Assistance Listing, Federal Agency, and Program Name - 11.611, United States Department of Commerce (DOC), National Institute of Standards and Technology (NIST)
Federal Award Identification Number and Year - 70NANB20H067
Finding Type - Material weakness and material noncompliance with laws and regulations
Repeat Finding - No
Criteria - SF 425 Federal Financial Reports are required to be submitted semi annually per the 2023 compliance supplement.
Condition - A process was not in place during the year to ensure program income was reported accurately on the SF 425 reports submitted during the year.
Questioned Costs - Not applicable
Context - Two SF 425 reports are required during the year under audit. For 6 month period ending June 30, 2023, program income was overstated on the SF 425 by $1,303,990. For 6 month period ending December 31, 2023, program income was understated on the SF 425 by $536,263.
Cause and Effect - Due to the lack of controls surrounding the preparation and review of the SF 425 reports errors occurred. The original amounts submitted were materially overstated.
Recommendation - The Organization should maintain documentation to support program income reported on the SF 425 reports submitted. An additional individual should be involved in reviewing the program income calculation to ensure accuracy prior to submission.
Views of Responsible Officials and Corrective Action Plan - Subsequent to year end, the reorganized finance team performed a recalculation and resubmitted corrected SF 425 reports.
Moving forward the Accounting Supervisor will calculate the NIST MEP monthly program income which is used to determine the monthly award drawdown of cash from the available grant award funds. This is reviewed by the Controller and this report is used to create SF 425.
Assistance Listing, Federal Agency, and Program Name - 11.611, United States Department of Commerce (DOC), National Institute of Standards and Technology (NIST)
Federal Award Identification Number and Year - 70NANB20H067
Finding Type - Significant deficiency
Repeat Finding - No
Criteria - Internal controls should be put in place to ensure grant duties are appropriately segregated between preparation and review processes.
In addition, written procdures to implement cash management requirements should in place and updated in accordance with 2 CFR Part 200.305.
Condition - The Organization did not have appropriate segregation of duties surrounding the preparation and review of the monthly NIST schedules which accumulate the information necessary to calculate allowable costs and matching for drawdown requests.
Further, while the Organization had written procedures over cash management, they were outdated and did not reflect the current staffing model.
Questioned Costs - Not applicable
Context - One individual was responsible for the preparation of the monthly schedule described above and submission of the drawdown request.
The cash management policy was not updated when there was restructuring in the finance department during fiscal year.
Cause and Effect - Turnover within the finance department contibuted to the lack of segregation of duties and delay in updating the cash management policy. A lack of segregation of duties allows for the potential for errors and/or noncompliance to occur without detection. The outdated cash management policy was not reflective of the actual process.
Recommendation - An individual independent of the preparation process should review and approve the information used to calculate allowable costs and matching prior to submitting the drawdown requests for cash management. Additionally, the cash management policy should be updated to reflect the new process.
Views of Responsible Officials and Planned Corrective Actions - Subsequent to year end, the reorganized finance team put new controls and procedures in place.
Moving forward the Accounting Supervisor will calculate the NIST MEP monthly program income which is used to determine the monthly award drawdown of cash from the available grant award funds. This is reviewed by the Controller and this report is used to create SF 425.
Assistance Listing Number, Federal Agency, and Program Name - 11.611, United States Department of Commerce (DOC), National Institute of Standards and Technology (NIST)
Federal Award Identification Number and Year - 70NANB20H067
Pass through Entity – Not applicable - Direct funded
Finding Type - Significant deficiency and material noncompliance with laws and regulations
Repeat Finding – No
Criteria – The Federal Funding Accountability and Transparency Act (FFATA), as amended by 6202 of Public La 110-252, requires a prime grant awardee to report its subgrants using the FFATA Subaward reporting System (FSRS) tool. The prime recipient will have until the end of the month plus one additional month after an award or sub-award is obligated to fulfill the reporting requirement.
Condition - The Organization did not have the appropriate controls in place over FFATA reporting and did not file the required reports.
Questioned Costs – Not Applicable
Identification of How Questioned Costs Were Computed - Not Applicable
Context - See the Finding template for chart/table
Cause and Effect - A process was not in place for the client to determine the required reports to be submitted under the grant.
Recommendation - The Organization must implement processes and controls to identify and comply with funding agency reporting requirements.
Views of Responsible Officials and Corrective Action Plan - A process has since been put in place to identify and adhere to required reporting requirements. The controller will gain access to the FFATA system to submit the reports.
