Audit 53290

Finding No: 2022 002 Activities Allowed or Unallowed/Allowable Costs Federal Agency: U.S. Department of Agriculture Assistance Listing Number: 10.652 Program: Research and Development Cluster ? Forestry Research Award Year: July 31, 2017 through July 30, 2022 (a) Criteria or Requirement Per 2 CFR 200.303, the non Federal entity must 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. (b) Condition Found, Including Perspective During our test work over the Research and Development cluster, we selected a sample of 50 disbursements made during the fiscal year. Within our sample, we noted one instance in which certain documented costs were approved and disbursements were made for an unallowable amount due to an inaccurate calculation on the underlying invoice. (c) Possible Cause The University has a management review process to review invoices and related documentation before payments are disbursed. The University management review control that was in place did not operate effectively to prevent unallowable charges from being submitted for reimbursement by the Federal agency. (d) Questioned Cost None reportable. (e) Effect Federal funds were expended for inaccurate amounts. (f) Statistical Validity The sample was not intended to be, and was not, a statistically valid sample. (g) Repeat Finding in the Prior Year Not a repeat finding. (h) Recommendation We recommend that the University strengthen controls over the management review process to prevent inaccurate amounts from being charged to Federal programs. (i) View of Responsible Officials Management concurs with the finding. While we have an adequate process in place, those responsible for steps of the review process need to be reminded of the importance of completing adequate reviews.

Finding No: 2022 004 Equipment Federal Agency: National Science Foundation Assistance Listing Number: 47.070 Pass-through Entities: Georgia Institute of Technology and Indiana University Pass-through Award Numbers: AWD-001289-G1 and 9058 Program: Research and Development Cluster ? Computer and Information Science and Engineering Award Year: October 1, 2017 through September 30, 2020 (a) Criteria or Requirement Per 2 CFR 200.303, the non Federal entity must 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 establishing procedures to ensure equipment is identified and adequately safe-guarded. (b) Condition Found, Including Perspective The University conducts research and development activities utilizing equipment purchased with Federal funds in multiple locations. The University identifies all equipment in its property management records with individually assigned asset numbers. Each individual asset records includes the specific location of the asset, the account number of the Federal award which funded the purchase of the asset, and other required information. An asset tag with the assigned asset number is affixed to each asset in accordance with the underlying University policy. During our physical observation of 50 pieces of equipment purchased with Federal research and development funds, we noted that a tag was not affixed to one item sampled. (c) Possible Cause The University purchased the asset in August 2018 and the last inventory was performed on this equipment was in June 2021. The University overlooked tagging the inventory when purchased. (d) Questioned Cost None identified. (e) Effect Failure to maintain accurate property records results in noncompliance with Federal requirements. (f) Statistical Validity The sample was not intended to be, and was not, a statistically valid sample. (g) Repeat Finding in the Prior Year Not a repeat finding. (h) Recommendation We recommend that the University strengthen controls to ensure property records are maintained in accordance with Federal and University policies including the tagging of individual items. (i) View of Responsible Officials Management concurs with the finding. It is the opinion of Property management that a tag was affixed to the asset at the time of purchase and initial placement. The existence of the tag and the asset was verified in June 2021. The tag has apparently fallen off.

Finding No: 2022 003 Activities Allowed or Unallowed/Allowable Costs Federal Agency: U.S. Department of Transportation Assistance Listing Number: 20.205 Pass-through Entity: Alabama Department of Transportation Pass-through Award Number: #2283(OX-002283-000) Program: Highway Planning and Construction Cluster Award Year: August 4, 2021 through January 13, 2024 (a) Criteria or Requirement Per 2 CFR 200.303, the non Federal entity must 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. (b) Condition Found, Including Perspective During our test work over the Highway Planning and Construction program, we selected a sample of 50 disbursements made during the fiscal year. For one of the 50 disbursements sampled, we noted that the expenditure was approved for payment based on an inaccurate calculation on the underlying vendor invoice. (c) Possible Cause The University has a management review process to review invoices and related documentation before payments are disbursed. The management review control that was in place did not operate effectively to prevent inaccurate amounts from being submitted for reimbursement by the federal agency. (d) Questioned Cost None reportable. (e) Effect Federal funds were expended for inaccurate amounts. (f) Statistical Validity The sample was not intended to be, and was not, a statistically valid sample. (g) Repeat Finding in the Prior Year Not a repeat finding. (h) Recommendation We recommend that the University strengthen controls over the management review process to prevent inaccurate amounts from being charged to the Federal programs. (i) View of Responsible Officials Management concurs with the finding. While we have an adequate process in place, those responsible for steps of the review process need to be reminded of the importance of completing adequate reviews.

