Finding 2022-008 ? Allowable Costs/Cost PrinciplesIdentification of the federal program U.S. Department of DefenseU.S. Department of Health and Human ServicesResearch and Development ClusterAssistance Listing Nos.12.420, 93.103, 93.121, 93.279, 93.286, 93.310, 93.350, 93.361, 93,394, 93.396, 93.650, 93.837, 93.838, 93.847, 93.853, 93.855, 93.865, and 93.866See Schedule of Findings and Questioned Costs for chart/tableCriteria or specific requirement (including statutory, regulatory, or other citation) 2 CFR 200.303(a) requires that the non-Federal entity must ?(a) 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. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).?2 CFR Part 200 Section 200.430 (i) states ?Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) be incorporated into the official records of the non-Federal entity; (iii) reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity?s written policy; (v) comply with the established accounting policies and practices of the non-Federal entity.?Condition St. Joseph?s Hospital and Medical Center used budgeted costs to determine the amount of expenses allocated to the grant and failed to reconcile these amounts to actual payroll costs at year-end. Additionally, certain payroll expenditures were not reviewed and approved.Cause Management did not review payroll expenditures to support allowable costs/cost principles nor did it reconcile budgeted costs to actual costs incurred for certain payroll expenses.Effect or potential effect Unallowable and inaccurate payroll expenditures could be charged to the federal program.Questioned costs None.Context We issued a material weakness related to internal controls in the prior year. Based upon the implementation date for the corrective action provided by management, the finding related to this internal control had not been remediated for the full period under audit. As such, we did not test the operating effectiveness of this control and are issuing a material weakness consistent with the prior year finding.Payroll expenditures of $4.1 million represent 33% of St. Joseph?s Hospital and Medical Center?s total research and development expenditures of $12.6 million, which represent 16% of total research and development cluster expenditures of $77.5 million.Identification as a repeat finding, if applicable This is a repeat finding for St. Joseph Hospital and Medical Center ? Finding 2021-009.Recommendation We recommend management implement a process to record time charged to federal grants in accordance with 2 CFR 200.430 and implement effective internal controls to review and approve payroll expenditures charged to the grant.Views of responsibleofficials Management agrees with the finding and implemented corrective action in September 2022.
Finding 2022-009 ? Allowable Costs/Cost PrinciplesIdentification of the federal program U.S. Department of DefenseU.S. Department of Health and Human ServicesResearch and Development ClusterAssistance Listing Nos.12.420, 93.103, 93.121, 93.279, 93.286, 93.310, 93.350, 93.361, 93,394, 93.396, 93.650, 93.837, 93.838, 93.847, 93.853, 93.855, 93.865, and 93.866St. Joseph?s Hospital and Medical Center ? All Research and Development Cluster awards listed in Finding 2022-008 above.Criteria or specific requirement (including statutory, regulatory, or other citation) 2 CFR 200.303(a) requires that a non-federal entity must ?(a) 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. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States and the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).?Condition At St. Joseph?s Hospital and Medical center, internal controls over allowability criteria with regard to indirect expenditures were not performed throughout the entire period.Cause Management did not have a process in place for the entire fiscal year to evaluate if indirect costs charged to the grant exceeded the amount allowed under the grant agreement.Effect or potential effect Unallowable and inaccurate indirect expenditures could be charged to the federal program.Questioned costs None.Context We issued a significant deficiency related to internal controls in the prior year. Based upon the implementation date for the corrective action provided by management, the finding related to this internal control had not been remediated for the full period under audit. As such, we did not test the operating effectiveness of this control and are issuing a significant deficiency consistent with the prior year finding.Starting in January 2022, management began reconciling the costs for all grants and made adjusting entries to correct the amount of indirect costs previously charged to the award that were in excess of amounts allowed.The total indirect expenses make up $2.7 million or 22% of the $12.6 million research and development expenditures for St. Joseph?s Hospital and Medical Center, which represent 16% of the total research and development cluster expenditures of $77.5 million.Identification as a repeat finding, if applicable This is a repeat finding for St. Joseph Hospital and Medical Center ? Finding 2021-010.Recommendation We recommend management implement and retain evidence of internal controls over indirect expenses charged to the grant to ensure that the rates used are in accordance with the federally negotiated rate or grant agreement and the total expenditures do not exceed the allowable limit.Views of responsibleofficials Management agrees with the finding and implemented corrective action in January 2022.
Finding 2022-010 ? Allowable Costs/Cost Principles (Salary Cap)Identification of the federal program U.S. Department of DefenseU.S. Department of Health and Human ServicesResearch and Development ClusterAssistance Listing Nos.12.420, 93.103, 93.121, 93.279, 93.286, 93.310, 93.350, 93.361, 93,394, 93.396, 93.650, 93.837, 93.838, 93.847, 93.853, 93.855, 93.865, and 93.866St. Joseph?s Hospital and Medical Center ? All Research and Development Cluster awards listed in Finding 2022-008 above.Criteria or specific requirement (including statutory, regulatory, orother citation) 2 CFR 200.303(a) requires that the non-Federal entity must ?(a) 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. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).?Condition St. Joseph?s Hospital and Medical Center did not retain evidence of review of the NIH salary cap requirement.Cause Management did not retain evidence of review and approval of NIH salary cap limited employees to support allowable costs/cost principles.Effect or potential effect Unallowable and inaccurate payroll expenditures surpassing the NIH salary cap could be charged to the federal program.Questioned costs None.Context We issued a material weakness related to internal controls in the prior year. Based upon the implementation date for the corrective action provided by management, the finding related to this internal control had not been remediated for the full period under audit. As such, we did not test the operating effectiveness of this control and are issuing a material weakness consistent with the prior year finding.Payroll expenditures of $4.1 million represent 33% of St. Joseph?s Hospital and Medical Center?s total research and development expenditures of $12.6 million, which represent 16% of total research and development cluster expenditures of $77.5 million.Identification as a repeat finding, if applicable This is a repeat finding for St. Joseph Hospital and Medical Center ? Finding 2021-011.Recommendation St. Joseph?s Hospital and Medical Center should retain evidence of its review to ensure the NIH salary cap is not exceeded.Views of responsibleofficials Management agrees with the finding and implemented corrective action in September 2022.
Finding 2022-011 ? Special Tests and Provisions ? Key PersonnelIdentification of the federal program U.S. Department of DefenseU.S. Department of Health and Human ServicesResearch and Development ClusterAssistance Listing Nos.12.420, 93.279, 93.103, 93.121, 93.279, 93.286, 93.310, 93.350, 93.361, 93,394, 93.396, 93.650, 93.830, 93.838, 93.847, 93.853, 93.856, 93.865, 93.866, 93.880, and 98.837St. Joseph?s Hospital and Medical Center ? All Research and Development Cluster awards listed in Finding 2022-008 above.Criteria or specific requirement (including statutory, regulatory, or other citation) 2 CFR 200.303(a) requires that the non-Federal entity must ?(a) 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. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).?Condition St. Joseph?s Hospital and Medical Center?s internal controls over key personnel were not designed and operating effectively since level of effort certifications were not completed and signed timely by key personnel on grants.Cause St. Joseph?s Hospital and Medical Center did not complete certifications and sign level of effort certifications during the year or shortly thereafter.Effect or potential effect Prior approvals for change in key personnel specified in the application or the federal award; and the disengagement of key personnel from the project for more than three months, or a 25% reduction in time devoted to the project by the approved project director or principal investigator may not be adequately reported to the federal awarding agencies.Questioned costs None.Context We issued a material weakness related to internal controls in the prior year. Based upon the implementation date for the corrective action provided by management, the finding related to this internal control had not been remediated for the full period under audit. As such, we did not test the operating effectiveness of this control and are issuing a material weakness consistent with the prior year finding.Although, St. Joseph?s Hospital and Medical Center did have completed and signed level-of-effort certifications for 17 key personnel selected for compliance testing, we noted the certifications were not prepared and signed during the year ended June 30, 2022 or prior to 6 months after year-end.St. Joseph?s Hospital and Medical Center?s total research and development expenditures of $12.6 million represent 16% of total research and development cluster expenditures of $77.5 million.Identification as a repeat finding, if applicable This is a repeat finding for St. Joseph Hospital and Medical Center ? Finding 2021-012.Recommendation St. Joseph?s Hospital and Medical Center should design internal controls over key personnel to ensure that certifications of level of effort by key personnel are completed and signed in a timely manner. Monitoring of the level of effort spent by key personnel should be performed throughout the year to ensure that the minimum requirements are being met.Views of responsible officials Management agrees with the finding and implemented corrective action in September 2022.
