2025-001: U.S. Department of Health and Human Services, National Institutes for Health Research and Development Cluster, Cancer Control, Assistance Listing #93.399; Lack of Required Written Policies Condition Montana Cancer Consortium (the Consortium) does not have written policies and procedures in place as required by 2 CFR § 200.302 and § 200.313. Specifically, the Consortium lacks documented policies for: • The timing of federal cash draws; • The allowability of costs charged to federal awards; and • Documentation of time-and-effort for personal services. Criteria 2 CFR § 200.302(b)(6)–(7) requires nonfederal entities to have written procedures for: (a) cash drawdowns and (b) determining cost allowability. § 200.305 requires written cash-management procedures that minimize the time between draw and disbursement. § 200.430 requires a written policy that is consistently applied to both federal and nonfederal activities for documentation of compensation for personal services. Context At the time of completion of the audit for the year ended May 31, 2025, the written policies were not in place. We noted that the policies were implemented on December 1, 2025, which was after the fiscal year under audit had ended. Cause The Consortium has not yet developed or adopted the required written policies due to limited administrative capacity and reliance on informal practices. Effect The absence of written policies increases the risk of noncompliance with federal requirements, mismanagement of federal funds, and audit findings in future periods. It may also impair the Consortium’s ability to consistently apply federal cost principles and properly safeguard assets. Recommendation We recommend that the Consortium develop and implement written policies and procedures that comply with the requirements of Uniform Guidance. Management Response See Corrective Action Plan.
2025-002: U.S. Department of Health and Human Services, National Institutes for Health Research and Development Cluster, Cancer Control, Assistance Listing #93.399; Lack of Adequate Documentation and Lack of Independent Review of Expenditures Condition During the audit for the fiscal year ended May 31, 2025, transactions lacked sufficient supporting documentation or evidence of review and approval by the director. Additionally, some of the expenditures were incurred by the director and were self-reviewed without any independent oversight or secondary approval. Management Response See Corrective Action Plan. Criteria Pursuant to 2 CFR § 200.303, nonfederal entities must establish and maintain effective internal control over federal awards that provide reasonable assurance that the organization is managing the awards in compliance with federal statutes, regulations, and the terms and conditions of the award. Effective internal controls include proper documentation and independent review of expenditures to ensure allowability, reasonableness, and compliance. Context Out of 63 expenditures tested, 29 lacked sufficient supporting documentation or evidence of review. 19 of the 29 were expenditures incurred by the director and self-reviewed. Cause The Consortium has not implemented adequate internal control procedures to ensure that all expenditures are properly documented and independently reviewed. The lack of segregation of duties, particularly in the review of expenditures made by the director, contributed to the deficiency. Effect The absence of sufficient documentation and independent review increases the risk of unauthorized, unsupported, or unallowable expenditures. Recommendation We recommend that the Consortium strengthen its internal control procedures by: • Requiring complete supporting documentation for all expenditures; • Implementing a formal review and approval process for all transactions, including those made by executive leadership; and • Ensuring that expenditures made by the director are reviewed and approved by an independent party, such as a board member or designated individual.