Significant Deficiency in Compliance and Internal Control over Compliance with
Reporting (Preparation of the Schedule of Expenditures of Federal Awards). Criteria: CFR Section §200.510(b) states in part: “The auditee must also prepare a schedule of
expenditures of Federal awards for the period covered by the auditee’s financial statements which
must include the total Federal awards expended as determined in accordance with CFR Section
§200.502 Basis for determining Federal awards expended.” For a cluster of programs, the schedule
must provide the cluster name, list individual Federal programs within the cluster of programs, and
provide the applicable Federal agency name. For a cluster of programs, the total for the cluster
must also be provided. Condition: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not operate as designed. BDO identified the following matters during
our testing of the SEFA: During our testing of management’s preparation of the Schedule of Expenditures of Federal
Awards (the SEFA), BDO identified 22 awards that were incorrectly classified as research and
development. In each case, the federal awarding agency or pass-through entity noted in the
award agreement the award was not classified or considered as research and development.
Management subsequently updated the classifications on the SEFA and corrected the
presentation of various programs presented as both clusters and nonclusters on the SEFA. The
SEFA, as presented, includes the corrections made by management. Questioned Costs: None.
Context: The nature of these findings is detailed in the condition section above. Any samples
selected as part of the overall SEFA review were performed using a non-statistical method. Cause: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not fully operate as designed. Urban prepares the SEFA once per
year in conjunction with the annual audit and did not include a procedure to properly identify
research and development classification.
Effect: The SEFA provided to BDO required several awards to be removed from the research and
development cluster. Failure to present the SEFA correctly would have resulted in incorrect major
program selection and an incorrect presentation of the overall SEFA.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend management continue to focus on training for both preparer and
reviewers of the SEFA to ensure the identification of research and development classification from
federal awarding agencies or pass-through entities is properly captured on the schedule. We suggest
this review process begin before the Institute signs an award agreement to determine whether the
agreement states whether it is considered to be research and development. The Institute would
then be aware of the classification prior to committing to the terms of the award. This will ensure
that the SEFA presents all relevant information as prescribed to ensure proper reporting on the SEFA
and major program determination.
Views of Responsible Officials: Management of the Institute agrees with the finding and
recommendations set forth within and has developed a corrective action plan to address the
instances of noncompliance identified and lapses in prescribed internal controls.
Significant Deficiency in Compliance and Internal Control over Compliance with
Reporting (Preparation of the Schedule of Expenditures of Federal Awards). Criteria: CFR Section §200.510(b) states in part: “The auditee must also prepare a schedule of
expenditures of Federal awards for the period covered by the auditee’s financial statements which
must include the total Federal awards expended as determined in accordance with CFR Section
§200.502 Basis for determining Federal awards expended.” For a cluster of programs, the schedule
must provide the cluster name, list individual Federal programs within the cluster of programs, and
provide the applicable Federal agency name. For a cluster of programs, the total for the cluster
must also be provided. Condition: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not operate as designed. BDO identified the following matters during
our testing of the SEFA: During our testing of management’s preparation of the Schedule of Expenditures of Federal
Awards (the SEFA), BDO identified 22 awards that were incorrectly classified as research and
development. In each case, the federal awarding agency or pass-through entity noted in the
award agreement the award was not classified or considered as research and development.
Management subsequently updated the classifications on the SEFA and corrected the
presentation of various programs presented as both clusters and nonclusters on the SEFA. The
SEFA, as presented, includes the corrections made by management. Questioned Costs: None.
Context: The nature of these findings is detailed in the condition section above. Any samples
selected as part of the overall SEFA review were performed using a non-statistical method. Cause: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not fully operate as designed. Urban prepares the SEFA once per
year in conjunction with the annual audit and did not include a procedure to properly identify
research and development classification.
Effect: The SEFA provided to BDO required several awards to be removed from the research and
development cluster. Failure to present the SEFA correctly would have resulted in incorrect major
program selection and an incorrect presentation of the overall SEFA.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend management continue to focus on training for both preparer and
reviewers of the SEFA to ensure the identification of research and development classification from
federal awarding agencies or pass-through entities is properly captured on the schedule. We suggest
this review process begin before the Institute signs an award agreement to determine whether the
agreement states whether it is considered to be research and development. The Institute would
then be aware of the classification prior to committing to the terms of the award. This will ensure
that the SEFA presents all relevant information as prescribed to ensure proper reporting on the SEFA
and major program determination.
Views of Responsible Officials: Management of the Institute agrees with the finding and
recommendations set forth within and has developed a corrective action plan to address the
instances of noncompliance identified and lapses in prescribed internal controls.
Significant Deficiency in Compliance and Internal Control over Compliance with
Reporting (Preparation of the Schedule of Expenditures of Federal Awards). Criteria: CFR Section §200.510(b) states in part: “The auditee must also prepare a schedule of
expenditures of Federal awards for the period covered by the auditee’s financial statements which
must include the total Federal awards expended as determined in accordance with CFR Section
§200.502 Basis for determining Federal awards expended.” For a cluster of programs, the schedule
must provide the cluster name, list individual Federal programs within the cluster of programs, and
provide the applicable Federal agency name. For a cluster of programs, the total for the cluster
must also be provided. Condition: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not operate as designed. BDO identified the following matters during
our testing of the SEFA: During our testing of management’s preparation of the Schedule of Expenditures of Federal
Awards (the SEFA), BDO identified 22 awards that were incorrectly classified as research and
development. In each case, the federal awarding agency or pass-through entity noted in the
award agreement the award was not classified or considered as research and development.
Management subsequently updated the classifications on the SEFA and corrected the
presentation of various programs presented as both clusters and nonclusters on the SEFA. The
SEFA, as presented, includes the corrections made by management. Questioned Costs: None.
Context: The nature of these findings is detailed in the condition section above. Any samples
selected as part of the overall SEFA review were performed using a non-statistical method. Cause: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not fully operate as designed. Urban prepares the SEFA once per
year in conjunction with the annual audit and did not include a procedure to properly identify
research and development classification.
Effect: The SEFA provided to BDO required several awards to be removed from the research and
development cluster. Failure to present the SEFA correctly would have resulted in incorrect major
program selection and an incorrect presentation of the overall SEFA.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend management continue to focus on training for both preparer and
reviewers of the SEFA to ensure the identification of research and development classification from
federal awarding agencies or pass-through entities is properly captured on the schedule. We suggest
this review process begin before the Institute signs an award agreement to determine whether the
agreement states whether it is considered to be research and development. The Institute would
then be aware of the classification prior to committing to the terms of the award. This will ensure
that the SEFA presents all relevant information as prescribed to ensure proper reporting on the SEFA
and major program determination.
Views of Responsible Officials: Management of the Institute agrees with the finding and
recommendations set forth within and has developed a corrective action plan to address the
instances of noncompliance identified and lapses in prescribed internal controls.
Significant Deficiency in Compliance and Internal Control over Compliance with
Reporting (Preparation of the Schedule of Expenditures of Federal Awards). Criteria: CFR Section §200.510(b) states in part: “The auditee must also prepare a schedule of
expenditures of Federal awards for the period covered by the auditee’s financial statements which
must include the total Federal awards expended as determined in accordance with CFR Section
§200.502 Basis for determining Federal awards expended.” For a cluster of programs, the schedule
must provide the cluster name, list individual Federal programs within the cluster of programs, and
provide the applicable Federal agency name. For a cluster of programs, the total for the cluster
must also be provided. Condition: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not operate as designed. BDO identified the following matters during
our testing of the SEFA: During our testing of management’s preparation of the Schedule of Expenditures of Federal
Awards (the SEFA), BDO identified 22 awards that were incorrectly classified as research and
development. In each case, the federal awarding agency or pass-through entity noted in the
award agreement the award was not classified or considered as research and development.
Management subsequently updated the classifications on the SEFA and corrected the
presentation of various programs presented as both clusters and nonclusters on the SEFA. The
SEFA, as presented, includes the corrections made by management. Questioned Costs: None.
Context: The nature of these findings is detailed in the condition section above. Any samples
selected as part of the overall SEFA review were performed using a non-statistical method. Cause: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not fully operate as designed. Urban prepares the SEFA once per
year in conjunction with the annual audit and did not include a procedure to properly identify
research and development classification.
Effect: The SEFA provided to BDO required several awards to be removed from the research and
development cluster. Failure to present the SEFA correctly would have resulted in incorrect major
program selection and an incorrect presentation of the overall SEFA.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend management continue to focus on training for both preparer and
reviewers of the SEFA to ensure the identification of research and development classification from
federal awarding agencies or pass-through entities is properly captured on the schedule. We suggest
this review process begin before the Institute signs an award agreement to determine whether the
agreement states whether it is considered to be research and development. The Institute would
then be aware of the classification prior to committing to the terms of the award. This will ensure
that the SEFA presents all relevant information as prescribed to ensure proper reporting on the SEFA
and major program determination.
Views of Responsible Officials: Management of the Institute agrees with the finding and
recommendations set forth within and has developed a corrective action plan to address the
instances of noncompliance identified and lapses in prescribed internal controls.
Significant Deficiency in Compliance and Internal Control over Compliance with
Reporting (Preparation of the Schedule of Expenditures of Federal Awards). Criteria: CFR Section §200.510(b) states in part: “The auditee must also prepare a schedule of
expenditures of Federal awards for the period covered by the auditee’s financial statements which
must include the total Federal awards expended as determined in accordance with CFR Section
§200.502 Basis for determining Federal awards expended.” For a cluster of programs, the schedule
must provide the cluster name, list individual Federal programs within the cluster of programs, and
provide the applicable Federal agency name. For a cluster of programs, the total for the cluster
must also be provided. Condition: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not operate as designed. BDO identified the following matters during
our testing of the SEFA: During our testing of management’s preparation of the Schedule of Expenditures of Federal
Awards (the SEFA), BDO identified 22 awards that were incorrectly classified as research and
development. In each case, the federal awarding agency or pass-through entity noted in the
award agreement the award was not classified or considered as research and development.
Management subsequently updated the classifications on the SEFA and corrected the
presentation of various programs presented as both clusters and nonclusters on the SEFA. The
SEFA, as presented, includes the corrections made by management. Questioned Costs: None.
Context: The nature of these findings is detailed in the condition section above. Any samples
selected as part of the overall SEFA review were performed using a non-statistical method. Cause: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not fully operate as designed. Urban prepares the SEFA once per
year in conjunction with the annual audit and did not include a procedure to properly identify
research and development classification.
Effect: The SEFA provided to BDO required several awards to be removed from the research and
development cluster. Failure to present the SEFA correctly would have resulted in incorrect major
program selection and an incorrect presentation of the overall SEFA.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend management continue to focus on training for both preparer and
reviewers of the SEFA to ensure the identification of research and development classification from
federal awarding agencies or pass-through entities is properly captured on the schedule. We suggest
this review process begin before the Institute signs an award agreement to determine whether the
agreement states whether it is considered to be research and development. The Institute would
then be aware of the classification prior to committing to the terms of the award. This will ensure
that the SEFA presents all relevant information as prescribed to ensure proper reporting on the SEFA
and major program determination.
Views of Responsible Officials: Management of the Institute agrees with the finding and
recommendations set forth within and has developed a corrective action plan to address the
instances of noncompliance identified and lapses in prescribed internal controls.
Significant Deficiency in Compliance and Internal Control over Compliance with
Reporting (Preparation of the Schedule of Expenditures of Federal Awards). Criteria: CFR Section §200.510(b) states in part: “The auditee must also prepare a schedule of
expenditures of Federal awards for the period covered by the auditee’s financial statements which
must include the total Federal awards expended as determined in accordance with CFR Section
§200.502 Basis for determining Federal awards expended.” For a cluster of programs, the schedule
must provide the cluster name, list individual Federal programs within the cluster of programs, and
provide the applicable Federal agency name. For a cluster of programs, the total for the cluster
must also be provided. Condition: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not operate as designed. BDO identified the following matters during
our testing of the SEFA: During our testing of management’s preparation of the Schedule of Expenditures of Federal
Awards (the SEFA), BDO identified 22 awards that were incorrectly classified as research and
development. In each case, the federal awarding agency or pass-through entity noted in the
award agreement the award was not classified or considered as research and development.