Finding 2022-008 ? Allowable Costs/Cost PrinciplesIdentification of the federal program U.S. Department of DefenseU.S. Department of Health and Human ServicesResearch and Development ClusterAssistance Listing Nos.12.420, 93.103, 93.121, 93.279, 93.286, 93.310, 93.350, 93.361, 93,394, 93.396, 93.650, 93.837, 93.838, 93.847, 93.853, 93.855, 93.865, and 93.866See Schedule of Findings and Questioned Costs for chart/tableCriteria or specific requirement (including statutory, regulatory, or other citation) 2 CFR 200.303(a) requires that the non-Federal entity must ?(a) 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. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).?2 CFR Part 200 Section 200.430 (i) states ?Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) be incorporated into the official records of the non-Federal entity; (iii) reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity?s written policy; (v) comply with the established accounting policies and practices of the non-Federal entity.?Condition St. Joseph?s Hospital and Medical Center used budgeted costs to determine the amount of expenses allocated to the grant and failed to reconcile these amounts to actual payroll costs at year-end. Additionally, certain payroll expenditures were not reviewed and approved.Cause Management did not review payroll expenditures to support allowable costs/cost principles nor did it reconcile budgeted costs to actual costs incurred for certain payroll expenses.Effect or potential effect Unallowable and inaccurate payroll expenditures could be charged to the federal program.Questioned costs None.Context We issued a material weakness related to internal controls in the prior year. Based upon the implementation date for the corrective action provided by management, the finding related to this internal control had not been remediated for the full period under audit. As such, we did not test the operating effectiveness of this control and are issuing a material weakness consistent with the prior year finding.Payroll expenditures of $4.1 million represent 33% of St. Joseph?s Hospital and Medical Center?s total research and development expenditures of $12.6 million, which represent 16% of total research and development cluster expenditures of $77.5 million.Identification as a repeat finding, if applicable This is a repeat finding for St. Joseph Hospital and Medical Center ? Finding 2021-009.Recommendation We recommend management implement a process to record time charged to federal grants in accordance with 2 CFR 200.430 and implement effective internal controls to review and approve payroll expenditures charged to the grant.Views of responsibleofficials Management agrees with the finding and implemented corrective action in September 2022.
Finding 2022-009 ? Allowable Costs/Cost PrinciplesIdentification of the federal program U.S. Department of DefenseU.S. Department of Health and Human ServicesResearch and Development ClusterAssistance Listing Nos.12.420, 93.103, 93.121, 93.279, 93.286, 93.310, 93.350, 93.361, 93,394, 93.396, 93.650, 93.837, 93.838, 93.847, 93.853, 93.855, 93.865, and 93.866St. Joseph?s Hospital and Medical Center ? All Research and Development Cluster awards listed in Finding 2022-008 above.Criteria or specific requirement (including statutory, regulatory, or other citation) 2 CFR 200.303(a) requires that a non-federal entity must ?(a) 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. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States and the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).?Condition At St. Joseph?s Hospital and Medical center, internal controls over allowability criteria with regard to indirect expenditures were not performed throughout the entire period.Cause Management did not have a process in place for the entire fiscal year to evaluate if indirect costs charged to the grant exceeded the amount allowed under the grant agreement.Effect or potential effect Unallowable and inaccurate indirect expenditures could be charged to the federal program.Questioned costs None.Context We issued a significant deficiency related to internal controls in the prior year. Based upon the implementation date for the corrective action provided by management, the finding related to this internal control had not been remediated for the full period under audit. As such, we did not test the operating effectiveness of this control and are issuing a significant deficiency consistent with the prior year finding.Starting in January 2022, management began reconciling the costs for all grants and made adjusting entries to correct the amount of indirect costs previously charged to the award that were in excess of amounts allowed.The total indirect expenses make up $2.7 million or 22% of the $12.6 million research and development expenditures for St. Joseph?s Hospital and Medical Center, which represent 16% of the total research and development cluster expenditures of $77.5 million.Identification as a repeat finding, if applicable This is a repeat finding for St. Joseph Hospital and Medical Center ? Finding 2021-010.Recommendation We recommend management implement and retain evidence of internal controls over indirect expenses charged to the grant to ensure that the rates used are in accordance with the federally negotiated rate or grant agreement and the total expenditures do not exceed the allowable limit.Views of responsibleofficials Management agrees with the finding and implemented corrective action in January 2022.
Finding 2022-010 ? Allowable Costs/Cost Principles (Salary Cap)Identification of the federal program U.S. Department of DefenseU.S. Department of Health and Human ServicesResearch and Development ClusterAssistance Listing Nos.12.420, 93.103, 93.121, 93.279, 93.286, 93.310, 93.350, 93.361, 93,394, 93.396, 93.650, 93.837, 93.838, 93.847, 93.853, 93.855, 93.865, and 93.866St. Joseph?s Hospital and Medical Center ? All Research and Development Cluster awards listed in Finding 2022-008 above.Criteria or specific requirement (including statutory, regulatory, orother citation) 2 CFR 200.303(a) requires that the non-Federal entity must ?(a) 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. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).?Condition St. Joseph?s Hospital and Medical Center did not retain evidence of review of the NIH salary cap requirement.Cause Management did not retain evidence of review and approval of NIH salary cap limited employees to support allowable costs/cost principles.Effect or potential effect Unallowable and inaccurate payroll expenditures surpassing the NIH salary cap could be charged to the federal program.Questioned costs None.Context We issued a material weakness related to internal controls in the prior year. Based upon the implementation date for the corrective action provided by management, the finding related to this internal control had not been remediated for the full period under audit. As such, we did not test the operating effectiveness of this control and are issuing a material weakness consistent with the prior year finding.Payroll expenditures of $4.1 million represent 33% of St. Joseph?s Hospital and Medical Center?s total research and development expenditures of $12.6 million, which represent 16% of total research and development cluster expenditures of $77.5 million.Identification as a repeat finding, if applicable This is a repeat finding for St. Joseph Hospital and Medical Center ? Finding 2021-011.Recommendation St. Joseph?s Hospital and Medical Center should retain evidence of its review to ensure the NIH salary cap is not exceeded.Views of responsibleofficials Management agrees with the finding and implemented corrective action in September 2022.
Finding 2022-011 ? Special Tests and Provisions ? Key PersonnelIdentification of the federal program U.S. Department of DefenseU.S. Department of Health and Human ServicesResearch and Development ClusterAssistance Listing Nos.12.420, 93.279, 93.103, 93.121, 93.279, 93.286, 93.310, 93.350, 93.361, 93,394, 93.396, 93.650, 93.830, 93.838, 93.847, 93.853, 93.856, 93.865, 93.866, 93.880, and 98.837St. Joseph?s Hospital and Medical Center ? All Research and Development Cluster awards listed in Finding 2022-008 above.Criteria or specific requirement (including statutory, regulatory, or other citation) 2 CFR 200.303(a) requires that the non-Federal entity must ?(a) 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. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).?Condition St. Joseph?s Hospital and Medical Center?s internal controls over key personnel were not designed and operating effectively since level of effort certifications were not completed and signed timely by key personnel on grants.Cause St. Joseph?s Hospital and Medical Center did not complete certifications and sign level of effort certifications during the year or shortly thereafter.Effect or potential effect Prior approvals for change in key personnel specified in the application or the federal award; and the disengagement of key personnel from the project for more than three months, or a 25% reduction in time devoted to the project by the approved project director or principal investigator may not be adequately reported to the federal awarding agencies.Questioned costs None.Context We issued a material weakness related to internal controls in the prior year. Based upon the implementation date for the corrective action provided by management, the finding related to this internal control had not been remediated for the full period under audit. As such, we did not test the operating effectiveness of this control and are issuing a material weakness consistent with the prior year finding.Although, St. Joseph?s Hospital and Medical Center did have completed and signed level-of-effort certifications for 17 key personnel selected for compliance testing, we noted the certifications were not prepared and signed during the year ended June 30, 2022 or prior to 6 months after year-end.St. Joseph?s Hospital and Medical Center?s total research and development expenditures of $12.6 million represent 16% of total research and development cluster expenditures of $77.5 million.Identification as a repeat finding, if applicable This is a repeat finding for St. Joseph Hospital and Medical Center ? Finding 2021-012.Recommendation St. Joseph?s Hospital and Medical Center should design internal controls over key personnel to ensure that certifications of level of effort by key personnel are completed and signed in a timely manner. Monitoring of the level of effort spent by key personnel should be performed throughout the year to ensure that the minimum requirements are being met.Views of responsible officials Management agrees with the finding and implemented corrective action in September 2022.
