FAC Explorer

Audit 343627

FY End
2024-05-31
Total Expended
$15.83M
Findings
6
Programs
3
Organization: Kansas Health Science Center, Inc. (IL)
Year: 2024 Accepted: 2025-02-24
Auditor: Rsm US LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
524389 2024-001 Significant Deficiency - C
524390 2024-002 Significant Deficiency - B
524391 2024-003 Significant Deficiency - I
1100831 2024-001 Significant Deficiency - C
1100832 2024-002 Significant Deficiency - B
1100833 2024-003 Significant Deficiency - I

Programs

ALN Program Spent Major Findings
84.268 Federal Direct Student Loans $14.34M Yes 1
21.027 Covid-19: Coronavirus State and Local Fiscal Recovery Funds $1.12M Yes 2
93.493 Congressional Directives $369,836 - 0

Contacts

Name Title Type
TD5TWYLNSZM7 Theresa Cowan Auditee
3177556905 Craig Wories Auditor
No contacts on file

Notes to SEFA

Title: Note 1. Basis of Presentation Accounting Policies: Expenditures reported in the Schedule are recognized on the accrual basis of accounting. Such expenditures are reported following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: KHSU has elected not to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance. The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of Kansas Health Science University (KHSU) under programs of the federal government for the year ended May 31, 2024. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of KHSU, it is not intended to and does not present the financial position, changes in net assets, or cash flows of KHSU. No funds were identified as having been provided to subrecipients by KHSU and accordingly, no funds identified in the Schedule of Expenditures of Federal Awards are attributable to subrecipient entities. There were no federal awards expended for non-cash assistance or insurance at year-end.
Title: Note 2. Summary of Significant Accounting Policies Accounting Policies: Expenditures reported in the Schedule are recognized on the accrual basis of accounting. Such expenditures are reported following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: KHSU has elected not to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance. Expenditures reported in the Schedule are recognized on the accrual basis of accounting. Such expenditures are reported following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement.
Title: Note 3. Indirect Cost Rate Accounting Policies: Expenditures reported in the Schedule are recognized on the accrual basis of accounting. Such expenditures are reported following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: KHSU has elected not to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance. KHSU has elected not to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance.
Title: Note 4. Federal Student Loan Program Accounting Policies: Expenditures reported in the Schedule are recognized on the accrual basis of accounting. Such expenditures are reported following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: KHSU has elected not to use the 10% de minimis indirect cost rate as allowed under the Uniform Guidance. During the fiscal year ended May 31, 2024, KHSU issued new loans to students under the Federal Direct Student Loan Program (FDLP). The loan program includes unsubsidized Stafford Loans and PLUS Loans for graduate and professional students. The value of loans issued for the FDLP is based on disbursed amounts. The loan amounts issued during the year are disclosed in the Schedule. KHSU is responsible only for the performance of certain administrative duties with respect to the federally guaranteed student loan programs and, accordingly, balances and transactions relating to these loan programs are not included in KHSU’s basic financial statements. Therefore, it is not practicable to determine the balance of loans outstanding to students and former students of KHSU at May 31, 2024.

