Federal Agency: 84 – Department of Education Federal Program Title: Higher Education Institutional Aid Assistance Listing Number: 84.031 Award Period: July 1, 2024, through June 30, 2025 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or Specific Requirement: In accordance with 2 CFR §200.214, non-Federal entities must comply with the requirements of 2 CFR Part 180, which adopts the governmentwide requirements for suspension and debarment. These requirements prohibit non-Federal entities from entering into covered transactions with parties that are suspended or debarred and require verification of eligibility prior to entering into such transactions. Condition/Context: During our testing of Suspension and Debarment compliance, we selected a sample of 4 contracts under the Higher Education Institutional Aid program. We noted that for 1 of the 4 contracts tested, suspension and debarment verification was not completed prior to the contract date. Questioned Costs: $45,000 Effect: Failure to verify suspension and debarment status prior to contract execution increases the risk that the UEC could enter into covered transactions with suspended or debarred parties, resulting in noncompliance with Federal requirements. Cause: The UEC’s internal controls did not consistently ensure that suspension and debarment verification procedures were completed prior to contract execution. Repeat Finding: No. Recommendation: We recommend the UEC strengthen its procurement procedures to ensure suspension and debarment verification is consistently performed and documented prior to entering into covered transactions funded with Federal awards. Views of Responsible Officials: Management agrees with the finding and has developed a plan to correct the finding.
Federal Agency: 84 – Department of Education Federal Program Title: Higher Education Institutional Aid Assistance Listing Number: 84.031 Award Period: July 1, 2024, through June 30, 2025 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or Specific Requirement: In accordance with 2 CFR §200.328, non‑Federal entities must submit required performance reports in accordance with the terms and conditions of the Federal award and include all information required by the Federal awarding agency. Performance reports must be submitted in the form, manner, and frequency prescribed in the award agreement. Additionally, 2 CFR §200.303 requires non‑Federal entities to establish and maintain effective internal control over Federal awards, including controls to ensure required reports are reviewed, approved, documented, and submitted in accordance with award requirements. Condition/Context: During our testing of Reporting, we selected a sample of 5 Higher Education Institutional Aid performance reports. This major program includes 5 award agreements, of which 2 agreements have quarterly reporting requirements, 2 agreements have semi‑annual reporting requirements, and 4 agreements have annual reporting requirements. The following exceptions were noted: • For 2 of the 5 reports tested, the reports were prepared; however, evidence supporting submission was not provided, and documentation could not be provided to demonstrate that the reports were reviewed and approved prior to submission. As a result, evidence of management review and report submission could not be verified. Questioned Costs: None. Effect: Failure to retain documentation supporting report submission and management review limits the UEC’s ability to demonstrate compliance with Federal reporting requirements and increases the risk that required reports are not reviewed or submitted in accordance with award terms. Cause: The UEC’s internal controls were not designed or implemented to consistently ensure that required performance reports are reviewed, approved, and submitted in accordance with Federal award requirements, and that documentation is retained to support evidence of review and submission. Repeat Finding: No. Recommendation: We recommend the UEC strengthen its reporting procedures to ensure required performance reports are reviewed and approved prior to submission and that documentation is retained to support evidence of management review and report submission in accordance with Federal award requirements. Views of Responsible Officials: Management agrees with the finding and has developed a plan to correct the finding.
