Audit 407740

Item No. 2025-003 – Period of Performance Compliance Applicable to: Research & Development (ALN 47.076) Criteria In accordance with the White House Compliance Supplement, allowable costs must be incurred within the established period of performance unless otherwise authorized. Costs incurred outside the grant period must be explicitly permitted under the terms of the award. Condition Testing identified four instances in which disbursements were made after the award’s estimated end date. Cause The University did not process or draw down funds in a timely manner upon completion of project activities. Effect Delayed disbursement of funds results in noncompliance with federal requirements governing the period of performance. Questioned Costs None.Recommendation Management should strengthen controls to ensure timely processing and drawdown of funds within the applicable grant period. Ongoing monitoring procedures should be implemented to ensure compliance with federal requirements. Views of Responsible Officials Management concurs with the finding. Management acknowledges the instances identified in which disbursements were processed after the award's period of performance. While no questioned costs were noted, the University recognizes that timely processing of expenditures and drawdowns is critical to ensuring compliance with federal requirements governing grant periods. To Strengthening Grant Closeout Procedures management will establish a formal grant closeout timeline to begin 90 days prior to the award end date, require principal investigators (PIs) and grant administrators to review all outstanding obligations and ensure timely submission of final expenses and implement a standardized closeout checklist to confirm all costs are recorded within the allowable period To Enhanced Monitoring of Grant Periods management will develop and maintain a centralized tracking system for all federal awards, including start and end dates, generate monthly reports identifying grants nearing expiration (within 90,60, and 30 days) and distribute reports to PIs, Grants Accounting, and Finance leadership for proactive management. For timely processing and drawdown controls management will require all invoices and expenditures to be submitted within a defined timeframe (e.g., within 30 days of service or project completion), establish internal deadlines for processing disbursements and drawdowns prior to the grant end date and implement a review step within Grants Accounting to verify that expenses fall within the period of performance before payment is released. The grants department will conduct mandatory training for PIs, grant managers, and finance staff on period of performance requirements and federal compliance expectations and reinforce accountability for timely submission and processing of expenditures Management will also put in place for any costs identified outside the period of performance will require, documented justification, review and approval by the Director of Grants Accounting and CFO, and verification of allowability under award terms or sponsor approval, if applicable.

Item No. 2025-002 – Missing Supporting Documentation Applicable to: All Federal Awards, including Higher Education Student Aid (ALN 84.031) and Research & Development (ALN 12.351) Criteria University policy requires that vendor invoices be maintained as supporting documentation for all federal award expenditures. Such documentation must be submitted and retained in accordance with established procedures. Condition Testing identified one instance in which the supporting vendor invoice for a disbursement could not be located or provided for audit.Cause The University did not retain required supporting documentation, indicating a lapse in record retention controls. Effect The absence of supporting documentation results in noncompliance with internal control requirements and increases the risk that unsupported or unallowable costs may be charged to federal programs. Questioned Costs None. Recommendation Management should reinforce compliance with documentation and record retention policies, ensuring that all required support is properly maintained and readily accessible. Periodic monitoring should be implemented to promote sustained compliance. Views of Responsible Officials Management concurs with the finding. Management acknowledges the instance identified in which supporting documentation for a federal award disbursement could not be located at the time of audit. While this appears to be an isolated occurrence, the University recognizes the importance of maintaining complete and readily accessible documentation to support all federal expenditures in accordance with institutional policy and federal compliance requirements. The University will reinforce documentation and record retention requirements with all relevant personnel, including finance staff, grant administrators, and principal investigators. Additionally, management will implement enhanced controls to ensure that all required supporting documentation is properly maintained and centrally accessible. This will include transitioning toward a more standardized and, where feasible, electronic document management process to reduce the risk of missing records.Furthermore, periodic monitoring procedures will be established, including routine reviews of disbursement files to confirm the presence of required supporting documentation. Any identified deficiencies will be promptly addressed, and corrective actions will be taken to prevent recurrence.

Item No. 2025-001 – Internal Controls Over Disbursement Approvals Applicable to: All Federal Awards, including Higher Education Student Aid (ALN 84.031) and Research & Development (ALN 47.076, 12.630, 93.859) Criteria The University’s Federal Award Procedures require that all Requests for Purchase be reviewed and approved by multiple levels of management prior to the disbursement of federal funds. Condition During testing of disbursements charged to federal programs, fourteen instances were identified in which required approvals were either incomplete or not documented. Specifically, certain transactions contained only a single approval or lacked evidence of approval entirely. Cause These exceptions appear to result from insufficient oversight and inconsistent adherence to established approval procedures related to federal expenditures. Effect The lack of required approvals constitutes noncompliance with the University’s internal control policies and increases the risk of unauthorized or unallowable expenditures. Questioned Costs None. Recommendation Management should enhance oversight of federal award disbursements to ensure compliance with established approval protocols. This includes reinforcing procedural expectations with relevant personnel and implementing periodic monitoring to ensure controls are consistently applied.Views of Responsible Officials Management concurs with the finding. The University acknowledges the control deficiencies identified related to disbursement approval documentation for federal awards. While policies requiring multi-level approvals are formally established, management recognizes that consistent execution and documentation of these controls were not fully adhered to in all instances. Management will formally re-communicate federal disbursement approval requirements to all relevant personnel, including principal investigators, department heads, and finance staff. This will include mandatory training sessions on federal compliance and approval protocols and distribution of updated written procedures outlining required approval levels and documentation standards. To reduce reliance on manual processes, the University will configure the financial system/workflow to require multiple levels of electronic approval prior to payment processing and restrict disbursement processing until all required approvals are completed and documented within the system. Management will implement ongoing monitoring procedures to ensure compliance, including monthly reviews of a sample of federal disbursements by the Controller's Office or Grants Accounting, quarterly compliance reporting to the CFO and senior leadership, and documentation of review results and corrective follow-up actions.