested were completed 119 to 461 days after the end of the quarter.We performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 838 (51%) out of 1,654 adjusting journal entries were made more than 90 days after the end of the quarter from the original transactions. The adjustments were made 97 to 1,026 days after the original transactions were recorded and 96 to 953 days after the end of the quarter.In a non-statistical random sample of 10 out of 1,654 payroll adjusting entries affecting R&D, tested by employee, project id (related to federal award), and journal id, six (60%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. Two of these adjusting entries added costs to the federal award projects and are considered questioned costs totaling $28,324.Criteria:2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity?s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments.Per LSUHSC-S?s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S?s policy, time and effort certifications should be completed within approximately 90 days of the end of the quarter. Management interprets the end of the quarter to be when the time and effort reports are sent to the departments once the last month of the quarter is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the quarterly reporting period, a payroll reallocation must be created within 30 days.Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework? issued by the Committee of Sponsoring Organizations of the Treadway Commission. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions.In addition, the National Institute of Health (NIH) is the grantor for the majority of the LSUHSC-S?s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made ?to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable.2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs.Cause:LSUHSC-S?s approval of P-Card transactions did not provide sufficient review of the allowability of expenses on federal awards. LSUHSC-S has procedures in place to review expenses prior to requesting reimbursement; however, it did not ensure that the necessary adjustments were made to the accounting system in a timely manner for expenses that were not allowed for reimbursement. In addition, training to emphasize accountability and the importance of completing time and effort certifications timely and accurately per policy was not completed as planned during fiscal year 2022 due to staffing shortages.LSUHSC-S is still in the process of implementing the corrective action outlined in the prior year to include documentation of adjusted effort and questions to address justification for the adjustment, errors, and timeliness on a modified Personnel Change form.Effect:Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects.In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor.Recommendation:Management should monitor time and effort certifications completed by the departments and investigate and obtain justification from department personnel for untimely certifications, as well as untimely adjustments and lack of supporting documentation for adjustments to enforce established policies. Management should ensure adequate design and operating effectiveness of controls over expenses, including P-Card expenses, charged to federal awards to verify allowability of costs in accordance with federal requirements and grant terms and conditions prior to requesting reimbursement. Management should also consider implementing other complementary controls such as preventing costs from being charged to projects in the accounting system beyond the approved budget or period of performance.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-52).
2022-005 - Noncompliance with and Weakness in Controls over Federal Research and Development ExpensesAward Years: VariousAward Numbers: VariousCompliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesPass-Through Entities: VariousRepeat Finding: Yes (Prior Year Finding No. 2021-007)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In addition, LSUHSC-S did not ensure that costs charged to federal awards were allowable in accordance with federal regulations and the terms and conditions of the award when requesting reimbursement.In a non-statistical random sample of 50 out of 10,798 expense transactions charged to R&D during the fiscal year ending June 30, 2022, the following exceptions were noted:? Three (6%) purchasing card (P-Card) transactions were not allowable in accordance with federal regulations and the terms and conditions of the award and are considered questioned costs totaling $1,073.? For five (10%) of 50 transactions tested, LSUHSC-S overstated expenses on the Schedule of Expenditures of Federal Awards because the award was fully funded, and expenses in excess of the award amount were not removed from the project used to identify expenditures to federal awards in the accounting records, or the expense was determined not allowable as noted above.? Seven (35%) of 20 time and effort certifications for salary and related benefit expenses tested were completed 119 to 461 days after the end of the quarter.We performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 838 (51%) out of 1,654 adjusting journal entries were made more than 90 days after the end of the quarter from the original transactions. The adjustments were made 97 to 1,026 days after the original transactions were recorded and 96 to 953 days after the end of the quarter.In a non-statistical random sample of 10 out of 1,654 payroll adjusting entries affecting R&D, tested by employee, project id (related to federal award), and journal id, six (60%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. Two of these adjusting entries added costs to the federal award projects and are considered questioned costs totaling $28,324.Criteria:2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity?s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments.Per LSUHSC-S?s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S?s policy, time and effort certifications should be completed within approximately 90 days of the end of the quarter. Management interprets the end of the quarter to be when the time and effort reports are sent to the departments once the last month of the quarter is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the quarterly reporting period, a payroll reallocation must be created within 30 days.Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework? issued by the Committee of Sponsoring Organizations of the Treadway Commission. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions.In addition, the National Institute of Health (NIH) is the grantor for the majority of the LSUHSC-S?s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made ?to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable.2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs.Cause:LSUHSC-S?s approval of P-Card transactions did not provide sufficient review of the allowability of expenses on federal awards. LSUHSC-S has procedures in place to review expenses prior to requesting reimbursement; however, it did not ensure that the necessary adjustments were made to the accounting system in a timely manner for expenses that were not allowed for reimbursement. In addition, training to emphasize accountability and the importance of completing time and effort certifications timely and accurately per policy was not completed as planned during fiscal year 2022 due to staffing shortages.LSUHSC-S is still in the process of implementing the corrective action outlined in the prior year to include documentation of adjusted effort and questions to address justification for the adjustment, errors, and timeliness on a modified Personnel Change form.Effect:Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects.In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor.Recommendation:Management should monitor time and effort certifications completed by the departments and investigate and obtain justification from department personnel for untimely certifications, as well as untimely adjustments and lack of supporting documentation for adjustments to enforce established policies. Management should ensure adequate design and operating effectiveness of controls over expenses, including P-Card expenses, charged to federal awards to verify allowability of costs in accordance with federal requirements and grant terms and conditions prior to requesting reimbursement. Management should also consider implementing other complementary controls such as preventing costs from being charged to projects in the accounting system beyond the approved budget or period of performance.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-52).
2022-035 - Weakness in Controls over Cash Management RequirementsAward Years: VariousAward Numbers: VariousCompliance Requirement: Cash ManagementRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:LSUHSC-S did not follow its prescribed controls over compliance with the cash management requirements of R&D programs. We reviewed a non-statistical sample of 25 federal R&D expense transactions resulting in reimbursement request support for two subaward invoice reconciliations and ten monthly direct award reconciliations, for the fiscal year ending June 30, 2022, from a population of 11,969 expense transactions. We also reviewed the two monthly reconciliations for July and November 2021 that were not selected from the expense transactions. We noted the following:? Four (29%) of 14 reconciliations had no evidence of review or approval by someone other than the preparer.? Ten (71%) of 14 approved reconciliations did not agree to the reimbursement request submitted to the grantor.Criteria:2 CFR 200.303 requires that non-federal entities establish and maintain internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.LSUHSC-S has established controls over cash management requirements, which consist of a monthly reconciliation of reimbursement requests for R&D expenses and includes the review and approval by someone other than the preparer.Cause:LSUHSC-S did not follow its established controls over monthly reconciliations.LSUHSC-S represented that the monthly reconciliations are the starting point in the process and additional determinations of which amounts should be drawn down are made after the reconciliation has been completed. LSUHSC-S did not provide any evidence that additional review and approval was performed prior to the reimbursement request.LSUHSC-S did not perform the drawdowns on a monthly basis when the reconciliations were performed. Drawdowns were performed in March and June 2022, and after fiscal year end in July, August, and October 2022 for expenses incurred during the fiscal year ending June 30, 2022. Management provided additional reconciliations for the draw down amounts, but there was no evidence of review and approval by someone other than the preparer.Effect:Failure to implement sufficient controls over cash management could result in LSUHSC-S requesting reimbursement for expenses not incurred prior to the request and place LSUHSC-S in noncompliance with federal regulations.Recommendation:LSUHSC-S should ensure that a review and approval is performed on the final amounts requested for reimbursement and evidence is maintained. LSUSHC-S should also ensure that established controls are followed to ensure the review and approval is performed by someone other than the preparer.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-55).
2022-033 - Weakness in Controls over Research and Development ProjectCloseouts and Accounting RecordsAward Years: 2021, 2022Award Numbers: 1K01AA024494-01A1, 1R21AA026022-01A1, 1R44DA046300-01, 2R01DK087800-06A1, 2R37AA018282-06, GM104940-17025-HSCNO01, INS151591-2, PO-0000180812, WFUHS 35-101730-117901Compliance Requirement: Period of PerformancePass-Through Entities: Eastern Virginia Medical School, La Jolla Alcohol Research, Inc., Wake Forest University HSCRepeat Finding: Yes (Prior Year Finding No. 2021-006)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the third consecutive year, the Louisiana State University Health Sciences Center in New Orleans (LSUHSC-NO) did not have adequate controls over project closeouts or accounting records for the R&D cluster federal program. We tested a non-statistical sample of 18 R&D projects, plus an additional five projects based on the total transaction amount recorded more than 90 days after the project end date, from a population of 139 projects with end dates between April 1, 2021, and June 30, 2022. Five (27.8%) of the sampled projects and all five of the additional projects included transactions for expenses or correcting entries posted to the project between 120 and 402 days after the project?s period of performance ended. On three of the additional projects, management submitted revised final reports to the grantor, or revised final invoices to the pass-through entity, more than 120 days after the period of performance ended resulting in noncompliance with federal program close-out requirements.Criteria:2 CFR 200.344 requires (a) that the recipient must submit, no later than 120 calendar days (or 90 days for a subrecipient) after the end of the period of performance, all reports required by the terms and conditions of the award, and (b) unless the federal awarding agency or pass-through entity authorizes an extension, a non-federal entity must liquidate all financial obligations incurred under the federal award no later than 120 calendar days after the end date of the period of performance.Additionally, LSUHSC-NO?s Sponsored Agreement Closeout Policy requires that completed sponsored agreements with surplus and/or deficit residual balances remaining in the project be certified and transferred to an appropriate, non-sponsored, departmentally-funded account or another sponsored project within 90 days of the project end date. LSUHSC-NO?s Sponsored Projects Accounting Cost Transfer Policy 011019 cautions that cost transfers will not be processed to cover cost overruns, to avoid restrictions by the Sponsor, to use up unspent funds, or for reasons of convenience or broadly-defined ?errors.?Cause:These exceptions occurred because (1) expenses are charged to projects after their closeout period in anticipation of a forthcoming project renewal, extension, or funding increase that may or may not be received; (2) the accounting system, PeopleSoft Commitment Control, allows certain personnel and other expenses to continue to post to projects after the project has ended unless a form, such as a change in source of funds form, is processed to update account coding in the system; (3) projects are not being closed out properly as they end, which includes submitting all required forms for updating accounting records; and (4) project budgets were not adequately monitored to ensure that expenses in the accounting system were charged to the correct project and any errors or budget overruns were identified and addressed in a timely manner.Effect:Untimely project updates in the accounting system increase the risk that expenses will be charged to the wrong project which hinders management?s ability to effectively monitor the budget and may result in budget overruns that would need to be covered with other funding sources, increase the number of corrections required at year end to ensure accurate financial reporting, and may result in noncompliance with federal program requirements.Recommendation:Management should continue to monitor budgets and ensure that budget overruns and errors are identified and corrected in a timely manner. Management should ensure that projects are effectively closed out including processing all required forms and updating the accounting system in a timely manner. Management should consider implementing a system control to prevent costs from being charged to projects in the accounting system beyond the project close out period. Management should also implement controls to exclude costs from its Schedule of Expenditures of Federal Awards until the awards or extensions are approved.Management?s Response and Corrective Action Plan:Management concurred with the finding and provided a corrective action plan (B-46).
2022-005 - Noncompliance with and Weakness in Controls over Federal Research and Development ExpensesAward Years: VariousAward Numbers: VariousCompliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesPass-Through Entities: VariousRepeat Finding: Yes (Prior Year Finding No. 2021-007)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In addition, LSUHSC-S did not ensure that costs charged to federal awards were allowable in accordance with federal regulations and the terms and conditions of the award when requesting reimbursement.In a non-statistical random sample of 50 out of 10,798 expense transactions charged to R&D during the fiscal year ending June 30, 2022, the following exceptions were noted:? Three (6%) purchasing card (P-Card) transactions were not allowable in accordance with federal regulations and the terms and conditions of the award and are considered questioned costs totaling $1,073.? For five (10%) of 50 transactions tested, LSUHSC-S overstated expenses on the Schedule of Expenditures of Federal Awards because the award was fully funded, and expenses in excess of the award amount were not removed from the project used to identify expenditures to federal awards in the accounting records, or the expense was determined not allowable as noted above.? Seven (35%) of 20 time and effort certifications for salary and related benefit expenses tested were completed 119 to 461 days after the end of the quarter.We performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 838 (51%) out of 1,654 adjusting journal entries were made more than 90 days after the end of the quarter from the original transactions. The adjustments were made 97 to 1,026 days after the original transactions were recorded and 96 to 953 days after the end of the quarter.In a non-statistical random sample of 10 out of 1,654 payroll adjusting entries affecting R&D, tested by employee, project id (related to federal award), and journal id, six (60%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. Two of these adjusting entries added costs to the federal award projects and are considered questioned costs totaling $28,324.Criteria:2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity?s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments.Per LSUHSC-S?s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S?s policy, time and effort certifications should be completed within approximately 90 days of the end of the quarter. Management interprets the end of the quarter to be when the time and effort reports are sent to the departments once the last month of the quarter is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the quarterly reporting period, a payroll reallocation must be created within 30 days.Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework? issued by the Committee of Sponsoring Organizations of the Treadway Commission. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions.In addition, the National Institute of Health (NIH) is the grantor for the majority of the LSUHSC-S?s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made ?to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable.2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs.Cause:LSUHSC-S?s approval of P-Card transactions did not provide sufficient review of the allowability of expenses on federal awards. LSUHSC-S has procedures in place to review expenses prior to requesting reimbursement; however, it did not ensure that the necessary adjustments were made to the accounting system in a timely manner for expenses that were not allowed for reimbursement. In addition, training to emphasize accountability and the importance of completing time and effort certifications timely and accurately per policy was not completed as planned during fiscal year 2022 due to staffing shortages.LSUHSC-S is still in the process of implementing the corrective action outlined in the prior year to include documentation of adjusted effort and questions to address justification for the adjustment, errors, and timeliness on a modified Personnel Change form.Effect:Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects.In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor.Recommendation:Management should monitor time and effort certifications completed by the departments and investigate and obtain justification from department personnel for untimely certifications, as well as untimely adjustments and lack of supporting documentation for adjustments to enforce established policies. Management should ensure adequate design and operating effectiveness of controls over expenses, including P-Card expenses, charged to federal awards to verify allowability of costs in accordance with federal requirements and grant terms and conditions prior to requesting reimbursement. Management should also consider implementing other complementary controls such as preventing costs from being charged to projects in the accounting system beyond the approved budget or period of performance.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-52).