Management subsequently updated the classifications on the SEFA and corrected the
presentation of various programs presented as both clusters and nonclusters on the SEFA. The
SEFA, as presented, includes the corrections made by management. Questioned Costs: None.
Context: The nature of these findings is detailed in the condition section above. Any samples
selected as part of the overall SEFA review were performed using a non-statistical method. Cause: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not fully operate as designed. Urban prepares the SEFA once per
year in conjunction with the annual audit and did not include a procedure to properly identify
research and development classification.
Effect: The SEFA provided to BDO required several awards to be removed from the research and
development cluster. Failure to present the SEFA correctly would have resulted in incorrect major
program selection and an incorrect presentation of the overall SEFA.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend management continue to focus on training for both preparer and
reviewers of the SEFA to ensure the identification of research and development classification from
federal awarding agencies or pass-through entities is properly captured on the schedule. We suggest
this review process begin before the Institute signs an award agreement to determine whether the
agreement states whether it is considered to be research and development. The Institute would
then be aware of the classification prior to committing to the terms of the award. This will ensure
that the SEFA presents all relevant information as prescribed to ensure proper reporting on the SEFA
and major program determination.
Views of Responsible Officials: Management of the Institute agrees with the finding and
recommendations set forth within and has developed a corrective action plan to address the
instances of noncompliance identified and lapses in prescribed internal controls.
Significant Deficiency in Compliance and Internal Control over Compliance with
Reporting (Preparation of the Schedule of Expenditures of Federal Awards). Criteria: CFR Section §200.510(b) states in part: “The auditee must also prepare a schedule of
expenditures of Federal awards for the period covered by the auditee’s financial statements which
must include the total Federal awards expended as determined in accordance with CFR Section
§200.502 Basis for determining Federal awards expended.” For a cluster of programs, the schedule
must provide the cluster name, list individual Federal programs within the cluster of programs, and
provide the applicable Federal agency name. For a cluster of programs, the total for the cluster
must also be provided. Condition: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not operate as designed. BDO identified the following matters during
our testing of the SEFA: During our testing of management’s preparation of the Schedule of Expenditures of Federal
Awards (the SEFA), BDO identified 22 awards that were incorrectly classified as research and
development. In each case, the federal awarding agency or pass-through entity noted in the
award agreement the award was not classified or considered as research and development.
Management subsequently updated the classifications on the SEFA and corrected the
presentation of various programs presented as both clusters and nonclusters on the SEFA. The
SEFA, as presented, includes the corrections made by management. Questioned Costs: None.
Context: The nature of these findings is detailed in the condition section above. Any samples
selected as part of the overall SEFA review were performed using a non-statistical method. Cause: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not fully operate as designed. Urban prepares the SEFA once per
year in conjunction with the annual audit and did not include a procedure to properly identify
research and development classification.
Effect: The SEFA provided to BDO required several awards to be removed from the research and
development cluster. Failure to present the SEFA correctly would have resulted in incorrect major
program selection and an incorrect presentation of the overall SEFA.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend management continue to focus on training for both preparer and
reviewers of the SEFA to ensure the identification of research and development classification from
federal awarding agencies or pass-through entities is properly captured on the schedule. We suggest
this review process begin before the Institute signs an award agreement to determine whether the
agreement states whether it is considered to be research and development. The Institute would
then be aware of the classification prior to committing to the terms of the award. This will ensure
that the SEFA presents all relevant information as prescribed to ensure proper reporting on the SEFA
and major program determination.
Views of Responsible Officials: Management of the Institute agrees with the finding and
recommendations set forth within and has developed a corrective action plan to address the
instances of noncompliance identified and lapses in prescribed internal controls.
Significant Deficiency in Compliance and Internal Control over Compliance with
Reporting (Preparation of the Schedule of Expenditures of Federal Awards). Criteria: CFR Section §200.510(b) states in part: “The auditee must also prepare a schedule of
expenditures of Federal awards for the period covered by the auditee’s financial statements which
must include the total Federal awards expended as determined in accordance with CFR Section
§200.502 Basis for determining Federal awards expended.” For a cluster of programs, the schedule
must provide the cluster name, list individual Federal programs within the cluster of programs, and
provide the applicable Federal agency name. For a cluster of programs, the total for the cluster
must also be provided. Condition: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not operate as designed. BDO identified the following matters during
our testing of the SEFA: During our testing of management’s preparation of the Schedule of Expenditures of Federal
Awards (the SEFA), BDO identified 22 awards that were incorrectly classified as research and
development. In each case, the federal awarding agency or pass-through entity noted in the
award agreement the award was not classified or considered as research and development.
Management subsequently updated the classifications on the SEFA and corrected the
presentation of various programs presented as both clusters and nonclusters on the SEFA. The
SEFA, as presented, includes the corrections made by management. Questioned Costs: None.
Context: The nature of these findings is detailed in the condition section above. Any samples
selected as part of the overall SEFA review were performed using a non-statistical method. Cause: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not fully operate as designed. Urban prepares the SEFA once per
year in conjunction with the annual audit and did not include a procedure to properly identify
research and development classification.
Effect: The SEFA provided to BDO required several awards to be removed from the research and
development cluster. Failure to present the SEFA correctly would have resulted in incorrect major
program selection and an incorrect presentation of the overall SEFA.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend management continue to focus on training for both preparer and
reviewers of the SEFA to ensure the identification of research and development classification from
federal awarding agencies or pass-through entities is properly captured on the schedule. We suggest
this review process begin before the Institute signs an award agreement to determine whether the
agreement states whether it is considered to be research and development. The Institute would
then be aware of the classification prior to committing to the terms of the award. This will ensure
that the SEFA presents all relevant information as prescribed to ensure proper reporting on the SEFA
and major program determination.
Views of Responsible Officials: Management of the Institute agrees with the finding and
recommendations set forth within and has developed a corrective action plan to address the
instances of noncompliance identified and lapses in prescribed internal controls.
Significant Deficiency in Compliance and Internal Control over Compliance with
Reporting (Preparation of the Schedule of Expenditures of Federal Awards). Criteria: CFR Section §200.510(b) states in part: “The auditee must also prepare a schedule of
expenditures of Federal awards for the period covered by the auditee’s financial statements which
must include the total Federal awards expended as determined in accordance with CFR Section
§200.502 Basis for determining Federal awards expended.” For a cluster of programs, the schedule
must provide the cluster name, list individual Federal programs within the cluster of programs, and
provide the applicable Federal agency name. For a cluster of programs, the total for the cluster
must also be provided. Condition: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not operate as designed. BDO identified the following matters during
our testing of the SEFA: During our testing of management’s preparation of the Schedule of Expenditures of Federal
Awards (the SEFA), BDO identified 22 awards that were incorrectly classified as research and
development. In each case, the federal awarding agency or pass-through entity noted in the
award agreement the award was not classified or considered as research and development.
Management subsequently updated the classifications on the SEFA and corrected the
presentation of various programs presented as both clusters and nonclusters on the SEFA. The
SEFA, as presented, includes the corrections made by management. Questioned Costs: None.
Context: The nature of these findings is detailed in the condition section above. Any samples
selected as part of the overall SEFA review were performed using a non-statistical method. Cause: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not fully operate as designed. Urban prepares the SEFA once per
year in conjunction with the annual audit and did not include a procedure to properly identify
research and development classification.
Effect: The SEFA provided to BDO required several awards to be removed from the research and
development cluster. Failure to present the SEFA correctly would have resulted in incorrect major
program selection and an incorrect presentation of the overall SEFA.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend management continue to focus on training for both preparer and
reviewers of the SEFA to ensure the identification of research and development classification from
federal awarding agencies or pass-through entities is properly captured on the schedule. We suggest
this review process begin before the Institute signs an award agreement to determine whether the
agreement states whether it is considered to be research and development. The Institute would
then be aware of the classification prior to committing to the terms of the award. This will ensure
that the SEFA presents all relevant information as prescribed to ensure proper reporting on the SEFA
and major program determination.
Views of Responsible Officials: Management of the Institute agrees with the finding and
recommendations set forth within and has developed a corrective action plan to address the
instances of noncompliance identified and lapses in prescribed internal controls.
Significant Deficiency in Compliance and Internal Control over Compliance with
Reporting (Preparation of the Schedule of Expenditures of Federal Awards). Criteria: CFR Section §200.510(b) states in part: “The auditee must also prepare a schedule of
expenditures of Federal awards for the period covered by the auditee’s financial statements which
must include the total Federal awards expended as determined in accordance with CFR Section
§200.502 Basis for determining Federal awards expended.” For a cluster of programs, the schedule
must provide the cluster name, list individual Federal programs within the cluster of programs, and
provide the applicable Federal agency name. For a cluster of programs, the total for the cluster
must also be provided. Condition: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not operate as designed. BDO identified the following matters during
our testing of the SEFA: During our testing of management’s preparation of the Schedule of Expenditures of Federal
Awards (the SEFA), BDO identified 22 awards that were incorrectly classified as research and
development. In each case, the federal awarding agency or pass-through entity noted in the
award agreement the award was not classified or considered as research and development.
Management subsequently updated the classifications on the SEFA and corrected the
presentation of various programs presented as both clusters and nonclusters on the SEFA. The
SEFA, as presented, includes the corrections made by management. Questioned Costs: None.
Context: The nature of these findings is detailed in the condition section above. Any samples
selected as part of the overall SEFA review were performed using a non-statistical method. Cause: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not fully operate as designed. Urban prepares the SEFA once per
year in conjunction with the annual audit and did not include a procedure to properly identify
research and development classification.
Effect: The SEFA provided to BDO required several awards to be removed from the research and
development cluster. Failure to present the SEFA correctly would have resulted in incorrect major
program selection and an incorrect presentation of the overall SEFA.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend management continue to focus on training for both preparer and
reviewers of the SEFA to ensure the identification of research and development classification from
federal awarding agencies or pass-through entities is properly captured on the schedule. We suggest
this review process begin before the Institute signs an award agreement to determine whether the
agreement states whether it is considered to be research and development. The Institute would
then be aware of the classification prior to committing to the terms of the award. This will ensure
that the SEFA presents all relevant information as prescribed to ensure proper reporting on the SEFA
and major program determination.
Views of Responsible Officials: Management of the Institute agrees with the finding and
recommendations set forth within and has developed a corrective action plan to address the
instances of noncompliance identified and lapses in prescribed internal controls.
Significant Deficiency in Compliance and Internal Control over Compliance with
Reporting (Preparation of the Schedule of Expenditures of Federal Awards). Criteria: CFR Section §200.510(b) states in part: “The auditee must also prepare a schedule of
expenditures of Federal awards for the period covered by the auditee’s financial statements which
must include the total Federal awards expended as determined in accordance with CFR Section
§200.502 Basis for determining Federal awards expended.” For a cluster of programs, the schedule
must provide the cluster name, list individual Federal programs within the cluster of programs, and
provide the applicable Federal agency name. For a cluster of programs, the total for the cluster
must also be provided. Condition: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not operate as designed. BDO identified the following matters during
our testing of the SEFA: During our testing of management’s preparation of the Schedule of Expenditures of Federal
Awards (the SEFA), BDO identified 22 awards that were incorrectly classified as research and
development. In each case, the federal awarding agency or pass-through entity noted in the
award agreement the award was not classified or considered as research and development.
Management subsequently updated the classifications on the SEFA and corrected the
presentation of various programs presented as both clusters and nonclusters on the SEFA. The
SEFA, as presented, includes the corrections made by management. Questioned Costs: None.
