Finding 2025-004 – Cash Management: Documentation Retention and Review of Reimbursement Requests – Material Weakness in Internal Control Over Compliance; Agencies – Department of Education, Department of Health and Human Services, National Science; Foundation, National Aeronautics and Space Administration, Department of Agriculture; Assistance Listing Numbers (ALN) - 84.356A, 93.859, 47.083, 47.050, 93.310, 43.008, 10.699, 47.078; Program Name - Alaska Native Educational Programs, Research and Development Cluster; Award Year / Award Number – FY 2025, 2024, 2023 / Award #S356A220066; FY 2025, 2024, 2023, 2022, 2021, 2020/Awards ANTHC- 23-U-396186; 5U24GM146576-02; 2049596; 2243258; ICER 2040729, Subaward 15660316; FIAN 2220560; ICER 1928230; Subaward 1558528; ICER 2052107; 2127346; 2309480; 80NSSC20M0070; 80NSSXC20M0070; 80NSSC24M0179, 24-MIRO-0054;1333MF4P0220; 18-JV-11261944-100; 2325081; 2419971, subaward 24-S37; Criteria or Specific Requirement – 2 CFR 200.303, Internal Controls, requires that non-federal entities receiving federal awards establish and maintain internal control designed to reasonably ensure compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR 200.302 requires that non-federal entities receiving federal awards maintain record that sufficiently identify the source and application of federal funds, and all records must be supported by source documentation.; Condition –APU did not retain sufficient documentation to demonstrate that the reimbursement request was reviewed and approved before submission. The files also did not include formal reconciliations or equivalent support tying the expenditures included in the reimbursement requests to the related drawdown amounts, but rather relied on a rolling general ledger record to support amounts reimbursed. As a result, we could not verify that the related review, approval, and reconciliation controls operated as designed.; Cause – Alaska Pacific University experienced personnel shortages and management transition during the year. Formal policies and procedures were not in place to ensure reimbursement request review, approval, reconciliation, and documentation retention responsibilities were consistently performed during the transition.; Effect or Potential Effect - Without retained evidence of review and approval and reconciliations supporting reimbursement requests, management may not be able to demonstrate that controls over reimbursement requests operated as designed. This increases the risk that errors in reimbursement requests may not be identified and corrected timely.; Questioned Costs - None reported.; Context – The exceptions were identified in all 10 reimbursement requests tested. For the Research and Development Cluster, seven drawdown requests were tested out of a total of 67. For the Alaska Native Educational Program, three were tested out of a total of 9 drawdown requests.; Repeat Finding – This is not a repeat finding.; Recommendation - We recommend that management establish formal written procedures requiring reimbursement requests to be reviewed and approved before submission, with evidence of review retained. Management should also formally retain reconciliations or detailed support tying expenditures included in each drawdown request to the amount requested, and ensure these records are readily available for audit and monitoring purposes.; Views of Responsible Officials – Management concurs with the finding and is implementing formal review of cash management.
Finding 2025-005 – Procurement and Suspension and Debarment: Retention of Debarment Checks – Noncompliance and Significant Deficiency in Internal Control Over Compliance; Agencies – Department of Health and Human Services, National Science Foundation, National Aeronautics and Space Administration, Department of Agriculture; Assistance Listing Numbers (ALN) - 93.859, 47.083, 47.050, 93.310, 43.008, 10.699, 47.078; Program Name - Research and Development Cluster; Award Year / Award Number – FY 2025, 2024, 2023, 2022, 2021, 2020 / Awards ANTHC- 23-U-396186; 5U24GM146576-02; 2049596; 2243258; ICER 2040729, Subaward 15660316; FIAN 2220560; ICER 1928230; Subaward 1558528; ICER 2052107; 2127346; 2309480; 80NSSC20M0070; 80NSSXC20M0070; 80NSSC24M0179, 24-MIRO-0054;1333MF4P0220; 18-JV-11261944-100; 2325081; 2419971, subaward 24-S37; Criteria or Specific Requirement – 2 CFR 200.214 prohibits recipients of federal awards from entering into contracts or other covered transactions with parties that are debarred, suspended, or otherwise excluded from participation in federal programs. Therefore, internal controls should be designed and implemented to provide reasonable assurance that an entity with which Alaska Pacific University plans to enter into a covered transaction is not debarred, suspended or otherwise excluded for covered transactions under Uniform Guidance.; Condition – APU did not retain evidence that vendor exclusion status was verified before contracts were executed.; Cause – Management did not have a formal process to verify and retain documentation of vendor suspension and debarment status for covered transactions under the Uniform Guidance.; Effect or Potential Effect – Management could enter into a covered transaction with a vendor that is debarred, suspended, or otherwise excluded.; Questioned Costs – None reported.; Context – We selected three procurements totaling $267,870 out of a total of 5 procurements totaling $369,307 made during the year. Documentation regarding vendor’s suspension, debarment, or other exclusion status was not retained on any of the selections tested.; Repeat Finding – This is not a repeat finding.; Recommendation - We recommend that management establish procedures requiring suspension and debarment checks to be completed before entering into covered transactions under federal awards. Documentation of the verification, such as SAM.gov search results, vendor certifications, or applicable contract provisions, should be retained in the procurement file.; Views of Responsible Officials – Management concurs with the finding and is implementing procedures to document and retain required verification.