2022-005 - Noncompliance with and Weakness in Controls over Federal Research and Development ExpensesAward Years: VariousAward Numbers: VariousCompliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesPass-Through Entities: VariousRepeat Finding: Yes (Prior Year Finding No. 2021-007)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In addition, LSUHSC-S did not ensure that costs charged to federal awards were allowable in accordance with federal regulations and the terms and conditions of the award when requesting reimbursement.In a non-statistical random sample of 50 out of 10,798 expense transactions charged to R&D during the fiscal year ending June 30, 2022, the following exceptions were noted:? Three (6%) purchasing card (P-Card) transactions were not allowable in accordance with federal regulations and the terms and conditions of the award and are considered questioned costs totaling $1,073.? For five (10%) of 50 transactions tested, LSUHSC-S overstated expenses on the Schedule of Expenditures of Federal Awards because the award was fully funded, and expenses in excess of the award amount were not removed from the project used to identify expenditures to federal awards in the accounting records, or the expense was determined not allowable as noted above.? Seven (35%) of 20 time and effort certifications for salary and related benefit expenses tested were completed 119 to 461 days after the end of the quarter.We performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 838 (51%) out of 1,654 adjusting journal entries were made more than 90 days after the end of the quarter from the original transactions. The adjustments were made 97 to 1,026 days after the original transactions were recorded and 96 to 953 days after the end of the quarter.In a non-statistical random sample of 10 out of 1,654 payroll adjusting entries affecting R&D, tested by employee, project id (related to federal award), and journal id, six (60%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. Two of these adjusting entries added costs to the federal award projects and are considered questioned costs totaling $28,324.Criteria:2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity?s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments.Per LSUHSC-S?s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S?s policy, time and effort certifications should be completed within approximately 90 days of the end of the quarter. Management interprets the end of the quarter to be when the time and effort reports are sent to the departments once the last month of the quarter is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the quarterly reporting period, a payroll reallocation must be created within 30 days.Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework? issued by the Committee of Sponsoring Organizations of the Treadway Commission. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions.In addition, the National Institute of Health (NIH) is the grantor for the majority of the LSUHSC-S?s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made ?to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable.2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs.Cause:LSUHSC-S?s approval of P-Card transactions did not provide sufficient review of the allowability of expenses on federal awards. LSUHSC-S has procedures in place to review expenses prior to requesting reimbursement; however, it did not ensure that the necessary adjustments were made to the accounting system in a timely manner for expenses that were not allowed for reimbursement. In addition, training to emphasize accountability and the importance of completing time and effort certifications timely and accurately per policy was not completed as planned during fiscal year 2022 due to staffing shortages.LSUHSC-S is still in the process of implementing the corrective action outlined in the prior year to include documentation of adjusted effort and questions to address justification for the adjustment, errors, and timeliness on a modified Personnel Change form.Effect:Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects.In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor.Recommendation:Management should monitor time and effort certifications completed by the departments and investigate and obtain justification from department personnel for untimely certifications, as well as untimely adjustments and lack of supporting documentation for adjustments to enforce established policies. Management should ensure adequate design and operating effectiveness of controls over expenses, including P-Card expenses, charged to federal awards to verify allowability of costs in accordance with federal requirements and grant terms and conditions prior to requesting reimbursement. Management should also consider implementing other complementary controls such as preventing costs from being charged to projects in the accounting system beyond the approved budget or period of performance.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-52).
2022-034 - Noncompliance and Weakness in Controls with Special Tests and Provisions RequirementsAward Years: 2018, 2022Award Numbers: P20GM121307, R56NS114272Compliance Requirement: Special Tests and ProvisionsRepeat Finding: Yes (Prior Year Finding No. 2021-069)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, LSUHSC-S did not have adequate controls in place to ensure compliance with Special Tests and Provisions requirements. We reviewed a non-statistical sample of 14 federal R&D Cluster awards, plus two additional awards based on materiality, for the fiscal year ending June 30, 2022, from a population of 54 awards with a total of 28 key personnel. We reviewed the quarterly Time and Effort Certification forms, as applicable, for each key personnel for each award selected.We noted two of 28 (7%) key personnel had documentation of actual effort on the Time and Effort Certification forms that did not agree to the effort reported to the federal grantor, and there was no evidence of prior approval from the federal grantor for a change in key personnel.Criteria:2 CFR 200.308(c) states that for non-construction federal awards, recipients must request prior approvals from federal awarding agencies for one or more of the following program or budget-related reasons: (i) change in the scope or the objective of the project or program (even if there is no associated budget revision requiring prior written approval); (ii) change in a key person specified in the application or the federal award; (iii) the disengagement from the project for more than three months, or a 25% reduction in time devoted to the project, by the approved project director or principal investigator.Cause:During fiscal year 2022, LSUHSC-S was in the process of implementing its corrective action plan. This included review of some time and effort certifications as training was performed, development of an updated Personnel Change (PER-3) form that now includes percentage effort documentation, and defined responsibilities for reporting changes in level of effort and requesting grantor approval as needed.Effect:Failure to implement controls over key personnel requirements could result in noncompliance with Special Tests and Provisions requirements.Recommendation:Management should continue to provide training for time and effort certifications. Management should also utilize the time and effort certifications and updated PER-3 forms to monitor changes in effort for key personnel and verify that prior written approval is obtained from the federal grantor for changes that exceed the thresholds set in federal regulations.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-49).
2022-035 - Weakness in Controls over Cash Management RequirementsAward Years: VariousAward Numbers: VariousCompliance Requirement: Cash ManagementRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:LSUHSC-S did not follow its prescribed controls over compliance with the cash management requirements of R&D programs. We reviewed a non-statistical sample of 25 federal R&D expense transactions resulting in reimbursement request support for two subaward invoice reconciliations and ten monthly direct award reconciliations, for the fiscal year ending June 30, 2022, from a population of 11,969 expense transactions. We also reviewed the two monthly reconciliations for July and November 2021 that were not selected from the expense transactions. We noted the following:? Four (29%) of 14 reconciliations had no evidence of review or approval by someone other than the preparer.? Ten (71%) of 14 approved reconciliations did not agree to the reimbursement request submitted to the grantor.Criteria:2 CFR 200.303 requires that non-federal entities establish and maintain internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.LSUHSC-S has established controls over cash management requirements, which consist of a monthly reconciliation of reimbursement requests for R&D expenses and includes the review and approval by someone other than the preparer.Cause:LSUHSC-S did not follow its established controls over monthly reconciliations.LSUHSC-S represented that the monthly reconciliations are the starting point in the process and additional determinations of which amounts should be drawn down are made after the reconciliation has been completed. LSUHSC-S did not provide any evidence that additional review and approval was performed prior to the reimbursement request.LSUHSC-S did not perform the drawdowns on a monthly basis when the reconciliations were performed. Drawdowns were performed in March and June 2022, and after fiscal year end in July, August, and October 2022 for expenses incurred during the fiscal year ending June 30, 2022. Management provided additional reconciliations for the draw down amounts, but there was no evidence of review and approval by someone other than the preparer.Effect:Failure to implement sufficient controls over cash management could result in LSUHSC-S requesting reimbursement for expenses not incurred prior to the request and place LSUHSC-S in noncompliance with federal regulations.Recommendation:LSUHSC-S should ensure that a review and approval is performed on the final amounts requested for reimbursement and evidence is maintained. LSUSHC-S should also ensure that established controls are followed to ensure the review and approval is performed by someone other than the preparer.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-55).
2022-005 - Noncompliance with and Weakness in Controls over Federal Research and Development ExpensesAward Years: VariousAward Numbers: VariousCompliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesPass-Through Entities: VariousRepeat Finding: Yes (Prior Year Finding No. 2021-007)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In addition, LSUHSC-S did not ensure that costs charged to federal awards were allowable in accordance with federal regulations and the terms and conditions of the award when requesting reimbursement.In a non-statistical random sample of 50 out of 10,798 expense transactions charged to R&D during the fiscal year ending June 30, 2022, the following exceptions were noted:? Three (6%) purchasing card (P-Card) transactions were not allowable in accordance with federal regulations and the terms and conditions of the award and are considered questioned costs totaling $1,073.? For five (10%) of 50 transactions tested, LSUHSC-S overstated expenses on the Schedule of Expenditures of Federal Awards because the award was fully funded, and expenses in excess of the award amount were not removed from the project used to identify expenditures to federal awards in the accounting records, or the expense was determined not allowable as noted above.? Seven (35%) of 20 time and effort certifications for salary and related benefit expenses tested were completed 119 to 461 days after the end of the quarter.We performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 838 (51%) out of 1,654 adjusting journal entries were made more than 90 days after the end of the quarter from the original transactions. The adjustments were made 97 to 1,026 days after the original transactions were recorded and 96 to 953 days after the end of the quarter.In a non-statistical random sample of 10 out of 1,654 payroll adjusting entries affecting R&D, tested by employee, project id (related to federal award), and journal id, six (60%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. Two of these adjusting entries added costs to the federal award projects and are considered questioned costs totaling $28,324.Criteria:2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity?s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments.Per LSUHSC-S?s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S?s policy, time and effort certifications should be completed within approximately 90 days of the end of the quarter. Management interprets the end of the quarter to be when the time and effort reports are sent to the departments once the last month of the quarter is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the quarterly reporting period, a payroll reallocation must be created within 30 days.Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework? issued by the Committee of Sponsoring Organizations of the Treadway Commission. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions.In addition, the National Institute of Health (NIH) is the grantor for the majority of the LSUHSC-S?s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made ?to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable.2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs.Cause:LSUHSC-S?s approval of P-Card transactions did not provide sufficient review of the allowability of expenses on federal awards. LSUHSC-S has procedures in place to review expenses prior to requesting reimbursement; however, it did not ensure that the necessary adjustments were made to the accounting system in a timely manner for expenses that were not allowed for reimbursement. In addition, training to emphasize accountability and the importance of completing time and effort certifications timely and accurately per policy was not completed as planned during fiscal year 2022 due to staffing shortages.LSUHSC-S is still in the process of implementing the corrective action outlined in the prior year to include documentation of adjusted effort and questions to address justification for the adjustment, errors, and timeliness on a modified Personnel Change form.Effect:Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects.In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor.Recommendation:Management should monitor time and effort certifications completed by the departments and investigate and obtain justification from department personnel for untimely certifications, as well as untimely adjustments and lack of supporting documentation for adjustments to enforce established policies. Management should ensure adequate design and operating effectiveness of controls over expenses, including P-Card expenses, charged to federal awards to verify allowability of costs in accordance with federal requirements and grant terms and conditions prior to requesting reimbursement. Management should also consider implementing other complementary controls such as preventing costs from being charged to projects in the accounting system beyond the approved budget or period of performance.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-52).
2022-005 - Noncompliance with and Weakness in Controls over Federal Research and Development ExpensesAward Years: VariousAward Numbers: VariousCompliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesPass-Through Entities: VariousRepeat Finding: Yes (Prior Year Finding No. 2021-007)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In addition, LSUHSC-S did not ensure that costs charged to federal awards were allowable in accordance with federal regulations and the terms and conditions of the award when requesting reimbursement.In a non-statistical random sample of 50 out of 10,798 expense transactions charged to R&D during the fiscal year ending June 30, 2022, the following exceptions were noted:? Three (6%) purchasing card (P-Card) transactions were not allowable in accordance with federal regulations and the terms and conditions of the award and are considered questioned costs totaling $1,073.? For five (10%) of 50 transactions tested, LSUHSC-S overstated expenses on the Schedule of Expenditures of Federal Awards because the award was fully funded, and expenses in excess of the award amount were not removed from the project used to identify expenditures to federal awards in the accounting records, or the expense was determined not allowable as noted above.? Seven (35%) of 20 time and effort certifications for salary and related benefit expenses tested were completed 119 to 461 days after the end of the quarter.We performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 838 (51%) out of 1,654 adjusting journal entries were made more than 90 days after the end of the quarter from the original transactions. The adjustments were made 97 to 1,026 days after the original transactions were recorded and 96 to 953 days after the end of the quarter.In a non-statistical random sample of 10 out of 1,654 payroll adjusting entries affecting R&D, tested by employee, project id (related to federal award), and journal id, six (60%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. Two of these adjusting entries added costs to the federal award projects and are considered questioned costs totaling $28,324.Criteria:2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity?s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments.Per LSUHSC-S?s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S?s policy, time and effort certifications should be completed within approximately 90 days of the end of the quarter. Management interprets the end of the quarter to be when the time and effort reports are sent to the departments once the last month of the quarter is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the quarterly reporting period, a payroll reallocation must be created within 30 days.Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework? issued by the Committee of Sponsoring Organizations of the Treadway Commission. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions.In addition, the National Institute of Health (NIH) is the grantor for the majority of the LSUHSC-S?s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made ?to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable.2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs.Cause:LSUHSC-S?s approval of P-Card transactions did not provide sufficient review of the allowability of expenses on federal awards. LSUHSC-S has procedures in place to review expenses prior to requesting reimbursement; however, it did not ensure that the necessary adjustments were made to the accounting system in a timely manner for expenses that were not allowed for reimbursement. In addition, training to emphasize accountability and the importance of completing time and effort certifications timely and accurately per policy was not completed as planned during fiscal year 2022 due to staffing shortages.LSUHSC-S is still in the process of implementing the corrective action outlined in the prior year to include documentation of adjusted effort and questions to address justification for the adjustment, errors, and timeliness on a modified Personnel Change form.Effect:Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects.In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor.Recommendation:Management should monitor time and effort certifications completed by the departments and investigate and obtain justification from department personnel for untimely certifications, as well as untimely adjustments and lack of supporting documentation for adjustments to enforce established policies. Management should ensure adequate design and operating effectiveness of controls over expenses, including P-Card expenses, charged to federal awards to verify allowability of costs in accordance with federal requirements and grant terms and conditions prior to requesting reimbursement. Management should also consider implementing other complementary controls such as preventing costs from being charged to projects in the accounting system beyond the approved budget or period of performance.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-52).
