Criteria In accordance with 2 CFR 200.313(c)(1), non-Federal entities must maintain accurate equipment records for all federally acquired equipment. At a minimum, the equipment records must include: • A description of the equipment • A serial number or other identification number • The source of funding for the equipment, including the Federal Award Identification Number (FAIN) • Who holds title • The acquisition date and cost • The location, use, and condition of the equipment • Any ultimate disposition data, including date of disposal and sales price, if applicable In accordance with 2 CFR 200.313(d)(2) requires entities to verify the existence, current utilization, and continued need for federally funded equipment through physical inventories conducted at least once every two years and to reconcile those results with the equipment records. In accordance with 2 CFR 200.303, it is emphasized that entities maintain complete and accurate equipment listings to demonstrate proper safeguarding, tracking, and continued use of equipment acquired under Federal awards Furthermore, in accordance with 2 CFR 200.303(a), non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Conditions Found We noted that the College does not maintain a complete and accurate equipment listing for federally acquired equipment. Specifically, the equipment listing did not consistently or correctly include all required data elements outlined in 2 CFR 200.313(c). Data elements that were missing from the listing included serial number, the source of funding for the equipment, including the FAIN, and the location. The data element that was incorrectly maintained on the equipment listing was acquisition date and cost as one instance was identified where the cost of acquiring an item on the equipment listing did not agree to the College’s system of record. Additionally, we noted the College does not have a process in place to reconcile the results of the bi-annual inventory count to the property record listing in order to reflect any changes or discrepancies resulting from the count. Cause The condition resulted from the absence of formally documented policies and procedures governing the maintenance and periodic review of the federally acquired equipment listing and the requirement of reconciling the federally acquired equipment to the property record listing after conducting a bi-annual physical inventory count. Also, the College has not implemented controls to ensure that required equipment information is consistently recorded, updated, and reviewed in accordance with Federal regulations. Possible Asserted Effect Failure to maintain a complete and accurate equipment listing can result in federally acquired equipment not being properly tracked, safeguarded, or used in accordance with Federal award requirements. The lack of accurate equipment records increases the risk of noncompliance with Federal statutes, regulations, and the terms and conditions of Federal awards. Additionally, the inability to locate equipment, inaccurate equipment records and undetected loss or misuse of federally funded equipment. Moreover, the absence of formal policies could result in federal noncompliance. Questioned Costs No questioned costs were identified. Statistical Sampling The sample was not intended to be and was not a statistically valid sample. Repeat Finding The conditions found do not constitute a repeat finding from the prior year. Recommendation We recommend that the College establish and implement formal policies and procedures to ensure that a complete and accurate equipment listing for federally acquired equipment is maintained in accordance with 2 CFR 200.303 and 313. This should include ensuring that all required data elements are recorded, that the listing is periodically reviewed and updated, and that results of physical inventories are reconciled to the equipment records to support compliance with Federal award requirements. Views of Responsible Officials The College acknowledges that the federally acquired equipment listing did not include all required data elements outlined in 2 CFR 200.313(c) and did not reconcile it against the bi-annual physical inventory completed. To mitigate the risk of incomplete equipment records for federally acquired equipment, the College is formalizing policies and procedures to ensure required data elements are recorded and maintained, implementing a periodic review process to update the equipment listing, and establishing a reconciliation process to compare bi-annual physical inventory results to the property records and promptly resolve any discrepancies. These corrective actions are being implemented in fiscal year 2026.
