Finding 2024-004: Allowable Costs Program Title: Defense Nuclear Nonproliferation Research Assistance Listing Number: 81.113 Federal Agency: U.S. Department of Energy Direct Award Identifying Numbers: DE-NA003862, DE-NA004179, DE-NA0004177 Federal Award Year: Year ended September 30, 2024 Program Title: Export Control and Related Border Security Assistance Listing Number: 19.901 Federal Agency: U.S. Department of State Direct Award Identifying Number: SAQMIP23CA0153 Pass-Through Entity Name, Pass-Through Identifying Number: The Research Foundation for SUNY, University at Albany, 3-98939 Federal Award Year: Year ended September 30, 2024 Type of Finding: Material Weakness in Internal Control over Compliance Criteria: According to 2 CFR §200.303, the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non- Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in Standards for Internal Control in the Federal Government issued by the Comptroller General of the United States or the Internal Control Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: During our testing over expenditures, we noted that there is no written documentation of the review and approval of transactions that are reimbursed by Federally funded awards. Cause: PFI does not have a formal policy in place with respect to documenting management’s review and approval over expenditures of Federal awards. As such, PFI did not have effective internal controls in place to ensure that approvals were performed and documented as being performed in a timely manner. Effect or Potential Effect: There is the potential that expenditures allocated to the Federal awards were not properly reviewed in a timely manner which could result in unallowable costs being charged to Federal awards and potential noncompliance. Questioned Costs: None. Context: 46 out of 46 salary and wage expenditure transactions and 60 out of 60 expenditure transactions selected for control testing did not have documented review and approval. The sample is deemed representative of the population. Repeat Finding: Not applicable. Recommendation: We recommend that PFI implement a formal expense review and approval policy. This policy should require that management formally document its review and approval all expense transactions on a timely basis.
Finding 2024-005: Period of Performance Program Title: Defense Nuclear Nonproliferation Research Assistance Listing Number: 81.113 Federal Agency: U.S. Department of Energy Direct Award Identifying Numbers: DE-NA003862, DE-NA004179, DE-NA0004177 Federal Award Year: Year ended September 30, 2024 Program Title: Export Control and Related Border Security Assistance Listing Number: 19.901 Federal Agency: U.S. Department of State Direct Award Identifying Number: SAQMIP23CA0153 Pass-Through Entity Name, Pass-Through Identifying Number: The Research Foundation for SUNY, University at Albany, 3-98939 Federal Award Year: Year ended September 30, 2024 Type of Finding: Material Weakness in Internal Control over Compliance Criteria: According to 2 CFR §200.303, the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non- Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in Standards for Internal Control in the Federal Government issued by the Comptroller General of the United States or the Internal Control Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: During our testing over expenditures, we noted that there is no written documentation of the review and approval of transactions that are reimbursed by Federally funded awards. Cause: PFI does not have a formal policy in place with respect to documenting management’s review and approval over expenditures of Federal awards. As such, PFI did not have effective internal controls in place to ensure that approvals were performed and documented as being performed in a timely manner. Effect or Potential Effect: There is the potential that expenditures allocated to the Federal awards were not properly reviewed in a timely manner and could have been charged to a Federally funded award outside of the grant’s stated period of performance, thereby creating a potential for being reimbursed for unallowable costs. Questioned Costs: None. Context: 3 out of 3 grants under ALN 81.113 and 2 out of 2 grants under ALN 19.901 selected for control testing did not have documented review and approval for their expenditures. The sample is deemed representative of the population. Repeat Finding: Not applicable. Recommendation: We recommend that PFI implement a formal expense review and approval policy. This policy should require that management formally review and approve all expense transactions on a timely basis.
