Audit 401828

Internal Control over Compliance and Compliance with Reporting (Preparation of the Schedule of Expenditures of Federal Awards (SEFA)) ALN: 93.866, Aging Research: The Role of Methylation-Sensitive PP2A Isoforms in Regulating the Pathological Response to Tau ALN: 21.027, COVID-19 Coronavirus State and Local Fiscal Recovery Fund, American Rescue Plan Act (ARPA) Criteria: The Code of Federal Regulations (CFR) Section 200.510(b) states in part: The auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with CFR Section 200.502 Basis for determining Federal awards expended. The schedule must provide total Federal awards expended for each individual Federal program. CFR 200.302(b)(1) requires the nonfederal entity to identify in its accounts and on the schedule of expenditures of federal awards all federal awards received and expended, as well as the federal programs under which they were received. Federal program and award identification must include, as applicable, the Assistance Listing program title and number, the federal award identification number and year, the name of the federal agency, and the name of the pass-through entity, if any. Condition: The Role of Methylation-Sensitive PP2A Isoforms in Regulating the Pathological Response to Tau grant included amounts that were not Federal expenditures. Investigating the Role of Long-Term Latent Herpes Simplex Virus Infection on APOE4-Associated Alzheimer’s Disease Pathogenesis Grant and COVID-19 Coronavirus State and Local Fiscal Recovery Fund, American Rescue Plan Act (ARPA) grant were left off the prepared SEFA. Context: The SEFA was understated or overstated by ALN as follows: • Overstated by $12,757 for The Role of Methylation-Sensitive PPA Isoforms in Regulating the Pathological Response to Tau grant; and • Understated by $150,000 for the omission of COVID-19 Coronavirus State and Local Fiscal Recovery Fund, American Rescue Plan Act (ARPA) grant. Effect: The SEFA provided was not complete and accurate. Questioned Costs: None. Cause: The overstated grant amount of $12,757 was a misinterpretation of contract costs being included as Federal Expenditures after the grant had ended. The omission of $150,000 was a misinterpretation of the Federal source of the grant. Recommendation: We recommend McLaughlin Research Institute for Biomedical Sciences, Inc. strengthen internal controls over the preparation of the SEFA by having staff familiar with the federal funds review the prepared SEFA for completeness and accuracy prior to providing it to the auditor.