Federal Agency: 11 – Department of Commerce, 12 – Department of Defense, 15 – Department of the Interior, 16 – Department of Justice, 43 – National Aeronautics and Space Administration, 47 – National Science Foundation, 81 – Department of Energy, 84 – Department of Education, 93 – Department of Health and Human Services Federal Program Title: R&D Cluster and TRIO Cluster Assistance Listing Number: R&D and 84.TRIO Award Period: July 1, 2024, through June 30, 2025 Type of Finding: • Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: In accordance with 2 CFR §200.403(a), costs charged to Federal awards must be necessary, reasonable, and allocable to the Federal award. Additionally, 2 CFR §200.309 requires costs to be incurred during the approved period of performance of the Federal award. Further, 2 CFR §200.302(a) requires non‑Federal entities to maintain financial management systems that provide for accurate, current, and complete disclosure of the financial results of each Federal award, and 2 CFR §200.303 requires non‑Federal entities to establish and maintain effective internal control over Federal awards. Condition/Context: The population sizes below are presented only for programs in which exceptions were identified for the applicable compliance test. Cash Disbursement Testing – TRIO Cluster (Control Finding Only): • For 2 of the 40 TRIO samples tested, the related expenses were allowable and incurred within the awards’ approved periods of performance; however, the expenses were improperly recorded in fiscal year 2025. Specifically, 1 expense related to fiscal year 2024, and 1 expense represented a prepayment for a fiscal year 2026 cost. The resulting misstatement to the Schedule of Expenditures of Federal Awards (SEFA) totaled $5,260, which is less than program materiality. Payroll Testing – R&D Cluster (Control Finding Only): • For 10 of the 40 R&D samples tested, timesheets were not submitted timely, resulting in variances between the payroll register and the recalculated gross wages for the applicable pay periods. No unallowable payroll costs were identified; however, controls over timely payroll documentation and reconciliation did not operate effectively. • For 1 of the 40 R&D samples tested, the timesheet was not signed by the supervisor, indicating that payroll review controls were not consistently applied. Questioned Costs: None. Effect: Although the costs tested were allowable and incurred within the approved periods of performance, improper period recognition and untimely or incomplete payroll documentation increase the risk that Federal expenditures are not recorded in the proper fiscal period and that Federal financial reporting is not accurate. Cause: The UEC’s internal controls were not designed or implemented to consistently ensure that expenditures are recorded in the proper fiscal period and that payroll documentation is submitted, reviewed, and approved timely. Repeat Finding: No. Recommendation: We recommend the UEC strengthen its controls over expenditure recognition to ensure costs are recorded in the appropriate fiscal period and enhance payroll review procedures to ensure timesheets are submitted and reviewed timely to support accurate payroll reporting. Views of Responsible Officials: Management agrees with the finding and has developed a plan to correct the finding.
Federal Agency: 11 – Department of Commerce, 12 – Department of Defense, 15 – Department of the Interior, 16 – Department of Justice, 43 – National Aeronautics and Space Administration, 47 – National Science Foundation, 81 – Department of Energy, 84 – Department of Education, 93 – Department of Health and Human Services Federal Program Title: R&D Cluster, Child Care Access Means Parents in School, TRIO Cluster, and Higher Education Institutional Aid Assistance Listing Number: R&D, 84.335, 84.TRIO, and 84.031 Award Period: July 1, 2024, through June 30, 2025 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or Specific Requirement: In accordance with 2 CFR §200.305(b), when using the reimbursement method, Federal drawdowns must be limited to allowable costs that have been incurred and supported. Additionally, 2 CFR §200.302(a) requires non Federal entities to maintain financial management systems that provide for accurate, current, and complete disclosure of the financial results of each Federal award. Condition/Context: During our testing of Cash Management, we selected a sample of 85 reimbursement requests, consisting of 40 R&D Cluster samples, 12 Child Care Access Means Parents in School samples, 23 TRIO Cluster samples, and 10 Higher Education Institutional Aid. The following exceptions were noted: R&D Cluster, TRIO Cluster, and Higher Education Institutional Aid: For 4 of the 40 R&D samples tested, 9 of the 23 TRIO samples tested, and 1 of the 10 Higher Education Institutional Aid samples tested, instances of noncompliance were identified. • For 4 of the 4 R&D samples, 8 of the 9 TRIO samples, and 1 of the 1 Higher Education Institutional Aid samples with instances of noncompliance noted, a portion of the reimbursement drawn down during fiscal year 2025 related to expenses incurred outside to the current fiscal year. Additionally, 1 of the 4 R&D samples included expenses incurred as far back as October 2020. • For 1 of the 9 TRIO samples with instances of noncompliance noted, supporting documentation (such as invoice support, indirect cost recalculations, or payroll registers) was not provided for a portion of the expenses included in the reimbursement requests. As a result, we were