Finding 2022-008 ? Allowable Costs/Cost PrinciplesIdentification of the federal program U.S. Department of DefenseU.S. Department of Health and Human ServicesResearch and Development ClusterAssistance Listing Nos.12.420, 93.103, 93.121, 93.279, 93.286, 93.310, 93.350, 93.361, 93,394, 93.396, 93.650, 93.837, 93.838, 93.847, 93.853, 93.855, 93.865, and 93.866See Schedule of Findings and Questioned Costs for chart/tableCriteria or specific requirement (including statutory, regulatory, or other citation) 2 CFR 200.303(a) requires that the non-Federal entity must ?(a) 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. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).?2 CFR Part 200 Section 200.430 (i) states ?Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) be incorporated into the official records of the non-Federal entity; (iii) reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity?s written policy; (v) comply with the established accounting policies and practices of the non-Federal entity.?Condition St. Joseph?s Hospital and Medical Center used budgeted costs to determine the amount of expenses allocated to the grant and failed to reconcile these amounts to actual payroll costs at year-end. Additionally, certain payroll expenditures were not reviewed and approved.Cause Management did not review payroll expenditures to support allowable costs/cost principles nor did it reconcile budgeted costs to actual costs incurred for certain payroll expenses.Effect or potential effect Unallowable and inaccurate payroll expenditures could be charged to the federal program.Questioned costs None.Context We issued a material weakness related to internal controls in the prior year. Based upon the implementation date for the corrective action provided by management, the finding related to this internal control had not been remediated for the full period under audit. As such, we did not test the operating effectiveness of this control and are issuing a material weakness consistent with the prior year finding.Payroll expenditures of $4.1 million represent 33% of St. Joseph?s Hospital and Medical Center?s total research and development expenditures of $12.6 million, which represent 16% of total research and development cluster expenditures of $77.5 million.Identification as a repeat finding, if applicable This is a repeat finding for St. Joseph Hospital and Medical Center ? Finding 2021-009.Recommendation We recommend management implement a process to record time charged to federal grants in accordance with 2 CFR 200.430 and implement effective internal controls to review and approve payroll expenditures charged to the grant.Views of responsibleofficials Management agrees with the finding and implemented corrective action in September 2022.
Finding 2022-009 ? Allowable Costs/Cost PrinciplesIdentification of the federal program U.S. Department of DefenseU.S. Department of Health and Human ServicesResearch and Development ClusterAssistance Listing Nos.12.420, 93.103, 93.121, 93.279, 93.286, 93.310, 93.350, 93.361, 93,394, 93.396, 93.650, 93.837, 93.838, 93.847, 93.853, 93.855, 93.865, and 93.866St. Joseph?s Hospital and Medical Center ? All Research and Development Cluster awards listed in Finding 2022-008 above.Criteria or specific requirement (including statutory, regulatory, or other citation) 2 CFR 200.303(a) requires that a non-federal entity must ?(a) 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. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States and the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).?Condition At St. Joseph?s Hospital and Medical center, internal controls over allowability criteria with regard to indirect expenditures were not performed throughout the entire period.Cause Management did not have a process in place for the entire fiscal year to evaluate if indirect costs charged to the grant exceeded the amount allowed under the grant agreement.Effect or potential effect Unallowable and inaccurate indirect expenditures could be charged to the federal program.Questioned costs None.Context We issued a significant deficiency related to internal controls in the prior year. Based upon the implementation date for the corrective action provided by management, the finding related to this internal control had not been remediated for the full period under audit. As such, we did not test the operating effectiveness of this control and are issuing a significant deficiency consistent with the prior year finding.Starting in January 2022, management began reconciling the costs for all grants and made adjusting entries to correct the amount of indirect costs previously charged to the award that were in excess of amounts allowed.The total indirect expenses make up $2.7 million or 22% of the $12.6 million research and development expenditures for St. Joseph?s Hospital and Medical Center, which represent 16% of the total research and development cluster expenditures of $77.5 million.Identification as a repeat finding, if applicable This is a repeat finding for St. Joseph Hospital and Medical Center ? Finding 2021-010.Recommendation We recommend management implement and retain evidence of internal controls over indirect expenses charged to the grant to ensure that the rates used are in accordance with the federally negotiated rate or grant agreement and the total expenditures do not exceed the allowable limit.Views of responsibleofficials Management agrees with the finding and implemented corrective action in January 2022.
Finding 2022-010 ? Allowable Costs/Cost Principles (Salary Cap)Identification of the federal program U.S. Department of DefenseU.S. Department of Health and Human ServicesResearch and Development ClusterAssistance Listing Nos.12.420, 93.103, 93.121, 93.279, 93.286, 93.310, 93.350, 93.361, 93,394, 93.396, 93.650, 93.837, 93.838, 93.847, 93.853, 93.855, 93.865, and 93.866St. Joseph?s Hospital and Medical Center ? All Research and Development Cluster awards listed in Finding 2022-008 above.Criteria or specific requirement (including statutory, regulatory, orother citation) 2 CFR 200.303(a) requires that the non-Federal entity must ?(a) 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. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).?Condition St. Joseph?s Hospital and Medical Center did not retain evidence of review of the NIH salary cap requirement.Cause Management did not retain evidence of review and approval of NIH salary cap limited employees to support allowable costs/cost principles.Effect or potential effect Unallowable and inaccurate payroll expenditures surpassing the NIH salary cap could be charged to the federal program.Questioned costs None.Context We issued a material weakness related to internal controls in the prior year. Based upon the implementation date for the corrective action provided by management, the finding related to this internal control had not been remediated for the full period under audit. As such, we did not test the operating effectiveness of this control and are issuing a material weakness consistent with the prior year finding.Payroll expenditures of $4.1 million represent 33% of St. Joseph?s Hospital and Medical Center?s total research and development expenditures of $12.6 million, which represent 16% of total research and development cluster expenditures of $77.5 million.Identification as a repeat finding, if applicable This is a repeat finding for St. Joseph Hospital and Medical Center ? Finding 2021-011.Recommendation St. Joseph?s Hospital and Medical Center should retain evidence of its review to ensure the NIH salary cap is not exceeded.Views of responsibleofficials Management agrees with the finding and implemented corrective action in September 2022.
Finding 2022-011 ? Special Tests and Provisions ? Key PersonnelIdentification of the federal program U.S. Department of DefenseU.S. Department of Health and Human ServicesResearch and Development ClusterAssistance Listing Nos.12.420, 93.279, 93.103, 93.121, 93.279, 93.286, 93.310, 93.350, 93.361, 93,394, 93.396, 93.650, 93.830, 93.838, 93.847, 93.853, 93.856, 93.865, 93.866, 93.880, and 98.837St. Joseph?s Hospital and Medical Center ? All Research and Development Cluster awards listed in Finding 2022-008 above.Criteria or specific requirement (including statutory, regulatory, or other citation) 2 CFR 200.303(a) requires that the non-Federal entity must ?(a) 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. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).?Condition St. Joseph?s Hospital and Medical Center?s internal controls over key personnel were not designed and operating effectively since level of effort certifications were not completed and signed timely by key personnel on grants.Cause St. Joseph?s Hospital and Medical Center did not complete certifications and sign level of effort certifications during the year or shortly thereafter.Effect or potential effect Prior approvals for change in key personnel specified in the application or the federal award; and the disengagement of key personnel from the project for more than three months, or a 25% reduction in time devoted to the project by the approved project director or principal investigator may not be adequately reported to the federal awarding agencies.Questioned costs None.Context We issued a material weakness related to internal controls in the prior year. Based upon the implementation date for the corrective action provided by management, the finding related to this internal control had not been remediated for the full period under audit. As such, we did not test the operating effectiveness of this control and are issuing a material weakness consistent with the prior year finding.Although, St. Joseph?s Hospital and Medical Center did have completed and signed level-of-effort certifications for 17 key personnel selected for compliance testing, we noted the certifications were not prepared and signed during the year ended June 30, 2022 or prior to 6 months after year-end.St. Joseph?s Hospital and Medical Center?s total research and development expenditures of $12.6 million represent 16% of total research and development cluster expenditures of $77.5 million.Identification as a repeat finding, if applicable This is a repeat finding for St. Joseph Hospital and Medical Center ? Finding 2021-012.Recommendation St. Joseph?s Hospital and Medical Center should design internal controls over key personnel to ensure that certifications of level of effort by key personnel are completed and signed in a timely manner. Monitoring of the level of effort spent by key personnel should be performed throughout the year to ensure that the minimum requirements are being met.Views of responsible officials Management agrees with the finding and implemented corrective action in September 2022.
Finding 2022-008 ? Allowable Costs/Cost PrinciplesIdentification of the federal program U.S. Department of DefenseU.S. Department of Health and Human ServicesResearch and Development ClusterAssistance Listing Nos.12.420, 93.103, 93.121, 93.279, 93.286, 93.310, 93.350, 93.361, 93,394, 93.396, 93.650, 93.837, 93.838, 93.847, 93.853, 93.855, 93.865, and 93.866See Schedule of Findings and Questioned Costs for chart/tableCriteria or specific requirement (including statutory, regulatory, or other citation) 2 CFR 200.303(a) requires that the non-Federal entity must ?(a) 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. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).?2 CFR Part 200 Section 200.430 (i) states ?Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) be incorporated into the official records of the non-Federal entity; (iii) reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity?s written policy; (v) comply with the established accounting policies and practices of the non-Federal entity.?Condition St. Joseph?s Hospital and Medical Center used budgeted costs to determine the amount of expenses allocated to the grant and failed to reconcile these amounts to actual payroll costs at year-end. Additionally, certain payroll expenditures were not reviewed and approved.Cause Management did not review payroll expenditures to support allowable costs/cost principles nor did it reconcile budgeted costs to actual costs incurred for certain payroll expenses.Effect or potential effect Unallowable and inaccurate payroll expenditures could be charged to the federal program.Questioned costs None.Context We issued a material weakness related to internal controls in the prior year. Based upon the implementation date for the corrective action provided by management, the finding related to this internal control had not been remediated for the full period under audit. As such, we did not test the operating effectiveness of this control and are issuing a material weakness consistent with the prior year finding.Payroll expenditures of $4.1 million represent 33% of St. Joseph?s Hospital and Medical Center?s total research and development expenditures of $12.6 million, which represent 16% of total research and development cluster expenditures of $77.5 million.Identification as a repeat finding, if applicable This is a repeat finding for St. Joseph Hospital and Medical Center ? Finding 2021-009.Recommendation We recommend management implement a process to record time charged to federal grants in accordance with 2 CFR 200.430 and implement effective internal controls to review and approve payroll expenditures charged to the grant.Views of responsibleofficials Management agrees with the finding and implemented corrective action in September 2022.