Finding Details

Finding 2024-001
Finding 2024-001: Excess Cash – Student Financial Aid Federal Agency: U.S. Department of Education Program Name: Student Financial Assistance Cluster, Federal Direct Student Loans Assistance Listing Number: 84.268 Award Year: June 1, 2023 – May 31, 2024 Program Expenditures: $14,342,246 Questioned Costs: None Criteria: Uniform Grant Guidance (34 CFR 668.166) states the Secretary considers excess cash to be any amount of Title IV, Higher Education Act (HEA) program funds, other than Federal Perkins Loan program funds, that an institution does not disburse to students by the end of the third business day following the date the institution (1) received those funds from the Secretary; or (2) deposited or transferred to its depository account previously disbursed Title IV, HEA program funds, such as those resulting from awards adjustments, recoveries, or cancellations. An institution may maintain for up to seven days an amount of excess cash that does not exceed one percent of the total amount of funds the institution drew down in the prior award year. The institution must return immediately to the Secretary any amount of excess cash over the one-percent tolerance and any amount of excess cash remaining in its account after the seven-day tolerance period. Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure excess cash is properly handled. Condition: The Kansas Health Science University (KHSU) had two instances of excess cash for the Federal Direct Student Loan program. During our cash management testing, we identified KHSU had excess cash for the Direct Loan program of $268,278 for the period from July 12, 2023 to July 19, 2023 and ranging from $2,204 to $13,385 for the period from April 8, 2024 to April 23, 2024. For the period of July 12, 2023 to July 19, 2023, the excess cash exceeded one percent of total prior year drawdowns and amounts were not returned within the three business-day period. For the period of April 8, 2024 to April 23, 2024, the excess cash did not exceed one percent of total prior year drawdowns, however, amounts were not returned with a seven-day period. Cause: University officials stated the excess cash issues were due to oversight regarding refunds issued to students. Effect: Excess cash is noncompliance with Federal regulations and could result in heightened monitoring by the U.S. Department of Education. Questioned Costs: None Finding 2024-001: Excess Cash – Student Financial Aid (Continued) Context: For the periods of July 12, 2023 to July 19, 2023 and April 8, 2024 to April 23, 2024, KHSU had excess cash in the amount of $268,278 and ranging from $2,204 to $13,385, respectively. KHSU held excess cash for a period of 5 business days and 17 calendar days, respectively. Repeat Finding: No. Recommendation: We recommend KHSU strengthen internal controls around the determination of amounts to be drawn and refunded to the Secretary during the fiscal year. Views of Responsible Officials: Management agrees with the finding. Please see corrective action plan attached.
Finding 2024-002
Finding 2024-002: Improper Controls over Personnel Expenses Federal Agency: U.S. Department of Treasury Program Name: COVID-19: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Award Year: June 1, 2023 – May 31, 2024 Program Expenditures: $1,119,206 Questioned Costs: None Criteria: Uniform Grant Guidance (2 CFR 200.430(g)(1)(i)) states charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure personnel activity reports are approved. Condition: A KHSU supervisor did not properly document approval for one employee’s personnel activity reports. Cause: KHSU officials stated that this issue was an isolated incident resulting from an unintentional oversight at multiple levels of approval. While established procedures generally ensure proper documentation of personnel activity reports, in this case, the required documentation was inadvertently missed during the review and approval process. Effect: If employee’s personnel activity reports are not properly reviewed and approved, KHSU could submit unallowable costs for the program. Questioned Costs: None Context: Of the 8 employee personnel activity reports sampled, one report did not contain the proper approval by a KHSU supervisor. Repeat Finding: No. Recommendation: We recommend KHSU strengthen internal controls around the approval of personnel activity reports to confirm that a reasonable person can confirm the control occurred. Views of Responsible Officials: Management agrees with the finding. Please see corrective action plan attached.
Finding 2024-003
Finding 2024-003: Lack of Control Documentation over Review of Suspended/Debarred Vendors Federal Agency: U.S. Department of Treasury Program Name: COVID-19: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Award Year: June 1, 2023 – May 31, 2024 Program Expenditures: $1,119,206 Questioned Costs: None Criteria: Uniform Grant Guidance (2 CFR 180.300) states that when entering into a covered transaction with another person at the next lower tier, the nonfederal entity must verify the person with whom the nonfederal entity intends to do business is not excluded or disqualified by: (a) checking Sam.gov Exclusions; or (b) collecting a certification from that person; or (c) adding a clause or condition to the covered transaction with that person. Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure vendors are not suspended or debarred. Condition: KHSU was not able to provide support showing that a check had been performed on vendors with whom KHSU entered into covered transactions to verify the vendor were not suspended or debarred. Cause: KHSU officials stated while the organization had a policy in place requiring the review of vendors to ensure compliance with federal requirements, the policy did not include proper documentation requirements. Effect: If KHSU does not maintain documentation confirming a vendor under a covered transaction was not suspended or debarred, KHSU could enter into a transaction with a suspended or debarred vendor and as a result represent noncompliance and improper use of federal funds. Questioned Costs: None Context: KHSU had covered transactions with five vendors for the program totaling expenditures of $440,610. KHSU confirmed it performed the check but did not maintain documentation showing the check was performed. Our testing of all five vendors did not indicate that any were suspended or debarred. Repeat Finding: No. Recommendation: We recommend KHSU update its policy over suspended and debarred vendors to affirm documentation of review of SAM.gov is maintained or certification is obtained from the vendor ensuring they are not suspended or debarred. Views of Responsible Officials: Management agrees with the finding. Please see corrective action plan attached.