Finding 2024-006: Cash Management Program Title: Defense Nuclear Nonproliferation Research Assistance Listing Number: 81.113 Federal Agency: U.S. Department of Energy Direct Award Identifying Numbers: DE-NA003862, DE-NA004179, DE-NA0004177 Federal Award Year: Year ended September 30, 2024 Program Title: Export Control and Related Border Security Assistance Listing Number: 19.901 Federal Agency: U.S. Department of State Direct Award Identifying Number: SAQMIP23CA0153 Pass-Through Entity Name, Pass-Through Identifying Number: The Research Foundation for SUNY, University at Albany, 3-98939 Federal Award Year: Year ended September 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matter Compliance Finding Criteria: Under 2 CFR § 200.303, organizations that receive Federal funding are required to “establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Under 2 CFR § 200.305(b)(3), when using the reimbursement method, entities should request payment as soon as possible after the costs are incurred to minimize the time between expenditure and Federal reimbursement. Condition: PFI does not have documentation of the review and approval of Federal cash drawdown requests prior to submission. During testing, we noted that drawdowns totaling $219,376 for ALN 81.113 and $188,631 for ALN 19.901 were processed without evidence of supervisory review. Additionally, we noted that PFI submitted a late cash drawdown request for Federal expenditures of $74,111 under ALN 81.113 that occurred during prior years but were newly identified and reimbursed during the year under audit. Cause: PFI has not implemented a formal review process for cash drawdowns. Furthermore, PFI lacks written procedures to ensure timely submission of reimbursement requests. Effect or Potential Effect: Lack of review increases the risk of drawing excessive funds, noncompliance with cash management requirements, and potential misuse of Federal funds. Delayed drawdowns resulted in PFI using non-Federal funds for an extended period of time, which may have impacted cash flow and program operations. Questioned Costs: None. Context: 4 out of 4 drawdown requests selected for testing under ALN 81.113 and 3 out of 3 drawdown requests selected for testing under ALN 19.901 did not have documented supervisory review and approval. 1 of 4 drawdown requests tested for ALN 81.113 was submitted late for expenditures that had occurred in prior fiscal years. The samples are representative of the population. Repeat Finding: Not applicable Recommendation: It is recommended that PFI establish and document a formal review and approval process for all cash drawdown requests, including maintaining evidence of supervisory approval. Furthermore, we recommend that PFI implement procedures to ensure reimbursement requests are submitted promptly after costs are incurred, ideally within 30 days.
Finding 2024-007: Procurement Program Title: Defense Nuclear Nonproliferation Research Assistance Listing Number: 81.113 Federal Agency: U.S. Department of Energy Direct Award Identifying Numbers: DE-NA003862, DE-NA004179, DE-NA0004177 Federal Award Year: Year ended September 30, 2024 Program Title: Export Control and Related Border Security Assistance Listing Number: 19.901 Federal Agency: U.S. Department of State Direct Award Identifying Number: SAQMIP23CA0153 Pass-Through Entity Name, Pass-Through Identifying Number: The Research Foundation for SUNY, University at Albany, 3-98939 Federal Award Year: Year ended September 30, 2024 Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: According to 2 CFR §200.303, the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non- Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in Standards for Internal Control in the Federal Government issued by the Comptroller General of the United States or the internal Control Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per CFR §200.318-§200.326, non-Federal entities must maintain written procurement procedures that comply with Federal standards, including thresholds, methods of procurement, and documentation requirements. Noncompetitive procurements can only be awarded in accordance with §200.320(c). According to 2 CFR §200.320 Procurement Standards, there are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: 1. The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold, 2. The item is available only from a single source; 3. The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; 4. The Federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-Federal entity; or 5. After solicitation of a number of sources, competition is determined inadequate. Condition: We noted that PFI’s procurement policy does not contain a micropurchase threshold and its threshold for simplified acquisitions is not accurately defined in accordance with the applicable Uniform Guidance requirements. During our testing over procurement, we noted several instances where PFI did not clearly document the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Furthermore, there were instances where review and approval over procurement was evidenced but the reviewer was not included in PFI’s procurement policy list of authorized approvers. Cause: PFI’s procurement policy was out of date and had not been updated to align with the current version of the Uniform Guidance. Effect or Potential Effect: An outdated procurement policy increases the risk of noncompliance with Federal requirements, improper procurement practices, and potential disallowance of costs charged to Federal awards. Questioned Costs: $31,120 of known questioned costs were identified for 2 procurements under ALN 81.113. $15,000 of known questioned costs were identified for ALN 19.901 along with $806 of likely questioned costs based on projecting the known questioned costs to the remaining population of procurement transactions. Context: 2 of 2 samples selected for testing under ALN 81.113 and 1 out of 3 samples selected for testing under 19.901 did not have adequate documentation for the rationale related to the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. For 2 out of 2 samples under ALN 81.113 and 2 out of 3 samples under ALN 19.901, PFI had evidence of review and approval, but the reviewer was not on PFI’s authorized list included in its procurement policy. The samples are representative of the populations. Repeat Finding: Not applicable. Recommendation: We recommend that PFI revise its procurement policy to fully comply with the requirements in the latest version of the Uniform Guidance. In particular, the revised policy should include a micropurchase threshold, an accurate simplified acquisition threshold, and update the authorized list of reviewers for procurement transactions.