Finding 2022-009 ? Allowable Costs/Cost PrinciplesIdentification of the federal program U.S. Department of DefenseU.S. Department of Health and Human ServicesResearch and Development ClusterAssistance Listing Nos.12.420, 93.103, 93.121, 93.279, 93.286, 93.310, 93.350, 93.361, 93,394, 93.396, 93.650, 93.837, 93.838, 93.847, 93.853, 93.855, 93.865, and 93.866St. Joseph?s Hospital and Medical Center ? All Research and Development Cluster awards listed in Finding 2022-008 above.Criteria or specific requirement (including statutory, regulatory, or other citation) 2 CFR 200.303(a) requires that a non-federal entity must ?(a) 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. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States and the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).?Condition At St. Joseph?s Hospital and Medical center, internal controls over allowability criteria with regard to indirect expenditures were not performed throughout the entire period.Cause Management did not have a process in place for the entire fiscal year to evaluate if indirect costs charged to the grant exceeded the amount allowed under the grant agreement.Effect or potential effect Unallowable and inaccurate indirect expenditures could be charged to the federal program.Questioned costs None.Context We issued a significant deficiency related to internal controls in the prior year. Based upon the implementation date for the corrective action provided by management, the finding related to this internal control had not been remediated for the full period under audit. As such, we did not test the operating effectiveness of this control and are issuing a significant deficiency consistent with the prior year finding.Starting in January 2022, management began reconciling the costs for all grants and made adjusting entries to correct the amount of indirect costs previously charged to the award that were in excess of amounts allowed.The total indirect expenses make up $2.7 million or 22% of the $12.6 million research and development expenditures for St. Joseph?s Hospital and Medical Center, which represent 16% of the total research and development cluster expenditures of $77.5 million.Identification as a repeat finding, if applicable This is a repeat finding for St. Joseph Hospital and Medical Center ? Finding 2021-010.Recommendation We recommend management implement and retain evidence of internal controls over indirect expenses charged to the grant to ensure that the rates used are in accordance with the federally negotiated rate or grant agreement and the total expenditures do not exceed the allowable limit.Views of responsibleofficials Management agrees with the finding and implemented corrective action in January 2022.
Finding 2022-010 ? Allowable Costs/Cost Principles (Salary Cap)Identification of the federal program U.S. Department of DefenseU.S. Department of Health and Human ServicesResearch and Development ClusterAssistance Listing Nos.12.420, 93.103, 93.121, 93.279, 93.286, 93.310, 93.350, 93.361, 93,394, 93.396, 93.650, 93.837, 93.838, 93.847, 93.853, 93.855, 93.865, and 93.866St. Joseph?s Hospital and Medical Center ? All Research and Development Cluster awards listed in Finding 2022-008 above.Criteria or specific requirement (including statutory, regulatory, orother citation) 2 CFR 200.303(a) requires that the non-Federal entity must ?(a) 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. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).?Condition St. Joseph?s Hospital and Medical Center did not retain evidence of review of the NIH salary cap requirement.Cause Management did not retain evidence of review and approval of NIH salary cap limited employees to support allowable costs/cost principles.Effect or potential effect Unallowable and inaccurate payroll expenditures surpassing the NIH salary cap could be charged to the federal program.Questioned costs None.Context We issued a material weakness related to internal controls in the prior year. Based upon the implementation date for the corrective action provided by management, the finding related to this internal control had not been remediated for the full period under audit. As such, we did not test the operating effectiveness of this control and are issuing a material weakness consistent with the prior year finding.Payroll expenditures of $4.1 million represent 33% of St. Joseph?s Hospital and Medical Center?s total research and development expenditures of $12.6 million, which represent 16% of total research and development cluster expenditures of $77.5 million.Identification as a repeat finding, if applicable This is a repeat finding for St. Joseph Hospital and Medical Center ? Finding 2021-011.Recommendation St. Joseph?s Hospital and Medical Center should retain evidence of its review to ensure the NIH salary cap is not exceeded.Views of responsibleofficials Management agrees with the finding and implemented corrective action in September 2022.
Finding 2022-011 ? Special Tests and Provisions ? Key PersonnelIdentification of the federal program U.S. Department of DefenseU.S. Department of Health and Human ServicesResearch and Development ClusterAssistance Listing Nos.12.420, 93.279, 93.103, 93.121, 93.279, 93.286, 93.310, 93.350, 93.361, 93,394, 93.396, 93.650, 93.830, 93.838, 93.847, 93.853, 93.856, 93.865, 93.866, 93.880, and 98.837St. Joseph?s Hospital and Medical Center ? All Research and Development Cluster awards listed in Finding 2022-008 above.Criteria or specific requirement (including statutory, regulatory, or other citation) 2 CFR 200.303(a) requires that the non-Federal entity must ?(a) 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. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).?Condition St. Joseph?s Hospital and Medical Center?s internal controls over key personnel were not designed and operating effectively since level of effort certifications were not completed and signed timely by key personnel on grants.Cause St. Joseph?s Hospital and Medical Center did not complete certifications and sign level of effort certifications during the year or shortly thereafter.Effect or potential effect Prior approvals for change in key personnel specified in the application or the federal award; and the disengagement of key personnel from the project for more than three months, or a 25% reduction in time devoted to the project by the approved project director or principal investigator may not be adequately reported to the federal awarding agencies.Questioned costs None.Context We issued a material weakness related to internal controls in the prior year. Based upon the implementation date for the corrective action provided by management, the finding related to this internal control had not been remediated for the full period under audit. As such, we did not test the operating effectiveness of this control and are issuing a material weakness consistent with the prior year finding.Although, St. Joseph?s Hospital and Medical Center did have completed and signed level-of-effort certifications for 17 key personnel selected for compliance testing, we noted the certifications were not prepared and signed during the year ended June 30, 2022 or prior to 6 months after year-end.St. Joseph?s Hospital and Medical Center?s total research and development expenditures of $12.6 million represent 16% of total research and development cluster expenditures of $77.5 million.Identification as a repeat finding, if applicable This is a repeat finding for St. Joseph Hospital and Medical Center ? Finding 2021-012.Recommendation St. Joseph?s Hospital and Medical Center should design internal controls over key personnel to ensure that certifications of level of effort by key personnel are completed and signed in a timely manner. Monitoring of the level of effort spent by key personnel should be performed throughout the year to ensure that the minimum requirements are being met.Views of responsible officials Management agrees with the finding and implemented corrective action in September 2022.
Finding 2022-007 ? Allowable Costs/Cost PrinciplesIdentification of the federal program Health Resources and Services AdministrationHIV Emergency Relief Project GrantsAssistance Listing No. 93.914See Schedule of Findings and Questioned Costs for chart/tableSt. Mary?s Medical Center ? San FranciscoVirginia MasonCriteria or specific requirement (including statutory, regulatory, orother citation) 2 CFR 200.303(a) requires that the non-Federal entity must ?(a) 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. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).?2 CFR 200.430 (i) states ?Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) be incorporated into the official records of the non-Federal entity; (iii) reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) encompass both federally assisted and all other activities compensated by theSection III ? Federal Award Findings and Questioned Costs (continued)Finding 2022-007 ? Allowable Costs/Cost Principles (continued)Criteria or specific requirement (including statutory, regulatory, orother citation) (continued) Non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity?s written policy; (v) comply with the established accounting policies and practices of the non-Federal entity.?Condition At St. Mary?s Medical Center ? San Francisco and Virginia Mason, controls over the required allowability criteria with regard to payroll expense were not performed and/or documented throughout the year.Cause St. Mary?s Medical Center ? San Francisco and Virginia Mason did not perform the necessary procedures addressing the requirements of 2 CFR 200.303(a) and 2 CFR 200.430.Effect or potential effect Unallowable and/or inaccurate payroll expenditures could becharged to the federal program.Questioned costs None.Context We issued a material weakness related to internal controls in the prior year. Based upon the implementation date for the corrective action provided by management, the finding related to this internal control had not been remediated for the full period under audit. As such, we did not test the operating effectiveness of this control and are issuing a material weakness consistent with the prior year finding.St. Mary?s Medical Center ? San Francisco expenditures of approximately $0.2 million represent 6% of total HIV Emergency Relief Project Grants expenditures of approximately $3.6 million.Virginia Mason expenditures of approximately $1.2 million represent 35% of total HIV Emergency Relief Project Grants expenditures of approximately $3.6 million.Identification as a repeat finding, if applicable This is a repeat finding for St. Mary?s Medical Center ? San Francisco ? Finding 2020-006 and 2021-008.This is a repeat finding for Virginia Mason ? Finding 2021-008.Recommendation We recommend management execute its processes toproperly approve time charged to federal grants in accordance with 2 CFR 200.430. Additionally, we recommend management execute and retain evidence of its internal controls over the allowability of payroll expenditures.Views of responsibleofficials Management agrees with the finding and implemented corrective action in April 2022.