2022-006 - Control Weakness and Noncompliance with Personnel Expenses Charged to Federal AwardsAward Years: 2018, 2019, 2021, 2022Award Numbers: 2138930, 2000614536, B-18-DP-22-001, EMW-2020-SS-00011-S01, M19AC00015, NR227217XXXXC002, P01AI048240, R21AI165939, R33HD099745, U19AI159840Compliance Requirements: Allowable Costs/Cost Principles, Special Tests and ProvisionsPass-Through Entities: Board of Trustees of the Leland Stanford Junior University, Emory UniversityRepeat Finding: Yes (Prior Year Finding No. 2021-009)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the second consecutive year, the University of Louisiana at Lafayette (UL Lafayette) did not have adequate controls in place to ensure personnel expenses and effort charged to federal R&D awards accurately reflected work performed. From a population of 28,744 payroll and non-payroll expenses charged to R&D grants, a non-statistical sample of 25 transactions was tested. For all 12 (48%) of the payroll transactions, UL Lafayette was unable to provide documentation to show that personnel-related expenses, totaling $4,520, were supported by time and effort certifications to ensure the accuracy of budget estimates charged to federal awards as required by federal regulations. Additionally, because there is no after-the-fact review to ensure the accuracy of personnel costs and effort charged to the awards, UL Lafayette could not ensure compliance with the requirements of special tests and provisions related to key personnel effort.Criteria:2 CFR 200.430(i) specifies the documentation standards for personnel expenses. In order to be allowable, charges to federal awards for personnel expenses must be based on records that accurately reflect the work performed and must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Budget estimates alone do not qualify as support for charges to federal awards, but can be used for interim accounting purposes provided that internal controls include an after-the-fact review to confirm the accuracy of final amounts charged to federal awards.Prior approval requirements related to key personnel effort are contained in 2 CFR 200.308(c) and within grant terms and conditions. A reduction of 25% or greater in time devoted to the project from key personnel requires prior approval.Cause:Management represented that it?s still in the process of implementing the prior-year corrective actions to address the issues noted in the prior-year finding. As a result, time and effort certifications were not completed by employees to support the accuracy of budget estimates charged to federal awards as required by 2 CFR 200.430(i).Effect:Inadequate controls related to federal documentation standards for personnel expenses could result in noncompliance with federal allowable costs and cost principles, as well as noncompliance with special tests and provisions related to key personnel effort.Recommendation:Management should strengthen internal controls to ensure that personnel expenses charged to the federal awards are supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.Management?s Response and Corrective Action Plan:Management did not concur with the finding, noting it did not have sufficient time in fiscal year 2022 for corrective action and provided its progress on addressing the finding (B-82).
2022-006 - Control Weakness and Noncompliance with Personnel Expenses Charged to Federal AwardsAward Years: 2018, 2019, 2021, 2022Award Numbers: 2138930, 2000614536, B-18-DP-22-001, EMW-2020-SS-00011-S01, M19AC00015, NR227217XXXXC002, P01AI048240, R21AI165939, R33HD099745, U19AI159840Compliance Requirements: Allowable Costs/Cost Principles, Special Tests and ProvisionsPass-Through Entities: Board of Trustees of the Leland Stanford Junior University, Emory UniversityRepeat Finding: Yes (Prior Year Finding No. 2021-009)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the second consecutive year, the University of Louisiana at Lafayette (UL Lafayette) did not have adequate controls in place to ensure personnel expenses and effort charged to federal R&D awards accurately reflected work performed. From a population of 28,744 payroll and non-payroll expenses charged to R&D grants, a non-statistical sample of 25 transactions was tested. For all 12 (48%) of the payroll transactions, UL Lafayette was unable to provide documentation to show that personnel-related expenses, totaling $4,520, were supported by time and effort certifications to ensure the accuracy of budget estimates charged to federal awards as required by federal regulations. Additionally, because there is no after-the-fact review to ensure the accuracy of personnel costs and effort charged to the awards, UL Lafayette could not ensure compliance with the requirements of special tests and provisions related to key personnel effort.Criteria:2 CFR 200.430(i) specifies the documentation standards for personnel expenses. In order to be allowable, charges to federal awards for personnel expenses must be based on records that accurately reflect the work performed and must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Budget estimates alone do not qualify as support for charges to federal awards, but can be used for interim accounting purposes provided that internal controls include an after-the-fact review to confirm the accuracy of final amounts charged to federal awards.Prior approval requirements related to key personnel effort are contained in 2 CFR 200.308(c) and within grant terms and conditions. A reduction of 25% or greater in time devoted to the project from key personnel requires prior approval.Cause:Management represented that it?s still in the process of implementing the prior-year corrective actions to address the issues noted in the prior-year finding. As a result, time and effort certifications were not completed by employees to support the accuracy of budget estimates charged to federal awards as required by 2 CFR 200.430(i).Effect:Inadequate controls related to federal documentation standards for personnel expenses could result in noncompliance with federal allowable costs and cost principles, as well as noncompliance with special tests and provisions related to key personnel effort.Recommendation:Management should strengthen internal controls to ensure that personnel expenses charged to the federal awards are supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.Management?s Response and Corrective Action Plan:Management did not concur with the finding, noting it did not have sufficient time in fiscal year 2022 for corrective action and provided its progress on addressing the finding (B-82).
2022-035 - Weakness in Controls over Cash Management RequirementsAward Years: VariousAward Numbers: VariousCompliance Requirement: Cash ManagementRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:LSUHSC-S did not follow its prescribed controls over compliance with the cash management requirements of R&D programs. We reviewed a non-statistical sample of 25 federal R&D expense transactions resulting in reimbursement request support for two subaward invoice reconciliations and ten monthly direct award reconciliations, for the fiscal year ending June 30, 2022, from a population of 11,969 expense transactions. We also reviewed the two monthly reconciliations for July and November 2021 that were not selected from the expense transactions. We noted the following:? Four (29%) of 14 reconciliations had no evidence of review or approval by someone other than the preparer.? Ten (71%) of 14 approved reconciliations did not agree to the reimbursement request submitted to the grantor.Criteria:2 CFR 200.303 requires that non-federal entities establish and maintain internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.LSUHSC-S has established controls over cash management requirements, which consist of a monthly reconciliation of reimbursement requests for R&D expenses and includes the review and approval by someone other than the preparer.Cause:LSUHSC-S did not follow its established controls over monthly reconciliations.LSUHSC-S represented that the monthly reconciliations are the starting point in the process and additional determinations of which amounts should be drawn down are made after the reconciliation has been completed. LSUHSC-S did not provide any evidence that additional review and approval was performed prior to the reimbursement request.LSUHSC-S did not perform the drawdowns on a monthly basis when the reconciliations were performed. Drawdowns were performed in March and June 2022, and after fiscal year end in July, August, and October 2022 for expenses incurred during the fiscal year ending June 30, 2022. Management provided additional reconciliations for the draw down amounts, but there was no evidence of review and approval by someone other than the preparer.Effect:Failure to implement sufficient controls over cash management could result in LSUHSC-S requesting reimbursement for expenses not incurred prior to the request and place LSUHSC-S in noncompliance with federal regulations.Recommendation:LSUHSC-S should ensure that a review and approval is performed on the final amounts requested for reimbursement and evidence is maintained. LSUSHC-S should also ensure that established controls are followed to ensure the review and approval is performed by someone other than the preparer.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-55).
2022-005 - Noncompliance with and Weakness in Controls over Federal Research and Development ExpensesAward Years: VariousAward Numbers: VariousCompliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesPass-Through Entities: VariousRepeat Finding: Yes (Prior Year Finding No. 2021-007)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In addition, LSUHSC-S did not ensure that costs charged to federal awards were allowable in accordance with federal regulations and the terms and conditions of the award when requesting reimbursement.In a non-statistical random sample of 50 out of 10,798 expense transactions charged to R&D during the fiscal year ending June 30, 2022, the following exceptions were noted:? Three (6%) purchasing card (P-Card) transactions were not allowable in accordance with federal regulations and the terms and conditions of the award and are considered questioned costs totaling $1,073.? For five (10%) of 50 transactions tested, LSUHSC-S overstated expenses on the Schedule of Expenditures of Federal Awards because the award was fully funded, and expenses in excess of the award amount were not removed from the project used to identify expenditures to federal awards in the accounting records, or the expense was determined not allowable as noted above.? Seven (35%) of 20 time and effort certifications for salary and related benefit expenses tested were completed 119 to 461 days after the end of the quarter.We performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 838 (51%) out of 1,654 adjusting journal entries were made more than 90 days after the end of the quarter from the original transactions. The adjustments were made 97 to 1,026 days after the original transactions were recorded and 96 to 953 days after the end of the quarter.In a non-statistical random sample of 10 out of 1,654 payroll adjusting entries affecting R&D, tested by employee, project id (related to federal award), and journal id, six (60%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. Two of these adjusting entries added costs to the federal award projects and are considered questioned costs totaling $28,324.Criteria:2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity?s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments.Per LSUHSC-S?s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S?s policy, time and effort certifications should be completed within approximately 90 days of the end of the quarter. Management interprets the end of the quarter to be when the time and effort reports are sent to the departments once the last month of the quarter is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the quarterly reporting period, a payroll reallocation must be created within 30 days.Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework? issued by the Committee of Sponsoring Organizations of the Treadway Commission. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions.In addition, the National Institute of Health (NIH) is the grantor for the majority of the LSUHSC-S?s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made ?to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable.2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs.Cause:LSUHSC-S?s approval of P-Card transactions did not provide sufficient review of the allowability of expenses on federal awards. LSUHSC-S has procedures in place to review expenses prior to requesting reimbursement; however, it did not ensure that the necessary adjustments were made to the accounting system in a timely manner for expenses that were not allowed for reimbursement. In addition, training to emphasize accountability and the importance of completing time and effort certifications timely and accurately per policy was not completed as planned during fiscal year 2022 due to staffing shortages.LSUHSC-S is still in the process of implementing the corrective action outlined in the prior year to include documentation of adjusted effort and questions to address justification for the adjustment, errors, and timeliness on a modified Personnel Change form.Effect:Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects.In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor.Recommendation:Management should monitor time and effort certifications completed by the departments and investigate and obtain justification from department personnel for untimely certifications, as well as untimely adjustments and lack of supporting documentation for adjustments to enforce established policies. Management should ensure adequate design and operating effectiveness of controls over expenses, including P-Card expenses, charged to federal awards to verify allowability of costs in accordance with federal requirements and grant terms and conditions prior to requesting reimbursement. Management should also consider implementing other complementary controls such as preventing costs from being charged to projects in the accounting system beyond the approved budget or period of performance.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-52).
2022-005 - Noncompliance with and Weakness in Controls over Federal Research and Development ExpensesAward Years: VariousAward Numbers: VariousCompliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesPass-Through Entities: VariousRepeat Finding: Yes (Prior Year Finding No. 2021-007)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In addition, LSUHSC-S did not ensure that costs charged to federal awards were allowable in accordance with federal regulations and the terms and conditions of the award when requesting reimbursement.In a non-statistical random sample of 50 out of 10,798 expense transactions charged to R&D during the fiscal year ending June 30, 2022, the following exceptions were noted:? Three (6%) purchasing card (P-Card) transactions were not allowable in accordance with federal regulations and the terms and conditions of the award and are considered questioned costs totaling $1,073.? For five (10%) of 50 transactions tested, LSUHSC-S overstated expenses on the Schedule of Expenditures of Federal Awards because the award was fully funded, and expenses in excess of the award amount were not removed from the project used to identify expenditures to federal awards in the accounting records, or the expense was determined not allowable as noted above.? Seven (35%) of 20 time and effort certifications for salary and related benefit expenses tested were completed 119 to 461 days after the end of the quarter.We performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 838 (51%) out of 1,654 adjusting journal entries were made more than 90 days after the end of the quarter from the original transactions. The adjustments were made 97 to 1,026 days after the original transactions were recorded and 96 to 953 days after the end of the quarter.In a non-statistical random sample of 10 out of 1,654 payroll adjusting entries affecting R&D, tested by employee, project id (related to federal award), and journal id, six (60%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. Two of these adjusting entries added costs to the federal award projects and are considered questioned costs totaling $28,324.Criteria:2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity?s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments.Per LSUHSC-S?s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S?s policy, time and effort certifications should be completed within approximately 90 days of the end of the quarter. Management interprets the end of the quarter to be when the time and effort reports are sent to the departments once the last month of the quarter is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the quarterly reporting period, a payroll reallocation must be created within 30 days.Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework? issued by the Committee of Sponsoring Organizations of the Treadway Commission. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions.In addition, the National Institute of Health (NIH) is the grantor for the majority of the LSUHSC-S?s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made ?to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable.2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs.Cause:LSUHSC-S?s approval of P-Card transactions did not provide sufficient review of the allowability of expenses on federal awards. LSUHSC-S has procedures in place to review expenses prior to requesting reimbursement; however, it did not ensure that the necessary adjustments were made to the accounting system in a timely manner for expenses that were not allowed for reimbursement. In addition, training to emphasize accountability and the importance of completing time and effort certifications timely and accurately per policy was not completed as planned during fiscal year 2022 due to staffing shortages.LSUHSC-S is still in the process of implementing the corrective action outlined in the prior year to include documentation of adjusted effort and questions to address justification for the adjustment, errors, and timeliness on a modified Personnel Change form.Effect:Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects.In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor.Recommendation:Management should monitor time and effort certifications completed by the departments and investigate and obtain justification from department personnel for untimely certifications, as well as untimely adjustments and lack of supporting documentation for adjustments to enforce established policies. Management should ensure adequate design and operating effectiveness of controls over expenses, including P-Card expenses, charged to federal awards to verify allowability of costs in accordance with federal requirements and grant terms and conditions prior to requesting reimbursement. Management should also consider implementing other complementary controls such as preventing costs from being charged to projects in the accounting system beyond the approved budget or period of performance.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-52).