Finding 2024-008: Suspension and Debarment Program Title: Defense Nuclear Nonproliferation Research Assistance Listing Number: 81.113 Federal Agency: U.S. Department of Energy Direct Award Identifying Numbers: DE-NA003862, DE-NA004179, DE-NA0004177 Federal Award Year: Year ended September 30, 2024 Program Title: Export Control and Related Border Security Assistance Listing Number: 19.901 Federal Agency: U.S. Department of State Direct Award Identifying Number: SAQMIP23CA0153 Pass-Through Entity Name, Pass-Through Identifying Number: The Research Foundation for SUNY, University at Albany, 3-98939 Federal Award Year: Year ended September 30, 2024 Type of Finding: Material Weakness in Internal Control over Compliance Criteria: Under 2 CFR §200.213, non-Federal entities are prohibited from contracting or making subawards to parties that are suspended or debarred. Entities must verify vendor eligibility and retain documentation of the verification process for covered transactions of $25,000 or more. Condition: During our testing over suspension and debarment, we noted that PFI did not maintain documentation evidencing that suspension and debarment checks were performed for vendors receiving Federal funds. Cause: PFI does not have a formal policy with respect to retaining written documentation to evidence suspension and debarment reviews for vendors receiving Federal funds. Effect or Potential Effect: Failure to screen, in a timely manner (before contract date or payment occurs) potential and current vendors, suppliers, contractors and employees increases the potential that Federal funds be inadvertently provided to parties deemed to be suspended or disbarred by the United States Government. Questioned Costs: None. Context: 2 of 2 covered transactions selected for testing under 19.901 and 1 of 1 covered transactions selected for testing under ALN 81.113 had no written documentation to evidence that a suspension and debarment check was performed. Recommendation: We recommend that management develop and implement a formal policy on suspension and debarment. All screenings should be conducted prior to entering into an agreement with a vendor. Additionally, evidence of documentation should include the date of when the SAM check was performed. We recommend that PFI notify all employees of this policy and ensure that it is enforced during the upcoming year.
Finding 2024-009: Reporting Program Title: Defense Nuclear Nonproliferation Research Assistance Listing Number: 81.113 Federal Agency: U.S. Department of Energy Direct Award Identifying Numbers: DE-NA003862, DE-NA004179, DE-NA0004177 Federal Award Year: Year ended September 30, 2024 Program Title: Export Control and Related Border Security Assistance Listing Number: 19.901 Federal Agency: U.S. Department of State Direct Award Identifying Number: SAQMIP23CA0153 Pass-Through Entity Name, Pass-Through Identifying Number: The Research Foundation for SUNY, University at Albany, 3-98939 Federal Award Year: Year ended September 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matter Compliance Finding Criteria: Per 2 CFR §200.327 and §200.328, non-Federal entities must submit required financial and performance reports by the specified due dates and maintain effective internal controls to ensure accuracy and compliance. Review and approval of reports is a key internal control. Condition: During the audit, we noted a lack of documented supervisory review and approval of financial reports and performance reports prior to submission. We also noted certain reports in our sample were filed a day late or not at all. Cause: PFI has not implemented formal procedures for documenting supervisory review of reports and lacks a tracking mechanism for reporting deadlines. Effect or Potential Effect: Without documented controls over reporting, there is a reasonable possibility that PFI could submit inaccurate or incomplete reporting. Late submissions may hinder the Federal agency’s ability to monitor program performance and compliance and could result in administrative actions or delays in funding. Questioned Costs: None noted. Context: Under 81.113, 4 of 4 financial reports and 4 of 4 performance reports selected for testing did not have documented evidence of supervisory review and approval. Under 19.901, 4 of 4 financial reports and 4 of 4 performance reports selected for testing did not have documented evidence of supervisory review and approval. Under ALN 19.901, 2 out of 4 financial reports and 1 out of 4 performance reports selected for testing were filed 1 day late. For one subaward under ALN 19.901, quarterly performance reports were a noted requirement per the subaward agreement, however, no reports were filed during the year under audit. Recommendation: We recommend that PFI implement a formal review and approval process for all required reports, including maintaining evidence of supervisory sign-off, including date of review. Additionally, we recommend that PFI establish a reporting calendar with automated reminders and assign responsibility for monitoring deadlines to ensure timely submission.
