Audit 402514

Findings and Questioned Costs Relating to Federal Awards: Finding 2025 001 Timeliness of Subrecipient Monitoring Federal Agency: National Science Foundation U.S. Department of Defense U.S. Department of Health and Human Services Program Name: Research and Development (R&D) Cluster ALN #: 12.910/47.041/47.049/93.213/93.286/93.399/93.837/93.838/93.865 Federal Award Numbers: FA8650 21 2 7119 P00014/EEC 2330040 001/CHE 2221346/ 5R01AT010413 04/5U54EB027049 08/5UG1CA242643 06/ 5UH3HL165065 04/5U01HL146240 07 Revised/ 5U01HL146408 06 Revised Federal Award Year: September 1, 2024 – August 31, 2025 Compliance Requirement: Subrecipient Monitoring Criteria According to 2 CFR 200.332(d), a pass through entity must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations and the terms and conditions of the subawards, and that the subaward performance goals are achieved. According to 2 CFR 200.332(d)(3) and 2 CFR 200.521, a pass through entity is required to issue a management decision on federal awards audit findings within six months of the acceptance of the report by the Federal Audit Clearinghouse and ensure the subrecipient takes timely and appropriate corrective action on all audit findings. In addition, 2 CFR 200.303 requires nonfederal entities to, among other things, 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. Effective internal controls should include procedures to ensure subrecipient single audit reports are reviewed and completed in a timely manner and management decisions are issued within required timeframes. Condition Found The University is required to review the single audit reports received from its subrecipients and issue management decision letters (MDL) within six months of the date of acceptance of the single audit report by the Federal Audit Clearinghouse (FAC). During our testwork over 40 subrecipients, we noted the following: For 3 subrecipients, the University did not issue an MDL in a timely manner. The delay in issuing this MDL was 42 to 167 days beyond the required timeframe. For 11 subrecipients, while the University did review the subrecipient’s single audit report, the review did not occur within the prescribed six month timeframe. The delay in reviewing the subrecipient's single audit reports was 2 to 140 days beyond the required timeframe. Cause The management review controls implemented by the University were not operating at a level of precision to ensure the University completed and documented the monitoring procedures timely primarily due to turnover. The delay occurred during the University’s corrective action period related to a similar finding from the previous year. Possible Asserted Effect Failure to complete and perform reviews of subrecipient single audit reports and issue MDLs in a timely manner may result in subrecipients not administering the federal programs in accordance with laws, regulations, and the grant agreement. Questioned Costs None Repeat Finding A similar finding was reported in the prior year audit as finding 2024 001. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Recommendation We recommend the University establish procedures to ensure subrecipient single audit report reviews are completed and documented in a timely manner. Views of University Officials The University agrees with this finding. Delays occurred during the corrective action period associated with the prior year findings. The University has implemented additional monitoring and tracking procedures indented to strengthen the timeliness of subrecipient reviews and management decision issuance going forward

Finding 2025 002 Expenditure Charged Outside of the Period of Performance Federal Agency: U.S. Department of Health and Human Services Program Name: Research and Development (R&D) Cluster ALN #: 93.310 Federal Award Numbers: 5U54CA272163 03 Federal Award Year: September 1, 2024 – August 31, 2025 Compliance Requirement: Equipment Criteria According to 2 CFR § 200.1, the period of performance is the time during which the non Federal entity may incur new obligations to carry out the work authorized under the Federal award. For a cost to be allowable, it must be incurred during the approved budget period, as stated in the terms and conditions of the award. During fiscal year 2025, certain grants were terminated resulting in a shorter period of performance than the grant agreement originally stated. 2 CFR 200.303 requires nonfederal entities to, among other things, 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. Effective internal controls should include procedures to ensure that expenditures charged to a federal award were incurred within that award’s specified period of performance. Condition Found During our testing of 25 expenditures totaling $277,862 charged to federal awards with performance period ending dates during the audit period, we identified one expenditure and its related indirect cost charge that were not incurred within the grant's shortened period of performance. That period of performance had been shortened by an early termination notice. Additionally, we noted that controls were not operating effectively to prevent or detect the charging of expenditures to a federal award after the period of performance had concluded. Cause While adjustments were made to the University’s controls to respond to the shortened timeframe related to terminated grants, the control did not operate at a level of precision to identify that the expenditure in question was outside of the termination period. Possible Asserted Effect Charging expenditures outside of the authorized period of performance results in non compliance with federal regulations and the terms of the grant agreement. Questioned Costs $1,994 Repeat Finding A similar finding was not reported in the prior year audit. Statistical Sampling The sample was not intended to be, and was not, a statistically valid sample. Recommendation We recommend the University review its procedures to ensure that all expenditures are reviewed for allowability and are incurred within the active period of performance before being charged to a federal award. Views of University Officials The University agrees with the finding and will implement corrective actions related to awards subject to shortened periods of performance. The university will continue to assess and strengthen its controls and review procedures to reduce the likelihood of similar occurrences in the future.