Context: The nature of these findings is detailed in the condition section above. Any samples
selected as part of the overall SEFA review were performed using a non-statistical method. Cause: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not fully operate as designed. Urban prepares the SEFA once per
year in conjunction with the annual audit and did not include a procedure to properly identify
research and development classification.
Effect: The SEFA provided to BDO required several awards to be removed from the research and
development cluster. Failure to present the SEFA correctly would have resulted in incorrect major
program selection and an incorrect presentation of the overall SEFA.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend management continue to focus on training for both preparer and
reviewers of the SEFA to ensure the identification of research and development classification from
federal awarding agencies or pass-through entities is properly captured on the schedule. We suggest
this review process begin before the Institute signs an award agreement to determine whether the
agreement states whether it is considered to be research and development. The Institute would
then be aware of the classification prior to committing to the terms of the award. This will ensure
that the SEFA presents all relevant information as prescribed to ensure proper reporting on the SEFA
and major program determination.
Views of Responsible Officials: Management of the Institute agrees with the finding and
recommendations set forth within and has developed a corrective action plan to address the
instances of noncompliance identified and lapses in prescribed internal controls.
Significant Deficiency in Compliance and Internal Control over Compliance with
Reporting (Preparation of the Schedule of Expenditures of Federal Awards). Criteria: CFR Section §200.510(b) states in part: “The auditee must also prepare a schedule of
expenditures of Federal awards for the period covered by the auditee’s financial statements which
must include the total Federal awards expended as determined in accordance with CFR Section
§200.502 Basis for determining Federal awards expended.” For a cluster of programs, the schedule
must provide the cluster name, list individual Federal programs within the cluster of programs, and
provide the applicable Federal agency name. For a cluster of programs, the total for the cluster
must also be provided. Condition: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not operate as designed. BDO identified the following matters during
our testing of the SEFA: During our testing of management’s preparation of the Schedule of Expenditures of Federal
Awards (the SEFA), BDO identified 22 awards that were incorrectly classified as research and
development. In each case, the federal awarding agency or pass-through entity noted in the
award agreement the award was not classified or considered as research and development.
Management subsequently updated the classifications on the SEFA and corrected the
presentation of various programs presented as both clusters and nonclusters on the SEFA. The
SEFA, as presented, includes the corrections made by management. Questioned Costs: None.
Context: The nature of these findings is detailed in the condition section above. Any samples
selected as part of the overall SEFA review were performed using a non-statistical method. Cause: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not fully operate as designed. Urban prepares the SEFA once per
year in conjunction with the annual audit and did not include a procedure to properly identify
research and development classification.
Effect: The SEFA provided to BDO required several awards to be removed from the research and
development cluster. Failure to present the SEFA correctly would have resulted in incorrect major
program selection and an incorrect presentation of the overall SEFA.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend management continue to focus on training for both preparer and
reviewers of the SEFA to ensure the identification of research and development classification from
federal awarding agencies or pass-through entities is properly captured on the schedule. We suggest
this review process begin before the Institute signs an award agreement to determine whether the
agreement states whether it is considered to be research and development. The Institute would
then be aware of the classification prior to committing to the terms of the award. This will ensure
that the SEFA presents all relevant information as prescribed to ensure proper reporting on the SEFA
and major program determination.
Views of Responsible Officials: Management of the Institute agrees with the finding and
recommendations set forth within and has developed a corrective action plan to address the
instances of noncompliance identified and lapses in prescribed internal controls.
Significant Deficiency in Compliance and Internal Control over Compliance with
Reporting (Preparation of the Schedule of Expenditures of Federal Awards). Criteria: CFR Section §200.510(b) states in part: “The auditee must also prepare a schedule of
expenditures of Federal awards for the period covered by the auditee’s financial statements which
must include the total Federal awards expended as determined in accordance with CFR Section
§200.502 Basis for determining Federal awards expended.” For a cluster of programs, the schedule
must provide the cluster name, list individual Federal programs within the cluster of programs, and
provide the applicable Federal agency name. For a cluster of programs, the total for the cluster
must also be provided. Condition: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not operate as designed. BDO identified the following matters during
our testing of the SEFA: During our testing of management’s preparation of the Schedule of Expenditures of Federal
Awards (the SEFA), BDO identified 22 awards that were incorrectly classified as research and
development. In each case, the federal awarding agency or pass-through entity noted in the
award agreement the award was not classified or considered as research and development.
Management subsequently updated the classifications on the SEFA and corrected the
presentation of various programs presented as both clusters and nonclusters on the SEFA. The
SEFA, as presented, includes the corrections made by management. Questioned Costs: None.
Context: The nature of these findings is detailed in the condition section above. Any samples
selected as part of the overall SEFA review were performed using a non-statistical method. Cause: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not fully operate as designed. Urban prepares the SEFA once per
year in conjunction with the annual audit and did not include a procedure to properly identify
research and development classification.
Effect: The SEFA provided to BDO required several awards to be removed from the research and
development cluster. Failure to present the SEFA correctly would have resulted in incorrect major
program selection and an incorrect presentation of the overall SEFA.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend management continue to focus on training for both preparer and
reviewers of the SEFA to ensure the identification of research and development classification from
federal awarding agencies or pass-through entities is properly captured on the schedule. We suggest
this review process begin before the Institute signs an award agreement to determine whether the
agreement states whether it is considered to be research and development. The Institute would
then be aware of the classification prior to committing to the terms of the award. This will ensure
that the SEFA presents all relevant information as prescribed to ensure proper reporting on the SEFA
and major program determination.
Views of Responsible Officials: Management of the Institute agrees with the finding and
recommendations set forth within and has developed a corrective action plan to address the
instances of noncompliance identified and lapses in prescribed internal controls.
Significant Deficiency in Compliance and Internal Control over Compliance with
Reporting (Preparation of the Schedule of Expenditures of Federal Awards). Criteria: CFR Section §200.510(b) states in part: “The auditee must also prepare a schedule of
expenditures of Federal awards for the period covered by the auditee’s financial statements which
must include the total Federal awards expended as determined in accordance with CFR Section
§200.502 Basis for determining Federal awards expended.” For a cluster of programs, the schedule
must provide the cluster name, list individual Federal programs within the cluster of programs, and
provide the applicable Federal agency name. For a cluster of programs, the total for the cluster
must also be provided. Condition: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not operate as designed. BDO identified the following matters during
our testing of the SEFA: During our testing of management’s preparation of the Schedule of Expenditures of Federal
Awards (the SEFA), BDO identified 22 awards that were incorrectly classified as research and
development. In each case, the federal awarding agency or pass-through entity noted in the
award agreement the award was not classified or considered as research and development.
Management subsequently updated the classifications on the SEFA and corrected the
presentation of various programs presented as both clusters and nonclusters on the SEFA. The
SEFA, as presented, includes the corrections made by management. Questioned Costs: None.
Context: The nature of these findings is detailed in the condition section above. Any samples
selected as part of the overall SEFA review were performed using a non-statistical method. Cause: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not fully operate as designed. Urban prepares the SEFA once per
year in conjunction with the annual audit and did not include a procedure to properly identify
research and development classification.
Effect: The SEFA provided to BDO required several awards to be removed from the research and
development cluster. Failure to present the SEFA correctly would have resulted in incorrect major
program selection and an incorrect presentation of the overall SEFA.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend management continue to focus on training for both preparer and
reviewers of the SEFA to ensure the identification of research and development classification from
federal awarding agencies or pass-through entities is properly captured on the schedule. We suggest
this review process begin before the Institute signs an award agreement to determine whether the
agreement states whether it is considered to be research and development. The Institute would
then be aware of the classification prior to committing to the terms of the award. This will ensure
that the SEFA presents all relevant information as prescribed to ensure proper reporting on the SEFA
and major program determination.
Views of Responsible Officials: Management of the Institute agrees with the finding and
recommendations set forth within and has developed a corrective action plan to address the
instances of noncompliance identified and lapses in prescribed internal controls.
Significant Deficiency in Compliance and Internal Control over Compliance with
Reporting (Preparation of the Schedule of Expenditures of Federal Awards). Criteria: CFR Section §200.510(b) states in part: “The auditee must also prepare a schedule of
expenditures of Federal awards for the period covered by the auditee’s financial statements which
must include the total Federal awards expended as determined in accordance with CFR Section
§200.502 Basis for determining Federal awards expended.” For a cluster of programs, the schedule
must provide the cluster name, list individual Federal programs within the cluster of programs, and
provide the applicable Federal agency name. For a cluster of programs, the total for the cluster
must also be provided. Condition: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not operate as designed. BDO identified the following matters during
our testing of the SEFA: During our testing of management’s preparation of the Schedule of Expenditures of Federal
Awards (the SEFA), BDO identified 22 awards that were incorrectly classified as research and
development. In each case, the federal awarding agency or pass-through entity noted in the
award agreement the award was not classified or considered as research and development.
Management subsequently updated the classifications on the SEFA and corrected the
presentation of various programs presented as both clusters and nonclusters on the SEFA. The
SEFA, as presented, includes the corrections made by management. Questioned Costs: None.
Context: The nature of these findings is detailed in the condition section above. Any samples
selected as part of the overall SEFA review were performed using a non-statistical method. Cause: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not fully operate as designed. Urban prepares the SEFA once per
year in conjunction with the annual audit and did not include a procedure to properly identify
research and development classification.
Effect: The SEFA provided to BDO required several awards to be removed from the research and
development cluster. Failure to present the SEFA correctly would have resulted in incorrect major
program selection and an incorrect presentation of the overall SEFA.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend management continue to focus on training for both preparer and
reviewers of the SEFA to ensure the identification of research and development classification from
federal awarding agencies or pass-through entities is properly captured on the schedule. We suggest
this review process begin before the Institute signs an award agreement to determine whether the
agreement states whether it is considered to be research and development. The Institute would
then be aware of the classification prior to committing to the terms of the award. This will ensure
that the SEFA presents all relevant information as prescribed to ensure proper reporting on the SEFA
and major program determination.
Views of Responsible Officials: Management of the Institute agrees with the finding and
recommendations set forth within and has developed a corrective action plan to address the
instances of noncompliance identified and lapses in prescribed internal controls.
Significant Deficiency in Compliance and Internal Control over Compliance with
Reporting (Preparation of the Schedule of Expenditures of Federal Awards). Criteria: CFR Section §200.510(b) states in part: “The auditee must also prepare a schedule of
expenditures of Federal awards for the period covered by the auditee’s financial statements which
must include the total Federal awards expended as determined in accordance with CFR Section
§200.502 Basis for determining Federal awards expended.” For a cluster of programs, the schedule
must provide the cluster name, list individual Federal programs within the cluster of programs, and
provide the applicable Federal agency name. For a cluster of programs, the total for the cluster
must also be provided. Condition: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not operate as designed. BDO identified the following matters during
our testing of the SEFA: During our testing of management’s preparation of the Schedule of Expenditures of Federal
Awards (the SEFA), BDO identified 22 awards that were incorrectly classified as research and
development. In each case, the federal awarding agency or pass-through entity noted in the
award agreement the award was not classified or considered as research and development.
Management subsequently updated the classifications on the SEFA and corrected the
presentation of various programs presented as both clusters and nonclusters on the SEFA. The
SEFA, as presented, includes the corrections made by management. Questioned Costs: None.
Context: The nature of these findings is detailed in the condition section above. Any samples
selected as part of the overall SEFA review were performed using a non-statistical method. Cause: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not fully operate as designed. Urban prepares the SEFA once per
year in conjunction with the annual audit and did not include a procedure to properly identify
research and development classification.
Effect: The SEFA provided to BDO required several awards to be removed from the research and
development cluster. Failure to present the SEFA correctly would have resulted in incorrect major
program selection and an incorrect presentation of the overall SEFA.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend management continue to focus on training for both preparer and
reviewers of the SEFA to ensure the identification of research and development classification from
federal awarding agencies or pass-through entities is properly captured on the schedule. We suggest
this review process begin before the Institute signs an award agreement to determine whether the
agreement states whether it is considered to be research and development. The Institute would
then be aware of the classification prior to committing to the terms of the award. This will ensure
that the SEFA presents all relevant information as prescribed to ensure proper reporting on the SEFA
and major program determination.
