Audit 395832

2025-004 Subrecipient Monitoring Program: 21.027 Coronavirus State and Local Fiscal Recovery Funds, 84.336 Teacher Quality Partnership Grants, 94.006 AmeriCorps State and National, 84.325 Special Education – Personnel Development to Improve Services, 16.812 Second Chance Act Reentry Initiative, Research and Development Cluster. Criteria: Per 2 CFR sections 200.332(d) through (f), a pass-through entity must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves the performance goals. Per 2 CFR section 200.502(a), the determination of when a Federal award is expended must be based on when the activity related to the Federal award occurs which is generally expenditure/expense transactions associated with awards. Condition: Subrecipients were not monitored timely enough to perform the necessary evaluation on subrecipient activities or to report expenditures on the schedule of expenditures of federal awards in the appropriate fiscal year. Cause: Cal State L.A. University Auxiliary Services, Inc. did not receive invoices for certain subrecipients until after year-end close and for amounts covering an entire fiscal year and no amounts were accrued. Effect: Activities of the subrecipient could not be reviewed timely to ensure authorized use or for allowability with grant terms and conditions. Activities of the subrecipient could not be reviewed timely to ensure inclusion or exclusion from the SEFA. Questioned Costs: The conditions did not result in questioned costs greater than $25,000 based on known costs. However, as a result of the lack of monitoring, questioned costs may have existed. Repeat Finding: Yes. Recommendation: Establish a timeline for subrecipients to provide required reports to Cal State L.A. University Auxiliary Services, Inc. in order to receive information during the fiscal year for monitoring during the post-award process. Review grant and subrecipient activity at year-end to evaluate whether all activity has been submitted and recorded. Views of Responsible Officials: Management agrees with the finding and a response is included in the corrective action plan.

2025-005 Report Submission Delay Program: 21.027 Coronavirus State and Local Fiscal Recovery Funds, 94.006 AmeriCorps State and National Criteria: In accordance with 2 CFR 200.328, non-Federal entities must submit financial reports at the interval required by the Federal awarding agency or pass-through entity no later than the specified due date. Additionally, reports are required to be reviewed prior to submission Condition: Three quarterly and two monthly reports were submitted after the stated due date and one monthly activity report did not have appropriate documentation to evidence approval. Cause: Inadequate internal controls over grant reporting, including the lack of a formalized process to track reporting requirements and due dates, and insufficient monitoring of compliance with reporting deadlines. Effect: Reports were not submitted to the grantor in a timely manner and requests for extension of the due date were not made. Questioned Costs: The conditions did not result in questioned costs greater than $25,000. Repeat Finding: Yes. Recommendation: Reports should be generated sooner to allow time for sufficient review and approval before the due date. When timely submission may not be possible, UAS should request an extension from the grantor by providing a notice of the delay and rationale for the late report, and, if approved, submit the report by the extended deadline. When extensions are not granted, UAS should submit reports by the initial stated due date. Views of Responsible Officials: Management agrees with the finding and a response is included in the corrective action plan.

2025-006 Level of Effort Program: 84.325 Special Education Criteria: 2 CFR 200 requires recipients to meet specified matching and level of effort requirements. When changes in key personnel effort occur that could impact compliance with award terms, recipients are required to notify and obtain approval from the granting agency, when applicable. Condition: Out of the 9 awards tested, there were 2 instances where the project director did not meet their level of effort requirements as stated in the grant agreement. Additionally, communication to the granting agency did not occur prior to this being identified in the audit. Cause: The condition appears to be the result of insufficient monitoring controls over grant compliance requirements, including a lack of procedures to track and verify actual effort against required levels and to ensure timely communication with the granting agency when deviations occur. Effect: Failure to meet required level of effort and to notify the granting agency may result in noncompliance with matching and award requirements. Questioned Costs: None Repeat Finding: No Recommendation: We recommend management implement formal procedures to monitor level of effort requirements for key personnel throughout the grant period. This should include periodic comparisons of actual effort to required levels, with procedures to promptly notify and obtain approval from the granting agency when changes in effort occur. Views of Responsible Officials: Management agrees with the finding and a response is included in the corrective action plan.

2025-003 SEFA and Expenditure Identification Criteria: Management is responsible for preparing a complete and accurate Schedule of Expenditures of Federal Awards (SEFA) in accordance with 2 CFR 200.510(b), which requires that the SEFA accurately present total federal expenditures for the period, including proper cutoff of costs to ensure expenditures are reported in the correct fiscal year. Condition: The SEFA was not complete and accurate. Specifically, certain federal program expenditures incurred in the current fiscal year were not accrued and included on the SEFA at year end, and in other instances, amounts from the prior fiscal year were reported on the current year SEFA. These errors were identified across multiple programs and required audit adjustments to properly state federal expenditures. Cause: The errors appear to be the result of inadequate controls over the preparation and review of the SEFA, including insufficient procedures to ensure proper cutoff of expenditures and reconciliation of reported amounts to the underlying accounting records and grant documentation. Effect: Failure to properly identify and report federal expenditures in the correct period increases the risk of noncompliance with federal reporting requirements and may impact major program determination and other compliance-related decisions. Repeat Finding: No. Recommendation: We recommend management implement and document formal procedures to ensure the SEFA is complete and accurate at year end. This should include reconciling SEFA amounts to the general ledger, reviewing grant activity for proper cutoff, recording all necessary accruals. Views of Responsible Officials: Management agrees with the finding and a response is included in the corrective action plan.