Audit 395317

Assistance Listing, Federal Agency, and Program Name - 93.332 - U.S. Department of Health and Human Services Navigator Grants Program, Various R&D Cluster Federal Award Identification Number and Year - NAVCA210431 02, NAVCA210431 03, Research and Development grants Pass through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - Yes 2024-003 Criteria - 2 CFR 200.318 requires that a nonfederal entity that acquires property or services under a federal award or subaward is required to adopt, maintain, and follow written procurement procedures, which comply with sections 2 CFR 200.318 through 327. Condition - The University did not follow the written procurement procedures in place. Questioned Costs - $888,816 Identification of How Questioned Costs Were Computed - Questioned costs reflect the amount of costs expended under the grant during 2025 that exceeded the procurement policy threshold. Context - The University did not follow its written policy in place over procurement methods, including using a competitive bid process and reviewing for suspension and debarment for purchases over the policy's threshold. Cause and Effect - Failure to comply with the University's written procurement policy, where controls were not in place to comply with University's policy. Recommendation - The University should ensure controls are in place to comply with the procurement policy on an ongoing basis. Views of Responsible Officials and Corrective Action Plan - It was noted that certain purchase orders and requisitions were processed after services had already been performed. To address this issue, procurement training will now be required for certain faculty and staff, emphasizing that requisitions and purchase orders must be submitted and approved prior to the initiation of any services, to ensure adherence to the University’s documented competitive bid process. The University Purchasing Department currently provides monthly procurement policy training. In the new award setup phase, the Office of Research Development and Administration will require that a Principal Investigator (PIs) with awards with direct costs greater than the University bid limit attend such training within three months of award date. PIs with multiple awards will only be required to attend such training every 24 months. Additionally, Sponsored Research Accounting will follow up with PIs on all awards opened within the first three months to confirm adherence to University purchasing policies. Continued non compliance may result in corrective actions for the applicable Principal Investigator/award team, including, but not limited to, loss of eligibility to submit future proposals, suspension of existing funding, or the requirement to use indirect cost (IDC) funds to cover any unallowable expenses.

Assistance Listing, Federal Agency, and Program Name - 93.855, 47.076 and 47.074 Federal Award Identification Number and Year - Research and Development Awards Pass through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - Per 2 CFR 200.332 (b) through (h), pass through entities must maintain documentation regarding initial and ongoing monitoring activities of the subrecipient to ensure that the subaward is used for authorized purposes and that performance goals are achieved. Condition - The University could not provide evidence of conducting a formal risk assessment of subrecipients, nor was there documentation showing that the subrecipient’s SAM.gov registration was reviewed or it's most recent Single Audit report. Additionally, the University did not document ongoing monitoring procedures or retain records. The University relied on information self reported by the subrecipient without independently validating or documenting the required monitoring steps. Questioned Costs - $191,442 Identification of How Questioned Costs Were Computed - Questioned costs reflect the amount of costs passed through to subrecipients under the grant in 2025 Context - The University did not follow its written policy in place over subrecipient monitoring. Cause and Effect - Failure to comply with the University's written subrecipient policy, can result in questioned costs. Recommendation - The University should ensure controls are in place to comply with the subrecipient monitoring policy on an ongoing basis. Views of Responsible Officials and Planned Corrective Actions - At the subrecipient proposal development stage, the University currently requires subrecipients to certify in writing that they are not excluded or disqualified from receiving Federal Funds, their audit status, and other compliance matters (in a Subrecipient Commitment Form or “SCF”). The University reviews such SCF, including independently obtaining and reviewing the most recent Single Audit report. If matters are noted, University staff performs additional reviews and follow up. The University will implement formal documentation requirements of such risk assessment procedures and debarment reviews for subrecipients will be added at the time a purchase requisition is initiated. Additionally, the University will add procedures to ensure that such risk assessments are reassessed annually.

Assistance Listing, Federal Agency, and Program Name - 93.332 U.S. Department of Health and Human Services Federal Award Identification Number and Year - NAVCA210431 02, NAVCA210431 03 Pass through Entity - N/A Finding Type - Material weakness Repeat Finding - Yes 2024-004 Criteria - A federal grant was incorrectly included in the Research and Development (R&D) cluster. The grant should have been identified as a separate federal program and tested as a major program in accordance with the Uniform Guidance requirements. Condition - Federal programs must be grouped into clusters only when specifically designated by the Office of Management and Budget (OMB). Questioned Costs - N/A Identification of How Questioned Costs Were Computed - N/A Context - During 2025 fiscal year single audit testing of the 2025 major programs, it was identified that a program was incorrectly included in the R&D cluster, when it should have been listed as a separately identified program. Cause and Effect - The error occurred due to misclassification of the grant on the schedule of expenditures. As a result, the schedule of expenditures was corrected and a separately identified program was selected as a major program during the 2025 audit and testing of the major program. Recommendation - Controls over SEFA classification and clustering should be implemented in order to properly present the SEFA. Views of Responsible Officials and Planned Corrective Actions - Additional review procedures have been implemented to prevent SEFA classification errors. Specifically, the Sponsored Research Accounting Manager now conducts a detailed review of the award documentation prior to SEFA categorization. Furthermore, a verification step has been added to the grant set up checklist, performed by Sponsored Research Accounting staff, to ensure accurate classification of all awards prior to inclusion in SEFA reporting.