Finding 2024-001
Finding 2024-001: Excess Cash – Student Financial Aid Federal Agency: U.S. Department of Education Program Name: Student Financial Assistance Cluster, Federal Direct Student Loans Assistance Listing Number: 84.268 Award Year: June 1, 2023 – May 31, 2024 Program Expenditures: $14,342,246 Questioned Costs: None Criteria: Uniform Grant Guidance (34 CFR 668.166) states the Secretary considers excess cash to be any amount of Title IV, Higher Education Act (HEA) program funds, other than Federal Perkins Loan program funds, that an institution does not disburse to students by the end of the third business day following the date the institution (1) received those funds from the Secretary; or (2) deposited or transferred to its depository account previously disbursed Title IV, HEA program funds, such as those resulting from awards adjustments, recoveries, or cancellations. An institution may maintain for up to seven days an amount of excess cash that does not exceed one percent of the total amount of funds the institution drew down in the prior award year. The institution must return immediately to the Secretary any amount of excess cash over the one-percent tolerance and any amount of excess cash remaining in its account after the seven-day tolerance period. Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure excess cash is properly handled. Condition: The Kansas Health Science University (KHSU) had two instances of excess cash for the Federal Direct Student Loan program. During our cash management testing, we identified KHSU had excess cash for the Direct Loan program of $268,278 for the period from July 12, 2023 to July 19, 2023 and ranging from $2,204 to $13,385 for the period from April 8, 2024 to April 23, 2024. For the period of July 12, 2023 to July 19, 2023, the excess cash exceeded one percent of total prior year drawdowns and amounts were not returned within the three business-day period. For the period of April 8, 2024 to April 23, 2024, the excess cash did not exceed one percent of total prior year drawdowns, however, amounts were not returned with a seven-day period. Cause: University officials stated the excess cash issues were due to oversight regarding refunds issued to students. Effect: Excess cash is noncompliance with Federal regulations and could result in heightened monitoring by the U.S. Department of Education. Questioned Costs: None Finding 2024-001: Excess Cash – Student Financial Aid (Continued) Context: For the periods of July 12, 2023 to July 19, 2023 and April 8, 2024 to April 23, 2024, KHSU had excess cash in the amount of $268,278 and ranging from $2,204 to $13,385, respectively. KHSU held excess cash for a period of 5 business days and 17 calendar days, respectively. Repeat Finding: No. Recommendation: We recommend KHSU strengthen internal controls around the determination of amounts to be drawn and refunded to the Secretary during the fiscal year. Views of Responsible Officials: Management agrees with the finding. Please see corrective action plan attached.
Finding 2024-002
Finding 2024-002: Improper Controls over Personnel Expenses Federal Agency: U.S. Department of Treasury Program Name: COVID-19: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Award Year: June 1, 2023 – May 31, 2024 Program Expenditures: $1,119,206 Questioned Costs: None Criteria: Uniform Grant Guidance (2 CFR 200.430(g)(1)(i)) states charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure personnel activity reports are approved. Condition: A KHSU supervisor did not properly document approval for one employee’s personnel activity reports. Cause: KHSU officials stated that this issue was an isolated incident resulting from an unintentional oversight at multiple levels of approval. While established procedures generally ensure proper documentation of personnel activity reports, in this case, the required documentation was inadvertently missed during the review and approval process. Effect: If employee’s personnel activity reports are not properly reviewed and approved, KHSU could submit unallowable costs for the program. Questioned Costs: None Context: Of the 8 employee personnel activity reports sampled, one report did not contain the proper approval by a KHSU supervisor. Repeat Finding: No. Recommendation: We recommend KHSU strengthen internal controls around the approval of personnel activity reports to confirm that a reasonable person can confirm the control occurred. Views of Responsible Officials: Management agrees with the finding. Please see corrective action plan attached.
Finding 2024-003
Finding 2024-003: Lack of Control Documentation over Review of Suspended/Debarred Vendors Federal Agency: U.S. Department of Treasury Program Name: COVID-19: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Award Year: June 1, 2023 – May 31, 2024 Program Expenditures: $1,119,206 Questioned Costs: None Criteria: Uniform Grant Guidance (2 CFR 180.300) states that when entering into a covered transaction with another person at the next lower tier, the nonfederal entity must verify the person with whom the nonfederal entity intends to do business is not excluded or disqualified by: (a) checking Sam.gov Exclusions; or (b) collecting a certification from that person; or (c) adding a clause or condition to the covered transaction with that person. Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure vendors are not suspended or debarred. Condition: KHSU was not able to provide support showing that a check had been performed on vendors with whom KHSU entered into covered transactions to verify the vendor were not suspended or debarred. Cause: KHSU officials stated while the organization had a policy in place requiring the review of vendors to ensure compliance with federal requirements, the policy did not include proper documentation requirements. Effect: If KHSU does not maintain documentation confirming a vendor under a covered transaction was not suspended or debarred, KHSU could enter into a transaction with a suspended or debarred vendor and as a result represent noncompliance and improper use of federal funds. Questioned Costs: None Context: KHSU had covered transactions with five vendors for the program totaling expenditures of $440,610. KHSU confirmed it performed the check but did not maintain documentation showing the check was performed. Our testing of all five vendors did not indicate that any were suspended or debarred. Repeat Finding: No. Recommendation: We recommend KHSU update its policy over suspended and debarred vendors to affirm documentation of review of SAM.gov is maintained or certification is obtained from the vendor ensuring they are not suspended or debarred. Views of Responsible Officials: Management agrees with the finding. Please see corrective action plan attached.