2022-033 - Weakness in Controls over Research and Development ProjectCloseouts and Accounting RecordsAward Years: 2021, 2022Award Numbers: 1K01AA024494-01A1, 1R21AA026022-01A1, 1R44DA046300-01, 2R01DK087800-06A1, 2R37AA018282-06, GM104940-17025-HSCNO01, INS151591-2, PO-0000180812, WFUHS 35-101730-117901Compliance Requirement: Period of PerformancePass-Through Entities: Eastern Virginia Medical School, La Jolla Alcohol Research, Inc., Wake Forest University HSCRepeat Finding: Yes (Prior Year Finding No. 2021-006)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the third consecutive year, the Louisiana State University Health Sciences Center in New Orleans (LSUHSC-NO) did not have adequate controls over project closeouts or accounting records for the R&D cluster federal program. We tested a non-statistical sample of 18 R&D projects, plus an additional five projects based on the total transaction amount recorded more than 90 days after the project end date, from a population of 139 projects with end dates between April 1, 2021, and June 30, 2022. Five (27.8%) of the sampled projects and all five of the additional projects included transactions for expenses or correcting entries posted to the project between 120 and 402 days after the project?s period of performance ended. On three of the additional projects, management submitted revised final reports to the grantor, or revised final invoices to the pass-through entity, more than 120 days after the period of performance ended resulting in noncompliance with federal program close-out requirements.Criteria:2 CFR 200.344 requires (a) that the recipient must submit, no later than 120 calendar days (or 90 days for a subrecipient) after the end of the period of performance, all reports required by the terms and conditions of the award, and (b) unless the federal awarding agency or pass-through entity authorizes an extension, a non-federal entity must liquidate all financial obligations incurred under the federal award no later than 120 calendar days after the end date of the period of performance.Additionally, LSUHSC-NO?s Sponsored Agreement Closeout Policy requires that completed sponsored agreements with surplus and/or deficit residual balances remaining in the project be certified and transferred to an appropriate, non-sponsored, departmentally-funded account or another sponsored project within 90 days of the project end date. LSUHSC-NO?s Sponsored Projects Accounting Cost Transfer Policy 011019 cautions that cost transfers will not be processed to cover cost overruns, to avoid restrictions by the Sponsor, to use up unspent funds, or for reasons of convenience or broadly-defined ?errors.?Cause:These exceptions occurred because (1) expenses are charged to projects after their closeout period in anticipation of a forthcoming project renewal, extension, or funding increase that may or may not be received; (2) the accounting system, PeopleSoft Commitment Control, allows certain personnel and other expenses to continue to post to projects after the project has ended unless a form, such as a change in source of funds form, is processed to update account coding in the system; (3) projects are not being closed out properly as they end, which includes submitting all required forms for updating accounting records; and (4) project budgets were not adequately monitored to ensure that expenses in the accounting system were charged to the correct project and any errors or budget overruns were identified and addressed in a timely manner.Effect:Untimely project updates in the accounting system increase the risk that expenses will be charged to the wrong project which hinders management?s ability to effectively monitor the budget and may result in budget overruns that would need to be covered with other funding sources, increase the number of corrections required at year end to ensure accurate financial reporting, and may result in noncompliance with federal program requirements.Recommendation:Management should continue to monitor budgets and ensure that budget overruns and errors are identified and corrected in a timely manner. Management should ensure that projects are effectively closed out including processing all required forms and updating the accounting system in a timely manner. Management should consider implementing a system control to prevent costs from being charged to projects in the accounting system beyond the project close out period. Management should also implement controls to exclude costs from its Schedule of Expenditures of Federal Awards until the awards or extensions are approved.Management?s Response and Corrective Action Plan:Management concurred with the finding and provided a corrective action plan (B-46).
2022-033 - Weakness in Controls over Research and Development ProjectCloseouts and Accounting RecordsAward Years: 2021, 2022Award Numbers: 1K01AA024494-01A1, 1R21AA026022-01A1, 1R44DA046300-01, 2R01DK087800-06A1, 2R37AA018282-06, GM104940-17025-HSCNO01, INS151591-2, PO-0000180812, WFUHS 35-101730-117901Compliance Requirement: Period of PerformancePass-Through Entities: Eastern Virginia Medical School, La Jolla Alcohol Research, Inc., Wake Forest University HSCRepeat Finding: Yes (Prior Year Finding No. 2021-006)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the third consecutive year, the Louisiana State University Health Sciences Center in New Orleans (LSUHSC-NO) did not have adequate controls over project closeouts or accounting records for the R&D cluster federal program. We tested a non-statistical sample of 18 R&D projects, plus an additional five projects based on the total transaction amount recorded more than 90 days after the project end date, from a population of 139 projects with end dates between April 1, 2021, and June 30, 2022. Five (27.8%) of the sampled projects and all five of the additional projects included transactions for expenses or correcting entries posted to the project between 120 and 402 days after the project?s period of performance ended. On three of the additional projects, management submitted revised final reports to the grantor, or revised final invoices to the pass-through entity, more than 120 days after the period of performance ended resulting in noncompliance with federal program close-out requirements.Criteria:2 CFR 200.344 requires (a) that the recipient must submit, no later than 120 calendar days (or 90 days for a subrecipient) after the end of the period of performance, all reports required by the terms and conditions of the award, and (b) unless the federal awarding agency or pass-through entity authorizes an extension, a non-federal entity must liquidate all financial obligations incurred under the federal award no later than 120 calendar days after the end date of the period of performance.Additionally, LSUHSC-NO?s Sponsored Agreement Closeout Policy requires that completed sponsored agreements with surplus and/or deficit residual balances remaining in the project be certified and transferred to an appropriate, non-sponsored, departmentally-funded account or another sponsored project within 90 days of the project end date. LSUHSC-NO?s Sponsored Projects Accounting Cost Transfer Policy 011019 cautions that cost transfers will not be processed to cover cost overruns, to avoid restrictions by the Sponsor, to use up unspent funds, or for reasons of convenience or broadly-defined ?errors.?Cause:These exceptions occurred because (1) expenses are charged to projects after their closeout period in anticipation of a forthcoming project renewal, extension, or funding increase that may or may not be received; (2) the accounting system, PeopleSoft Commitment Control, allows certain personnel and other expenses to continue to post to projects after the project has ended unless a form, such as a change in source of funds form, is processed to update account coding in the system; (3) projects are not being closed out properly as they end, which includes submitting all required forms for updating accounting records; and (4) project budgets were not adequately monitored to ensure that expenses in the accounting system were charged to the correct project and any errors or budget overruns were identified and addressed in a timely manner.Effect:Untimely project updates in the accounting system increase the risk that expenses will be charged to the wrong project which hinders management?s ability to effectively monitor the budget and may result in budget overruns that would need to be covered with other funding sources, increase the number of corrections required at year end to ensure accurate financial reporting, and may result in noncompliance with federal program requirements.Recommendation:Management should continue to monitor budgets and ensure that budget overruns and errors are identified and corrected in a timely manner. Management should ensure that projects are effectively closed out including processing all required forms and updating the accounting system in a timely manner. Management should consider implementing a system control to prevent costs from being charged to projects in the accounting system beyond the project close out period. Management should also implement controls to exclude costs from its Schedule of Expenditures of Federal Awards until the awards or extensions are approved.Management?s Response and Corrective Action Plan:Management concurred with the finding and provided a corrective action plan (B-46).
2022-034 - Noncompliance and Weakness in Controls with Special Tests and Provisions RequirementsAward Years: 2018, 2022Award Numbers: P20GM121307, R56NS114272Compliance Requirement: Special Tests and ProvisionsRepeat Finding: Yes (Prior Year Finding No. 2021-069)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, LSUHSC-S did not have adequate controls in place to ensure compliance with Special Tests and Provisions requirements. We reviewed a non-statistical sample of 14 federal R&D Cluster awards, plus two additional awards based on materiality, for the fiscal year ending June 30, 2022, from a population of 54 awards with a total of 28 key personnel. We reviewed the quarterly Time and Effort Certification forms, as applicable, for each key personnel for each award selected.We noted two of 28 (7%) key personnel had documentation of actual effort on the Time and Effort Certification forms that did not agree to the effort reported to the federal grantor, and there was no evidence of prior approval from the federal grantor for a change in key personnel.Criteria:2 CFR 200.308(c) states that for non-construction federal awards, recipients must request prior approvals from federal awarding agencies for one or more of the following program or budget-related reasons: (i) change in the scope or the objective of the project or program (even if there is no associated budget revision requiring prior written approval); (ii) change in a key person specified in the application or the federal award; (iii) the disengagement from the project for more than three months, or a 25% reduction in time devoted to the project, by the approved project director or principal investigator.Cause:During fiscal year 2022, LSUHSC-S was in the process of implementing its corrective action plan. This included review of some time and effort certifications as training was performed, development of an updated Personnel Change (PER-3) form that now includes percentage effort documentation, and defined responsibilities for reporting changes in level of effort and requesting grantor approval as needed.Effect:Failure to implement controls over key personnel requirements could result in noncompliance with Special Tests and Provisions requirements.Recommendation:Management should continue to provide training for time and effort certifications. Management should also utilize the time and effort certifications and updated PER-3 forms to monitor changes in effort for key personnel and verify that prior written approval is obtained from the federal grantor for changes that exceed the thresholds set in federal regulations.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-49).
2022-035 - Weakness in Controls over Cash Management RequirementsAward Years: VariousAward Numbers: VariousCompliance Requirement: Cash ManagementRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:LSUHSC-S did not follow its prescribed controls over compliance with the cash management requirements of R&D programs. We reviewed a non-statistical sample of 25 federal R&D expense transactions resulting in reimbursement request support for two subaward invoice reconciliations and ten monthly direct award reconciliations, for the fiscal year ending June 30, 2022, from a population of 11,969 expense transactions. We also reviewed the two monthly reconciliations for July and November 2021 that were not selected from the expense transactions. We noted the following:? Four (29%) of 14 reconciliations had no evidence of review or approval by someone other than the preparer.? Ten (71%) of 14 approved reconciliations did not agree to the reimbursement request submitted to the grantor.Criteria:2 CFR 200.303 requires that non-federal entities establish and maintain internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.LSUHSC-S has established controls over cash management requirements, which consist of a monthly reconciliation of reimbursement requests for R&D expenses and includes the review and approval by someone other than the preparer.Cause:LSUHSC-S did not follow its established controls over monthly reconciliations.LSUHSC-S represented that the monthly reconciliations are the starting point in the process and additional determinations of which amounts should be drawn down are made after the reconciliation has been completed. LSUHSC-S did not provide any evidence that additional review and approval was performed prior to the reimbursement request.LSUHSC-S did not perform the drawdowns on a monthly basis when the reconciliations were performed. Drawdowns were performed in March and June 2022, and after fiscal year end in July, August, and October 2022 for expenses incurred during the fiscal year ending June 30, 2022. Management provided additional reconciliations for the draw down amounts, but there was no evidence of review and approval by someone other than the preparer.Effect:Failure to implement sufficient controls over cash management could result in LSUHSC-S requesting reimbursement for expenses not incurred prior to the request and place LSUHSC-S in noncompliance with federal regulations.Recommendation:LSUHSC-S should ensure that a review and approval is performed on the final amounts requested for reimbursement and evidence is maintained. LSUSHC-S should also ensure that established controls are followed to ensure the review and approval is performed by someone other than the preparer.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-55).
2022-006 - Control Weakness and Noncompliance with Personnel Expenses Charged to Federal AwardsAward Years: 2018, 2019, 2021, 2022Award Numbers: 2138930, 2000614536, B-18-DP-22-001, EMW-2020-SS-00011-S01, M19AC00015, NR227217XXXXC002, P01AI048240, R21AI165939, R33HD099745, U19AI159840Compliance Requirements: Allowable Costs/Cost Principles, Special Tests and ProvisionsPass-Through Entities: Board of Trustees of the Leland Stanford Junior University, Emory UniversityRepeat Finding: Yes (Prior Year Finding No. 2021-009)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the second consecutive year, the University of Louisiana at Lafayette (UL Lafayette) did not have adequate controls in place to ensure personnel expenses and effort charged to federal R&D awards accurately reflected work performed. From a population of 28,744 payroll and non-payroll expenses charged to R&D grants, a non-statistical sample of 25 transactions was tested. For all 12 (48%) of the payroll transactions, UL Lafayette was unable to provide documentation to show that personnel-related expenses, totaling $4,520, were supported by time and effort certifications to ensure the accuracy of budget estimates charged to federal awards as required by federal regulations. Additionally, because there is no after-the-fact review to ensure the accuracy of personnel costs and effort charged to the awards, UL Lafayette could not ensure compliance with the requirements of special tests and provisions related to key personnel effort.Criteria:2 CFR 200.430(i) specifies the documentation standards for personnel expenses. In order to be allowable, charges to federal awards for personnel expenses must be based on records that accurately reflect the work performed and must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Budget estimates alone do not qualify as support for charges to federal awards, but can be used for interim accounting purposes provided that internal controls include an after-the-fact review to confirm the accuracy of final amounts charged to federal awards.Prior approval requirements related to key personnel effort are contained in 2 CFR 200.308(c) and within grant terms and conditions. A reduction of 25% or greater in time devoted to the project from key personnel requires prior approval.Cause:Management represented that it?s still in the process of implementing the prior-year corrective actions to address the issues noted in the prior-year finding. As a result, time and effort certifications were not completed by employees to support the accuracy of budget estimates charged to federal awards as required by 2 CFR 200.430(i).Effect:Inadequate controls related to federal documentation standards for personnel expenses could result in noncompliance with federal allowable costs and cost principles, as well as noncompliance with special tests and provisions related to key personnel effort.Recommendation:Management should strengthen internal controls to ensure that personnel expenses charged to the federal awards are supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.Management?s Response and Corrective Action Plan:Management did not concur with the finding, noting it did not have sufficient time in fiscal year 2022 for corrective action and provided its progress on addressing the finding (B-82).