Finding 2025-006 – Procurement and Suspension and Debarment: Inadequate Documentation of Competitive Bidding Procedures – Noncompliance and Significant Deficiency in Internal Control Over Compliance; Agencies – Department of Health and Human Services, National Science Foundation, National Institutes of Health, National Aeronautics and Space Administration, Department of Agriculture; Assistance Listing Numbers (ALN) - 93.859, 47.083, 47.050, 93.310, 43.008, 10.699, 47.078; Program Name - Research and Development Cluster; Award Year / Award Number – FY 2025, 2024, 2023, 2022, 2021, 2020 / Awards ANTHC- 23-U-396186; 5U24GM146576-02; 2049596; 2243258; ICER 2040729, Subaward 15660316; FIAN 2220560; ICER 1928230; Subaward 1558528; ICER 2052107; 2127346; 2309480; 80NSSC20M0070; 80NSSXC20M0070; 80NSSC24M0179, 24-MIRO-0054;1333MF4P0220; 18-JV-11261944-100; 2325081; 2419971, subaward 24-S37; Criteria or Specific Requirement – 2 CFR 200.318 and 2 CFR 200.320 require recipients of federal awards to maintain sufficient records to document the history of procurement transactions, including the procurement method used, bids or proposals received, contractor selection or rejection, and the basis for contract price, as applicable.; Condition – For one procurement tested, APU did not retain documentation showing that bids were solicited, received, and evaluated before vendor selection. As a result, we could not determine whether the appropriate procurement method was used or whether adequate competition was obtained for that transaction.; Cause – Management did not have formal procurement policies and procedures requiring documentation of competitive bidding and vendor selection to be retained in the procurement file for all applicable transactions.; Effect or Potential Effect – Without sufficient procurement documentation, management may not be able to demonstrate that the appropriate procurement method was used or that adequate competition was obtained for covered transactions.; Questioned Costs - None reported.; Context – We selected three procurements totaling $267,870 out of a total of 5 procurements totaling $369,307 made during the year. We identified one exception totaling $18,000.; Repeat Finding – This is not a repeat finding.; Recommendation - We recommend that management strengthen procurement procedures to require documentation of the procurement method used, bids or proposals received, evaluation of vendor responses, and vendor selection rationale to be retained in the procurement file.; Views of Responsible Officials – Management concurs with the finding and is strengthening procedures to ensure bidding and vendor selection documentation is retained.
