Audit 391159

Noncompliance – Reporting Compliance Requirement: Reporting (L) Criteria: Per 2 CFR Part 200, Subpart 7 (2 CFR 200.512): (a) General. (1) The audit must be completed and the data collection form and reporting package described must be submitted within the earlier of 30 calendar days after receipt of the auditor’s report(s), or 9 months after the end of the audit period. Condition: The data collection form for the audit year December 31, 2024 was not submitted to the Federal Audit Clearinghouse on a timely basis. Cause: Due to personnel turnover and new programming, there were delays in closing the 2024 books as well as delays in completing the audit. Effect: By not submitting information the Federal Audit Clearing House on a timely basis, the Organization may be subject to additional scrutiny by its funders. Questioned Costs: None noted. Context: The data collection form for the year ended December 31, 2024 should have been submitted to the Federal Audit Clearinghouse by September 30, 2025. Recommendation: We recommend management ensure the data collection form is submitted within the earlier of 30 calendar days after receipt of the auditor’s report, or 9 months after the end of the audit period, including reaching out to grant administrators early in the year to request a program specific audit. Management’s Response: Management concurs with the finding, see Corrective Action Plan.

Finding 2024-003 – All Federal Programs – Significant Deficiency Deficiency in Internal Controls over the Preparation of the Schedule of Expenditures of Federal Awards (SEFA) Criteria: 2 CFR section 200.510(b) requires recipients of federal awards to prepare a complete and accurate Schedule of Expenditures of Federal Awards (SEFA) for the period covered by the auditee’s financial statements. The Uniform Guidance also requires that management establish and maintain effective internal controls over the preparation of the SEFA to ensure its accuracy and completeness. Condition: During our audit, we noted that the Organization did not have adequate internal controls in place to ensure the accuracy of the SEFA. Specifically, there was no documented review process to verify that all federal expenditures were properly identified, classified, and reported under the correct Assistance Listing numbers. As a result, a material adjustment was required to correct the SEFA for balance that were not from federal sources as well as correct the amounts reported. There was also certain federal expenditures reported under an incorrect Assistance Listing number. Cause: The deficiency occurred because the Organization had not developed or implemented a formal review procedure for the preparation of the SEFA. Finance staff responsible for preparing the SEFA did not coordinate with grant reporting personnel to ensure the completeness and accuracy of the information included in the schedule. Effect: The lack of appropriate internal controls over the preparation of the SEFA resulted in the initial omission and misclassification of federal expenditures. This could lead to incomplete or inaccurate reporting of federal awards, potentially resulting in noncompliance with federal requirements and affecting the determination of major programs for audit purposes. Questioned Costs: None noted. Recommendation: We recommend that the Organization develop and implement formal internal control procedures over the preparation of the SEFA. This should include a documented review process to ensure that all federal expenditures are accurately identified, classified, and reported under the correct Assistance Listing numbers. Finance staff should coordinate with grant reporting personnel to verify the completeness and accuracy of the SEFA prior to its finalization.

Finding 2024-004 – All Federal Programs – Material Weakness Type of Finding: Significant Deficiency in Internal Control over Compliance and Compliance - Cash Management Federal Agency: National Science Foundation Federal Program Name: Research and Development Cluster - NSF Technology, Innovation and Partnerships CO-WY Climate Resilience Engine Assistance Listing Number: 47.084 Federal Award Identification Number: 2315760 Award Period: March 1, 2024 – February 28, 2026 Criteria or specific requirement: Per the Uniform Guidance (2 CFR §200.305), non-federal entities must minimize the time between the transfer of funds from the U.S. Treasury and the disbursement for program purposes. Drawdowns must be based on immediate cash needs and supported by incurred expenses. Condition: During the audit of federal program compliance, it was identified that the entity did not have a consistent process for tracking, calculating, reviewing and approving federal draw downs. Specifically, cash management procedures did not consistently ensure that funds drawn down were limited to actual expenditures incurred, resulting in excess cash balances held temporarily beyond the allowable timeframe. Questioned costs: None noted for major program as of December 31, 2024 as drawdowns occurred after year end, $65,000 for other program. Context: We noted through our testing of drawdowns and related expenses that the amount of the draw downs made after year end were in excess of what was required for costs incurred through December 31, 2024, however there were no advance amount held as of December 31, 2024. Management trued up the draws during 2025 and 2026. Cause: The entity lacked effective internal controls to reconcile actual drawdowns with expenditures incurred. Effect: This deficiency resulted in noncompliance with federal cash management requirements and exposed the entity to potential interest liabilities. It also indicates a reasonable possibility that material noncompliance with federal requirements may not be prevented or detected and corrected on a timely basis. Repeat finding: No Recommendation: We recommend that management ensure drawdowns are strictly aligned with incurred and allowable expenses and the use of a consistent template to determine the amount of the drawdown that includes: 1) pre-drawdown verification of expense documentation reviewed by knowledgeable staff 2) monthly reconciliations of drawdown activity to actual expenditures, 3) training for staff involved in federal fund management on Uniform Guidance requirements. Views of responsible officials: There is no disagreement with the audit finding. See Corrective Action Plan.

Findings 2024-005 – All Federal Programs – Significant Deficiency Type of Finding: Significant Deficiency in Internal Control over Compliance and Compliance – Allowable Costs (Payroll) Federal Agency: National Science Foundation Federal Program Name: Research and Development Cluster - NSF Technology, Innovation and Partnerships CO-WY Climate Resilience Engine Assistance Listing Number: 47.084 Federal Award Identification Number: 2315760 Award Period: March 1, 2024 – February 28, 2026 Criteria or specific requirement: Federal regulations require that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Per 2 CFR §200.430(i), payroll allocations must be supported by after-the-fact records of actual time worked rather than budget. Condition: It was noted through our testing that the Organization allocated salaries and wages to the program based on budgeted percentages rather than after-the-fact records of time and efforts expended by employees. Individuals whose time is fully charged to federal grants are also not required to provide time and effort reporting. Further, for one of the five individuals selected, the individual timesheet could not be located. Questioned costs: Unknown Context: Based on our testing of payroll, for the one individual out of five selected that had time allocated to multiple grants and programs, no time and effort reporting was available to support the allocation to the federal grant. There was also not a consistent process of reviewing and approving payroll time sheets and registers by management. There was also no time reporting required to support individuals that were fully charged to the grant. Cause: The Organization does not currently have a payroll system whereby individuals are required to record time and effort by program or grant. Allocations are entered into the system based on expected budgets for grant programs when individuals participate in more than one program. The payroll system also did not require payroll to be initiated and approved by separate individuals. Effect: As a result, there is an increased risk that payroll costs charged to the federal program do not accurately reflect the actual effort expended, which could result in unallowable costs being charged to the grant. This practice does not comply with federal requirements for documentation of personnel expenses. Repeat finding: No Recommendation: We recommend that the Organization implement procedures to ensure that payroll allocations to federal programs are supported by after-the-fact records of actual time worked, in accordance with 2 CFR part 200.430(i). The Organization should discontinue the use of budget estimates for payroll allocations and require contemporaneous documentation of time and effort for all employees whose salaries are charged to federal awards. Payroll should be initiated and reviewed by different individuals and the process should include a way to verify either manually or electronically that payroll was approved prior to processing. Views of responsible officials: There is no disagreement with the audit finding. See Corrective Action Plan.