Criteria Non-Federal entities are prohibited from entering into covered transactions with parties that are suspended, debarred, or otherwise excluded from participation in Federal assistance programs in accordance with 2 CFR Part 180, as adopted by Federal agencies. Additionally, 2 CFR 200.214 requires non-Federal entities to ensure that Federal awards are not made to parties listed as excluded in the System for Award Management (SAM). The Compliance Supplement further requires non-Federal entities to establish and maintain effective internal controls to provide reasonable assurance that vendors involved in covered transactions under Federal awards are properly screened and verified for eligibility prior to entering into such transactions. Condition The College did not have an updated suspension and debarment policy or established procedures in place to ensure that vendors utilized in federally funded R&D transactions were not suspended, debarred, or otherwise excluded from participation in Federal programs. Although management was able to locate a suspension and debarment policy, management indicated that the policy was outdated and not followed in practice. As a result, the College did not consistently perform or document verification internal control procedures to confirm vendor eligibility through SAM prior to entering into covered transactions under Federal awards during the audit period. There were no instances of noncompliance identified in our sample of 4. Cause The condition occurred because the College did not maintain effective internal controls or current procedures to ensure compliance with Federal suspension and debarment requirements. Specifically, although a policy existed, it was outdated and not implemented in practice. In addition, the College did not establish a formal process to routinely verify and document vendor eligibility for covered transactions under Federal awards. Possible Asserted Affect Failure to establish and maintain effective controls over suspension and debarment may cause the College to enter into transactions with vendors that are suspended, debarred, or otherwise excluded from participation in Federal programs. This condition may result in noncompliance with 2 CFR Part 180, 2 CFR 200.214, and the Procurement, Suspension and Debarment requirements of the OMB Compliance Supplement for the R&D Cluster, and limits the College’s ability to demonstrate compliance with Federal statutes, regulations, and the terms and conditions of Federal awards. Questioned Costs No questioned costs were identified. Statistical Sampling The sample was not intended to be, and was not a statistically valid sample. Repeat Finding The conditions found do not constitute a repeat finding from the prior year. Recommendation We recommend that the College update and formally implement its suspension and debarment policy to ensure it is current, aligns with applicable Federal regulations, and is followed in practice. Specifically, the College should establish and document procedures to require verification of vendor eligibility through the System for Award Management (SAM) prior to entering into covered transactions under Federal awards. Additionally, the College should ensure that such verification procedures are performed consistently, documented appropriately, and retained to demonstrate compliance with 2 CFR Part 180, 2 CFR 200.214, and the Procurement, Suspension and Debarment requirements of the OMB Compliance Supplement for the R&D Cluster. Management should also consider periodic monitoring or review of these procedures to ensure ongoing compliance with Federal award requirements. Views of Responsible Officials The College concurs with this finding. To mitigate the risk of entering into covered transactions with suspended or debarred vendors, the College is updating and formalizing its suspension and debarment policy, establishing procedures to require and document SAM verification prior to covered transactions under Federal awards, and implementing periodic monitoring to ensure these procedures are performed consistently. These corrective actions are being implemented in fiscal year 2026.
Criteria Payroll costs charged to Federal awards must be allowable, allocable, and supported by records that accurately reflect the work performed, in accordance with 2 CFR 200.430(i). Non-Federal entities are required to establish and maintain effective internal controls to provide reasonable assurance that payroll charges comply with Federal requirements. Specific requirements for Research and Development involve ensuring payroll costs were reasonable and necessary for performance of the R&D effort identified in the applicable award. Condition The College’s documented control design requires review and approval of employee timesheets (hourly employees) or effort percentage reports (salaried employees) by the Principal Investigator (PI) or an immediate supervisor to evidence that time charged to R&D awards reflects actual work performed. However, this control was not operating effectively, as 18 out of the 40 samples selected lacked evidence of required review. Cause The condition occurred because the College’s designed control requiring PI or direct supervisor review of employee timesheets or effort percentage reports was not operating effectively in practice. While the control was intended to be performed through the Kronos timekeeping system, system and workflow limitations prevented consistent requirement of PI or supervisor approvals within the system during the audit period. Additionally, the College did not have compensating procedures in place to detect or remediate missing required approvals when Kronos approval evidence was not obtained. As a result, the control was not consistently operating for employees charging time to R&D awards. Possible Asserted Affect The lack of Principal Investigator (PI) or supervisor review of timesheets increases the risk that payroll costs charged to Federal Awards may not be supported or reflect actual work performed on the sponsored projects. This condition may result in noncompliance with 2 CFR 200.430(i) and limits the College’s ability to demonstrate that payroll expenditures charged to Federal awards were incurred for allowable activities and in accordance with the terms and conditions of the awards. Questioned Costs No questioned costs were identified. Statistical Sampling The sample was not intended to be, and was not a statistically valid sample. Repeat Finding The conditions found do not constitute a repeat finding from the prior year. Recommendation We recommend that the College ensure consistent documentation of PI or supervisor review of employee timesheets and/or effort percentage reports charged to Federal R&D awards by formalizing procedures and configuring the timekeeping system to require and retain evidence of approval. The College should also implement monitoring controls to identify missing approvals and ensure compliance with Federal award requirements. Views of Responsible Officials The identified conditions related to timesheets for hourly student employees. To mitigate the risk of missing approval documentation for payroll charged to Federal R&D awards, the College is formalizing procedures requiring PI or supervisor review of applicable timesheets, configuring the approval workflow in Workday to require and retain evidence of approval, and implementing periodic monitoring to identify and correct missing approvals. These corrective actions are being implemented in fiscal year 2026.