Views of Responsible Officials: Management of the Institute agrees with the finding and
recommendations set forth within and has developed a corrective action plan to address the
instances of noncompliance identified and lapses in prescribed internal controls.
Significant Deficiency in Compliance and Internal Control over Compliance with
Reporting (Preparation of the Schedule of Expenditures of Federal Awards). Criteria: CFR Section §200.510(b) states in part: “The auditee must also prepare a schedule of
expenditures of Federal awards for the period covered by the auditee’s financial statements which
must include the total Federal awards expended as determined in accordance with CFR Section
§200.502 Basis for determining Federal awards expended.” For a cluster of programs, the schedule
must provide the cluster name, list individual Federal programs within the cluster of programs, and
provide the applicable Federal agency name. For a cluster of programs, the total for the cluster
must also be provided. Condition: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not operate as designed. BDO identified the following matters during
our testing of the SEFA: During our testing of management’s preparation of the Schedule of Expenditures of Federal
Awards (the SEFA), BDO identified 22 awards that were incorrectly classified as research and
development. In each case, the federal awarding agency or pass-through entity noted in the
award agreement the award was not classified or considered as research and development.
Management subsequently updated the classifications on the SEFA and corrected the
presentation of various programs presented as both clusters and nonclusters on the SEFA. The
SEFA, as presented, includes the corrections made by management. Questioned Costs: None.
Context: The nature of these findings is detailed in the condition section above. Any samples
selected as part of the overall SEFA review were performed using a non-statistical method. Cause: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not fully operate as designed. Urban prepares the SEFA once per
year in conjunction with the annual audit and did not include a procedure to properly identify
research and development classification.
Effect: The SEFA provided to BDO required several awards to be removed from the research and
development cluster. Failure to present the SEFA correctly would have resulted in incorrect major
program selection and an incorrect presentation of the overall SEFA.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend management continue to focus on training for both preparer and
reviewers of the SEFA to ensure the identification of research and development classification from
federal awarding agencies or pass-through entities is properly captured on the schedule. We suggest
this review process begin before the Institute signs an award agreement to determine whether the
agreement states whether it is considered to be research and development. The Institute would
then be aware of the classification prior to committing to the terms of the award. This will ensure
that the SEFA presents all relevant information as prescribed to ensure proper reporting on the SEFA
and major program determination.
Views of Responsible Officials: Management of the Institute agrees with the finding and
recommendations set forth within and has developed a corrective action plan to address the
instances of noncompliance identified and lapses in prescribed internal controls.
Significant Deficiency in Compliance and Internal Control over Compliance with
Reporting (Preparation of the Schedule of Expenditures of Federal Awards). Criteria: CFR Section §200.510(b) states in part: “The auditee must also prepare a schedule of
expenditures of Federal awards for the period covered by the auditee’s financial statements which
must include the total Federal awards expended as determined in accordance with CFR Section
§200.502 Basis for determining Federal awards expended.” For a cluster of programs, the schedule
must provide the cluster name, list individual Federal programs within the cluster of programs, and
provide the applicable Federal agency name. For a cluster of programs, the total for the cluster
must also be provided. Condition: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not operate as designed. BDO identified the following matters during
our testing of the SEFA: During our testing of management’s preparation of the Schedule of Expenditures of Federal
Awards (the SEFA), BDO identified 22 awards that were incorrectly classified as research and
development. In each case, the federal awarding agency or pass-through entity noted in the
award agreement the award was not classified or considered as research and development.
Management subsequently updated the classifications on the SEFA and corrected the
presentation of various programs presented as both clusters and nonclusters on the SEFA. The
SEFA, as presented, includes the corrections made by management. Questioned Costs: None.
Context: The nature of these findings is detailed in the condition section above. Any samples
selected as part of the overall SEFA review were performed using a non-statistical method. Cause: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not fully operate as designed. Urban prepares the SEFA once per
year in conjunction with the annual audit and did not include a procedure to properly identify
research and development classification.
Effect: The SEFA provided to BDO required several awards to be removed from the research and
development cluster. Failure to present the SEFA correctly would have resulted in incorrect major
program selection and an incorrect presentation of the overall SEFA.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend management continue to focus on training for both preparer and
reviewers of the SEFA to ensure the identification of research and development classification from
federal awarding agencies or pass-through entities is properly captured on the schedule. We suggest
this review process begin before the Institute signs an award agreement to determine whether the
agreement states whether it is considered to be research and development. The Institute would
then be aware of the classification prior to committing to the terms of the award. This will ensure
that the SEFA presents all relevant information as prescribed to ensure proper reporting on the SEFA
and major program determination.
Views of Responsible Officials: Management of the Institute agrees with the finding and
recommendations set forth within and has developed a corrective action plan to address the
instances of noncompliance identified and lapses in prescribed internal controls.
Significant Deficiency in Compliance and Internal Control over Compliance with
Reporting (Preparation of the Schedule of Expenditures of Federal Awards). Criteria: CFR Section §200.510(b) states in part: “The auditee must also prepare a schedule of
expenditures of Federal awards for the period covered by the auditee’s financial statements which
must include the total Federal awards expended as determined in accordance with CFR Section
§200.502 Basis for determining Federal awards expended.” For a cluster of programs, the schedule
must provide the cluster name, list individual Federal programs within the cluster of programs, and
provide the applicable Federal agency name. For a cluster of programs, the total for the cluster
must also be provided. Condition: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not operate as designed. BDO identified the following matters during
our testing of the SEFA: During our testing of management’s preparation of the Schedule of Expenditures of Federal
Awards (the SEFA), BDO identified 22 awards that were incorrectly classified as research and
development. In each case, the federal awarding agency or pass-through entity noted in the
award agreement the award was not classified or considered as research and development.
Management subsequently updated the classifications on the SEFA and corrected the
presentation of various programs presented as both clusters and nonclusters on the SEFA. The
SEFA, as presented, includes the corrections made by management. Questioned Costs: None.
Context: The nature of these findings is detailed in the condition section above. Any samples
selected as part of the overall SEFA review were performed using a non-statistical method. Cause: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not fully operate as designed. Urban prepares the SEFA once per
year in conjunction with the annual audit and did not include a procedure to properly identify
research and development classification.
Effect: The SEFA provided to BDO required several awards to be removed from the research and
development cluster. Failure to present the SEFA correctly would have resulted in incorrect major
program selection and an incorrect presentation of the overall SEFA.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend management continue to focus on training for both preparer and
reviewers of the SEFA to ensure the identification of research and development classification from
federal awarding agencies or pass-through entities is properly captured on the schedule. We suggest
this review process begin before the Institute signs an award agreement to determine whether the
agreement states whether it is considered to be research and development. The Institute would
then be aware of the classification prior to committing to the terms of the award. This will ensure
that the SEFA presents all relevant information as prescribed to ensure proper reporting on the SEFA
and major program determination.
Views of Responsible Officials: Management of the Institute agrees with the finding and
recommendations set forth within and has developed a corrective action plan to address the
instances of noncompliance identified and lapses in prescribed internal controls.
Significant Deficiency in Compliance and Internal Control over Compliance with
Reporting (Preparation of the Schedule of Expenditures of Federal Awards). Criteria: CFR Section §200.510(b) states in part: “The auditee must also prepare a schedule of
expenditures of Federal awards for the period covered by the auditee’s financial statements which
must include the total Federal awards expended as determined in accordance with CFR Section
§200.502 Basis for determining Federal awards expended.” For a cluster of programs, the schedule
must provide the cluster name, list individual Federal programs within the cluster of programs, and
provide the applicable Federal agency name. For a cluster of programs, the total for the cluster
must also be provided. Condition: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not operate as designed. BDO identified the following matters during
our testing of the SEFA: During our testing of management’s preparation of the Schedule of Expenditures of Federal
Awards (the SEFA), BDO identified 22 awards that were incorrectly classified as research and
development. In each case, the federal awarding agency or pass-through entity noted in the
award agreement the award was not classified or considered as research and development.
Management subsequently updated the classifications on the SEFA and corrected the
presentation of various programs presented as both clusters and nonclusters on the SEFA. The
SEFA, as presented, includes the corrections made by management. Questioned Costs: None.
Context: The nature of these findings is detailed in the condition section above. Any samples
selected as part of the overall SEFA review were performed using a non-statistical method. Cause: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not fully operate as designed. Urban prepares the SEFA once per
year in conjunction with the annual audit and did not include a procedure to properly identify
research and development classification.
Effect: The SEFA provided to BDO required several awards to be removed from the research and
development cluster. Failure to present the SEFA correctly would have resulted in incorrect major
program selection and an incorrect presentation of the overall SEFA.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend management continue to focus on training for both preparer and
reviewers of the SEFA to ensure the identification of research and development classification from
federal awarding agencies or pass-through entities is properly captured on the schedule. We suggest
this review process begin before the Institute signs an award agreement to determine whether the
agreement states whether it is considered to be research and development. The Institute would
then be aware of the classification prior to committing to the terms of the award. This will ensure
that the SEFA presents all relevant information as prescribed to ensure proper reporting on the SEFA
and major program determination.
Views of Responsible Officials: Management of the Institute agrees with the finding and
recommendations set forth within and has developed a corrective action plan to address the
instances of noncompliance identified and lapses in prescribed internal controls.
Significant Deficiency in Compliance and Internal Control over Compliance with
Reporting (Preparation of the Schedule of Expenditures of Federal Awards). Criteria: CFR Section §200.510(b) states in part: “The auditee must also prepare a schedule of
expenditures of Federal awards for the period covered by the auditee’s financial statements which
must include the total Federal awards expended as determined in accordance with CFR Section
§200.502 Basis for determining Federal awards expended.” For a cluster of programs, the schedule
must provide the cluster name, list individual Federal programs within the cluster of programs, and
provide the applicable Federal agency name. For a cluster of programs, the total for the cluster
must also be provided. Condition: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not operate as designed. BDO identified the following matters during
our testing of the SEFA: During our testing of management’s preparation of the Schedule of Expenditures of Federal
Awards (the SEFA), BDO identified 22 awards that were incorrectly classified as research and
development. In each case, the federal awarding agency or pass-through entity noted in the
award agreement the award was not classified or considered as research and development.
Management subsequently updated the classifications on the SEFA and corrected the
presentation of various programs presented as both clusters and nonclusters on the SEFA. The
SEFA, as presented, includes the corrections made by management. Questioned Costs: None.
Context: The nature of these findings is detailed in the condition section above. Any samples
selected as part of the overall SEFA review were performed using a non-statistical method. Cause: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not fully operate as designed. Urban prepares the SEFA once per
year in conjunction with the annual audit and did not include a procedure to properly identify
research and development classification.
Effect: The SEFA provided to BDO required several awards to be removed from the research and
development cluster. Failure to present the SEFA correctly would have resulted in incorrect major
program selection and an incorrect presentation of the overall SEFA.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend management continue to focus on training for both preparer and
reviewers of the SEFA to ensure the identification of research and development classification from
federal awarding agencies or pass-through entities is properly captured on the schedule. We suggest
this review process begin before the Institute signs an award agreement to determine whether the
agreement states whether it is considered to be research and development. The Institute would
then be aware of the classification prior to committing to the terms of the award. This will ensure
that the SEFA presents all relevant information as prescribed to ensure proper reporting on the SEFA
and major program determination.
Views of Responsible Officials: Management of the Institute agrees with the finding and
recommendations set forth within and has developed a corrective action plan to address the
instances of noncompliance identified and lapses in prescribed internal controls.