Finding No: 2022 001 Activities Allowed or Unallowed/Allowable Costs Federal Agency: U.S. Department of Health and Human Services Assistance Listing Number: 93.498 Program: COVID -19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Award Year: January 1, 2020 through June 30, 2022 (a) Criteria or Requirement Per 2 CFR 200.303, the non Federal entity must 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. (b) Condition Found, Including Perspective During our test work, we selected a sample of 60 non-payroll disbursements made during the fiscal year 2022 reporting period. We noted seven instances in which expenditures were approved for payment based on vendor invoices which included inaccurate calculations. In an eighth instance, a moving expense that was paid during June 2020, but authorized prior to January 1, 2020 was approved for payment. In addition, the University was unable to provide evidence of management review and approval for 14 of the 60 disbursements sampled. These 14 disbursements were for allowable costs under the terms and conditions of the program. (c) Possible Cause The University has a management review process to review invoices and related documentation before payments are disbursed. The University management review control that was in place did not operate effectively to prevent unallowable charges and inaccurate amounts from being submitted for reimbursement by the federal agency. In addition, the University was unable to provide evidence of certain management reviews and approvals due to employee turnover subsequent to the time that the underlying activity occurred. (d) Questioned Cost None reportable. (e) Effect Federal funds were expended for unallowable purposes or for inaccurate amounts and evidence of the effective operation of management review controls was not maintained in accordance with Federal requirements. (f) Statistical Validity The sample was not intended to be, and was not, a statistically valid sample. (g) Repeat Finding in the Prior Year Not a repeat finding. (h) Recommendation We recommend that the University strengthen controls over the management review process to prevent unallowable costs and inaccurate amounts from being charged to Federal programs and to enhance the retention of evidence of management review and approval. (i) View of Responsible Officials Management concurs with the finding. While appropriate controls exist relative to management review and recalculation of expenditures, opportunity exists to retrain staff and further enhance controls.

Finding No: 2022 002 Activities Allowed or Unallowed/Allowable Costs Federal Agency: U.S. Department of Agriculture Assistance Listing Number: 10.652 Program: Research and Development Cluster ? Forestry Research Award Year: July 31, 2017 through July 30, 2022 (a) Criteria or Requirement Per 2 CFR 200.303, the non Federal entity must 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. (b) Condition Found, Including Perspective During our test work over the Research and Development cluster, we selected a sample of 50 disbursements made during the fiscal year. Within our sample, we noted one instance in which certain documented costs were approved and disbursements were made for an unallowable amount due to an inaccurate calculation on the underlying invoice. (c) Possible Cause The University has a management review process to review invoices and related documentation before payments are disbursed. The University management review control that was in place did not operate effectively to prevent unallowable charges from being submitted for reimbursement by the Federal agency. (d) Questioned Cost None reportable. (e) Effect Federal funds were expended for inaccurate amounts. (f) Statistical Validity The sample was not intended to be, and was not, a statistically valid sample. (g) Repeat Finding in the Prior Year Not a repeat finding. (h) Recommendation We recommend that the University strengthen controls over the management review process to prevent inaccurate amounts from being charged to Federal programs. (i) View of Responsible Officials Management concurs with the finding. While we have an adequate process in place, those responsible for steps of the review process need to be reminded of the importance of completing adequate reviews.