Finding 2024-010: Late Filing of Data Collection Form Program Title: Defense Nuclear Nonproliferation Research Assistance Listing Number: 81.113 Federal Agency: U.S. Department of Energy Direct Award Identifying Numbers: DE-NA003862, DE-NA004179, DE-NA0004177 Federal Award Year: Year ended September 30, 2024 Program Title: Export Control and Related Border Security Assistance Listing Number: 19.901 Federal Agency: U.S. Department of State Direct Award Identifying Number: SAQMIP23CA0153 Pass-Through Entity Name, Pass-Through Identifying Number: The Research Foundation for SUNY, University at Albany, 3-98939 Federal Award Year: Year ended September 30, 2024 Type of Finding: Significant Deficiency in Internal Control and Other Matter Compliance Finding Criteria: Per 2 CFR §200.512(a), non-Federal entities must submit the DCF and reporting package to the Federal Audit Clearinghouse within the earlier of 30 days after receipt of the auditor’s report or nine months after the end of the audit period. Condition: PFI will submit its Data Collection Form (DCF) and Single Audit reporting package to the Federal Audit Clearinghouse approximately 6 months past the required deadline. The delay occurred because the audit was not completed within the nine-month timeframe following the fiscal year-end, as required by Uniform Guidance. Cause: The audit was not completed timely due to delays in receiving requested information, follow-ups for additional information, the identification of several potential audit adjustments, the audit team’s need to extend sample sizes due to identified audit adjustments and internal control deficiencies, and extended review processes as a result of identified audit findings. Effect or Potential Effect: Late submission of the DCF and reporting package results in noncompliance with Uniform Guidance requirements and may impact PFI’s eligibility for future Federal funding or trigger additional oversight. Questioned Costs: None. Context: The DCF was filed after the nine-month timeframe following PFI’s fiscal year end. Recommendation: We recommend that PFI establish a timeline for audit preparation and obtain more assistance from their outsourced accountants to ensure that requests for information are completed timely and accurately.
Finding 2024-003: Schedule of Expenditures of Federal Awards Presentation Program Title: Professional and Cultural Exchange Programs Assistance Listing Number: 19.402 Federal Agency: U.S. Department of State Pass-Through Entity Name, Pass-Through Identifying Numbers: Global Ties, CPG-ECA24-019 Global Ties, DBH-ECA24-14 Global Ties, IVRC-ECA23-04 Global Ties, CPG-ECA23-072-II Global Ties, N/A Federal Award Year: Year ended September 30, 2024 Program Title: Defense Nuclear Nonproliferation Research Assistance Listing Number: 81.113 Federal Agency: U.S. Department of Energy Direct Award Identifying Number: DE-NA004179 Federal Award Years: Years ended September 30, 2020, 2019 and 2018 Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: Management is responsible for the complete and fair presentation of the financial statements, including any supplementary information that is presented in relation to the financial statements, such as the Schedule of Expenditures of Federal Awards (SEFA). Also, in accordance with 2 CFR Section 200.510 (b)(2), PFI is required to include only direct and pass-through Federal awards expended during the fiscal year in the SEFA. Condition: During our audit fieldwork, we noted that the SEFA omitted Federal expenditures of $38,047 that were passed through to PFI by a subrecipient under ALN 19.402. In addition, we noted that the SEFA omitted Federal expenditures of $74,111 under ALN 81.113 that occurred during prior years but were newly identified and reimbursed during the year under audit. Cause: The omission related to the reporting of the pass-through award appears to be due to a misunderstanding regarding the source of the funding. The omission related to the reporting of expenditures from a prior year appears to be due to a deficiency in controls over reconciling cash draws to activity in the general ledger. Effect or Potential Effect: The SEFA was understated. When the SEFA is not prepared properly, it could have an effect on the auditor's determination of major programs or the auditor's sample selections. Questioned Costs: None. Repeat Finding: Not applicable. Recommendation: We recommend that PFI ensure that their staff and outsourced accountants are properly trained to identify all funding sources that should be presented on the SEFA, particularly in connection with passthrough funding from other organizations, in accordance with 2 CFR §200. Furthermore, PFI should reconcile Federal grant expenditures per the general ledger to cumulative Federal financial reporting and cash draws to ensure consistency and completeness of their accounting records prior to preparing the SEFA.