Finding 2025-007 – Allowable Costs/Cost Principles: Indirect Costs Charged in Excess of Approved Rate – Noncompliance and Significant Deficiency in Internal Control Over Compliance; Agencies –Department of Health and Human Services, National Science Foundation, National Aeronautics and Space Administration, Department of Agriculture; Assistance Listing Numbers (ALN) - 93.859, 47.083, 47.050, 93.310, 43.008, 10.699, 47.078; Program Name - Research and Development Cluster; Award Year / Award Number – FY 2025, 2024, 2023, 2022, 2021, 2020 / Awards ANTHC- 23-U-396186; 5U24GM146576-02; 2049596; 2243258; ICER 2040729, Subaward 15660316; FIAN 2220560; ICER 1928230; Subaward 1558528; ICER 2052107; 2127346; 2309480; 80NSSC20M0070; 80NSSXC20M0070; 80NSSC24M0179, 24-MIRO-0054;1333MF4P0220; 18-JV-11261944-100; 2325081; 2419971, subaward 24-S37; Criteria or Specific Requirement – 2 CFR 200.414 requires recipients to apply indirect costs in accordance with the approved negotiated indirect cost rate agreement or the indirect cost rate specifically authorized by the terms and conditions of the federal award.; Condition – For two grants, APU applied an indirect cost rate that exceeded the rate authorized by the applicable grant agreement.; Cause – Management did not have sufficient review procedures to verify that the indirect cost rate applied to award expenditures agreed to the rate authorized by the applicable grant agreement before costs were charged.; Effect or Potential Effect – Without effective review of indirect cost rates before costs are charged to federal awards, indirect costs may be calculated using an incorrect rate, increasing the risk that amounts charged to the award exceed the rate authorized by the grant agreement.; Questioned Costs - None reported.; Context – Indirect costs were charged to 13 grants totaling $437,103 of indirect costs. We recalculated total indirect charged for the entire population and identified a total overcharge of $2,238. We selected six programs for control testing totaling $42,760 of indirect costs and identified exceptions in two programs where the indirect cost rate applied exceeded the rate approved in the applicable grant agreement.; Repeat Finding – This is not a repeat finding.; Recommendation - Management should identify and correct indirect costs charged above the allowable rate and implement review procedures to ensure future charges comply with the grant agreement.; Views of Responsible Officials – Management concurs with the finding and has strengthened review procedures to ensure indirect costs are charged using the rates authorized by award.
Finding 2025-008 – Allowable Costs/Cost Principles: Insufficient Documentation of Expenditure Review and Approval – Significant Deficiency in Internal Control Over Compliance; Agencies – Department of Education; Assistance Listing Numbers (ALN) - 84.356A; Program Name - Alaska Native Educational Programs; Award Year / Award Number – FY 2025, 2024, 2023 / Award #S356A220066; Criteria or Specific Requirement – 2 CFR 200.303 requires recipients of federal awards to establish and maintain effective internal control over federal awards to provide reasonable assurance that awards are managed in compliance with federal statutes, regulations, and the terms and conditions of the award. In addition, 2 CFR 200.403 requires costs charged to federal awards to be allowable, adequately documented, and consistent with applicable federal requirements and the terms and conditions of the award.; Condition – APU did not retain evidence that the required review and approval was performed over credit card-related transactions before the expenditures were charged to the federal award. There are other mitigating controls relating to the payment of expenses, including credit cards.; Cause – For credit card-related nonpayroll expenditures, management did not have sufficient procedures to ensure required reviews and approvals were consistently documented and retained before expenditures were charged to the federal award.; Effect or Potential Effect – Without documented approval, errors, unallowable costs, or noncompliance with federal program requirements may occur and not be detected timely.; Questioned Costs - None reported.; Context – The population selected for testing consisted of 41 nonpayroll expenditure transactions totaling $101,810, with a total population of nonpayroll expenses of $366,354. We identified exceptions in 9 transactions totaling $7,537, all of which related to credit card transactions.; Repeat Finding – This is not a repeat finding.; Recommendation - Management should strengthen controls over nonpayroll expenditures by ensuring all required reviews and approvals are documented and retained.; Views of Responsible Officials – Management concurs with the finding and is strengthening procedures to ensure expenditure reviews and approvals are documented and retained.