Finding 2022-006 ? EligibilityIdentification of the federal program Health Resources and Services AdministrationHIV Emergency Relief Project GrantsAssistance Listing No. 93.914See Schedule of Findings and Questioned Costs for chart/tableSt. Mary Medical Center ? Long BeachSt. Mary?s Medical Center ? San FranciscoCriteria or specific requirement (including statutory, regulatory, orother citation) 2 CFR 200.303(a) requires that the non-Federal entity must ?(a) 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. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).?Condition St. Mary Medical Center ? Long Beach and St. Mary?s Medical Center ? San Francisco did not consistently retain evidence of their internal controls over the requirement to review eligibility requirements prior to administering services in accordance with the grant agreements.Cause At St. Mary Medical Center ? Long Beach and St. Mary?s Medical Center ? San Francisco, controls over the required eligibility criteria were not performed and/or documented for each participant.Effect or potential effect St. Mary Medical Center ? Long Beach and St. Mary?s Medical Center ? San Francisco could have provided services to ineligible individuals.Questioned costs None.Context We issued a material weakness related to internal controls in the prior year. Based upon the implementation date for the corrective action provided by management, the finding related to this internal control had not been remediated for the full period under audit. As such, we did not test the operating effectiveness of this control and are issuing a material weakness consistent with the prior year finding.St. Mary Medical Center ? Long Beach expenditures of approximately $1.9 million represent 52% of total HIV Emergency Relief Project Grants expenditures of approximately $3.6 million.St. Mary?s Medical Center ? San Francisco expenditures of approximately $0.2 million represent 6% of total HIV Emergency Relief Project Grants expenditures of approximately $3.6 million.Identification as a repeat finding, if applicable This is a repeat finding for St. Mary?s Medical Center ? Long Beach ? Finding (2021-007).This is a repeat finding for St. Mary?s Medical Center ? San Francisco ? Finding (2021-007 and 2020-005).Recommendation St. Mary Medical Center ? Long Beach and St. Mary?s Medical Center ? San Francisco should perform and retain evidence of their review of patient eligibility as defined by the grant agreement to support the internal control environment.Views of responsibleofficials Management agrees with the finding and implemented corrective action in April 2022.
Finding 2022-007 ? Allowable Costs/Cost PrinciplesIdentification of the federal program Health Resources and Services AdministrationHIV Emergency Relief Project GrantsAssistance Listing No. 93.914See Schedule of Findings and Questioned Costs for chart/tableSt. Mary?s Medical Center ? San FranciscoVirginia MasonCriteria or specific requirement (including statutory, regulatory, orother citation) 2 CFR 200.303(a) requires that the non-Federal entity must ?(a) 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. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).?2 CFR 200.430 (i) states ?Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) be incorporated into the official records of the non-Federal entity; (iii) reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) encompass both federally assisted and all other activities compensated by theSection III ? Federal Award Findings and Questioned Costs (continued)Finding 2022-007 ? Allowable Costs/Cost Principles (continued)Criteria or specific requirement (including statutory, regulatory, orother citation) (continued) Non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity?s written policy; (v) comply with the established accounting policies and practices of the non-Federal entity.?Condition At St. Mary?s Medical Center ? San Francisco and Virginia Mason, controls over the required allowability criteria with regard to payroll expense were not performed and/or documented throughout the year.Cause St. Mary?s Medical Center ? San Francisco and Virginia Mason did not perform the necessary procedures addressing the requirements of 2 CFR 200.303(a) and 2 CFR 200.430.Effect or potential effect Unallowable and/or inaccurate payroll expenditures could becharged to the federal program.Questioned costs None.Context We issued a material weakness related to internal controls in the prior year. Based upon the implementation date for the corrective action provided by management, the finding related to this internal control had not been remediated for the full period under audit. As such, we did not test the operating effectiveness of this control and are issuing a material weakness consistent with the prior year finding.St. Mary?s Medical Center ? San Francisco expenditures of approximately $0.2 million represent 6% of total HIV Emergency Relief Project Grants expenditures of approximately $3.6 million.Virginia Mason expenditures of approximately $1.2 million represent 35% of total HIV Emergency Relief Project Grants expenditures of approximately $3.6 million.Identification as a repeat finding, if applicable This is a repeat finding for St. Mary?s Medical Center ? San Francisco ? Finding 2020-006 and 2021-008.This is a repeat finding for Virginia Mason ? Finding 2021-008.Recommendation We recommend management execute its processes toproperly approve time charged to federal grants in accordance with 2 CFR 200.430. Additionally, we recommend management execute and retain evidence of its internal controls over the allowability of payroll expenditures.Views of responsibleofficials Management agrees with the finding and implemented corrective action in April 2022.
Finding 2022-006 ? EligibilityIdentification of the federal program Health Resources and Services AdministrationHIV Emergency Relief Project GrantsAssistance Listing No. 93.914See Schedule of Findings and Questioned Costs for chart/tableSt. Mary Medical Center ? Long BeachSt. Mary?s Medical Center ? San FranciscoCriteria or specific requirement (including statutory, regulatory, orother citation) 2 CFR 200.303(a) requires that the non-Federal entity must ?(a) 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. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).?Condition St. Mary Medical Center ? Long Beach and St. Mary?s Medical Center ? San Francisco did not consistently retain evidence of their internal controls over the requirement to review eligibility requirements prior to administering services in accordance with the grant agreements.Cause At St. Mary Medical Center ? Long Beach and St. Mary?s Medical Center ? San Francisco, controls over the required eligibility criteria were not performed and/or documented for each participant.Effect or potential effect St. Mary Medical Center ? Long Beach and St. Mary?s Medical Center ? San Francisco could have provided services to ineligible individuals.Questioned costs None.Context We issued a material weakness related to internal controls in the prior year. Based upon the implementation date for the corrective action provided by management, the finding related to this internal control had not been remediated for the full period under audit. As such, we did not test the operating effectiveness of this control and are issuing a material weakness consistent with the prior year finding.St. Mary Medical Center ? Long Beach expenditures of approximately $1.9 million represent 52% of total HIV Emergency Relief Project Grants expenditures of approximately $3.6 million.St. Mary?s Medical Center ? San Francisco expenditures of approximately $0.2 million represent 6% of total HIV Emergency Relief Project Grants expenditures of approximately $3.6 million.Identification as a repeat finding, if applicable This is a repeat finding for St. Mary?s Medical Center ? Long Beach ? Finding (2021-007).This is a repeat finding for St. Mary?s Medical Center ? San Francisco ? Finding (2021-007 and 2020-005).Recommendation St. Mary Medical Center ? Long Beach and St. Mary?s Medical Center ? San Francisco should perform and retain evidence of their review of patient eligibility as defined by the grant agreement to support the internal control environment.Views of responsibleofficials Management agrees with the finding and implemented corrective action in April 2022.
Finding 2022-006 ? EligibilityIdentification of the federal program Health Resources and Services AdministrationHIV Emergency Relief Project GrantsAssistance Listing No. 93.914See Schedule of Findings and Questioned Costs for chart/tableSt. Mary Medical Center ? Long BeachSt. Mary?s Medical Center ? San FranciscoCriteria or specific requirement (including statutory, regulatory, orother citation) 2 CFR 200.303(a) requires that the non-Federal entity must ?(a) 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. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).?Condition St. Mary Medical Center ? Long Beach and St. Mary?s Medical Center ? San Francisco did not consistently retain evidence of their internal controls over the requirement to review eligibility requirements prior to administering services in accordance with the grant agreements.Cause At St. Mary Medical Center ? Long Beach and St. Mary?s Medical Center ? San Francisco, controls over the required eligibility criteria were not performed and/or documented for each participant.Effect or potential effect St. Mary Medical Center ? Long Beach and St. Mary?s Medical Center ? San Francisco could have provided services to ineligible individuals.Questioned costs None.Context We issued a material weakness related to internal controls in the prior year. Based upon the implementation date for the corrective action provided by management, the finding related to this internal control had not been remediated for the full period under audit. As such, we did not test the operating effectiveness of this control and are issuing a material weakness consistent with the prior year finding.St. Mary Medical Center ? Long Beach expenditures of approximately $1.9 million represent 52% of total HIV Emergency Relief Project Grants expenditures of approximately $3.6 million.St. Mary?s Medical Center ? San Francisco expenditures of approximately $0.2 million represent 6% of total HIV Emergency Relief Project Grants expenditures of approximately $3.6 million.Identification as a repeat finding, if applicable This is a repeat finding for St. Mary?s Medical Center ? Long Beach ? Finding (2021-007).This is a repeat finding for St. Mary?s Medical Center ? San Francisco ? Finding (2021-007 and 2020-005).Recommendation St. Mary Medical Center ? Long Beach and St. Mary?s Medical Center ? San Francisco should perform and retain evidence of their review of patient eligibility as defined by the grant agreement to support the internal control environment.Views of responsibleofficials Management agrees with the finding and implemented corrective action in April 2022.