Assistance Listing, Federal Agency, and Program Name - 11.611, United States Department of Commerce (DOC), National Institute of Standards and Technology (NIST)
Federal Award Identification Number and Year - 70NANB20H067
Finding Type - Material weakness and material noncompliance with laws and regulations
Repeat Finding - No
Criteria - SF 425 Federal Financial Reports are required to be submitted semi annually per the 2023 compliance supplement.
Condition - A process was not in place during the year to ensure program income was reported accurately on the SF 425 reports submitted during the year.
Questioned Costs - Not applicable
Context - Two SF 425 reports are required during the year under audit. For 6 month period ending June 30, 2023, program income was overstated on the SF 425 by $1,303,990. For 6 month period ending December 31, 2023, program income was understated on the SF 425 by $536,263.
Cause and Effect - Due to the lack of controls surrounding the preparation and review of the SF 425 reports errors occurred. The original amounts submitted were materially overstated.
Recommendation - The Organization should maintain documentation to support program income reported on the SF 425 reports submitted. An additional individual should be involved in reviewing the program income calculation to ensure accuracy prior to submission.
Views of Responsible Officials and Corrective Action Plan - Subsequent to year end, the reorganized finance team performed a recalculation and resubmitted corrected SF 425 reports.
Moving forward the Accounting Supervisor will calculate the NIST MEP monthly program income which is used to determine the monthly award drawdown of cash from the available grant award funds. This is reviewed by the Controller and this report is used to create SF 425.
Assistance Listing, Federal Agency, and Program Name - 11.611, United States Department of Commerce (DOC), National Institute of Standards and Technology (NIST)
Federal Award Identification Number and Year - 70NANB20H067
Finding Type - Significant deficiency
Repeat Finding - No
Criteria - Internal controls should be put in place to ensure grant duties are appropriately segregated between preparation and review processes.
In addition, written procdures to implement cash management requirements should in place and updated in accordance with 2 CFR Part 200.305.
Condition - The Organization did not have appropriate segregation of duties surrounding the preparation and review of the monthly NIST schedules which accumulate the information necessary to calculate allowable costs and matching for drawdown requests.
Further, while the Organization had written procedures over cash management, they were outdated and did not reflect the current staffing model.
Questioned Costs - Not applicable
Context - One individual was responsible for the preparation of the monthly schedule described above and submission of the drawdown request.
The cash management policy was not updated when there was restructuring in the finance department during fiscal year.
Cause and Effect - Turnover within the finance department contibuted to the lack of segregation of duties and delay in updating the cash management policy. A lack of segregation of duties allows for the potential for errors and/or noncompliance to occur without detection. The outdated cash management policy was not reflective of the actual process.
Recommendation - An individual independent of the preparation process should review and approve the information used to calculate allowable costs and matching prior to submitting the drawdown requests for cash management. Additionally, the cash management policy should be updated to reflect the new process.
Views of Responsible Officials and Planned Corrective Actions - Subsequent to year end, the reorganized finance team put new controls and procedures in place.
Moving forward the Accounting Supervisor will calculate the NIST MEP monthly program income which is used to determine the monthly award drawdown of cash from the available grant award funds. This is reviewed by the Controller and this report is used to create SF 425.
Assistance Listing Number, Federal Agency, and Program Name - 11.611, United States Department of Commerce (DOC), National Institute of Standards and Technology (NIST)
Federal Award Identification Number and Year - 70NANB20H067
Pass through Entity – Not applicable - Direct funded
Finding Type - Significant deficiency and material noncompliance with laws and regulations
Repeat Finding – No
Criteria – The Federal Funding Accountability and Transparency Act (FFATA), as amended by 6202 of Public La 110-252, requires a prime grant awardee to report its subgrants using the FFATA Subaward reporting System (FSRS) tool. The prime recipient will have until the end of the month plus one additional month after an award or sub-award is obligated to fulfill the reporting requirement.
Condition - The Organization did not have the appropriate controls in place over FFATA reporting and did not file the required reports.
Questioned Costs – Not Applicable
Identification of How Questioned Costs Were Computed - Not Applicable
Context - See the Finding template for chart/table
Cause and Effect - A process was not in place for the client to determine the required reports to be submitted under the grant.
Recommendation - The Organization must implement processes and controls to identify and comply with funding agency reporting requirements.
Views of Responsible Officials and Corrective Action Plan - A process has since been put in place to identify and adhere to required reporting requirements. The controller will gain access to the FFATA system to submit the reports.