Significant Deficiency in Compliance and Internal Control over Compliance with
Reporting (Preparation of the Schedule of Expenditures of Federal Awards). Criteria: CFR Section §200.510(b) states in part: “The auditee must also prepare a schedule of
expenditures of Federal awards for the period covered by the auditee’s financial statements which
must include the total Federal awards expended as determined in accordance with CFR Section
§200.502 Basis for determining Federal awards expended.” For a cluster of programs, the schedule
must provide the cluster name, list individual Federal programs within the cluster of programs, and
provide the applicable Federal agency name. For a cluster of programs, the total for the cluster
must also be provided. Condition: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not operate as designed. BDO identified the following matters during
our testing of the SEFA: During our testing of management’s preparation of the Schedule of Expenditures of Federal
Awards (the SEFA), BDO identified 22 awards that were incorrectly classified as research and
development. In each case, the federal awarding agency or pass-through entity noted in the
award agreement the award was not classified or considered as research and development.
Management subsequently updated the classifications on the SEFA and corrected the
presentation of various programs presented as both clusters and nonclusters on the SEFA. The
SEFA, as presented, includes the corrections made by management. Questioned Costs: None.
Context: The nature of these findings is detailed in the condition section above. Any samples
selected as part of the overall SEFA review were performed using a non-statistical method. Cause: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not fully operate as designed. Urban prepares the SEFA once per
year in conjunction with the annual audit and did not include a procedure to properly identify
research and development classification.
Effect: The SEFA provided to BDO required several awards to be removed from the research and
development cluster. Failure to present the SEFA correctly would have resulted in incorrect major
program selection and an incorrect presentation of the overall SEFA.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend management continue to focus on training for both preparer and
reviewers of the SEFA to ensure the identification of research and development classification from
federal awarding agencies or pass-through entities is properly captured on the schedule. We suggest
this review process begin before the Institute signs an award agreement to determine whether the
agreement states whether it is considered to be research and development. The Institute would
then be aware of the classification prior to committing to the terms of the award. This will ensure
that the SEFA presents all relevant information as prescribed to ensure proper reporting on the SEFA
and major program determination.
Views of Responsible Officials: Management of the Institute agrees with the finding and
recommendations set forth within and has developed a corrective action plan to address the
instances of noncompliance identified and lapses in prescribed internal controls.
Significant Deficiency in Compliance and Internal Control over Compliance with
Reporting (Preparation of the Schedule of Expenditures of Federal Awards). Criteria: CFR Section §200.510(b) states in part: “The auditee must also prepare a schedule of
expenditures of Federal awards for the period covered by the auditee’s financial statements which
must include the total Federal awards expended as determined in accordance with CFR Section
§200.502 Basis for determining Federal awards expended.” For a cluster of programs, the schedule
must provide the cluster name, list individual Federal programs within the cluster of programs, and
provide the applicable Federal agency name. For a cluster of programs, the total for the cluster
must also be provided. Condition: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not operate as designed. BDO identified the following matters during
our testing of the SEFA: During our testing of management’s preparation of the Schedule of Expenditures of Federal
Awards (the SEFA), BDO identified 22 awards that were incorrectly classified as research and
development. In each case, the federal awarding agency or pass-through entity noted in the
award agreement the award was not classified or considered as research and development.
Management subsequently updated the classifications on the SEFA and corrected the
presentation of various programs presented as both clusters and nonclusters on the SEFA. The
SEFA, as presented, includes the corrections made by management. Questioned Costs: None.
Context: The nature of these findings is detailed in the condition section above. Any samples
selected as part of the overall SEFA review were performed using a non-statistical method. Cause: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not fully operate as designed. Urban prepares the SEFA once per
year in conjunction with the annual audit and did not include a procedure to properly identify
research and development classification.
Effect: The SEFA provided to BDO required several awards to be removed from the research and
development cluster. Failure to present the SEFA correctly would have resulted in incorrect major
program selection and an incorrect presentation of the overall SEFA.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend management continue to focus on training for both preparer and
reviewers of the SEFA to ensure the identification of research and development classification from
federal awarding agencies or pass-through entities is properly captured on the schedule. We suggest
this review process begin before the Institute signs an award agreement to determine whether the
agreement states whether it is considered to be research and development. The Institute would
then be aware of the classification prior to committing to the terms of the award. This will ensure
that the SEFA presents all relevant information as prescribed to ensure proper reporting on the SEFA
and major program determination.
Views of Responsible Officials: Management of the Institute agrees with the finding and
recommendations set forth within and has developed a corrective action plan to address the
instances of noncompliance identified and lapses in prescribed internal controls.
Significant Deficiency in Compliance and Internal Control over Compliance with
Reporting (Preparation of the Schedule of Expenditures of Federal Awards). Criteria: CFR Section §200.510(b) states in part: “The auditee must also prepare a schedule of
expenditures of Federal awards for the period covered by the auditee’s financial statements which
must include the total Federal awards expended as determined in accordance with CFR Section
§200.502 Basis for determining Federal awards expended.” For a cluster of programs, the schedule
must provide the cluster name, list individual Federal programs within the cluster of programs, and
provide the applicable Federal agency name. For a cluster of programs, the total for the cluster
must also be provided. Condition: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not operate as designed. BDO identified the following matters during
our testing of the SEFA: During our testing of management’s preparation of the Schedule of Expenditures of Federal
Awards (the SEFA), BDO identified 22 awards that were incorrectly classified as research and
development. In each case, the federal awarding agency or pass-through entity noted in the
award agreement the award was not classified or considered as research and development.
Management subsequently updated the classifications on the SEFA and corrected the
presentation of various programs presented as both clusters and nonclusters on the SEFA. The
SEFA, as presented, includes the corrections made by management. Questioned Costs: None.
Context: The nature of these findings is detailed in the condition section above. Any samples
selected as part of the overall SEFA review were performed using a non-statistical method. Cause: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not fully operate as designed. Urban prepares the SEFA once per
year in conjunction with the annual audit and did not include a procedure to properly identify
research and development classification.
Effect: The SEFA provided to BDO required several awards to be removed from the research and
development cluster. Failure to present the SEFA correctly would have resulted in incorrect major
program selection and an incorrect presentation of the overall SEFA.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend management continue to focus on training for both preparer and
reviewers of the SEFA to ensure the identification of research and development classification from
federal awarding agencies or pass-through entities is properly captured on the schedule. We suggest
this review process begin before the Institute signs an award agreement to determine whether the
agreement states whether it is considered to be research and development. The Institute would
then be aware of the classification prior to committing to the terms of the award. This will ensure
that the SEFA presents all relevant information as prescribed to ensure proper reporting on the SEFA
and major program determination.
Views of Responsible Officials: Management of the Institute agrees with the finding and
recommendations set forth within and has developed a corrective action plan to address the
instances of noncompliance identified and lapses in prescribed internal controls.
Significant Deficiency in Compliance and Internal Control over Compliance with
Reporting (Preparation of the Schedule of Expenditures of Federal Awards). Criteria: CFR Section §200.510(b) states in part: “The auditee must also prepare a schedule of
expenditures of Federal awards for the period covered by the auditee’s financial statements which
must include the total Federal awards expended as determined in accordance with CFR Section
§200.502 Basis for determining Federal awards expended.” For a cluster of programs, the schedule
must provide the cluster name, list individual Federal programs within the cluster of programs, and
provide the applicable Federal agency name. For a cluster of programs, the total for the cluster
must also be provided. Condition: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not operate as designed. BDO identified the following matters during
our testing of the SEFA: During our testing of management’s preparation of the Schedule of Expenditures of Federal
Awards (the SEFA), BDO identified 22 awards that were incorrectly classified as research and
development. In each case, the federal awarding agency or pass-through entity noted in the
award agreement the award was not classified or considered as research and development.
Management subsequently updated the classifications on the SEFA and corrected the
presentation of various programs presented as both clusters and nonclusters on the SEFA. The
SEFA, as presented, includes the corrections made by management. Questioned Costs: None.
Context: The nature of these findings is detailed in the condition section above. Any samples
selected as part of the overall SEFA review were performed using a non-statistical method. Cause: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not fully operate as designed. Urban prepares the SEFA once per
year in conjunction with the annual audit and did not include a procedure to properly identify
research and development classification.
Effect: The SEFA provided to BDO required several awards to be removed from the research and
development cluster. Failure to present the SEFA correctly would have resulted in incorrect major
program selection and an incorrect presentation of the overall SEFA.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend management continue to focus on training for both preparer and
reviewers of the SEFA to ensure the identification of research and development classification from
federal awarding agencies or pass-through entities is properly captured on the schedule. We suggest
this review process begin before the Institute signs an award agreement to determine whether the
agreement states whether it is considered to be research and development. The Institute would
then be aware of the classification prior to committing to the terms of the award. This will ensure
that the SEFA presents all relevant information as prescribed to ensure proper reporting on the SEFA
and major program determination.
Views of Responsible Officials: Management of the Institute agrees with the finding and
recommendations set forth within and has developed a corrective action plan to address the
instances of noncompliance identified and lapses in prescribed internal controls.
Significant Deficiency in Compliance and Internal Control over Compliance with
Reporting (Preparation of the Schedule of Expenditures of Federal Awards). Criteria: CFR Section §200.510(b) states in part: “The auditee must also prepare a schedule of
expenditures of Federal awards for the period covered by the auditee’s financial statements which
must include the total Federal awards expended as determined in accordance with CFR Section
§200.502 Basis for determining Federal awards expended.” For a cluster of programs, the schedule
must provide the cluster name, list individual Federal programs within the cluster of programs, and
provide the applicable Federal agency name. For a cluster of programs, the total for the cluster
must also be provided. Condition: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not operate as designed. BDO identified the following matters during
our testing of the SEFA: During our testing of management’s preparation of the Schedule of Expenditures of Federal
Awards (the SEFA), BDO identified 22 awards that were incorrectly classified as research and
development. In each case, the federal awarding agency or pass-through entity noted in the
award agreement the award was not classified or considered as research and development.
Management subsequently updated the classifications on the SEFA and corrected the
presentation of various programs presented as both clusters and nonclusters on the SEFA. The
SEFA, as presented, includes the corrections made by management. Questioned Costs: None.
Context: The nature of these findings is detailed in the condition section above. Any samples
selected as part of the overall SEFA review were performed using a non-statistical method. Cause: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not fully operate as designed. Urban prepares the SEFA once per
year in conjunction with the annual audit and did not include a procedure to properly identify
research and development classification.
Effect: The SEFA provided to BDO required several awards to be removed from the research and
development cluster. Failure to present the SEFA correctly would have resulted in incorrect major
program selection and an incorrect presentation of the overall SEFA.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend management continue to focus on training for both preparer and
reviewers of the SEFA to ensure the identification of research and development classification from
federal awarding agencies or pass-through entities is properly captured on the schedule. We suggest
this review process begin before the Institute signs an award agreement to determine whether the
agreement states whether it is considered to be research and development. The Institute would
then be aware of the classification prior to committing to the terms of the award. This will ensure
that the SEFA presents all relevant information as prescribed to ensure proper reporting on the SEFA
and major program determination.
Views of Responsible Officials: Management of the Institute agrees with the finding and
recommendations set forth within and has developed a corrective action plan to address the
instances of noncompliance identified and lapses in prescribed internal controls.
Significant Deficiency in Compliance and Internal Control over Compliance with
Reporting (Preparation of the Schedule of Expenditures of Federal Awards). Criteria: CFR Section §200.510(b) states in part: “The auditee must also prepare a schedule of
expenditures of Federal awards for the period covered by the auditee’s financial statements which
must include the total Federal awards expended as determined in accordance with CFR Section
§200.502 Basis for determining Federal awards expended.” For a cluster of programs, the schedule
must provide the cluster name, list individual Federal programs within the cluster of programs, and
provide the applicable Federal agency name. For a cluster of programs, the total for the cluster
must also be provided. Condition: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not operate as designed. BDO identified the following matters during
our testing of the SEFA: During our testing of management’s preparation of the Schedule of Expenditures of Federal
Awards (the SEFA), BDO identified 22 awards that were incorrectly classified as research and
development. In each case, the federal awarding agency or pass-through entity noted in the
award agreement the award was not classified or considered as research and development.