Finding 2025-009 – Equipment and Real Property Management: Lack of Documentation Supporting Physical Inventory Counts – Significant Deficiency in Internal Control Over Compliance; Agencies – Department of Health and Human Services, National Science Foundation, National Aeronautics and Space Administration, Department of Agriculture; Assistance Listing Numbers (ALN) - 93.859, 47.083, 47.050, 93.310, 43.008, 10.699, 47.078; Program Name - Research and Development Cluster; Award Year / Award Number – FY 2025, 2024, 2023, 2022, 2021, 2020 / Awards ANTHC- 23-U-396186; 5U24GM146576-02; 2049596; 2243258; ICER 2040729, Subaward 15660316; FIAN 2220560; ICER 1928230; Subaward 1558528; ICER 2052107; 2127346; 2309480; 80NSSC20M0070; 80NSSXC20M0070; 80NSSC24M0179, 24-MIRO-0054;1333MF4P0220; 18-JV-11261944-100; 2325081; 2419971, subaward 24-S37; Criteria or Specific Requirement – 2 CFR 200.313 requires recipients of federal awards to maintain property records for equipment acquired under federal awards, perform a physical inventory of equipment at least once every two years, and reconcile the results of the physical inventory to the property records.; Condition – The inventory count control could not be verified because management was unable to provide documentation showing that inventory counts were completed within the required two-year period.; Cause – Management did not have sufficient documentation retention policies and procedures to ensure physical inventory counts of federally funded equipment were documented, reconciled to property records, and retained in accordance with federal equipment management requirements.; Effect or Potential Effect – Without documented physical inventory counts and reconciliations, management may not identify missing, inaccurate, or unsupported equipment records timely.; Questioned Costs - None reported.; Context – During testing of three equipment samples totaling $334,957, management stated that physical inventory counts had been performed; however, APU did not provide documentation showing that the counts occurred within the required two-year period or that the results were reconciled to the property records. Detailed asset records were maintained for the items tested, and we were able to verify that the assets remained in service. However, due to the lack of retained inventory count and reconciliation documentation, we could not verify that the physical inventory control operated as designed for the three samples selected.; Repeat Finding – This is not a repeat finding.; Recommendation - Management should ensure physical inventory counts of equipment are performed and documented at least once every two years, and that documentation of the inventory counts and related reconciliations is retained to demonstrate compliance with federal equipment management requirements.; Views of Responsible Officials – Management concurs with the finding and is implementing procedures to document, reconcile, and retain required physical inventory records.
Finding 2025-010 – Special Tests and Provisions: Key Personnel Changes – Significant Deficiency in Internal Control Over Compliance; Agencies – Department of Health and Human Services, National Science Foundation, National Aeronautics and Space Administration, Department of Agriculture; Assistance Listing Numbers (ALN) - 93.859, 47.083, 47.050, 93.310, 43.008, 10.699, 47.078; Program Name - Research and Development Cluster; Award Year / Award Number – FY 2025, 2024, 2023, 2022, 2021, 2020 / Awards ANTHC- 23-U-396186; 5U24GM146576-02; 2049596; 2243258; ICER 2040729, Subaward 15660316; FIAN 2220560; ICER 1928230; Subaward 1558528; ICER 2052107; 2127346; 2309480; 80NSSC20M0070; 80NSSXC20M0070; 80NSSC24M0179, 24-MIRO-0054;1333MF4P0220; 18-JV-11261944-100; 2325081; 2419971, subaward 24-S37; Criteria or Specific Requirement – 2 CFR 200.308 requires recipients to obtain prior written approval from the federal awarding agency or pass-through entity for certain post-award changes, including changes in key personnel specified in the federal award. Accordingly, management should have controls in place to identify key personnel requirements, monitor changes in assigned personnel, and obtain required approvals before making such changes.; Condition – APU does not have a process or policy in place for review or tracking of notifications and approvals of personnel changes by the applicable federal awarding agency or pass-through entity.; Cause – APU did not have a centralized policy or procedure to periodically track and monitor key personnel identified in federal awards and evaluate whether any changes required communication to the applicable federal awarding agency or pass-through entity.; Effect or Potential Effect – Failure to identify and communicate changes in key personnel may result in noncompliance with the terms and conditions of the federal award.; Questioned Costs - None reported.; Context – We selected five grants out of a total of 19 with personnel notification requirements. There were no exceptions to the notification requirements noted. However, there was no tracking mechanism or policy in place to ensure this notification and approval is done timely and in accordance with grant requirements.; Repeat Finding – This is not a repeat finding.; Recommendation – We recommend that management establish formal procedures to identify key personnel requirements in federal awards and maintain a centralized tracking process to monitor assigned key personnel throughout the award period. The procedures should include periodic review of key personnel assignments, evaluation of whether changes require communication to the federal awarding agency or pass-through entity, and retention of documentation supporting the review and any related communications.; Views of Responsible Officials – Management concurs with the finding and is implementing a centralized process to monitor key personnel requirements and required agency notifications.