Finding No: 2022 004 Equipment Federal Agency: National Science Foundation Assistance Listing Number: 47.070 Pass-through Entities: Georgia Institute of Technology and Indiana University Pass-through Award Numbers: AWD-001289-G1 and 9058 Program: Research and Development Cluster ? Computer and Information Science and Engineering Award Year: October 1, 2017 through September 30, 2020 (a) Criteria or Requirement Per 2 CFR 200.303, the non Federal entity must 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 establishing procedures to ensure equipment is identified and adequately safe-guarded. (b) Condition Found, Including Perspective The University conducts research and development activities utilizing equipment purchased with Federal funds in multiple locations. The University identifies all equipment in its property management records with individually assigned asset numbers. Each individual asset records includes the specific location of the asset, the account number of the Federal award which funded the purchase of the asset, and other required information. An asset tag with the assigned asset number is affixed to each asset in accordance with the underlying University policy. During our physical observation of 50 pieces of equipment purchased with Federal research and development funds, we noted that a tag was not affixed to one item sampled. (c) Possible Cause The University purchased the asset in August 2018 and the last inventory was performed on this equipment was in June 2021. The University overlooked tagging the inventory when purchased. (d) Questioned Cost None identified. (e) Effect Failure to maintain accurate property records results in noncompliance with Federal requirements. (f) Statistical Validity The sample was not intended to be, and was not, a statistically valid sample. (g) Repeat Finding in the Prior Year Not a repeat finding. (h) Recommendation We recommend that the University strengthen controls to ensure property records are maintained in accordance with Federal and University policies including the tagging of individual items. (i) View of Responsible Officials Management concurs with the finding. It is the opinion of Property management that a tag was affixed to the asset at the time of purchase and initial placement. The existence of the tag and the asset was verified in June 2021. The tag has apparently fallen off.

Finding No: 2022 003 Activities Allowed or Unallowed/Allowable Costs Federal Agency: U.S. Department of Transportation Assistance Listing Number: 20.205 Pass-through Entity: Alabama Department of Transportation Pass-through Award Number: #2283(OX-002283-000) Program: Highway Planning and Construction Cluster Award Year: August 4, 2021 through January 13, 2024 (a) Criteria or Requirement Per 2 CFR 200.303, the non Federal entity must 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. (b) Condition Found, Including Perspective During our test work over the Highway Planning and Construction program, we selected a sample of 50 disbursements made during the fiscal year. For one of the 50 disbursements sampled, we noted that the expenditure was approved for payment based on an inaccurate calculation on the underlying vendor invoice. (c) Possible Cause The University has a management review process to review invoices and related documentation before payments are disbursed. The management review control that was in place did not operate effectively to prevent inaccurate amounts from being submitted for reimbursement by the federal agency. (d) Questioned Cost None reportable. (e) Effect Federal funds were expended for inaccurate amounts. (f) Statistical Validity The sample was not intended to be, and was not, a statistically valid sample. (g) Repeat Finding in the Prior Year Not a repeat finding. (h) Recommendation We recommend that the University strengthen controls over the management review process to prevent inaccurate amounts from being charged to the Federal programs. (i) View of Responsible Officials Management concurs with the finding. While we have an adequate process in place, those responsible for steps of the review process need to be reminded of the importance of completing adequate reviews.

Finding No: 2022 001 Activities Allowed or Unallowed/Allowable Costs Federal Agency: U.S. Department of Health and Human Services Assistance Listing Number: 93.498 Program: COVID -19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Award Year: January 1, 2020 through June 30, 2022 (a) Criteria or Requirement Per 2 CFR 200.303, the non Federal entity must 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. (b) Condition Found, Including Perspective During our test work, we selected a sample of 60 non-payroll disbursements made during the fiscal year 2022 reporting period. We noted seven instances in which expenditures were approved for payment based on vendor invoices which included inaccurate calculations. In an eighth instance, a moving expense that was paid during June 2020, but authorized prior to January 1, 2020 was approved for payment. In addition, the University was unable to provide evidence of management review and approval for 14 of the 60 disbursements sampled. These 14 disbursements were for allowable costs under the terms and conditions of the program. (c) Possible Cause The University has a management review process to review invoices and related documentation before payments are disbursed. The University management review control that was in place did not operate effectively to prevent unallowable charges and inaccurate amounts from being submitted for reimbursement by the federal agency. In addition, the University was unable to provide evidence of certain management reviews and approvals due to employee turnover subsequent to the time that the underlying activity occurred. (d) Questioned Cost None reportable. (e) Effect Federal funds were expended for unallowable purposes or for inaccurate amounts and evidence of the effective operation of management review controls was not maintained in accordance with Federal requirements. (f) Statistical Validity The sample was not intended to be, and was not, a statistically valid sample. (g) Repeat Finding in the Prior Year Not a repeat finding. (h) Recommendation We recommend that the University strengthen controls over the management review process to prevent unallowable costs and inaccurate amounts from being charged to Federal programs and to enhance the retention of evidence of management review and approval. (i) View of Responsible Officials Management concurs with the finding. While appropriate controls exist relative to management review and recalculation of expenditures, opportunity exists to retrain staff and further enhance controls.