Audit 371463

Criteria The cash management compliance requirements in Part 3 of the OMB Compliance Supplement indicate recipients must follow procedures to minimize the time lapsing between the transfer of funds from the federal government and disbursement when awards are provided for in advance payments. Condition The Organization requests funds from their grantors in advance with no procedures in place to minimize the time between their drawdown and disbursement. Cause Historically, upon execution of annual grant agreements, the Organization was instructed by the grantor to request the full amount of the award at that time. These awards span anywhere from six months to a year in length. Effect The Organization is not in compliance with the cash management requirements. Questioned Costs None Context The Organization does not have procedures in place to minimize the time elapsing between the transfer of funds from the federal government and their disbursement. Recommendation The Organization should create a business plan for its grants which require cash advances and determine an appropriate length of time or interval of funding necessary for the Organization to operate at the appropriate level. The Organization should then establish policies and procedures over the development of this business plan to evidence their procedures over cash management. Lastly, the Organization should operate grants on a cost reimbursement basis, with minimal advances, when possible. Views of Responsible Officials See the accompanying Corrective Action Plan.

Criteria OMB Circular A-110 requires that equipment be used in the program for which it was acquired or, when appropriate, other Federal programs. Equipment records shall be maintained, a physical inventory of equipment shall be taken at least once every two years and reconciled to the equipment records, an appropriate control system shall be used to safeguard equipment and equipment shall be adequately maintained. Condition The Organization does not have formal policies and procedures over the maintenance of equipment records and does not perform periodic inventories of equipment. Cause The Organization does not have entity-wide policies and procedures in place to require the different locations to uniformly follow the equipment management requirements. Effect The Organization is not in compliance with the equipment and real property management requirements. Questioned Costs None Context Each location of the Organization maintains some form of equipment records. However, not all of them contain the required elements: description, including serial number, source, who holds title, acquisition date and cost, percentage of Federal participation in the cost, location, condition and any disposition data. Also, not every location indicates when the last equipment inventory was conducted. Recommendation The Organization should create formal policies and procedures that require equipment records be maintained in accordance with Uniform Guidance. Those policies and procedures should also require an inventory of equipment be conducted, at least bi-annually. The Organization should also expand personnel at the Corporate level to allow for someone to follow up on these corrective actions and ensure compliance by the various locations. Views of Responsible Officials See the accompanying Corrective Action Plan.

Criteria Institutions of higher education, hospitals and other non-profit organizations will use procurement procedures that conform to applicable Federal law and regulations and standards identified in OMB Circular A-110 (2 CFR part 215). Condition The Organization does not have formal policies and procedures over procurement, suspension and debarment to ensure compliance with these requirements. Cause The Organization does not have formal policies and procedures over procurement which requires the retention of evidence of quotes and bids. Effect The Organization is not in compliance with the procurement, suspension or debarment requirements. Questioned Costs None Context The Organization could not provide evidence to support compliance with the procurement requirements for a sample of expenditures charged to the program. Recommendation The Organization should create formal policies and procedures that require employees overseeing the purchasing of items to retain evidence of the necessary bids, quotes and/or sole source documentation. Such documentation should be required for approval of the related disbursements. Views of Responsible Officials See the accompanying Corrective Action Plan.

Criteria The special tests and provisions compliance requirements for the R&D Cluster found in Part 4 of the OMB Compliance Supplement indicate applications/proposals or awards may include staffing proposals that specify individuals who will work on the project and the extent of the planned involvement of personnel. The non-Federal entity may change the staffing mix and level of involvement, within limits specified by agency policy or in the award but may be required to obtain Federal awarding agency approval of changes in key personnel (as identified in the award, which may differ from the non-Federal entity’s designation in the application/proposal) and changes in the principal investigator’s/project director’s time commitment/level of participation in the project. For grants and cooperative agreements, this may include not only a change in the principal investigator or project director but also the disengagement from the project for more than three months, or a 25 percent reduction in time devoted to the project, by the approved project director or principal investigator. Condition The Organization does not have formal policies and procedures to determine and document if key personnel who were involved in projects were approved by the grantors. The Organization represented that it did obtain verbal approval for changes in the key personnel. Cause The Organization does not have formal policies and procedures over key personnel. Effect The Organization is not able to provide evidence that it is in compliance with the special tests and provisions over key personnel. Questioned Costs None Context We sampled one of the seven grant agreements in effect for the period under audit. The Organization was not able to provide evidence of the key personnel being approved by the funder as required by the grant agreement. Recommendation The Organization should create formal policies and procedures that require retention of evidence of the funders' approval of any changes in identified key personnel. The Organization should also add policies and procedures in place to maintain a listing of all key personnel identified in the various grant agreements. Views of Responsible Officials See the accompanying Corrective Action Plan.