2022-005 - Noncompliance with and Weakness in Controls over Federal Research and Development ExpensesAward Years: VariousAward Numbers: VariousCompliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesPass-Through Entities: VariousRepeat Finding: Yes (Prior Year Finding No. 2021-007)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In addition, LSUHSC-S did not ensure that costs charged to federal awards were allowable in accordance with federal regulations and the terms and conditions of the award when requesting reimbursement.In a non-statistical random sample of 50 out of 10,798 expense transactions charged to R&D during the fiscal year ending June 30, 2022, the following exceptions were noted:? Three (6%) purchasing card (P-Card) transactions were not allowable in accordance with federal regulations and the terms and conditions of the award and are considered questioned costs totaling $1,073.? For five (10%) of 50 transactions tested, LSUHSC-S overstated expenses on the Schedule of Expenditures of Federal Awards because the award was fully funded, and expenses in excess of the award amount were not removed from the project used to identify expenditures to federal awards in the accounting records, or the expense was determined not allowable as noted above.? Seven (35%) of 20 time and effort certifications for salary and related benefit expenses tested were completed 119 to 461 days after the end of the quarter.We performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 838 (51%) out of 1,654 adjusting journal entries were made more than 90 days after the end of the quarter from the original transactions. The adjustments were made 97 to 1,026 days after the original transactions were recorded and 96 to 953 days after the end of the quarter.In a non-statistical random sample of 10 out of 1,654 payroll adjusting entries affecting R&D, tested by employee, project id (related to federal award), and journal id, six (60%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. Two of these adjusting entries added costs to the federal award projects and are considered questioned costs totaling $28,324.Criteria:2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity?s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments.Per LSUHSC-S?s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S?s policy, time and effort certifications should be completed within approximately 90 days of the end of the quarter. Management interprets the end of the quarter to be when the time and effort reports are sent to the departments once the last month of the quarter is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the quarterly reporting period, a payroll reallocation must be created within 30 days.Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework? issued by the Committee of Sponsoring Organizations of the Treadway Commission. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions.In addition, the National Institute of Health (NIH) is the grantor for the majority of the LSUHSC-S?s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made ?to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable.2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs.Cause:LSUHSC-S?s approval of P-Card transactions did not provide sufficient review of the allowability of expenses on federal awards. LSUHSC-S has procedures in place to review expenses prior to requesting reimbursement; however, it did not ensure that the necessary adjustments were made to the accounting system in a timely manner for expenses that were not allowed for reimbursement. In addition, training to emphasize accountability and the importance of completing time and effort certifications timely and accurately per policy was not completed as planned during fiscal year 2022 due to staffing shortages.LSUHSC-S is still in the process of implementing the corrective action outlined in the prior year to include documentation of adjusted effort and questions to address justification for the adjustment, errors, and timeliness on a modified Personnel Change form.Effect:Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects.In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor.Recommendation:Management should monitor time and effort certifications completed by the departments and investigate and obtain justification from department personnel for untimely certifications, as well as untimely adjustments and lack of supporting documentation for adjustments to enforce established policies. Management should ensure adequate design and operating effectiveness of controls over expenses, including P-Card expenses, charged to federal awards to verify allowability of costs in accordance with federal requirements and grant terms and conditions prior to requesting reimbursement. Management should also consider implementing other complementary controls such as preventing costs from being charged to projects in the accounting system beyond the approved budget or period of performance.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-52).
2022-005 - Noncompliance with and Weakness in Controls over Federal Research and Development ExpensesAward Years: VariousAward Numbers: VariousCompliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesPass-Through Entities: VariousRepeat Finding: Yes (Prior Year Finding No. 2021-007)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In addition, LSUHSC-S did not ensure that costs charged to federal awards were allowable in accordance with federal regulations and the terms and conditions of the award when requesting reimbursement.In a non-statistical random sample of 50 out of 10,798 expense transactions charged to R&D during the fiscal year ending June 30, 2022, the following exceptions were noted:? Three (6%) purchasing card (P-Card) transactions were not allowable in accordance with federal regulations and the terms and conditions of the award and are considered questioned costs totaling $1,073.? For five (10%) of 50 transactions tested, LSUHSC-S overstated expenses on the Schedule of Expenditures of Federal Awards because the award was fully funded, and expenses in excess of the award amount were not removed from the project used to identify expenditures to federal awards in the accounting records, or the expense was determined not allowable as noted above.? Seven (35%) of 20 time and effort certifications for salary and related benefit expenses tested were completed 119 to 461 days after the end of the quarter.We performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 838 (51%) out of 1,654 adjusting journal entries were made more than 90 days after the end of the quarter from the original transactions. The adjustments were made 97 to 1,026 days after the original transactions were recorded and 96 to 953 days after the end of the quarter.In a non-statistical random sample of 10 out of 1,654 payroll adjusting entries affecting R&D, tested by employee, project id (related to federal award), and journal id, six (60%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. Two of these adjusting entries added costs to the federal award projects and are considered questioned costs totaling $28,324.Criteria:2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity?s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments.Per LSUHSC-S?s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S?s policy, time and effort certifications should be completed within approximately 90 days of the end of the quarter. Management interprets the end of the quarter to be when the time and effort reports are sent to the departments once the last month of the quarter is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the quarterly reporting period, a payroll reallocation must be created within 30 days.Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework? issued by the Committee of Sponsoring Organizations of the Treadway Commission. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions.In addition, the National Institute of Health (NIH) is the grantor for the majority of the LSUHSC-S?s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made ?to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable.2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs.Cause:LSUHSC-S?s approval of P-Card transactions did not provide sufficient review of the allowability of expenses on federal awards. LSUHSC-S has procedures in place to review expenses prior to requesting reimbursement; however, it did not ensure that the necessary adjustments were made to the accounting system in a timely manner for expenses that were not allowed for reimbursement. In addition, training to emphasize accountability and the importance of completing time and effort certifications timely and accurately per policy was not completed as planned during fiscal year 2022 due to staffing shortages.LSUHSC-S is still in the process of implementing the corrective action outlined in the prior year to include documentation of adjusted effort and questions to address justification for the adjustment, errors, and timeliness on a modified Personnel Change form.Effect:Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects.In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor.Recommendation:Management should monitor time and effort certifications completed by the departments and investigate and obtain justification from department personnel for untimely certifications, as well as untimely adjustments and lack of supporting documentation for adjustments to enforce established policies. Management should ensure adequate design and operating effectiveness of controls over expenses, including P-Card expenses, charged to federal awards to verify allowability of costs in accordance with federal requirements and grant terms and conditions prior to requesting reimbursement. Management should also consider implementing other complementary controls such as preventing costs from being charged to projects in the accounting system beyond the approved budget or period of performance.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-52).
2022-022 - Weaknesses in Controls over Child Care and Development Fund GrantsAward Year: 2021Award Numbers: 2101LACCC5, 2101LACSC6Compliance Requirements: Activities Allowed or Unallowed, EligibilityRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:DOE overpaid child care providers who received grants funded with child care stabilization funds from the Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act and the American Rescue Plan (ARP) Act during fiscal year 2022. Our procedures disclosed the following:? DOE overpaid six child care providers who received ARP child care stabilization funds by a total of $59,063. DOE?s internal controls did not detect the overpayments.? During DOE?s review of payments to child care providers who received grant payments funded with CRRSA and ARP funds, DOE identified overpayments to 11 child care providers totaling $887,212. DOE recovered and repaid $856,139 of the overpayments to the U.S. Department of Health and Human Services, and is in the process of recovering the remaining $31,073.Criteria:DOE received CRRSA and ARP funds through the Child Care and Development Block Grant. These funds were distributed as grants to child care providers to support child care access and to provide financial support to child care providers during and/or after the COVID-19 public health emergency. The CRRSA and ARP Acts specify that payments must be made to eligible providers. In addition, good internal controls include adequate procedures to ensure payment amounts are calculated correctly and eligibility requirements are met prior to payments being made.Cause:The overpayments occurred because of a formula error in the spreadsheet DOE used to calculate the amount of funds certain providers were eligible to receive, system processing errors, incorrect eligibility determinations, and duplicate payments that were made in error.Effect:Failure to ensure the accuracy of all formulas and data in the payment calculation spreadsheet prior to payments being made increases the risk that child care providers will receive more or less funds than they are eligible to receive. Failure to ensure payment amounts are accurate and providers are eligible prior to payments being made increases the risk that funds will not be used in accordance with federal requirements.Recommendation:DOE management should strengthen internal controls to ensure that spreadsheets used to calculate payment amounts are accurate and providers meet eligibility requirements before payments are made. In addition, DOE should continue to take steps to recover the remaining overpayments.Management?s Response and Corrective Action Plan:Management concurred in part with the finding and provided a plan of corrective action (B-11).
2022-023 - Inadequate Controls and Noncompliance over ADP Risk Analysis and System Security ReviewAward Years: 2021, 2022Award Numbers: 2105LA5021, 2105LA5MAP, 2205LA5021, 2205LA5MAPCompliance Requirement: Special Tests and ProvisionsRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:The Louisiana Department of Health (LDH) did not have adequate controls in place to ensure that the Magellan Medicaid Administration (Magellan) Service Organization Control (SOC) 1 type 2 report was reviewed in accordance with the Automated Data Processing (ADP) Risk Analysis and System Security Review federal requirements for the year ending June 30, 2022. LDH contracted with Magellan in fiscal year 2022 to provide services that include maintaining system controls related to the drug rebates program.Criteria:According to 45 CFR 95.621, the state shall maintain reports on its biennial ADP system security reviews, together with pertinent supporting documentation, for on-site reviews. Good internal controls require that policies and procedures are established and followed to ensure compliance with federal requirements.Cause:LDH received the required SOC 1 type 2 report from Magellan but was unable to provide any evidence to support its review and did not have written procedures regarding the review of the SOC report.Effect:Proper review of the required SOC report is critical to ensuring the controls utilized by Magellan are adequate and operating effectively.Recommendation:LDH should design and implement procedures to document and support its review of all ADP system security reports.Management?s Response and Corrective Action Plan:Management partially concurred with the finding and provided a corrective action plan (B-19).
2022-024 - Inadequate Controls over and Noncompliance with National Correct Coding Initiative RequirementsAward Years: 2021, 2022Award Numbers: 2105LA5MAP, 2205LA5MAPCompliance Requirement: Special Tests and ProvisionsRepeat Finding: Yes (Prior Year Finding No. 2021-054)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the second consecutive year, LDH failed to properly implement and monitor National Correct Coding Initiative Requirements (NCCI) for Medically Unlikely edits (MUE) and Procedure-to-Procedure (PTP) edits for the Medical Assistance Program (Medicaid) Fee-for-Service (FFS) claims. MUE is an edit on claims in which the number of units billed on the claim are more than what is considered necessary/allowed for a particular procedure code and PTP is an edit on claims in which one specific procedure code is not allowed to be billed with a different specific procedure code on the same recipient on the same day by the same provider.Our testing of NCCI edits included all FFS claims for Durable Medical Equipment (DME), Outpatient Hospital Service (OP), and practitioner and ambulatory surgical center (PRA) paid in state fiscal year 2022. These claims were subject to two edit types: MUE and PTP.In a test of 10,115,246 paid claims to determine if the proper NCCI MUE and PTP edits had been implemented, the following was noted:? 19,683 claims for DME, OP, and PRA were paid but should have been evaluated by an NCCI MUE and denied. These NCCI MUE edit errors resulted in questioned costs of $732,101 in federal funds. LDH noted that required NCCI MUE edits have not been applied to OP and DME FFS claims due to system constraints.? 269 claims for DME, OP, and PRA were paid but should have been evaluated by an NCCI PTP edit and denied. These NCCI PTP edit errors resulted in questioned costs of $33,463 in federal funds.Criteria:Section 1903(r) of the Social Security Act requires State Medicaid agencies to incorporate NCCI methodologies into State Medicaid programs. Federal regulations and the NCCI Medicaid Technical Guidance Manual contains requirements for implementation of the NCCI methodologies.Cause:The errors noted occurred due to inadequate NCCI edit monitoring procedures by LDH and instances of noncompliance with the federal regulations and NCCI Medicaid Technical Guidance.Effect:Failure to properly implement and enforce all required NCCI edits increases the likelihood that FFS claims, which should be denied, could potentially be paid.Recommendation:Management should ensure all required NCCI edits are properly applied to FFS claims.Management?s Response and Corrective Action Plan:Management partially concurred with the finding and provided a corrective action plan (B-21).Auditor?s Additional Comments:Management?s response stated, ?The data pull does not consider the final adjudication of claims.? However, LLA data analysis included final adjudication for FFS claims paid in state fiscal year ended June 30, 2022.
2022-025 - Inadequate Controls over Billing for Behavioral Health ServicesAward Years: 2021, 2022Award Numbers: 2105LA5021, 2105LA5MAP, 2205LA5021, 2205LA5MAPCompliance Requirement: Activities Allowed or UnallowedRepeat Finding: Yes (Prior Year Finding No. 2021-055)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, LDH, the managed care organizations (MCOs), and Magellan Health Services (Magellan) did not have adequate controls in place to ensure that behavioral health services in the Medical Assistance Program (Medicaid) and Children?s Health Insurance Program (CHIP) were properly billed and that improper encounters were denied. For fiscal year 2022, we identified approximately $8.8 million in encounters for services between July 1, 2021, and June 30, 2022, that were paid by the MCOs and Magellan even though the encounters do not appear to comply with LDH?s encounter coding requirements and/or approved fee schedules.Our analysis identified the following instances of billing errors:? Providers were paid $8,329,594 for 125,734 encounters that were billed using incorrect procedure and modifier codes.? Providers were paid $489,342 more than indicated on approved fee schedules for 13,019 encounters for behavioral health services.Criteria:LDH?s fee schedule outlines procedure codes for services and the applicable billing rates. Some services require that procedure codes also contain modifier codes which indicate information such as the age of the recipient, location where the service was provided, the educational background of the person providing the service, and the license(s) they have obtained.The approved fee schedules outline different rates depending on the procedure code and modifier codes. The MCOs can optionally pay more than the minimum LDH fee schedule.Cause:The billing errors could be avoided by LDH, the MCOs, and Magellan applying system edits that would flag encounters for further review when encounter coding and/or fee schedule requirements are not followed.Effect:Without the required modifiers, the encounter does not contain enough information to determine that the billing was appropriate.Because LDH does not currently maintain a list of providers in which the MCO pays more than the minimum fee schedule, LDH cannot determine if an encounter paid at an excessive rate was improperly billed.It is important that encounter data is accurate because LDH and other stakeholders, such as the Medicaid Fraud Control Unit within the Attorney General?s Office, use this data to identify improper payments and potential fraud. LDH also uses this encounter data to establish per member per month rates for the MCOs.Recommendation:LDH should implement adequate internal controls to ensure that encounters are coded correctly, which could include edit checks to flag potential improper billings for further review.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-25).