Finding 2022-006 ? EligibilityIdentification of the federal program Health Resources and Services AdministrationHIV Emergency Relief Project GrantsAssistance Listing No. 93.914See Schedule of Findings and Questioned Costs for chart/tableSt. Mary Medical Center ? Long BeachSt. Mary?s Medical Center ? San FranciscoCriteria or specific requirement (including statutory, regulatory, orother citation) 2 CFR 200.303(a) requires that the non-Federal entity must ?(a) 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. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).?Condition St. Mary Medical Center ? Long Beach and St. Mary?s Medical Center ? San Francisco did not consistently retain evidence of their internal controls over the requirement to review eligibility requirements prior to administering services in accordance with the grant agreements.Cause At St. Mary Medical Center ? Long Beach and St. Mary?s Medical Center ? San Francisco, controls over the required eligibility criteria were not performed and/or documented for each participant.Effect or potential effect St. Mary Medical Center ? Long Beach and St. Mary?s Medical Center ? San Francisco could have provided services to ineligible individuals.Questioned costs None.Context We issued a material weakness related to internal controls in the prior year. Based upon the implementation date for the corrective action provided by management, the finding related to this internal control had not been remediated for the full period under audit. As such, we did not test the operating effectiveness of this control and are issuing a material weakness consistent with the prior year finding.St. Mary Medical Center ? Long Beach expenditures of approximately $1.9 million represent 52% of total HIV Emergency Relief Project Grants expenditures of approximately $3.6 million.St. Mary?s Medical Center ? San Francisco expenditures of approximately $0.2 million represent 6% of total HIV Emergency Relief Project Grants expenditures of approximately $3.6 million.Identification as a repeat finding, if applicable This is a repeat finding for St. Mary?s Medical Center ? Long Beach ? Finding (2021-007).This is a repeat finding for St. Mary?s Medical Center ? San Francisco ? Finding (2021-007 and 2020-005).Recommendation St. Mary Medical Center ? Long Beach and St. Mary?s Medical Center ? San Francisco should perform and retain evidence of their review of patient eligibility as defined by the grant agreement to support the internal control environment.Views of responsibleofficials Management agrees with the finding and implemented corrective action in April 2022.
Finding 2022-006 ? EligibilityIdentification of the federal program Health Resources and Services AdministrationHIV Emergency Relief Project GrantsAssistance Listing No. 93.914See Schedule of Findings and Questioned Costs for chart/tableSt. Mary Medical Center ? Long BeachSt. Mary?s Medical Center ? San FranciscoCriteria or specific requirement (including statutory, regulatory, orother citation) 2 CFR 200.303(a) requires that the non-Federal entity must ?(a) 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. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).?Condition St. Mary Medical Center ? Long Beach and St. Mary?s Medical Center ? San Francisco did not consistently retain evidence of their internal controls over the requirement to review eligibility requirements prior to administering services in accordance with the grant agreements.Cause At St. Mary Medical Center ? Long Beach and St. Mary?s Medical Center ? San Francisco, controls over the required eligibility criteria were not performed and/or documented for each participant.Effect or potential effect St. Mary Medical Center ? Long Beach and St. Mary?s Medical Center ? San Francisco could have provided services to ineligible individuals.Questioned costs None.Context We issued a material weakness related to internal controls in the prior year. Based upon the implementation date for the corrective action provided by management, the finding related to this internal control had not been remediated for the full period under audit. As such, we did not test the operating effectiveness of this control and are issuing a material weakness consistent with the prior year finding.St. Mary Medical Center ? Long Beach expenditures of approximately $1.9 million represent 52% of total HIV Emergency Relief Project Grants expenditures of approximately $3.6 million.St. Mary?s Medical Center ? San Francisco expenditures of approximately $0.2 million represent 6% of total HIV Emergency Relief Project Grants expenditures of approximately $3.6 million.Identification as a repeat finding, if applicable This is a repeat finding for St. Mary?s Medical Center ? Long Beach ? Finding (2021-007).This is a repeat finding for St. Mary?s Medical Center ? San Francisco ? Finding (2021-007 and 2020-005).Recommendation St. Mary Medical Center ? Long Beach and St. Mary?s Medical Center ? San Francisco should perform and retain evidence of their review of patient eligibility as defined by the grant agreement to support the internal control environment.Views of responsibleofficials Management agrees with the finding and implemented corrective action in April 2022.
Finding 2022-006 ? EligibilityIdentification of the federal program Health Resources and Services AdministrationHIV Emergency Relief Project GrantsAssistance Listing No. 93.914See Schedule of Findings and Questioned Costs for chart/tableSt. Mary Medical Center ? Long BeachSt. Mary?s Medical Center ? San FranciscoCriteria or specific requirement (including statutory, regulatory, orother citation) 2 CFR 200.303(a) requires that the non-Federal entity must ?(a) 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. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).?Condition St. Mary Medical Center ? Long Beach and St. Mary?s Medical Center ? San Francisco did not consistently retain evidence of their internal controls over the requirement to review eligibility requirements prior to administering services in accordance with the grant agreements.Cause At St. Mary Medical Center ? Long Beach and St. Mary?s Medical Center ? San Francisco, controls over the required eligibility criteria were not performed and/or documented for each participant.Effect or potential effect St. Mary Medical Center ? Long Beach and St. Mary?s Medical Center ? San Francisco could have provided services to ineligible individuals.Questioned costs None.Context We issued a material weakness related to internal controls in the prior year. Based upon the implementation date for the corrective action provided by management, the finding related to this internal control had not been remediated for the full period under audit. As such, we did not test the operating effectiveness of this control and are issuing a material weakness consistent with the prior year finding.St. Mary Medical Center ? Long Beach expenditures of approximately $1.9 million represent 52% of total HIV Emergency Relief Project Grants expenditures of approximately $3.6 million.St. Mary?s Medical Center ? San Francisco expenditures of approximately $0.2 million represent 6% of total HIV Emergency Relief Project Grants expenditures of approximately $3.6 million.Identification as a repeat finding, if applicable This is a repeat finding for St. Mary?s Medical Center ? Long Beach ? Finding (2021-007).This is a repeat finding for St. Mary?s Medical Center ? San Francisco ? Finding (2021-007 and 2020-005).Recommendation St. Mary Medical Center ? Long Beach and St. Mary?s Medical Center ? San Francisco should perform and retain evidence of their review of patient eligibility as defined by the grant agreement to support the internal control environment.Views of responsibleofficials Management agrees with the finding and implemented corrective action in April 2022.
Finding 2022-006 ? EligibilityIdentification of the federal program Health Resources and Services AdministrationHIV Emergency Relief Project GrantsAssistance Listing No. 93.914See Schedule of Findings and Questioned Costs for chart/tableSt. Mary Medical Center ? Long BeachSt. Mary?s Medical Center ? San FranciscoCriteria or specific requirement (including statutory, regulatory, orother citation) 2 CFR 200.303(a) requires that the non-Federal entity must ?(a) 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. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).?Condition St. Mary Medical Center ? Long Beach and St. Mary?s Medical Center ? San Francisco did not consistently retain evidence of their internal controls over the requirement to review eligibility requirements prior to administering services in accordance with the grant agreements.Cause At St. Mary Medical Center ? Long Beach and St. Mary?s Medical Center ? San Francisco, controls over the required eligibility criteria were not performed and/or documented for each participant.Effect or potential effect St. Mary Medical Center ? Long Beach and St. Mary?s Medical Center ? San Francisco could have provided services to ineligible individuals.Questioned costs None.Context We issued a material weakness related to internal controls in the prior year. Based upon the implementation date for the corrective action provided by management, the finding related to this internal control had not been remediated for the full period under audit. As such, we did not test the operating effectiveness of this control and are issuing a material weakness consistent with the prior year finding.St. Mary Medical Center ? Long Beach expenditures of approximately $1.9 million represent 52% of total HIV Emergency Relief Project Grants expenditures of approximately $3.6 million.St. Mary?s Medical Center ? San Francisco expenditures of approximately $0.2 million represent 6% of total HIV Emergency Relief Project Grants expenditures of approximately $3.6 million.Identification as a repeat finding, if applicable This is a repeat finding for St. Mary?s Medical Center ? Long Beach ? Finding (2021-007).This is a repeat finding for St. Mary?s Medical Center ? San Francisco ? Finding (2021-007 and 2020-005).Recommendation St. Mary Medical Center ? Long Beach and St. Mary?s Medical Center ? San Francisco should perform and retain evidence of their review of patient eligibility as defined by the grant agreement to support the internal control environment.Views of responsibleofficials Management agrees with the finding and implemented corrective action in April 2022.