unable to determine the period to which the funds drawn down related. Child Care Access Means Parents in School (Control Finding Only): • For 1 of the 12 samples tested, the UEC was ultimately in compliance with cash management requirements; however, internal controls did not operate effectively. Specifically, there was an approximate six‑month delay between the incurrence of program costs and the submission of the reimbursement request. Questioned Costs: $68,759 Effect: Reimbursement requests that include costs incurred outside the applicable fiscal period or costs that are not supported increase the risk that Federal expenditures are not recorded in the proper accounting period and that Federal financial reporting is not accurate. Additionally, delays in submitting reimbursement requests increase the risk that expenditures are not timely reported in accordance with Federal requirements. Cause: The UEC’s internal controls were not designed or implemented to consistently ensure that costs included in reimbursement requests are recorded in the appropriate fiscal period, supported by adequate documentation, and submitted timely in accordance with Federal cash management and financial reporting requirements. Repeat Finding: No. Recommendation: We recommend the UEC strengthen its cash management and financial reporting procedures to ensure reimbursement requests include only costs incurred in the appropriate fiscal period, are supported by adequate documentation, and are submitted timely. The UEC should also enhance review controls to verify proper period recognition of costs prior to submission of reimbursement requests. Views of Responsible Officials: Management agrees with the finding and has developed a plan to correct the finding. Further, 2 CFR §200.303 requires non Federal entities to establish and maintain effective internal control over Federal awards to ensure transactions are recorded in the proper accounting period and in accordance with applicable Federal requirements.
Federal Agencies: 11 – Department of Commerce, 12 – Department of Defense, 15 – Department of the Interior, 16 – Department of Justice, 43 – National Aeronautics and Space Administration, 47 – National Science Foundation, 81 – Department of Energy, 84 – Department of Education, 93 – Department of Health and Human Services Federal Program Title: R&D Cluster and Congressional Directives Assistance Listing Number: R&D and 93.493 Award Period: July 1, 2024, through June 30, 2025 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or Specific Requirement: In accordance with 2 CFR §200.313(d), non-Federal entities must maintain effective control and accountability for all equipment acquired under a Federal award. Property records must be maintained and include, at a minimum, a description of the equipment (including a serial number or other identification number), source of funding (including the Federal award identification number), who holds title, acquisition date, cost of the equipment, percentage of Federal participation in the cost, location, use and condition of the equipment, and any ultimate disposition data, including the date of disposal and sales price or the method used to determine current fair market value. Additionally, 2 CFR §200.313(d)(2) requires a physical inventory of equipment to be taken and the results reconciled with the property records at least once every two years. 2 CFR §200.313(d)(3) further requires non-Federal entities to establish adequate safeguards to prevent loss, damage, or theft of equipment. Condition/Context: During our testing of Equipment and Real Property Management, we selected a sample of 11 equipment items, consisting of 6 items from the R&D Cluster and 5 items from the Congressional Directives program. The following exceptions were noted: • For 2 of the 6 R&D equipment items, the UEC did not perform a physical inventory within the last two years. • For 1 of the 6 R&D equipment items and 1 of the 5 Congressional Directives equipment items, the UEC did not maintain property records containing the information required under Federal equipment management requirements. • For 1 of the 6 R&D equipment items, we were unable to physically inspect the equipment, as photographs or other evidence of existence were not provided by the UEC. • For 1 of the 6 R&D equipment items, while initial property records (invoice support demonstrating review and confirmation that the equipment was received) were available, we were unable to confirm that ongoing control systems were in place to safeguard the equipment after initial acquisition. Questioned Costs: $77,610. Effect: Without complete property records, timely physical inventories, and adequate safeguarding controls, the UEC is unable to demonstrate compliance with Federal equipment management requirements, increasing the risk of loss, misuse, or improper disposition of equipment purchased with Federal funds. Cause: The UEC’s internal controls over equipment tracking, inventory, and safeguarding were not designed or implemented to consistently ensure compliance with Federal equipment management requirements across Federal programs. Repeat Finding: No. Recommendation: We recommend the UEC establish and implement equipment management procedures to ensure property records are complete, physical inventories are performed at least biennially, and adequate safeguards are maintained for all equipment acquired with Federal funds. Views of Responsible Officials: Management agrees with the finding and has developed a plan to correct the finding.