2022-026 - Inadequate Controls over Drug Rebate CollectionsAward Years: 2021, 2022Award Numbers: 2105LA5MAP, 2205LA5MAPCompliance Requirement: Allowable Costs/Cost PrinciplesRepeat Finding: Yes (Prior Year Finding No. 2021-056)See Schedule of Findings and Questioned Costs for chart/tableCondition:In a non-statistical sample of 60 drug rebate invoices from a population of 9,014, three tested (5%) revealed only a partial payment had been collected and no disputes have been made by the manufacturer. Magellan Medicaid Administration, Inc. (Magellan) personnel also confirmed that a dunning notice was not sent to these manufacturers for the unpaid balances. This is the second consecutive year LDH did not have adequate controls related to drug rebate collections.LDH contracted with Magellan for support in performing the federal and supplemental drug rebates processing for the LDH Medicaid program, including but not limited to invoicing, reconciliation, dispute resolution, and follow up on drug manufacturer (manufacturer) non-payment and aged balances for all of LDH?s Medicaid drug rebate programs. The contract sets a frequency in which a written delinquency notice (dunning notice) should be sent to manufacturers with unpaid invoices, but does not address manufacturers who make partial payments towards their quarterly invoice. Magellan personnel confirmed that for fiscal year 2022 these dunning notices are only sent to manufacturers who have not made any payments towards an invoice.Criteria:42 USC 1396r-8 requires manufacturers that wish to have their covered outpatient drugs covered by Medicaid to enter into an agreement under which the manufacturers agree to pay rebates for drugs dispensed and paid for by state Medicaid agencies under the state plan. Those rebates are shared between the state and federal government. Drug rebates are to be paid by the drug manufacturers no later than 30 days after the date of receipt of the utilization data from the state or provide notice of disputed items not paid because of discrepancies found. The state should perform follow up procedures to attempt to collect any unpaid balances in a timely manner.Cause:LDH did not have adequate controls in place to monitor its contract with Magellan and was unable to identify a control that would address the timely collection of partially-paid drug rebates invoices.In following its corrective action plan from fiscal year 2021, LDH began the process of implementing new controls to improve the outstanding balances process for all drug rebate invoices that have not been fully collected or disputed in a timely manner. Specifically, Magellan is in the process of changing its Dunning Notices process as part of the RxLink implementation to include manufacturers that only made partial payments. This process was not implemented during fiscal year 2022 though, and is expected to go live in fiscal year 2023.Effect:Without procedures to address manufacturers that do not pay the entire quarterly balance, there is a risk that appropriate rebates will not be collected.Recommendation:LDH should ensure that agency personnel are adequately monitoring contract provisions for the drug rebate program and follow up procedures are performed for all drug rebate invoices that have not been fully collected or disputed in a timely manner.Management?s Response and Corrective Action Plan:Management did not concur with the finding noting it did not have sufficient time in fiscal year 2022 for corrective action and provided its progress on addressing the finding (B-29).
2022-027 - Inadequate Controls over Monitoring of Abortion ClaimsAward Years: 2021, 2022Award Numbers: 2105LA5021, 2105LA5MAP, 2205LA5021, 2205LA5MAPCompliance Requirement: Activities Allowed or UnallowedRepeat Finding: Yes (Prior Year Finding No. 2021-057)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, LDH did not have adequate controls to ensure compliance with federal regulations prohibiting the use of federal funding for abortion claims.Criteria:42 CFR 441 Subpart E and 42 USC 1397ee(c) prohibit Medicaid and CHIP funding for abortion services except in instances where abortion is necessary to save the mother?s life or if the pregnancy is the result of an act of rape or incest.Cause:Under managed care, LDH pays the health plans monthly premiums for enrolled recipients. The health plans pay provider claims for services provided to enrolled recipients and submit the claims to LDH as encounter claims.LDH included provisions in the Healthy Louisiana managed care contracts requiring the health plans to comply with the federal regulations regarding funding of prohibited abortion services, but LDH did not have adequate procedures in place to monitor the health plans? compliance with the federal regulations. While LDH received monthly self-reported information from the health plans, LDH was not comparing or validating the self-reported information to ensure the reporting was accurate and complete for the entire year. In addition, the instructions provided to the health plans concerning how to complete the reports are not detailed and could potentially lead to all five health plans reporting different information.In fiscal year 2022, LDH began the process of implementing new controls to validate the health plans self-reported information in order to ensure compliance with federal regulations regarding the funding of prohibited abortion claims. Specifically, in July of 2022 LDH began a spot check review of the health plans self-reported encounter claims information and reviewed data retroactively for the third and fourth quarter of fiscal year 2022 (January 2022 to June 2022). However, this process was not fully implemented during fiscal year 2022, nor did it cover the first two quarters of the audit period of July 1, 2021, to December 31, 2021. It is expected this process will cover all four quarters beginning in fiscal year 2023.Effect:Claims paid by the managed care health plans for abortion services that do not meet exceptions noted in federal regulations may go undetected, and LDH may accept these improper claims as encounter claims. Encounter claims are considered in future premium rate setting and are used for reporting and monitoring of the Medicaid and CHIP programs.Recommendation:LDH should continue its process to validate self-reported information from the health plans and ensure its process is operating effectively to ensure compliance with federal regulations regarding funding of prohibited abortions claims.Management?s Response and Corrective Action Plan:Management concurred in part with the finding and provided a corrective action plan (B-32).
2022-028 - Inadequate Internal Controls over Eligibility DeterminationsAward Years: 2020 - 2022Award Numbers: 2005LA5MAP, 2105LA5021, 2105LA5MAP, 2205LA5021, 2205LA5MAPCompliance Requirement: EligibilityRepeat Finding: Yes (Prior Year Finding No. 2021-060)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the third consecutive year, LDH lacked adequate internal controls over eligibility determinations in the Medicaid and CHIP programs for the state fiscal year ending June 30, 2022.From a population of 1,919,113 Medicaid recipients, a non-statistical sample of 60 recipients was tested. Five (8.3%) out of 60 Medicaid recipients tested did not have adequate documentation to support the eligibility determination or redetermination within the recipient?s case record.The following errors were noted for Medicaid:? For one recipient, LDH personnel did not discontinue coverage on a beneficiary that was invalidly enrolled prior to the start of the public health emergency (PHE).? For one recipient, LDH personnel did not discontinue coverage on a recipient who moved out of state.? For three recipients, renewals were not performed during the state fiscal year as required by federal regulations.During our testing of Medicaid managed care premiums, we identified an additional recipient with eligibility not supported by the case record. The recipient?s case record did not reflect timely transition into an appropriate case type based on the recipient?s age.In addition, from a population of 212,933 CHIP eligibility recipients, a non-statistical sample of 60 recipients was tested. For two (3.3%) out of 60 CHIP recipients tested, LDH did not perform renewals during the state fiscal year as required by federal regulations.Criteria:42 CFR 431, 42 CFR 435, and 42 CFR 457 require that in order to be considered eligible, a recipient must meet eligibility factors and the recipient case record must include facts to support agency eligibility decision. 42 CFR 435 and 457 also require annual renewal of eligibility.42 CFR 433.400 also states in order to claim the temporary increase in the federal medical assistance percentage (FMAP), states must maintain the Medicaid enrollment of ?validly enrolled beneficiaries? in one of three tiers of coverage. States may terminate individuals not validly enrolled.LDH has outlined eligibility criteria and documentation to support determinations and renewals in its Medicaid eligibility manual.Cause:LDH did not adhere to established control procedures to ensure case records support eligibility decisions, including performance of annual renewals, per federal regulations, and the Medicaid Eligibility Manual.Effect:Proper eligibility determination and renewals are critical to ensuring appropriate service eligibility, appropriate premium payments, and appropriate federal match rate on expenditures.We noted questioned costs totaling $77,983 in federal funds in relation to the two Medicaid recipients whose coverage was not discontinued. We did not note any questioned costs related to the other errors due to certain restrictions on eligibility actions during the PHE.Recommendation:LDH should ensure its employees follow procedures relating to eligibility determinations and renewals in the Medicaid and CHIP programs to ensure the case records support the eligibility decisions.Management?s Response and Corrective Action Plan:Management did not concur with the finding and noted that the Center for Medicare and Medicaid Services (CMS) provided certain flexibilities in meeting the timeliness of renewals in accordance with 42 CFR 435.912(e)(2), and LDH used this flexibility to suspend renewals during the PHE. LDH also indicated, while there was no particular documentation in the ?case note? section of the Louisiana Medicaid Eligibility Determination System (LaMEDS), LDH provided audit staff with LaMEDS log tables which documented system jobs called ?data fixes? that were completed which set certain renewals to a future date per the approved flexibility.In addition, on the one instance of coverage that was not discontinued on a beneficiary invalidly enrolled prior to the start of the PHE, LDH noted that in November 2020 CMS issued an Interim Final Rule (CMS-9912-IFC) which provided additional information concerning the continuous enrollment period and allowable terminations and transitions during the PHE for beneficiaries invalidly enrolled. LDH?s opinion is the Interim Final Rule nor the FAQ guidance that followed provided any instruction to review or take action on cases that were prevented from termination prior to its release; therefore, LDH applied the clarification of ?validly enrolled? on decisions going forward (B-34).Auditor?s Additional Comments:The LaMEDS log tables were considered during testing by the auditor. For the exceptions related to renewals above, there was no evidence of any systems being checked with the data logs provided by LDH during state fiscal year 2022. Although CMS granted flexibilities for completing the renewals at a future date, it did not appear that CMS was granting approval for suspension of renewals. CMS also notified LDH that federal regulation requires the agency to document the reason for the delay in each case record, but there was no evidence of this in the exceptions noted above.In reference to the one beneficiary invalidly enrolled prior to the start of the PHE, LDH should have implemented the CMS Interim Final Rule (CMS-9912-IFC) to include all months during the PHE in order to discontinue coverage on a beneficiary that was invalidly enrolled prior to the start of the PHE or during the PHE.
2022-029 - Noncompliance with Managed Care Provider Enrollment and Screening RequirementAward Years: 2021, 2022Award Numbers: 2105LA5021, 2105LA5MAP, 2205LA5021, 2205LA5MAPCompliance Requirement: Special Tests and ProvisionsRepeat Finding: Yes (Prior Year Finding No. 2021-061)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fifth consecutive year, LDH did not enroll and screen Healthy Louisiana managed care providers and dental managed care providers as required by federal regulations. During fiscal year 2022, the managed care plans continued to enroll and screen some managed care providers, in violation of federal regulations.Criteria:42 CFR 438.602 (2016 Managed Care Final Rule) and Section 5005 of the 21st Century Cures Act require that the enrollment process include providing the Medicaid agency with the provider?s identifying information including the name, specialty, date of birth, Social Security number, national provider identifier, federal taxpayer identification number, and state license or certification number of the provider. Additionally, the state agency is required to screen enrolled providers, require certain disclosures, provide enhanced oversight of certain providers, and comply with reporting of adverse provider actions and provider terminations. By using the federally required process, managed care providers must participate in the same screening and enrollment process as Medicaid and CHIP fee-for-service providers.Cause:LDH noted that enrollment and screening of managed care providers was to be performed as part of a new provider management system. After cancellation of the new provider management system contract, the state?s current provider enrollment vendor, Gainwell Technologies Inc. (Gainwell), began the process of creating a web-based portal for Medicaid and its providers to complete the necessary screenings required by federal regulations.In July 2021, LDH launched the enrollment portal created by Gainwell. Although the enrollment portal was launched in fiscal year 2022, LDH gave providers until December 31, 2022, to enroll. Therefore, LDH did not enroll and screen all of the Healthy Louisiana managed care providers and dental managed care providers as required by federal regulations before the fiscal year-end.Effect:LDH cannot ensure the accuracy of provider information obtained from the Louisiana Medicaid managed care plans and cannot ensure compliance with enrollment requirements defined by law and the Medicaid and CHIP state plan. LDH accepted 96 million Healthy Louisiana encounter claims totaling $7.5 billion and 2.8 million dental encounter claims totaling $125.8 million in fiscal year 2022 from the managed care plans and paid $14.7 billion in Healthy Louisiana premiums and $375.8 million in dental premiums.Recommendation:LDH should ensure all providers are screened and enrolled as required by federal regulations.Management?s Response and Corrective Action Plan:Management concurred in part with the finding and provided a corrective action plan (B-37).
2022-030 - Noncompliance with Provider Revalidation and Screening RequirementsAward Years: 2021, 2022Award Numbers: 2105LA5021, 2105LA5MAP, 2205LA5021, 2205LA5MAPCompliance Requirement: Special Tests and ProvisionsRepeat Finding: Yes (Prior Year Finding No. 2021-063)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fifth consecutive year, LDH did not perform five-year revalidations; screenings based on categorical risk of fraud, waste, or abuse; and monthly checks of the federal excluded party database, as required by federal regulations for all Medicaid and CHIP fee-for-service providers.Based on information provided by LDH, approximately 71% of providers with claims activity in fiscal year 2022 have not had a risk-based screening with the majority of those providers enrolled more than five years ago.In addition, LDH did not routinely check required federal databases to determine if providers have been excluded from participation in federal programs. Although LDH began checking the System for Award Management (SAM) on a monthly basis beginning March of 2022, a check was not performed for all providers for all months during fiscal year 2022.Criteria:Providers are enrolled by LDH and can provide services to either Medicaid and/or CHIP recipients as applicable.42 CFR 455 Subpart E requires that LDH screen all providers according to the provider?s categorical risk level upon initial enrollment, re-enrollment, or revalidation of enrollment. LDH must complete a revalidation of enrollment for all providers, regardless of type, at least every five years. The required screening procedures for each provider varies based on the risk score ? limited, moderate, or high. For example, a high-risk score requires additional screening procedures including criminal background checks and fingerprinting.LDH submitted and received the Medicaid State Plan approval in 2012 regarding compliance with revalidation and screening requirements.42 CFR 455 Subpart E required LDH to check the List of Excluded Individuals/Entities and SAM on at least a monthly basis. The SAM database includes information on providers excluded from contracting with the federal government.Cause:LDH noted that revalidation and screening of providers was to be performed as part of a new provider management system. After cancellation of the new provider management system contract, the state?s current provider enrollment vendor, Gainwell, began the process of creating a web-based portal for Medicaid and its providers to complete the necessary screenings required by federal regulations.In July 2021, LDH launched the enrollment portal created by Gainwell. Although the enrollment portal was launched in fiscal year 2022, LDH gave providers until December 31, 2022, to enroll. Therefore, LDH did not revalidate and screen all of the providers as required by federal regulations before the fiscal year-end.Effect:Proper enrollment and revalidation, including screening based on categorical risk and monthly checks of required databases, would enable the state to identify ineligible providers that should be rejected or excluded from the program.Recommendation:LDH should ensure all providers are screened based on categorical risk level upon initial enrollment, re-enrollment, and revalidation of enrollment as required by federal regulations. Also, LDH should perform revalidation of enrollment on all providers at least every five years. In addition, LDH should ensure all required databases are checked at least on a frequency required by federal regulations.Management?s Response and Corrective Action Plan:Management partially concurred with the finding and provided a corrective action plan (B-39).