Finding 2025-011 – Special Tests and Provisions: NSLDS Reporting – Noncompliance and Significant Deficiency in Internal Control Over Compliance; Agencies – Department of Education; Assistance Listing Numbers (ALN) – 84.007, 84.033, 84.063 & 84.268; Program Name – Student Financial Assistance Cluster; Award Year / Award Number – N/A; Criteria or Specific Requirement – 34 CFR §685.309 requires institutions to accurately and timely report student enrollment status information to NSLDS, including enrollment status, program information, and effective dates, in accordance with Department of Education requirements and the NSLDS Enrollment Reporting process. Management should maintain controls to ensure enrollment information is reviewed, updated, certified, and reported accurately and timely.; Condition – For 1 item tested, APU did not report the student’s enrollment status to NSLDS within the required timeframe.; Cause – Management did not have sufficient monitoring and review procedures to ensure enrollment status changes were identified, updated, and reported to NSLDS within required timeframes.; Effect or Potential Effect – The University was not in compliance with NSLDS enrollment reporting timeliness requirements for the sample identified.; Questioned Costs - None reported.; Context – During testing of 24 NSLDS enrollment samples, we identified 1 sample for which the student’s graduated status was not reported to NSLDS timely. The degree conferral occurred outside the normal graduation reporting cycle and was not timely reported by the institution to the National Student Clearinghouse, which resulted in inaccurate enrollment status reporting to NSLDS.; Repeat Finding – This is not a repeat finding.; Recommendation – We recommend that the University enhance its procedures over enrollment reporting to ensure students’ enrollment statuses are accurately and timely reported to NSLDS.; Views of Responsible Officials – Management concurs with the finding and is strengthening monitoring procedures to ensure enrollment status changes are reported accurately and timely.
Finding 2025-012 – Special Tests and Provisions: Title IV Credit Balance Disbursements – Noncompliance and Significant Deficiency in Internal Control Over Compliance; Agencies – Department of Education; Assistance Listing Numbers (ALN) – 84.007, 84.033, 84.063 & 84.268; Program Name – Student Financial Assistance Cluster; Award Year / Award Number – N/A; Criteria or Specific Requirement – Pursuant to 34 C.F.R. § 668.164(h), an institution must pay any remaining balance of Title IV, Higher Education Act program funds directly to the student or parent as soon as possible, but no later than 14 calendar days after the date the Title IV credit balance occurs. Management should maintain procedures to ensure Title IV credit balances are identified and disbursed within the required regulatory timeframe.; Condition – For one Title IV credit balance tested, management did not ensure the Title IV credit balance was identified and disbursed within the required 14-day timeframe.; Cause – Based on inquiries with management and review of the circumstances surrounding the transaction, the University's monitoring and review controls did not identify the outstanding Title IV credit balance in sufficient time to ensure disbursement within the required regulatory timeframe.; Effect or Potential Effect – The student did not receive the Title IV credit balance within the timeframe required by Department of Education cash management requirements Failure to timely disburse Title IV credit balances may delay students' access to federal financial aid funds and results in noncompliance with the cash management requirements established by the U.S. Department of Education. Repeated occurrences could increase the institution's risk of regulatory scrutiny and potential sanctions.; Questioned Costs - None reported.; Context – There were 12 students with credit balances on their account. A sample of 3 of these students were selected. We identified one credit balance that was not disbursed within the required 14-day timeframe. The refund was disbursed 41 days after the required deadline.; Repeat Finding – This is not a repeat finding.; Recommendation – We recommend that the University enhance its controls over Title IV credit balance disbursements to ensure refunds are timely identified, processed, and disbursed in accordance with the federal 14-day requirement.; Views of Responsible Officials – Management concurs with the finding and is strengthening monitoring procedures to ensure Title IV credit balances are identified and disbursed within required timeframes.