Audit 315903

Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Proper controls over drawdowns are critical to reduce the risk that there are errors in amounts and information reported. Further, the risk of noncompliance is increased when federal awards are not properly identified. Internal controls procedures should be in place to ensure review of drawdowns. Condition: There is a lack of sufficient controls over review and documentation of review of drawdowns. Questioned costs: N/A Context: During testing of indirect costs, allowable cost/activities, and period of performance, there was no control or review taking place over these compliance areas. Cause: Due to the Institute receiving federal funding for the first time in 2022, the Institute had not set up a proper system of internal controls till 2023. Effect: Ensuring the drawdowns are reviewed for accuracy is critical to ensure a proper internal control system and prevention of errors. Repeat Finding: No Recommendation: Recommend the Institute identify an individual with an understanding of the grant and compliance requirements to review the drawdowns prepared by the Controller. Views of responsible officials: There is no disagreement with the audit finding.

Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Under the Uniform Guidance, the Institute’s records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: There is a lack of controls in place for review of the payroll grant summary compiled on a monthly basis. This resulted in errors in calculating payroll that could be applied to the Coronavirus State and Local Fiscal Recovery Funds Program. Questioned costs: N/A Context: The following errors were noted in allowable cost testing over payroll: 1. It was noted that the total hours in a month for salary employees were calculated by counting all days within a month that fell between Monday to Friday and multiplied by 8. The number of hours used to calculate payroll to the grant is based on these hours. There were errors noted in the number of days/hours used. In all situations, the Institute used a number of hours that are more than the actual. This resulted in the payroll being applied to the grant to be less than actual and therefore no questioned costs resulted. 2. On multiple occasions the salary rate used to calculate the payroll costs was being calculated with the incorrect rate. The rates that were used were the approved pay rates prior to a raise. We note the rate was lower than the approved rate resulting in no questioned costs. Further, we note that all wage rates selected for testing were properly reviewed and approved by the Institute. 3. The payroll grant summary is compiled using a manual process. There were multiple occasions where there were data entry errors noted in the calculation. Cause: There is a lack of controls in place for review of the payroll grant summary compiled on a monthly basis. Effect: Inaccurate capturing of costs charged to the grant. Repeat Finding: No Recommendation: The Organization should establish a policy that has an individual review the monthly payroll grant summary for accuracy. Views of responsible officials: There is no disagreement with the audit finding.

Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Proper controls over drawdowns are critical to reduce the risk that there are errors in amounts and information reported. Further, the risk of noncompliance is increased when federal awards are not properly identified. Internal controls procedures should be in place to ensure review of drawdowns. Condition: There is a lack of sufficient controls over review and documentation of review of drawdowns. Questioned costs: N/A Context: During testing of indirect costs, allowable cost/activities, and period of performance, there was no control or review taking place over these compliance areas. Cause: Due to the Institute receiving federal funding for the first time in 2022, the Institute had not set up a proper system of internal controls till 2023. Effect: Ensuring the drawdowns are reviewed for accuracy is critical to ensure a proper internal control system and prevention of errors. Repeat Finding: No Recommendation: Recommend the Institute identify an individual with an understanding of the grant and compliance requirements to review the drawdowns prepared by the Controller. Views of responsible officials: There is no disagreement with the audit finding.

Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Under the Uniform Guidance, the Institute’s records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: There is a lack of controls in place for review of the payroll grant summary compiled on a monthly basis. This resulted in errors in calculating payroll that could be applied to the Coronavirus State and Local Fiscal Recovery Funds Program. Questioned costs: N/A Context: The following errors were noted in allowable cost testing over payroll: 1. It was noted that the total hours in a month for salary employees were calculated by counting all days within a month that fell between Monday to Friday and multiplied by 8. The number of hours used to calculate payroll to the grant is based on these hours. There were errors noted in the number of days/hours used. In all situations, the Institute used a number of hours that are more than the actual. This resulted in the payroll being applied to the grant to be less than actual and therefore no questioned costs resulted. 2. On multiple occasions the salary rate used to calculate the payroll costs was being calculated with the incorrect rate. The rates that were used were the approved pay rates prior to a raise. We note the rate was lower than the approved rate resulting in no questioned costs. Further, we note that all wage rates selected for testing were properly reviewed and approved by the Institute. 3. The payroll grant summary is compiled using a manual process. There were multiple occasions where there were data entry errors noted in the calculation. Cause: There is a lack of controls in place for review of the payroll grant summary compiled on a monthly basis. Effect: Inaccurate capturing of costs charged to the grant. Repeat Finding: No Recommendation: The Organization should establish a policy that has an individual review the monthly payroll grant summary for accuracy. Views of responsible officials: There is no disagreement with the audit finding.