2022-031 - Weakness in Controls over and Noncompliance with Provider OverpaymentsAward Years: 2021, 2022Award Numbers: 2105LA5021, 2105LA5MAP, 2205LA5021, 2205LA5MAPCompliance Requirement: Special Tests and ProvisionsRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:During our review over the LDH?s reconciliations related to the return of the federal share of provider overpayments that have reached the one-year reporting deadline, we noted that one out of four (25%) CMS 64 quarterly reports was reconciled using incorrect data. For the quarterly report ending September 30, 2021, LDH inadvertently pulled the June 2020 report as a starting point instead of the June 2021 report when creating its one-year reconciliation. This resulted in the amount reported on the quarterly report ending September 30, 2021, to be overstated by approximately $20 million. LDH did not identify this error during its review process of the September 30, 2021 report, but did discover this error later and corrected the error on the CMS 64 quarterly report ending December 31, 2021. Therefore, we do not consider the overstatement to be questioned costs.In addition, in a non-statistical sample of 60 provider overpayments from a population of 402,032, we were unable to obtain sufficient appropriate audit evidence to determine if the federal portion of provider overpayment collections were returned to CMS in the appropriate quarter.Criteria:Pursuant to 1903(d)(2)(c) of the Act (42 USC 1396b), states have up to one year from the date of discovery of the overpayment to recover or attempt to recover the overpayment from the provider before the federal share must be refunded to CMS via the CMS 64 quarterly report, regardless of whether recovery is made from the provider. The state must credit the federal share to CMS as outlined under 42 CFR 433.320(a)(2) either in the quarter in which the recovery is made or in the quarter in which the one-year period following discovery ends, whichever is earlier.Cause:LDH?s control over compliance with federal regulations regarding the refunding of provider overpayments to CMS was not operating effectively for all quarters for the fiscal year ending June 30, 2022. In addition, LDH did not provide proper supporting documentation for the auditor to test federal regulations over provider overpayments.Effect:Provider overpayments that reached the one-year deadline in September 2021 were not accurately reported until the December 2021 CMS 64 report was completed, causing them to be late and not in compliance with federal regulations.Recommendation:LDH should strengthen its controls over the preparation of the quarterly CMS 64 reports to ensure compliance with federal regulations. In addition, LDH should ensure it is able to provide supporting documentation timely for amounts reported in the CMS 64 reports for overpayments.Management?s Response and Corrective Action Plan:Management did not concur with the finding noting LDH Fiscal is currently in the process of revising procedures to ensure provisions of the 365-Day Receivable report as supporting documentation for provider overpayments (B-41).
2022-023 - Inadequate Controls and Noncompliance over ADP Risk Analysis and System Security ReviewAward Years: 2021, 2022Award Numbers: 2105LA5021, 2105LA5MAP, 2205LA5021, 2205LA5MAPCompliance Requirement: Special Tests and ProvisionsRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:The Louisiana Department of Health (LDH) did not have adequate controls in place to ensure that the Magellan Medicaid Administration (Magellan) Service Organization Control (SOC) 1 type 2 report was reviewed in accordance with the Automated Data Processing (ADP) Risk Analysis and System Security Review federal requirements for the year ending June 30, 2022. LDH contracted with Magellan in fiscal year 2022 to provide services that include maintaining system controls related to the drug rebates program.Criteria:According to 45 CFR 95.621, the state shall maintain reports on its biennial ADP system security reviews, together with pertinent supporting documentation, for on-site reviews. Good internal controls require that policies and procedures are established and followed to ensure compliance with federal requirements.Cause:LDH received the required SOC 1 type 2 report from Magellan but was unable to provide any evidence to support its review and did not have written procedures regarding the review of the SOC report.Effect:Proper review of the required SOC report is critical to ensuring the controls utilized by Magellan are adequate and operating effectively.Recommendation:LDH should design and implement procedures to document and support its review of all ADP system security reports.Management?s Response and Corrective Action Plan:Management partially concurred with the finding and provided a corrective action plan (B-19).
2022-024 - Inadequate Controls over and Noncompliance with National Correct Coding Initiative RequirementsAward Years: 2021, 2022Award Numbers: 2105LA5MAP, 2205LA5MAPCompliance Requirement: Special Tests and ProvisionsRepeat Finding: Yes (Prior Year Finding No. 2021-054)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the second consecutive year, LDH failed to properly implement and monitor National Correct Coding Initiative Requirements (NCCI) for Medically Unlikely edits (MUE) and Procedure-to-Procedure (PTP) edits for the Medical Assistance Program (Medicaid) Fee-for-Service (FFS) claims. MUE is an edit on claims in which the number of units billed on the claim are more than what is considered necessary/allowed for a particular procedure code and PTP is an edit on claims in which one specific procedure code is not allowed to be billed with a different specific procedure code on the same recipient on the same day by the same provider.Our testing of NCCI edits included all FFS claims for Durable Medical Equipment (DME), Outpatient Hospital Service (OP), and practitioner and ambulatory surgical center (PRA) paid in state fiscal year 2022. These claims were subject to two edit types: MUE and PTP.In a test of 10,115,246 paid claims to determine if the proper NCCI MUE and PTP edits had been implemented, the following was noted:? 19,683 claims for DME, OP, and PRA were paid but should have been evaluated by an NCCI MUE and denied. These NCCI MUE edit errors resulted in questioned costs of $732,101 in federal funds. LDH noted that required NCCI MUE edits have not been applied to OP and DME FFS claims due to system constraints.? 269 claims for DME, OP, and PRA were paid but should have been evaluated by an NCCI PTP edit and denied. These NCCI PTP edit errors resulted in questioned costs of $33,463 in federal funds.Criteria:Section 1903(r) of the Social Security Act requires State Medicaid agencies to incorporate NCCI methodologies into State Medicaid programs. Federal regulations and the NCCI Medicaid Technical Guidance Manual contains requirements for implementation of the NCCI methodologies.Cause:The errors noted occurred due to inadequate NCCI edit monitoring procedures by LDH and instances of noncompliance with the federal regulations and NCCI Medicaid Technical Guidance.Effect:Failure to properly implement and enforce all required NCCI edits increases the likelihood that FFS claims, which should be denied, could potentially be paid.Recommendation:Management should ensure all required NCCI edits are properly applied to FFS claims.Management?s Response and Corrective Action Plan:Management partially concurred with the finding and provided a corrective action plan (B-21).Auditor?s Additional Comments:Management?s response stated, ?The data pull does not consider the final adjudication of claims.? However, LLA data analysis included final adjudication for FFS claims paid in state fiscal year ended June 30, 2022.
2022-025 - Inadequate Controls over Billing for Behavioral Health ServicesAward Years: 2021, 2022Award Numbers: 2105LA5021, 2105LA5MAP, 2205LA5021, 2205LA5MAPCompliance Requirement: Activities Allowed or UnallowedRepeat Finding: Yes (Prior Year Finding No. 2021-055)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, LDH, the managed care organizations (MCOs), and Magellan Health Services (Magellan) did not have adequate controls in place to ensure that behavioral health services in the Medical Assistance Program (Medicaid) and Children?s Health Insurance Program (CHIP) were properly billed and that improper encounters were denied. For fiscal year 2022, we identified approximately $8.8 million in encounters for services between July 1, 2021, and June 30, 2022, that were paid by the MCOs and Magellan even though the encounters do not appear to comply with LDH?s encounter coding requirements and/or approved fee schedules.Our analysis identified the following instances of billing errors:? Providers were paid $8,329,594 for 125,734 encounters that were billed using incorrect procedure and modifier codes.? Providers were paid $489,342 more than indicated on approved fee schedules for 13,019 encounters for behavioral health services.Criteria:LDH?s fee schedule outlines procedure codes for services and the applicable billing rates. Some services require that procedure codes also contain modifier codes which indicate information such as the age of the recipient, location where the service was provided, the educational background of the person providing the service, and the license(s) they have obtained.The approved fee schedules outline different rates depending on the procedure code and modifier codes. The MCOs can optionally pay more than the minimum LDH fee schedule.Cause:The billing errors could be avoided by LDH, the MCOs, and Magellan applying system edits that would flag encounters for further review when encounter coding and/or fee schedule requirements are not followed.Effect:Without the required modifiers, the encounter does not contain enough information to determine that the billing was appropriate.Because LDH does not currently maintain a list of providers in which the MCO pays more than the minimum fee schedule, LDH cannot determine if an encounter paid at an excessive rate was improperly billed.It is important that encounter data is accurate because LDH and other stakeholders, such as the Medicaid Fraud Control Unit within the Attorney General?s Office, use this data to identify improper payments and potential fraud. LDH also uses this encounter data to establish per member per month rates for the MCOs.Recommendation:LDH should implement adequate internal controls to ensure that encounters are coded correctly, which could include edit checks to flag potential improper billings for further review.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-25).
2022-026 - Inadequate Controls over Drug Rebate CollectionsAward Years: 2021, 2022Award Numbers: 2105LA5MAP, 2205LA5MAPCompliance Requirement: Allowable Costs/Cost PrinciplesRepeat Finding: Yes (Prior Year Finding No. 2021-056)See Schedule of Findings and Questioned Costs for chart/tableCondition:In a non-statistical sample of 60 drug rebate invoices from a population of 9,014, three tested (5%) revealed only a partial payment had been collected and no disputes have been made by the manufacturer. Magellan Medicaid Administration, Inc. (Magellan) personnel also confirmed that a dunning notice was not sent to these manufacturers for the unpaid balances. This is the second consecutive year LDH did not have adequate controls related to drug rebate collections.LDH contracted with Magellan for support in performing the federal and supplemental drug rebates processing for the LDH Medicaid program, including but not limited to invoicing, reconciliation, dispute resolution, and follow up on drug manufacturer (manufacturer) non-payment and aged balances for all of LDH?s Medicaid drug rebate programs. The contract sets a frequency in which a written delinquency notice (dunning notice) should be sent to manufacturers with unpaid invoices, but does not address manufacturers who make partial payments towards their quarterly invoice. Magellan personnel confirmed that for fiscal year 2022 these dunning notices are only sent to manufacturers who have not made any payments towards an invoice.Criteria:42 USC 1396r-8 requires manufacturers that wish to have their covered outpatient drugs covered by Medicaid to enter into an agreement under which the manufacturers agree to pay rebates for drugs dispensed and paid for by state Medicaid agencies under the state plan. Those rebates are shared between the state and federal government. Drug rebates are to be paid by the drug manufacturers no later than 30 days after the date of receipt of the utilization data from the state or provide notice of disputed items not paid because of discrepancies found. The state should perform follow up procedures to attempt to collect any unpaid balances in a timely manner.Cause:LDH did not have adequate controls in place to monitor its contract with Magellan and was unable to identify a control that would address the timely collection of partially-paid drug rebates invoices.In following its corrective action plan from fiscal year 2021, LDH began the process of implementing new controls to improve the outstanding balances process for all drug rebate invoices that have not been fully collected or disputed in a timely manner. Specifically, Magellan is in the process of changing its Dunning Notices process as part of the RxLink implementation to include manufacturers that only made partial payments. This process was not implemented during fiscal year 2022 though, and is expected to go live in fiscal year 2023.Effect:Without procedures to address manufacturers that do not pay the entire quarterly balance, there is a risk that appropriate rebates will not be collected.Recommendation:LDH should ensure that agency personnel are adequately monitoring contract provisions for the drug rebate program and follow up procedures are performed for all drug rebate invoices that have not been fully collected or disputed in a timely manner.Management?s Response and Corrective Action Plan:Management did not concur with the finding noting it did not have sufficient time in fiscal year 2022 for corrective action and provided its progress on addressing the finding (B-29).
2022-027 - Inadequate Controls over Monitoring of Abortion ClaimsAward Years: 2021, 2022Award Numbers: 2105LA5021, 2105LA5MAP, 2205LA5021, 2205LA5MAPCompliance Requirement: Activities Allowed or UnallowedRepeat Finding: Yes (Prior Year Finding No. 2021-057)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, LDH did not have adequate controls to ensure compliance with federal regulations prohibiting the use of federal funding for abortion claims.Criteria:42 CFR 441 Subpart E and 42 USC 1397ee(c) prohibit Medicaid and CHIP funding for abortion services except in instances where abortion is necessary to save the mother?s life or if the pregnancy is the result of an act of rape or incest.Cause:Under managed care, LDH pays the health plans monthly premiums for enrolled recipients. The health plans pay provider claims for services provided to enrolled recipients and submit the claims to LDH as encounter claims.LDH included provisions in the Healthy Louisiana managed care contracts requiring the health plans to comply with the federal regulations regarding funding of prohibited abortion services, but LDH did not have adequate procedures in place to monitor the health plans? compliance with the federal regulations. While LDH received monthly self-reported information from the health plans, LDH was not comparing or validating the self-reported information to ensure the reporting was accurate and complete for the entire year. In addition, the instructions provided to the health plans concerning how to complete the reports are not detailed and could potentially lead to all five health plans reporting different information.In fiscal year 2022, LDH began the process of implementing new controls to validate the health plans self-reported information in order to ensure compliance with federal regulations regarding the funding of prohibited abortion claims. Specifically, in July of 2022 LDH began a spot check review of the health plans self-reported encounter claims information and reviewed data retroactively for the third and fourth quarter of fiscal year 2022 (January 2022 to June 2022). However, this process was not fully implemented during fiscal year 2022, nor did it cover the first two quarters of the audit period of July 1, 2021, to December 31, 2021. It is expected this process will cover all four quarters beginning in fiscal year 2023.Effect:Claims paid by the managed care health plans for abortion services that do not meet exceptions noted in federal regulations may go undetected, and LDH may accept these improper claims as encounter claims. Encounter claims are considered in future premium rate setting and are used for reporting and monitoring of the Medicaid and CHIP programs.Recommendation:LDH should continue its process to validate self-reported information from the health plans and ensure its process is operating effectively to ensure compliance with federal regulations regarding funding of prohibited abortions claims.Management?s Response and Corrective Action Plan:Management concurred in part with the finding and provided a corrective action plan (B-32).