2022-005 - Noncompliance with and Weakness in Controls over Federal Research and Development ExpensesAward Years: VariousAward Numbers: VariousCompliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesPass-Through Entities: VariousRepeat Finding: Yes (Prior Year Finding No. 2021-007)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In addition, LSUHSC-S did not ensure that costs charged to federal awards were allowable in accordance with federal regulations and the terms and conditions of the award when requesting reimbursement.In a non-statistical random sample of 50 out of 10,798 expense transactions charged to R&D during the fiscal year ending June 30, 2022, the following exceptions were noted:? Three (6%) purchasing card (P-Card) transactions were not allowable in accordance with federal regulations and the terms and conditions of the award and are considered questioned costs totaling $1,073.? For five (10%) of 50 transactions tested, LSUHSC-S overstated expenses on the Schedule of Expenditures of Federal Awards because the award was fully funded, and expenses in excess of the award amount were not removed from the project used to identify expenditures to federal awards in the accounting records, or the expense was determined not allowable as noted above.? Seven (35%) of 20 time and effort certifications for salary and related benefit expenses tested were completed 119 to 461 days after the end of the quarter.We performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 838 (51%) out of 1,654 adjusting journal entries were made more than 90 days after the end of the quarter from the original transactions. The adjustments were made 97 to 1,026 days after the original transactions were recorded and 96 to 953 days after the end of the quarter.In a non-statistical random sample of 10 out of 1,654 payroll adjusting entries affecting R&D, tested by employee, project id (related to federal award), and journal id, six (60%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. Two of these adjusting entries added costs to the federal award projects and are considered questioned costs totaling $28,324.Criteria:2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity?s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments.Per LSUHSC-S?s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S?s policy, time and effort certifications should be completed within approximately 90 days of the end of the quarter. Management interprets the end of the quarter to be when the time and effort reports are sent to the departments once the last month of the quarter is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the quarterly reporting period, a payroll reallocation must be created within 30 days.Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework? issued by the Committee of Sponsoring Organizations of the Treadway Commission. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions.In addition, the National Institute of Health (NIH) is the grantor for the majority of the LSUHSC-S?s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made ?to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable.2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs.Cause:LSUHSC-S?s approval of P-Card transactions did not provide sufficient review of the allowability of expenses on federal awards. LSUHSC-S has procedures in place to review expenses prior to requesting reimbursement; however, it did not ensure that the necessary adjustments were made to the accounting system in a timely manner for expenses that were not allowed for reimbursement. In addition, training to emphasize accountability and the importance of completing time and effort certifications timely and accurately per policy was not completed as planned during fiscal year 2022 due to staffing shortages.LSUHSC-S is still in the process of implementing the corrective action outlined in the prior year to include documentation of adjusted effort and questions to address justification for the adjustment, errors, and timeliness on a modified Personnel Change form.Effect:Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects.In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor.Recommendation:Management should monitor time and effort certifications completed by the departments and investigate and obtain justification from department personnel for untimely certifications, as well as untimely adjustments and lack of supporting documentation for adjustments to enforce established policies. Management should ensure adequate design and operating effectiveness of controls over expenses, including P-Card expenses, charged to federal awards to verify allowability of costs in accordance with federal requirements and grant terms and conditions prior to requesting reimbursement. Management should also consider implementing other complementary controls such as preventing costs from being charged to projects in the accounting system beyond the approved budget or period of performance.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-52).
2022-012 - Inadequate Controls over and Noncompliance with Unemployment Insurance Benefits RequirementsAward Year: Not ApplicableAward Number: Not ApplicableCompliance Requirements: Activities Allowed or Unallowed, EligibilityRepeat Finding: Yes (Prior Year Finding No. 2021-008)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the third consecutive year, LWC did not have adequate internal controls and did not comply with requirements of the Unemployment Insurance (UI) federal program. LWC issued more than $681 million in benefit payments to more than 260,000 claimants during fiscal year 2022.In December 2020, Congress passed the Continued Assistance for Unemployed Workers Act of 2020 (CAA), which extended many of the UI-related provisions in the Coronavirus Aid, Relief, and Economic Security (CARES) Act and also required claimants to provide supporting documents to verify income and identity, if receiving Pandemic Unemployment Assistance (PUA). Federal funding for the pandemic benefits ended after July 2021.In a non-statistical random sample of 60 claimants who were paid $188,180 in unemployment benefits in fiscal year 2022, we identified errors for 16 claimants, which resulted in questioned costs totaling $30,704. One claimant file contained multiple errors.For 13 (22%) out of 60 UI claimants, claimant files did not support monetary eligibility.? 12 claimant files did not have required wage documentation. CAA required all claimants receiving federal assistance payments after December 27, 2020, to provide evidence of self-employment earnings in order to remain eligible for PUA. According to LWC, a waiver has been requested from the U.S. Department of Labor from this requirement; as of March 21, 2023, LWC has not received a waiver.? One claimant file did not have evidence of child support payments properly withheld from the benefit payment by LWC as instructed by the child support order in the claimant file.For four (7%) out of 60 UI claimants, claimant files did not support non-monetary eligibility.? Four claimant files did not include required claimant identification. CAA requires states to verify the identity of PUA applicants whose identities were not previously verified on an Unemployment Compensation (UC), Extended Benefits (EB), or Pandemic Emergency Unemployment Compensation (PEUC) claim within the last 12 months.Criteria:Claimant files are required to contain certain information, including wage documentation and claimant identification to support eligibility for benefits paid under the PUA program. Upon notification from DCFS, child support court orders must be followed. Louisiana Revised Statute 23:1693 requires child support to be deducted from unemployment compensation when notified by DCFS.2 CFR 200.303(a) requires that non-federal entities receiving federal awards establish and maintain effective internal control designed to reasonably ensure compliance with federal statutes, regulations, and the terms and conditions of the federal awards.Cause:LWC failed to obtain needed documentation.Effect:Failure to obtain personal identifying information and wage documents results in noncompliance with federal program requirements and increases the risk of overpayments. Failure to properly withhold child support payments as ordered by a court results in noncompliance with state laws.Recommendation:LWC should strengthen controls to ensure all required documentation is obtained. In addition, LWC should take the necessary actions to ensure court ordered child support deductions are setup timely to ensure compliance with applicable laws.Management?s Response and Corrective Action Plan:Management concurred in part with the finding and provided a corrective action plan (B-72).Auditor?s Additional Comments:LWC noted in its response that a blanket waiver of overpayments resulting from the implementation of the proof of employment requirement has been requested; however, as noted in the finding and LWC?s response, the waiver has not yet been approved. LWC disagrees with the LLA?s interpretation of the identity verification requirements. The CAA provisions for identification verification noted above should be applied unless specific guidance is received from the federal grantor stating otherwise. Per CAA, states that previously verified an individual?s identity on a UC, EB, or PEUC claim within the last 12 months are not required to re-verify identity on the PUA claim. There was no evidence of verified identification in the claimant files for the errors noted. LWC remains responsible for administering the UI program with adequate internal controls to ensure compliance with federal requirements.
2022-012 - Inadequate Controls over and Noncompliance with Unemployment Insurance Benefits RequirementsAward Year: Not ApplicableAward Number: Not ApplicableCompliance Requirements: Activities Allowed or Unallowed, EligibilityRepeat Finding: Yes (Prior Year Finding No. 2021-008)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the third consecutive year, LWC did not have adequate internal controls and did not comply with requirements of the Unemployment Insurance (UI) federal program. LWC issued more than $681 million in benefit payments to more than 260,000 claimants during fiscal year 2022.In December 2020, Congress passed the Continued Assistance for Unemployed Workers Act of 2020 (CAA), which extended many of the UI-related provisions in the Coronavirus Aid, Relief, and Economic Security (CARES) Act and also required claimants to provide supporting documents to verify income and identity, if receiving Pandemic Unemployment Assistance (PUA). Federal funding for the pandemic benefits ended after July 2021.In a non-statistical random sample of 60 claimants who were paid $188,180 in unemployment benefits in fiscal year 2022, we identified errors for 16 claimants, which resulted in questioned costs totaling $30,704. One claimant file contained multiple errors.For 13 (22%) out of 60 UI claimants, claimant files did not support monetary eligibility.? 12 claimant files did not have required wage documentation. CAA required all claimants receiving federal assistance payments after December 27, 2020, to provide evidence of self-employment earnings in order to remain eligible for PUA. According to LWC, a waiver has been requested from the U.S. Department of Labor from this requirement; as of March 21, 2023, LWC has not received a waiver.? One claimant file did not have evidence of child support payments properly withheld from the benefit payment by LWC as instructed by the child support order in the claimant file.For four (7%) out of 60 UI claimants, claimant files did not support non-monetary eligibility.? Four claimant files did not include required claimant identification. CAA requires states to verify the identity of PUA applicants whose identities were not previously verified on an Unemployment Compensation (UC), Extended Benefits (EB), or Pandemic Emergency Unemployment Compensation (PEUC) claim within the last 12 months.Criteria:Claimant files are required to contain certain information, including wage documentation and claimant identification to support eligibility for benefits paid under the PUA program. Upon notification from DCFS, child support court orders must be followed. Louisiana Revised Statute 23:1693 requires child support to be deducted from unemployment compensation when notified by DCFS.2 CFR 200.303(a) requires that non-federal entities receiving federal awards establish and maintain effective internal control designed to reasonably ensure compliance with federal statutes, regulations, and the terms and conditions of the federal awards.Cause:LWC failed to obtain needed documentation.Effect:Failure to obtain personal identifying information and wage documents results in noncompliance with federal program requirements and increases the risk of overpayments. Failure to properly withhold child support payments as ordered by a court results in noncompliance with state laws.Recommendation:LWC should strengthen controls to ensure all required documentation is obtained. In addition, LWC should take the necessary actions to ensure court ordered child support deductions are setup timely to ensure compliance with applicable laws.Management?s Response and Corrective Action Plan:Management concurred in part with the finding and provided a corrective action plan (B-72).Auditor?s Additional Comments:LWC noted in its response that a blanket waiver of overpayments resulting from the implementation of the proof of employment requirement has been requested; however, as noted in the finding and LWC?s response, the waiver has not yet been approved. LWC disagrees with the LLA?s interpretation of the identity verification requirements. The CAA provisions for identification verification noted above should be applied unless specific guidance is received from the federal grantor stating otherwise. Per CAA, states that previously verified an individual?s identity on a UC, EB, or PEUC claim within the last 12 months are not required to re-verify identity on the PUA claim. There was no evidence of verified identification in the claimant files for the errors noted. LWC remains responsible for administering the UI program with adequate internal controls to ensure compliance with federal requirements.