Management subsequently updated the classifications on the SEFA and corrected the
presentation of various programs presented as both clusters and nonclusters on the SEFA. The
SEFA, as presented, includes the corrections made by management. Questioned Costs: None.
Context: The nature of these findings is detailed in the condition section above. Any samples
selected as part of the overall SEFA review were performed using a non-statistical method. Cause: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not fully operate as designed. Urban prepares the SEFA once per
year in conjunction with the annual audit and did not include a procedure to properly identify
research and development classification.
Effect: The SEFA provided to BDO required several awards to be removed from the research and
development cluster. Failure to present the SEFA correctly would have resulted in incorrect major
program selection and an incorrect presentation of the overall SEFA.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend management continue to focus on training for both preparer and
reviewers of the SEFA to ensure the identification of research and development classification from
federal awarding agencies or pass-through entities is properly captured on the schedule. We suggest
this review process begin before the Institute signs an award agreement to determine whether the
agreement states whether it is considered to be research and development. The Institute would
then be aware of the classification prior to committing to the terms of the award. This will ensure
that the SEFA presents all relevant information as prescribed to ensure proper reporting on the SEFA
and major program determination.
Views of Responsible Officials: Management of the Institute agrees with the finding and
recommendations set forth within and has developed a corrective action plan to address the
instances of noncompliance identified and lapses in prescribed internal controls.
Significant Deficiency in Compliance and Internal Control over Compliance with
Reporting (Preparation of the Schedule of Expenditures of Federal Awards). Criteria: CFR Section §200.510(b) states in part: “The auditee must also prepare a schedule of
expenditures of Federal awards for the period covered by the auditee’s financial statements which
must include the total Federal awards expended as determined in accordance with CFR Section
§200.502 Basis for determining Federal awards expended.” For a cluster of programs, the schedule
must provide the cluster name, list individual Federal programs within the cluster of programs, and
provide the applicable Federal agency name. For a cluster of programs, the total for the cluster
must also be provided. Condition: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not operate as designed. BDO identified the following matters during
our testing of the SEFA: During our testing of management’s preparation of the Schedule of Expenditures of Federal
Awards (the SEFA), BDO identified 22 awards that were incorrectly classified as research and
development. In each case, the federal awarding agency or pass-through entity noted in the
award agreement the award was not classified or considered as research and development.
Management subsequently updated the classifications on the SEFA and corrected the
presentation of various programs presented as both clusters and nonclusters on the SEFA. The
SEFA, as presented, includes the corrections made by management. Questioned Costs: None.
Context: The nature of these findings is detailed in the condition section above. Any samples
selected as part of the overall SEFA review were performed using a non-statistical method. Cause: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not fully operate as designed. Urban prepares the SEFA once per
year in conjunction with the annual audit and did not include a procedure to properly identify
research and development classification.
Effect: The SEFA provided to BDO required several awards to be removed from the research and
development cluster. Failure to present the SEFA correctly would have resulted in incorrect major
program selection and an incorrect presentation of the overall SEFA.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend management continue to focus on training for both preparer and
reviewers of the SEFA to ensure the identification of research and development classification from
federal awarding agencies or pass-through entities is properly captured on the schedule. We suggest
this review process begin before the Institute signs an award agreement to determine whether the
agreement states whether it is considered to be research and development. The Institute would
then be aware of the classification prior to committing to the terms of the award. This will ensure
that the SEFA presents all relevant information as prescribed to ensure proper reporting on the SEFA
and major program determination.
Views of Responsible Officials: Management of the Institute agrees with the finding and
recommendations set forth within and has developed a corrective action plan to address the
instances of noncompliance identified and lapses in prescribed internal controls.
Significant Deficiency in Compliance and Internal Control over Compliance with
Reporting (Preparation of the Schedule of Expenditures of Federal Awards). Criteria: CFR Section §200.510(b) states in part: “The auditee must also prepare a schedule of
expenditures of Federal awards for the period covered by the auditee’s financial statements which
must include the total Federal awards expended as determined in accordance with CFR Section
§200.502 Basis for determining Federal awards expended.” For a cluster of programs, the schedule
must provide the cluster name, list individual Federal programs within the cluster of programs, and
provide the applicable Federal agency name. For a cluster of programs, the total for the cluster
must also be provided. Condition: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not operate as designed. BDO identified the following matters during
our testing of the SEFA: During our testing of management’s preparation of the Schedule of Expenditures of Federal
Awards (the SEFA), BDO identified 22 awards that were incorrectly classified as research and
development. In each case, the federal awarding agency or pass-through entity noted in the
award agreement the award was not classified or considered as research and development.
Management subsequently updated the classifications on the SEFA and corrected the
presentation of various programs presented as both clusters and nonclusters on the SEFA. The
SEFA, as presented, includes the corrections made by management. Questioned Costs: None.
Context: The nature of these findings is detailed in the condition section above. Any samples
selected as part of the overall SEFA review were performed using a non-statistical method. Cause: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not fully operate as designed. Urban prepares the SEFA once per
year in conjunction with the annual audit and did not include a procedure to properly identify
research and development classification.
Effect: The SEFA provided to BDO required several awards to be removed from the research and
development cluster. Failure to present the SEFA correctly would have resulted in incorrect major
program selection and an incorrect presentation of the overall SEFA.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend management continue to focus on training for both preparer and
reviewers of the SEFA to ensure the identification of research and development classification from
federal awarding agencies or pass-through entities is properly captured on the schedule. We suggest
this review process begin before the Institute signs an award agreement to determine whether the
agreement states whether it is considered to be research and development. The Institute would
then be aware of the classification prior to committing to the terms of the award. This will ensure
that the SEFA presents all relevant information as prescribed to ensure proper reporting on the SEFA
and major program determination.
Views of Responsible Officials: Management of the Institute agrees with the finding and
recommendations set forth within and has developed a corrective action plan to address the
instances of noncompliance identified and lapses in prescribed internal controls.
Significant Deficiency in Compliance and Internal Control over Compliance with
Reporting (Preparation of the Schedule of Expenditures of Federal Awards). Criteria: CFR Section §200.510(b) states in part: “The auditee must also prepare a schedule of
expenditures of Federal awards for the period covered by the auditee’s financial statements which
must include the total Federal awards expended as determined in accordance with CFR Section
§200.502 Basis for determining Federal awards expended.” For a cluster of programs, the schedule
must provide the cluster name, list individual Federal programs within the cluster of programs, and
provide the applicable Federal agency name. For a cluster of programs, the total for the cluster
must also be provided. Condition: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not operate as designed. BDO identified the following matters during
our testing of the SEFA: During our testing of management’s preparation of the Schedule of Expenditures of Federal
Awards (the SEFA), BDO identified 22 awards that were incorrectly classified as research and
development. In each case, the federal awarding agency or pass-through entity noted in the
award agreement the award was not classified or considered as research and development.
Management subsequently updated the classifications on the SEFA and corrected the
presentation of various programs presented as both clusters and nonclusters on the SEFA. The
SEFA, as presented, includes the corrections made by management. Questioned Costs: None.
Context: The nature of these findings is detailed in the condition section above. Any samples
selected as part of the overall SEFA review were performed using a non-statistical method. Cause: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not fully operate as designed. Urban prepares the SEFA once per
year in conjunction with the annual audit and did not include a procedure to properly identify
research and development classification.
Effect: The SEFA provided to BDO required several awards to be removed from the research and
development cluster. Failure to present the SEFA correctly would have resulted in incorrect major
program selection and an incorrect presentation of the overall SEFA.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend management continue to focus on training for both preparer and
reviewers of the SEFA to ensure the identification of research and development classification from
federal awarding agencies or pass-through entities is properly captured on the schedule. We suggest
this review process begin before the Institute signs an award agreement to determine whether the
agreement states whether it is considered to be research and development. The Institute would
then be aware of the classification prior to committing to the terms of the award. This will ensure
that the SEFA presents all relevant information as prescribed to ensure proper reporting on the SEFA
and major program determination.
Views of Responsible Officials: Management of the Institute agrees with the finding and
recommendations set forth within and has developed a corrective action plan to address the
instances of noncompliance identified and lapses in prescribed internal controls.
Significant Deficiency in Compliance and Internal Control over Compliance with
Reporting (Preparation of the Schedule of Expenditures of Federal Awards). Criteria: CFR Section §200.510(b) states in part: “The auditee must also prepare a schedule of
expenditures of Federal awards for the period covered by the auditee’s financial statements which
must include the total Federal awards expended as determined in accordance with CFR Section
§200.502 Basis for determining Federal awards expended.” For a cluster of programs, the schedule
must provide the cluster name, list individual Federal programs within the cluster of programs, and
provide the applicable Federal agency name. For a cluster of programs, the total for the cluster
must also be provided. Condition: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not operate as designed. BDO identified the following matters during
our testing of the SEFA: During our testing of management’s preparation of the Schedule of Expenditures of Federal
Awards (the SEFA), BDO identified 22 awards that were incorrectly classified as research and
development. In each case, the federal awarding agency or pass-through entity noted in the
award agreement the award was not classified or considered as research and development.
Management subsequently updated the classifications on the SEFA and corrected the
presentation of various programs presented as both clusters and nonclusters on the SEFA. The
SEFA, as presented, includes the corrections made by management. Questioned Costs: None.
Context: The nature of these findings is detailed in the condition section above. Any samples
selected as part of the overall SEFA review were performed using a non-statistical method. Cause: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not fully operate as designed. Urban prepares the SEFA once per
year in conjunction with the annual audit and did not include a procedure to properly identify
research and development classification.
Effect: The SEFA provided to BDO required several awards to be removed from the research and
development cluster. Failure to present the SEFA correctly would have resulted in incorrect major
program selection and an incorrect presentation of the overall SEFA.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend management continue to focus on training for both preparer and
reviewers of the SEFA to ensure the identification of research and development classification from
federal awarding agencies or pass-through entities is properly captured on the schedule. We suggest
this review process begin before the Institute signs an award agreement to determine whether the
agreement states whether it is considered to be research and development. The Institute would
then be aware of the classification prior to committing to the terms of the award. This will ensure
that the SEFA presents all relevant information as prescribed to ensure proper reporting on the SEFA
and major program determination.
Views of Responsible Officials: Management of the Institute agrees with the finding and
recommendations set forth within and has developed a corrective action plan to address the
instances of noncompliance identified and lapses in prescribed internal controls.
Significant Deficiency in Compliance and Internal Control over Compliance with
Reporting (Preparation of the Schedule of Expenditures of Federal Awards). Criteria: CFR Section §200.510(b) states in part: “The auditee must also prepare a schedule of
expenditures of Federal awards for the period covered by the auditee’s financial statements which
must include the total Federal awards expended as determined in accordance with CFR Section
§200.502 Basis for determining Federal awards expended.” For a cluster of programs, the schedule
must provide the cluster name, list individual Federal programs within the cluster of programs, and
provide the applicable Federal agency name. For a cluster of programs, the total for the cluster
must also be provided. Condition: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not operate as designed. BDO identified the following matters during
our testing of the SEFA: During our testing of management’s preparation of the Schedule of Expenditures of Federal
Awards (the SEFA), BDO identified 22 awards that were incorrectly classified as research and
development. In each case, the federal awarding agency or pass-through entity noted in the
award agreement the award was not classified or considered as research and development.
Management subsequently updated the classifications on the SEFA and corrected the
presentation of various programs presented as both clusters and nonclusters on the SEFA. The
SEFA, as presented, includes the corrections made by management. Questioned Costs: None.