2022-028 - Inadequate Internal Controls over Eligibility DeterminationsAward Years: 2020 - 2022Award Numbers: 2005LA5MAP, 2105LA5021, 2105LA5MAP, 2205LA5021, 2205LA5MAPCompliance Requirement: EligibilityRepeat Finding: Yes (Prior Year Finding No. 2021-060)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the third consecutive year, LDH lacked adequate internal controls over eligibility determinations in the Medicaid and CHIP programs for the state fiscal year ending June 30, 2022.From a population of 1,919,113 Medicaid recipients, a non-statistical sample of 60 recipients was tested. Five (8.3%) out of 60 Medicaid recipients tested did not have adequate documentation to support the eligibility determination or redetermination within the recipient?s case record.The following errors were noted for Medicaid:? For one recipient, LDH personnel did not discontinue coverage on a beneficiary that was invalidly enrolled prior to the start of the public health emergency (PHE).? For one recipient, LDH personnel did not discontinue coverage on a recipient who moved out of state.? For three recipients, renewals were not performed during the state fiscal year as required by federal regulations.During our testing of Medicaid managed care premiums, we identified an additional recipient with eligibility not supported by the case record. The recipient?s case record did not reflect timely transition into an appropriate case type based on the recipient?s age.In addition, from a population of 212,933 CHIP eligibility recipients, a non-statistical sample of 60 recipients was tested. For two (3.3%) out of 60 CHIP recipients tested, LDH did not perform renewals during the state fiscal year as required by federal regulations.Criteria:42 CFR 431, 42 CFR 435, and 42 CFR 457 require that in order to be considered eligible, a recipient must meet eligibility factors and the recipient case record must include facts to support agency eligibility decision. 42 CFR 435 and 457 also require annual renewal of eligibility.42 CFR 433.400 also states in order to claim the temporary increase in the federal medical assistance percentage (FMAP), states must maintain the Medicaid enrollment of ?validly enrolled beneficiaries? in one of three tiers of coverage. States may terminate individuals not validly enrolled.LDH has outlined eligibility criteria and documentation to support determinations and renewals in its Medicaid eligibility manual.Cause:LDH did not adhere to established control procedures to ensure case records support eligibility decisions, including performance of annual renewals, per federal regulations, and the Medicaid Eligibility Manual.Effect:Proper eligibility determination and renewals are critical to ensuring appropriate service eligibility, appropriate premium payments, and appropriate federal match rate on expenditures.We noted questioned costs totaling $77,983 in federal funds in relation to the two Medicaid recipients whose coverage was not discontinued. We did not note any questioned costs related to the other errors due to certain restrictions on eligibility actions during the PHE.Recommendation:LDH should ensure its employees follow procedures relating to eligibility determinations and renewals in the Medicaid and CHIP programs to ensure the case records support the eligibility decisions.Management?s Response and Corrective Action Plan:Management did not concur with the finding and noted that the Center for Medicare and Medicaid Services (CMS) provided certain flexibilities in meeting the timeliness of renewals in accordance with 42 CFR 435.912(e)(2), and LDH used this flexibility to suspend renewals during the PHE. LDH also indicated, while there was no particular documentation in the ?case note? section of the Louisiana Medicaid Eligibility Determination System (LaMEDS), LDH provided audit staff with LaMEDS log tables which documented system jobs called ?data fixes? that were completed which set certain renewals to a future date per the approved flexibility.In addition, on the one instance of coverage that was not discontinued on a beneficiary invalidly enrolled prior to the start of the PHE, LDH noted that in November 2020 CMS issued an Interim Final Rule (CMS-9912-IFC) which provided additional information concerning the continuous enrollment period and allowable terminations and transitions during the PHE for beneficiaries invalidly enrolled. LDH?s opinion is the Interim Final Rule nor the FAQ guidance that followed provided any instruction to review or take action on cases that were prevented from termination prior to its release; therefore, LDH applied the clarification of ?validly enrolled? on decisions going forward (B-34).Auditor?s Additional Comments:The LaMEDS log tables were considered during testing by the auditor. For the exceptions related to renewals above, there was no evidence of any systems being checked with the data logs provided by LDH during state fiscal year 2022. Although CMS granted flexibilities for completing the renewals at a future date, it did not appear that CMS was granting approval for suspension of renewals. CMS also notified LDH that federal regulation requires the agency to document the reason for the delay in each case record, but there was no evidence of this in the exceptions noted above.In reference to the one beneficiary invalidly enrolled prior to the start of the PHE, LDH should have implemented the CMS Interim Final Rule (CMS-9912-IFC) to include all months during the PHE in order to discontinue coverage on a beneficiary that was invalidly enrolled prior to the start of the PHE or during the PHE.
2022-029 - Noncompliance with Managed Care Provider Enrollment and Screening RequirementAward Years: 2021, 2022Award Numbers: 2105LA5021, 2105LA5MAP, 2205LA5021, 2205LA5MAPCompliance Requirement: Special Tests and ProvisionsRepeat Finding: Yes (Prior Year Finding No. 2021-061)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fifth consecutive year, LDH did not enroll and screen Healthy Louisiana managed care providers and dental managed care providers as required by federal regulations. During fiscal year 2022, the managed care plans continued to enroll and screen some managed care providers, in violation of federal regulations.Criteria:42 CFR 438.602 (2016 Managed Care Final Rule) and Section 5005 of the 21st Century Cures Act require that the enrollment process include providing the Medicaid agency with the provider?s identifying information including the name, specialty, date of birth, Social Security number, national provider identifier, federal taxpayer identification number, and state license or certification number of the provider. Additionally, the state agency is required to screen enrolled providers, require certain disclosures, provide enhanced oversight of certain providers, and comply with reporting of adverse provider actions and provider terminations. By using the federally required process, managed care providers must participate in the same screening and enrollment process as Medicaid and CHIP fee-for-service providers.Cause:LDH noted that enrollment and screening of managed care providers was to be performed as part of a new provider management system. After cancellation of the new provider management system contract, the state?s current provider enrollment vendor, Gainwell Technologies Inc. (Gainwell), began the process of creating a web-based portal for Medicaid and its providers to complete the necessary screenings required by federal regulations.In July 2021, LDH launched the enrollment portal created by Gainwell. Although the enrollment portal was launched in fiscal year 2022, LDH gave providers until December 31, 2022, to enroll. Therefore, LDH did not enroll and screen all of the Healthy Louisiana managed care providers and dental managed care providers as required by federal regulations before the fiscal year-end.Effect:LDH cannot ensure the accuracy of provider information obtained from the Louisiana Medicaid managed care plans and cannot ensure compliance with enrollment requirements defined by law and the Medicaid and CHIP state plan. LDH accepted 96 million Healthy Louisiana encounter claims totaling $7.5 billion and 2.8 million dental encounter claims totaling $125.8 million in fiscal year 2022 from the managed care plans and paid $14.7 billion in Healthy Louisiana premiums and $375.8 million in dental premiums.Recommendation:LDH should ensure all providers are screened and enrolled as required by federal regulations.Management?s Response and Corrective Action Plan:Management concurred in part with the finding and provided a corrective action plan (B-37).
2022-030 - Noncompliance with Provider Revalidation and Screening RequirementsAward Years: 2021, 2022Award Numbers: 2105LA5021, 2105LA5MAP, 2205LA5021, 2205LA5MAPCompliance Requirement: Special Tests and ProvisionsRepeat Finding: Yes (Prior Year Finding No. 2021-063)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fifth consecutive year, LDH did not perform five-year revalidations; screenings based on categorical risk of fraud, waste, or abuse; and monthly checks of the federal excluded party database, as required by federal regulations for all Medicaid and CHIP fee-for-service providers.Based on information provided by LDH, approximately 71% of providers with claims activity in fiscal year 2022 have not had a risk-based screening with the majority of those providers enrolled more than five years ago.In addition, LDH did not routinely check required federal databases to determine if providers have been excluded from participation in federal programs. Although LDH began checking the System for Award Management (SAM) on a monthly basis beginning March of 2022, a check was not performed for all providers for all months during fiscal year 2022.Criteria:Providers are enrolled by LDH and can provide services to either Medicaid and/or CHIP recipients as applicable.42 CFR 455 Subpart E requires that LDH screen all providers according to the provider?s categorical risk level upon initial enrollment, re-enrollment, or revalidation of enrollment. LDH must complete a revalidation of enrollment for all providers, regardless of type, at least every five years. The required screening procedures for each provider varies based on the risk score ? limited, moderate, or high. For example, a high-risk score requires additional screening procedures including criminal background checks and fingerprinting.LDH submitted and received the Medicaid State Plan approval in 2012 regarding compliance with revalidation and screening requirements.42 CFR 455 Subpart E required LDH to check the List of Excluded Individuals/Entities and SAM on at least a monthly basis. The SAM database includes information on providers excluded from contracting with the federal government.Cause:LDH noted that revalidation and screening of providers was to be performed as part of a new provider management system. After cancellation of the new provider management system contract, the state?s current provider enrollment vendor, Gainwell, began the process of creating a web-based portal for Medicaid and its providers to complete the necessary screenings required by federal regulations.In July 2021, LDH launched the enrollment portal created by Gainwell. Although the enrollment portal was launched in fiscal year 2022, LDH gave providers until December 31, 2022, to enroll. Therefore, LDH did not revalidate and screen all of the providers as required by federal regulations before the fiscal year-end.Effect:Proper enrollment and revalidation, including screening based on categorical risk and monthly checks of required databases, would enable the state to identify ineligible providers that should be rejected or excluded from the program.Recommendation:LDH should ensure all providers are screened based on categorical risk level upon initial enrollment, re-enrollment, and revalidation of enrollment as required by federal regulations. Also, LDH should perform revalidation of enrollment on all providers at least every five years. In addition, LDH should ensure all required databases are checked at least on a frequency required by federal regulations.Management?s Response and Corrective Action Plan:Management partially concurred with the finding and provided a corrective action plan (B-39).
2022-031 - Weakness in Controls over and Noncompliance with Provider OverpaymentsAward Years: 2021, 2022Award Numbers: 2105LA5021, 2105LA5MAP, 2205LA5021, 2205LA5MAPCompliance Requirement: Special Tests and ProvisionsRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:During our review over the LDH?s reconciliations related to the return of the federal share of provider overpayments that have reached the one-year reporting deadline, we noted that one out of four (25%) CMS 64 quarterly reports was reconciled using incorrect data. For the quarterly report ending September 30, 2021, LDH inadvertently pulled the June 2020 report as a starting point instead of the June 2021 report when creating its one-year reconciliation. This resulted in the amount reported on the quarterly report ending September 30, 2021, to be overstated by approximately $20 million. LDH did not identify this error during its review process of the September 30, 2021 report, but did discover this error later and corrected the error on the CMS 64 quarterly report ending December 31, 2021. Therefore, we do not consider the overstatement to be questioned costs.In addition, in a non-statistical sample of 60 provider overpayments from a population of 402,032, we were unable to obtain sufficient appropriate audit evidence to determine if the federal portion of provider overpayment collections were returned to CMS in the appropriate quarter.Criteria:Pursuant to 1903(d)(2)(c) of the Act (42 USC 1396b), states have up to one year from the date of discovery of the overpayment to recover or attempt to recover the overpayment from the provider before the federal share must be refunded to CMS via the CMS 64 quarterly report, regardless of whether recovery is made from the provider. The state must credit the federal share to CMS as outlined under 42 CFR 433.320(a)(2) either in the quarter in which the recovery is made or in the quarter in which the one-year period following discovery ends, whichever is earlier.Cause:LDH?s control over compliance with federal regulations regarding the refunding of provider overpayments to CMS was not operating effectively for all quarters for the fiscal year ending June 30, 2022. In addition, LDH did not provide proper supporting documentation for the auditor to test federal regulations over provider overpayments.Effect:Provider overpayments that reached the one-year deadline in September 2021 were not accurately reported until the December 2021 CMS 64 report was completed, causing them to be late and not in compliance with federal regulations.Recommendation:LDH should strengthen its controls over the preparation of the quarterly CMS 64 reports to ensure compliance with federal regulations. In addition, LDH should ensure it is able to provide supporting documentation timely for amounts reported in the CMS 64 reports for overpayments.Management?s Response and Corrective Action Plan:Management did not concur with the finding noting LDH Fiscal is currently in the process of revising procedures to ensure provisions of the 365-Day Receivable report as supporting documentation for provider overpayments (B-41).
2022-006 - Control Weakness and Noncompliance with Personnel Expenses Charged to Federal AwardsAward Years: 2018, 2019, 2021, 2022Award Numbers: 2138930, 2000614536, B-18-DP-22-001, EMW-2020-SS-00011-S01, M19AC00015, NR227217XXXXC002, P01AI048240, R21AI165939, R33HD099745, U19AI159840Compliance Requirements: Allowable Costs/Cost Principles, Special Tests and ProvisionsPass-Through Entities: Board of Trustees of the Leland Stanford Junior University, Emory UniversityRepeat Finding: Yes (Prior Year Finding No. 2021-009)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the second consecutive year, the University of Louisiana at Lafayette (UL Lafayette) did not have adequate controls in place to ensure personnel expenses and effort charged to federal R&D awards accurately reflected work performed. From a population of 28,744 payroll and non-payroll expenses charged to R&D grants, a non-statistical sample of 25 transactions was tested. For all 12 (48%) of the payroll transactions, UL Lafayette was unable to provide documentation to show that personnel-related expenses, totaling $4,520, were supported by time and effort certifications to ensure the accuracy of budget estimates charged to federal awards as required by federal regulations. Additionally, because there is no after-the-fact review to ensure the accuracy of personnel costs and effort charged to the awards, UL Lafayette could not ensure compliance with the requirements of special tests and provisions related to key personnel effort.Criteria:2 CFR 200.430(i) specifies the documentation standards for personnel expenses. In order to be allowable, charges to federal awards for personnel expenses must be based on records that accurately reflect the work performed and must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Budget estimates alone do not qualify as support for charges to federal awards, but can be used for interim accounting purposes provided that internal controls include an after-the-fact review to confirm the accuracy of final amounts charged to federal awards.Prior approval requirements related to key personnel effort are contained in 2 CFR 200.308(c) and within grant terms and conditions. A reduction of 25% or greater in time devoted to the project from key personnel requires prior approval.Cause:Management represented that it?s still in the process of implementing the prior-year corrective actions to address the issues noted in the prior-year finding. As a result, time and effort certifications were not completed by employees to support the accuracy of budget estimates charged to federal awards as required by 2 CFR 200.430(i).Effect:Inadequate controls related to federal documentation standards for personnel expenses could result in noncompliance with federal allowable costs and cost principles, as well as noncompliance with special tests and provisions related to key personnel effort.Recommendation:Management should strengthen internal controls to ensure that personnel expenses charged to the federal awards are supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.Management?s Response and Corrective Action Plan:Management did not concur with the finding, noting it did not have sufficient time in fiscal year 2022 for corrective action and provided its progress on addressing the finding (B-82).