Audit 411767

Criteria: 2 CFR § 200.303(a) requires the establishment and maintenance of effective internal control over federal awards to provide reasonable assurance of compliance with federal statutes, regulations, and the terms and conditions of the federal award Condition: During our audit, we noted that POP Biotechnologies Inc. does not maintain or store bank reconciliations on file. There is no evidence of a formal process for reconciling cash balances on a regular basis. Cause: The organization has not established or implemented procedures requiring the preparation and retention of bank reconciliations. Effect or Potential Effect: Failure to perform and retain bank reconciliations increases the risk of errors or irregularities in cash balances going undetected, which could result in misstatements in the financial statements and noncompliance with federal requirements. Known Questioned Costs: None identified. Perspective Information: This issue was identified for all bank accounts reviewed during the audit period, indicating a systemic deficiency. Identification of Repeat Findings: This is a new finding for the current year. Recommendation: We recommend that POP Biotechnologies Inc. implement procedures to ensure that bank reconciliations are prepared and reviewed monthly, and that documentation is retained for audit and management review.

Criteria: 2 CFR § 200.332(d) requires pass-through entities to monitor the activities of subrecipients as necessary to ensure that subawards are used for authorized purposes, in compliance with federal statutes, regulations, and the terms and conditions of the subaward, and that subaward performance goals are achieved[15]. Condition: For a selection of two subcontractors, POP Biotechnologies Inc. did not utilize a monitoring process for subrecipients. The organization did not create or maintain identifying information for all subrecipients, nor did it document monitoring activities. Cause: The organization has not developed or implemented formal subrecipient monitoring procedures, including the maintenance of required documentation. Effect or Potential Effect: Lack of subrecipient monitoring increases the risk that subawards may not be used for authorized purposes or in compliance with federal requirements, and that performance goals may not be achieved. Known Questioned Costs: None identified. Perspective Information: This deficiency was identified in both subrecipients selected for testing, suggesting a lack of systemic controls over subrecipient monitoring. Identification of Repeat Findings: This is a new finding for the current year. Recommendation: We recommend that POP Biotechnologies Inc. develop and implement formal subrecipient monitoring procedures, including maintaining identifying information for all subrecipients and documenting monitoring activities in accordance with Uniform Guidance requirements.