Context: The nature of these findings is detailed in the condition section above. Any samples
selected as part of the overall SEFA review were performed using a non-statistical method. Cause: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not fully operate as designed. Urban prepares the SEFA once per
year in conjunction with the annual audit and did not include a procedure to properly identify
research and development classification.
Effect: The SEFA provided to BDO required several awards to be removed from the research and
development cluster. Failure to present the SEFA correctly would have resulted in incorrect major
program selection and an incorrect presentation of the overall SEFA.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend management continue to focus on training for both preparer and
reviewers of the SEFA to ensure the identification of research and development classification from
federal awarding agencies or pass-through entities is properly captured on the schedule. We suggest
this review process begin before the Institute signs an award agreement to determine whether the
agreement states whether it is considered to be research and development. The Institute would
then be aware of the classification prior to committing to the terms of the award. This will ensure
that the SEFA presents all relevant information as prescribed to ensure proper reporting on the SEFA
and major program determination.
Views of Responsible Officials: Management of the Institute agrees with the finding and
recommendations set forth within and has developed a corrective action plan to address the
instances of noncompliance identified and lapses in prescribed internal controls.
Significant Deficiency in Compliance and Internal Control over Compliance with
Reporting (Preparation of the Schedule of Expenditures of Federal Awards). Criteria: CFR Section §200.510(b) states in part: “The auditee must also prepare a schedule of
expenditures of Federal awards for the period covered by the auditee’s financial statements which
must include the total Federal awards expended as determined in accordance with CFR Section
§200.502 Basis for determining Federal awards expended.” For a cluster of programs, the schedule
must provide the cluster name, list individual Federal programs within the cluster of programs, and
provide the applicable Federal agency name. For a cluster of programs, the total for the cluster
must also be provided. Condition: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not operate as designed. BDO identified the following matters during
our testing of the SEFA: During our testing of management’s preparation of the Schedule of Expenditures of Federal
Awards (the SEFA), BDO identified 22 awards that were incorrectly classified as research and
development. In each case, the federal awarding agency or pass-through entity noted in the
award agreement the award was not classified or considered as research and development.
Management subsequently updated the classifications on the SEFA and corrected the
presentation of various programs presented as both clusters and nonclusters on the SEFA. The
SEFA, as presented, includes the corrections made by management. Questioned Costs: None.
Context: The nature of these findings is detailed in the condition section above. Any samples
selected as part of the overall SEFA review were performed using a non-statistical method. Cause: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not fully operate as designed. Urban prepares the SEFA once per
year in conjunction with the annual audit and did not include a procedure to properly identify
research and development classification.
Effect: The SEFA provided to BDO required several awards to be removed from the research and
development cluster. Failure to present the SEFA correctly would have resulted in incorrect major
program selection and an incorrect presentation of the overall SEFA.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend management continue to focus on training for both preparer and
reviewers of the SEFA to ensure the identification of research and development classification from
federal awarding agencies or pass-through entities is properly captured on the schedule. We suggest
this review process begin before the Institute signs an award agreement to determine whether the
agreement states whether it is considered to be research and development. The Institute would
then be aware of the classification prior to committing to the terms of the award. This will ensure
that the SEFA presents all relevant information as prescribed to ensure proper reporting on the SEFA
and major program determination.
Views of Responsible Officials: Management of the Institute agrees with the finding and
recommendations set forth within and has developed a corrective action plan to address the
instances of noncompliance identified and lapses in prescribed internal controls.
Significant Deficiency in Compliance and Internal Control over Compliance with
Reporting (Preparation of the Schedule of Expenditures of Federal Awards). Criteria: CFR Section §200.510(b) states in part: “The auditee must also prepare a schedule of
expenditures of Federal awards for the period covered by the auditee’s financial statements which
must include the total Federal awards expended as determined in accordance with CFR Section
§200.502 Basis for determining Federal awards expended.” For a cluster of programs, the schedule
must provide the cluster name, list individual Federal programs within the cluster of programs, and
provide the applicable Federal agency name. For a cluster of programs, the total for the cluster
must also be provided. Condition: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not operate as designed. BDO identified the following matters during
our testing of the SEFA: During our testing of management’s preparation of the Schedule of Expenditures of Federal
Awards (the SEFA), BDO identified 22 awards that were incorrectly classified as research and
development. In each case, the federal awarding agency or pass-through entity noted in the
award agreement the award was not classified or considered as research and development.
Management subsequently updated the classifications on the SEFA and corrected the
presentation of various programs presented as both clusters and nonclusters on the SEFA. The
SEFA, as presented, includes the corrections made by management. Questioned Costs: None.
Context: The nature of these findings is detailed in the condition section above. Any samples
selected as part of the overall SEFA review were performed using a non-statistical method. Cause: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not fully operate as designed. Urban prepares the SEFA once per
year in conjunction with the annual audit and did not include a procedure to properly identify
research and development classification.
Effect: The SEFA provided to BDO required several awards to be removed from the research and
development cluster. Failure to present the SEFA correctly would have resulted in incorrect major
program selection and an incorrect presentation of the overall SEFA.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend management continue to focus on training for both preparer and
reviewers of the SEFA to ensure the identification of research and development classification from
federal awarding agencies or pass-through entities is properly captured on the schedule. We suggest
this review process begin before the Institute signs an award agreement to determine whether the
agreement states whether it is considered to be research and development. The Institute would
then be aware of the classification prior to committing to the terms of the award. This will ensure
that the SEFA presents all relevant information as prescribed to ensure proper reporting on the SEFA
and major program determination.
Views of Responsible Officials: Management of the Institute agrees with the finding and
recommendations set forth within and has developed a corrective action plan to address the
instances of noncompliance identified and lapses in prescribed internal controls.
Significant Deficiency in Compliance and Internal Control over Compliance with
Reporting (Preparation of the Schedule of Expenditures of Federal Awards). Criteria: CFR Section §200.510(b) states in part: “The auditee must also prepare a schedule of
expenditures of Federal awards for the period covered by the auditee’s financial statements which
must include the total Federal awards expended as determined in accordance with CFR Section
§200.502 Basis for determining Federal awards expended.” For a cluster of programs, the schedule
must provide the cluster name, list individual Federal programs within the cluster of programs, and
provide the applicable Federal agency name. For a cluster of programs, the total for the cluster
must also be provided. Condition: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not operate as designed. BDO identified the following matters during
our testing of the SEFA: During our testing of management’s preparation of the Schedule of Expenditures of Federal
Awards (the SEFA), BDO identified 22 awards that were incorrectly classified as research and
development. In each case, the federal awarding agency or pass-through entity noted in the
award agreement the award was not classified or considered as research and development.
Management subsequently updated the classifications on the SEFA and corrected the
presentation of various programs presented as both clusters and nonclusters on the SEFA. The
SEFA, as presented, includes the corrections made by management. Questioned Costs: None.
Context: The nature of these findings is detailed in the condition section above. Any samples
selected as part of the overall SEFA review were performed using a non-statistical method. Cause: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not fully operate as designed. Urban prepares the SEFA once per
year in conjunction with the annual audit and did not include a procedure to properly identify
research and development classification.
Effect: The SEFA provided to BDO required several awards to be removed from the research and
development cluster. Failure to present the SEFA correctly would have resulted in incorrect major
program selection and an incorrect presentation of the overall SEFA.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend management continue to focus on training for both preparer and
reviewers of the SEFA to ensure the identification of research and development classification from
federal awarding agencies or pass-through entities is properly captured on the schedule. We suggest
this review process begin before the Institute signs an award agreement to determine whether the
agreement states whether it is considered to be research and development. The Institute would
then be aware of the classification prior to committing to the terms of the award. This will ensure
that the SEFA presents all relevant information as prescribed to ensure proper reporting on the SEFA
and major program determination.
Views of Responsible Officials: Management of the Institute agrees with the finding and
recommendations set forth within and has developed a corrective action plan to address the
instances of noncompliance identified and lapses in prescribed internal controls.
Significant Deficiency in Compliance and Internal Control over Compliance with
Reporting (Preparation of the Schedule of Expenditures of Federal Awards). Criteria: CFR Section §200.510(b) states in part: “The auditee must also prepare a schedule of
expenditures of Federal awards for the period covered by the auditee’s financial statements which
must include the total Federal awards expended as determined in accordance with CFR Section
§200.502 Basis for determining Federal awards expended.” For a cluster of programs, the schedule
must provide the cluster name, list individual Federal programs within the cluster of programs, and
provide the applicable Federal agency name. For a cluster of programs, the total for the cluster
must also be provided. Condition: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not operate as designed. BDO identified the following matters during
our testing of the SEFA: During our testing of management’s preparation of the Schedule of Expenditures of Federal
Awards (the SEFA), BDO identified 22 awards that were incorrectly classified as research and
development. In each case, the federal awarding agency or pass-through entity noted in the
award agreement the award was not classified or considered as research and development.
Management subsequently updated the classifications on the SEFA and corrected the
presentation of various programs presented as both clusters and nonclusters on the SEFA. The
SEFA, as presented, includes the corrections made by management. Questioned Costs: None.
Context: The nature of these findings is detailed in the condition section above. Any samples
selected as part of the overall SEFA review were performed using a non-statistical method. Cause: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not fully operate as designed. Urban prepares the SEFA once per
year in conjunction with the annual audit and did not include a procedure to properly identify
research and development classification.
Effect: The SEFA provided to BDO required several awards to be removed from the research and
development cluster. Failure to present the SEFA correctly would have resulted in incorrect major
program selection and an incorrect presentation of the overall SEFA.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend management continue to focus on training for both preparer and
reviewers of the SEFA to ensure the identification of research and development classification from
federal awarding agencies or pass-through entities is properly captured on the schedule. We suggest
this review process begin before the Institute signs an award agreement to determine whether the
agreement states whether it is considered to be research and development. The Institute would
then be aware of the classification prior to committing to the terms of the award. This will ensure
that the SEFA presents all relevant information as prescribed to ensure proper reporting on the SEFA
and major program determination.
Views of Responsible Officials: Management of the Institute agrees with the finding and
recommendations set forth within and has developed a corrective action plan to address the
instances of noncompliance identified and lapses in prescribed internal controls.
Significant Deficiency in Compliance and Internal Control over Compliance with
Reporting (Preparation of the Schedule of Expenditures of Federal Awards). Criteria: CFR Section §200.510(b) states in part: “The auditee must also prepare a schedule of
expenditures of Federal awards for the period covered by the auditee’s financial statements which
must include the total Federal awards expended as determined in accordance with CFR Section
§200.502 Basis for determining Federal awards expended.” For a cluster of programs, the schedule
must provide the cluster name, list individual Federal programs within the cluster of programs, and
provide the applicable Federal agency name. For a cluster of programs, the total for the cluster
must also be provided. Condition: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not operate as designed. BDO identified the following matters during
our testing of the SEFA: During our testing of management’s preparation of the Schedule of Expenditures of Federal
Awards (the SEFA), BDO identified 22 awards that were incorrectly classified as research and
development. In each case, the federal awarding agency or pass-through entity noted in the
award agreement the award was not classified or considered as research and development.
Management subsequently updated the classifications on the SEFA and corrected the
presentation of various programs presented as both clusters and nonclusters on the SEFA. The
SEFA, as presented, includes the corrections made by management. Questioned Costs: None.
Context: The nature of these findings is detailed in the condition section above. Any samples
selected as part of the overall SEFA review were performed using a non-statistical method. Cause: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not fully operate as designed. Urban prepares the SEFA once per
year in conjunction with the annual audit and did not include a procedure to properly identify
research and development classification.
Effect: The SEFA provided to BDO required several awards to be removed from the research and
development cluster. Failure to present the SEFA correctly would have resulted in incorrect major
program selection and an incorrect presentation of the overall SEFA.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend management continue to focus on training for both preparer and
reviewers of the SEFA to ensure the identification of research and development classification from
federal awarding agencies or pass-through entities is properly captured on the schedule. We suggest
this review process begin before the Institute signs an award agreement to determine whether the
agreement states whether it is considered to be research and development. The Institute would
then be aware of the classification prior to committing to the terms of the award. This will ensure
that the SEFA presents all relevant information as prescribed to ensure proper reporting on the SEFA
and major program determination.
Views of Responsible Officials: Management of the Institute agrees with the finding and
recommendations set forth within and has developed a corrective action plan to address the
instances of noncompliance identified and lapses in prescribed internal controls.
Significant Deficiency in Compliance and Internal Control over Compliance with
Reporting (Preparation of the Schedule of Expenditures of Federal Awards). Criteria: CFR Section §200.510(b) states in part: “The auditee must also prepare a schedule of
expenditures of Federal awards for the period covered by the auditee’s financial statements which
must include the total Federal awards expended as determined in accordance with CFR Section
§200.502 Basis for determining Federal awards expended.” For a cluster of programs, the schedule
must provide the cluster name, list individual Federal programs within the cluster of programs, and
provide the applicable Federal agency name. For a cluster of programs, the total for the cluster
must also be provided. Condition: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not operate as designed. BDO identified the following matters during
our testing of the SEFA: During our testing of management’s preparation of the Schedule of Expenditures of Federal
Awards (the SEFA), BDO identified 22 awards that were incorrectly classified as research and
development. In each case, the federal awarding agency or pass-through entity noted in the
award agreement the award was not classified or considered as research and development.
Management subsequently updated the classifications on the SEFA and corrected the
presentation of various programs presented as both clusters and nonclusters on the SEFA. The
SEFA, as presented, includes the corrections made by management. Questioned Costs: None.
Context: The nature of these findings is detailed in the condition section above. Any samples
selected as part of the overall SEFA review were performed using a non-statistical method. Cause: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not fully operate as designed. Urban prepares the SEFA once per
year in conjunction with the annual audit and did not include a procedure to properly identify
research and development classification.
Effect: The SEFA provided to BDO required several awards to be removed from the research and
development cluster. Failure to present the SEFA correctly would have resulted in incorrect major
program selection and an incorrect presentation of the overall SEFA.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend management continue to focus on training for both preparer and
reviewers of the SEFA to ensure the identification of research and development classification from
federal awarding agencies or pass-through entities is properly captured on the schedule. We suggest
this review process begin before the Institute signs an award agreement to determine whether the
agreement states whether it is considered to be research and development. The Institute would
then be aware of the classification prior to committing to the terms of the award. This will ensure
that the SEFA presents all relevant information as prescribed to ensure proper reporting on the SEFA
and major program determination.
Views of Responsible Officials: Management of the Institute agrees with the finding and
recommendations set forth within and has developed a corrective action plan to address the
instances of noncompliance identified and lapses in prescribed internal controls.
Significant Deficiency in Compliance and Internal Control over Compliance with
Reporting (Preparation of the Schedule of Expenditures of Federal Awards). Criteria: CFR Section §200.510(b) states in part: “The auditee must also prepare a schedule of
expenditures of Federal awards for the period covered by the auditee’s financial statements which
must include the total Federal awards expended as determined in accordance with CFR Section
§200.502 Basis for determining Federal awards expended.” For a cluster of programs, the schedule
must provide the cluster name, list individual Federal programs within the cluster of programs, and
provide the applicable Federal agency name. For a cluster of programs, the total for the cluster
must also be provided. Condition: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not operate as designed. BDO identified the following matters during
our testing of the SEFA: During our testing of management’s preparation of the Schedule of Expenditures of Federal
Awards (the SEFA), BDO identified 22 awards that were incorrectly classified as research and
development. In each case, the federal awarding agency or pass-through entity noted in the
award agreement the award was not classified or considered as research and development.
Management subsequently updated the classifications on the SEFA and corrected the
presentation of various programs presented as both clusters and nonclusters on the SEFA. The
SEFA, as presented, includes the corrections made by management. Questioned Costs: None.
Context: The nature of these findings is detailed in the condition section above. Any samples
selected as part of the overall SEFA review were performed using a non-statistical method. Cause: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not fully operate as designed. Urban prepares the SEFA once per
year in conjunction with the annual audit and did not include a procedure to properly identify
research and development classification.
Effect: The SEFA provided to BDO required several awards to be removed from the research and
development cluster. Failure to present the SEFA correctly would have resulted in incorrect major
program selection and an incorrect presentation of the overall SEFA.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend management continue to focus on training for both preparer and
reviewers of the SEFA to ensure the identification of research and development classification from
federal awarding agencies or pass-through entities is properly captured on the schedule. We suggest
this review process begin before the Institute signs an award agreement to determine whether the
agreement states whether it is considered to be research and development. The Institute would
then be aware of the classification prior to committing to the terms of the award. This will ensure
that the SEFA presents all relevant information as prescribed to ensure proper reporting on the SEFA
and major program determination.
Views of Responsible Officials: Management of the Institute agrees with the finding and
recommendations set forth within and has developed a corrective action plan to address the
instances of noncompliance identified and lapses in prescribed internal controls.
Significant Deficiency in Compliance and Internal Control over Compliance with
Reporting (Preparation of the Schedule of Expenditures of Federal Awards). Criteria: CFR Section §200.510(b) states in part: “The auditee must also prepare a schedule of
expenditures of Federal awards for the period covered by the auditee’s financial statements which
must include the total Federal awards expended as determined in accordance with CFR Section
§200.502 Basis for determining Federal awards expended.” For a cluster of programs, the schedule
must provide the cluster name, list individual Federal programs within the cluster of programs, and
provide the applicable Federal agency name. For a cluster of programs, the total for the cluster
must also be provided. Condition: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not operate as designed. BDO identified the following matters during
our testing of the SEFA: During our testing of management’s preparation of the Schedule of Expenditures of Federal
Awards (the SEFA), BDO identified 22 awards that were incorrectly classified as research and
development. In each case, the federal awarding agency or pass-through entity noted in the
award agreement the award was not classified or considered as research and development.
Management subsequently updated the classifications on the SEFA and corrected the
presentation of various programs presented as both clusters and nonclusters on the SEFA. The
SEFA, as presented, includes the corrections made by management. Questioned Costs: None.
Context: The nature of these findings is detailed in the condition section above. Any samples
selected as part of the overall SEFA review were performed using a non-statistical method. Cause: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not fully operate as designed. Urban prepares the SEFA once per
year in conjunction with the annual audit and did not include a procedure to properly identify
research and development classification.
Effect: The SEFA provided to BDO required several awards to be removed from the research and
development cluster. Failure to present the SEFA correctly would have resulted in incorrect major
program selection and an incorrect presentation of the overall SEFA.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend management continue to focus on training for both preparer and
reviewers of the SEFA to ensure the identification of research and development classification from
federal awarding agencies or pass-through entities is properly captured on the schedule. We suggest
this review process begin before the Institute signs an award agreement to determine whether the
agreement states whether it is considered to be research and development. The Institute would
then be aware of the classification prior to committing to the terms of the award. This will ensure
that the SEFA presents all relevant information as prescribed to ensure proper reporting on the SEFA
and major program determination.
Views of Responsible Officials: Management of the Institute agrees with the finding and
recommendations set forth within and has developed a corrective action plan to address the
instances of noncompliance identified and lapses in prescribed internal controls.
Significant Deficiency in Compliance and Internal Control over Compliance with
Reporting (Preparation of the Schedule of Expenditures of Federal Awards). Criteria: CFR Section §200.510(b) states in part: “The auditee must also prepare a schedule of
expenditures of Federal awards for the period covered by the auditee’s financial statements which
must include the total Federal awards expended as determined in accordance with CFR Section
§200.502 Basis for determining Federal awards expended.” For a cluster of programs, the schedule
must provide the cluster name, list individual Federal programs within the cluster of programs, and
provide the applicable Federal agency name. For a cluster of programs, the total for the cluster
must also be provided. Condition: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not operate as designed. BDO identified the following matters during
our testing of the SEFA: During our testing of management’s preparation of the Schedule of Expenditures of Federal
Awards (the SEFA), BDO identified 22 awards that were incorrectly classified as research and
development. In each case, the federal awarding agency or pass-through entity noted in the
award agreement the award was not classified or considered as research and development.
Management subsequently updated the classifications on the SEFA and corrected the
presentation of various programs presented as both clusters and nonclusters on the SEFA. The
SEFA, as presented, includes the corrections made by management. Questioned Costs: None.
Context: The nature of these findings is detailed in the condition section above. Any samples
selected as part of the overall SEFA review were performed using a non-statistical method. Cause: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not fully operate as designed. Urban prepares the SEFA once per
year in conjunction with the annual audit and did not include a procedure to properly identify
research and development classification.
Effect: The SEFA provided to BDO required several awards to be removed from the research and
development cluster. Failure to present the SEFA correctly would have resulted in incorrect major
program selection and an incorrect presentation of the overall SEFA.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend management continue to focus on training for both preparer and
reviewers of the SEFA to ensure the identification of research and development classification from
federal awarding agencies or pass-through entities is properly captured on the schedule. We suggest
this review process begin before the Institute signs an award agreement to determine whether the
agreement states whether it is considered to be research and development. The Institute would
then be aware of the classification prior to committing to the terms of the award. This will ensure
that the SEFA presents all relevant information as prescribed to ensure proper reporting on the SEFA
and major program determination.
Views of Responsible Officials: Management of the Institute agrees with the finding and
recommendations set forth within and has developed a corrective action plan to address the
instances of noncompliance identified and lapses in prescribed internal controls.
Significant Deficiency in Compliance and Internal Control over Compliance with
Reporting (Preparation of the Schedule of Expenditures of Federal Awards). Criteria: CFR Section §200.510(b) states in part: “The auditee must also prepare a schedule of
expenditures of Federal awards for the period covered by the auditee’s financial statements which
must include the total Federal awards expended as determined in accordance with CFR Section
§200.502 Basis for determining Federal awards expended.” For a cluster of programs, the schedule
must provide the cluster name, list individual Federal programs within the cluster of programs, and
provide the applicable Federal agency name. For a cluster of programs, the total for the cluster
must also be provided. Condition: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not operate as designed. BDO identified the following matters during
our testing of the SEFA: During our testing of management’s preparation of the Schedule of Expenditures of Federal
Awards (the SEFA), BDO identified 22 awards that were incorrectly classified as research and
development. In each case, the federal awarding agency or pass-through entity noted in the
award agreement the award was not classified or considered as research and development.
Management subsequently updated the classifications on the SEFA and corrected the
presentation of various programs presented as both clusters and nonclusters on the SEFA. The
SEFA, as presented, includes the corrections made by management. Questioned Costs: None.
Context: The nature of these findings is detailed in the condition section above. Any samples
selected as part of the overall SEFA review were performed using a non-statistical method. Cause: The internal controls established for the review and approval of the SEFA to ensure its
completeness and accuracy did not fully operate as designed. Urban prepares the SEFA once per
year in conjunction with the annual audit and did not include a procedure to properly identify
research and development classification.
Effect: The SEFA provided to BDO required several awards to be removed from the research and
development cluster. Failure to present the SEFA correctly would have resulted in incorrect major
program selection and an incorrect presentation of the overall SEFA.
Repeat Finding: This is not a repeat finding.
Recommendation: We recommend management continue to focus on training for both preparer and
reviewers of the SEFA to ensure the identification of research and development classification from
federal awarding agencies or pass-through entities is properly captured on the schedule. We suggest
this review process begin before the Institute signs an award agreement to determine whether the
agreement states whether it is considered to be research and development. The Institute would
then be aware of the classification prior to committing to the terms of the award. This will ensure
that the SEFA presents all relevant information as prescribed to ensure proper reporting on the SEFA
and major program determination.
Views of Responsible Officials: Management of the Institute agrees with the finding and
recommendations set forth within and has developed a corrective action plan to address the
instances of noncompliance identified and lapses in prescribed internal controls.