2022-005 - Noncompliance with and Weakness in Controls over Federal Research and Development ExpensesAward Years: VariousAward Numbers: VariousCompliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesPass-Through Entities: VariousRepeat Finding: Yes (Prior Year Finding No. 2021-007)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In addition, LSUHSC-S did not ensure that costs charged to federal awards were allowable in accordance with federal regulations and the terms and conditions of the award when requesting reimbursement.In a non-statistical random sample of 50 out of 10,798 expense transactions charged to R&D during the fiscal year ending June 30, 2022, the following exceptions were noted:? Three (6%) purchasing card (P-Card) transactions were not allowable in accordance with federal regulations and the terms and conditions of the award and are considered questioned costs totaling $1,073.? For five (10%) of 50 transactions tested, LSUHSC-S overstated expenses on the Schedule of Expenditures of Federal Awards because the award was fully funded, and expenses in excess of the award amount were not removed from the project used to identify expenditures to federal awards in the accounting records, or the expense was determined not allowable as noted above.? Seven (35%) of 20 time and effort certifications for salary and related benefit expenses tested were completed 119 to 461 days after the end of the quarter.We performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 838 (51%) out of 1,654 adjusting journal entries were made more than 90 days after the end of the quarter from the original transactions. The adjustments were made 97 to 1,026 days after the original transactions were recorded and 96 to 953 days after the end of the quarter.In a non-statistical random sample of 10 out of 1,654 payroll adjusting entries affecting R&D, tested by employee, project id (related to federal award), and journal id, six (60%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. Two of these adjusting entries added costs to the federal award projects and are considered questioned costs totaling $28,324.Criteria:2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity?s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments.Per LSUHSC-S?s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S?s policy, time and effort certifications should be completed within approximately 90 days of the end of the quarter. Management interprets the end of the quarter to be when the time and effort reports are sent to the departments once the last month of the quarter is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the quarterly reporting period, a payroll reallocation must be created within 30 days.Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework? issued by the Committee of Sponsoring Organizations of the Treadway Commission. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions.In addition, the National Institute of Health (NIH) is the grantor for the majority of the LSUHSC-S?s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made ?to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable.2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs.Cause:LSUHSC-S?s approval of P-Card transactions did not provide sufficient review of the allowability of expenses on federal awards. LSUHSC-S has procedures in place to review expenses prior to requesting reimbursement; however, it did not ensure that the necessary adjustments were made to the accounting system in a timely manner for expenses that were not allowed for reimbursement. In addition, training to emphasize accountability and the importance of completing time and effort certifications timely and accurately per policy was not completed as planned during fiscal year 2022 due to staffing shortages.LSUHSC-S is still in the process of implementing the corrective action outlined in the prior year to include documentation of adjusted effort and questions to address justification for the adjustment, errors, and timeliness on a modified Personnel Change form.Effect:Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects.In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor.Recommendation:Management should monitor time and effort certifications completed by the departments and investigate and obtain justification from department personnel for untimely certifications, as well as untimely adjustments and lack of supporting documentation for adjustments to enforce established policies. Management should ensure adequate design and operating effectiveness of controls over expenses, including P-Card expenses, charged to federal awards to verify allowability of costs in accordance with federal requirements and grant terms and conditions prior to requesting reimbursement. Management should also consider implementing other complementary controls such as preventing costs from being charged to projects in the accounting system beyond the approved budget or period of performance.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-52).
2022-032 - Control Weakness Related to Foster Care BillingsAward Year: 2022Award Number: 2201LAFOSTCompliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:OJJ did not adequately review Foster Care invoices submitted to DCFS for reimbursement to ensure billings were accurately calculated.In a non-statistical sample of two quarterly administrative invoices billed to DCFS totaling $831,311 from a population of four quarterly administrative invoices totaling $1,708,503, one (50%) invoice for the quarter ending December 2021 was calculated using incorrect expenditure data, resulting in billing errors.Criteria:2 CFR 200.303(a) requires that non-federal entities receiving federal awards establish and maintain effective internal control designed to reasonably ensure compliance with federal statutes, regulations, and the terms and conditions of the federal award.Per OJJ?s contract with DCFS for reimbursement of Foster Care expenditures, OJJ must submit quarterly administrative billing reports to DCFS and monitor and track allowable administrative claim information.Cause:These conditions occurred because of a weakness in controls in the review of Foster Care administrative invoices.Effect:Failure to properly review invoices resulted in over billings and could result in disallowed costs by the federal grantor. Based on the methodology used, there was $128,236 in overpayments considered questioned costs.Recommendation:OJJ should strengthen controls to ensure administrative invoices submitted to DCFS are calculated accurately.Management?s Response and Corrective Action Plan:Management concurred with the finding and provided a corrective action plan (B-45).
2022-005 - Noncompliance with and Weakness in Controls over Federal Research and Development ExpensesAward Years: VariousAward Numbers: VariousCompliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesPass-Through Entities: VariousRepeat Finding: Yes (Prior Year Finding No. 2021-007)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In addition, LSUHSC-S did not ensure that costs charged to federal awards were allowable in accordance with federal regulations and the terms and conditions of the award when requesting reimbursement.In a non-statistical random sample of 50 out of 10,798 expense transactions charged to R&D during the fiscal year ending June 30, 2022, the following exceptions were noted:? Three (6%) purchasing card (P-Card) transactions were not allowable in accordance with federal regulations and the terms and conditions of the award and are considered questioned costs totaling $1,073.? For five (10%) of 50 transactions tested, LSUHSC-S overstated expenses on the Schedule of Expenditures of Federal Awards because the award was fully funded, and expenses in excess of the award amount were not removed from the project used to identify expenditures to federal awards in the accounting records, or the expense was determined not allowable as noted above.? Seven (35%) of 20 time and effort certifications for salary and related benefit expenses tested were completed 119 to 461 days after the end of the quarter.We performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 838 (51%) out of 1,654 adjusting journal entries were made more than 90 days after the end of the quarter from the original transactions. The adjustments were made 97 to 1,026 days after the original transactions were recorded and 96 to 953 days after the end of the quarter.In a non-statistical random sample of 10 out of 1,654 payroll adjusting entries affecting R&D, tested by employee, project id (related to federal award), and journal id, six (60%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. Two of these adjusting entries added costs to the federal award projects and are considered questioned costs totaling $28,324.Criteria:2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity?s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments.Per LSUHSC-S?s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S?s policy, time and effort certifications should be completed within approximately 90 days of the end of the quarter. Management interprets the end of the quarter to be when the time and effort reports are sent to the departments once the last month of the quarter is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the quarterly reporting period, a payroll reallocation must be created within 30 days.Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework? issued by the Committee of Sponsoring Organizations of the Treadway Commission. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions.In addition, the National Institute of Health (NIH) is the grantor for the majority of the LSUHSC-S?s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made ?to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable.2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs.Cause:LSUHSC-S?s approval of P-Card transactions did not provide sufficient review of the allowability of expenses on federal awards. LSUHSC-S has procedures in place to review expenses prior to requesting reimbursement; however, it did not ensure that the necessary adjustments were made to the accounting system in a timely manner for expenses that were not allowed for reimbursement. In addition, training to emphasize accountability and the importance of completing time and effort certifications timely and accurately per policy was not completed as planned during fiscal year 2022 due to staffing shortages.LSUHSC-S is still in the process of implementing the corrective action outlined in the prior year to include documentation of adjusted effort and questions to address justification for the adjustment, errors, and timeliness on a modified Personnel Change form.Effect:Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects.In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor.Recommendation:Management should monitor time and effort certifications completed by the departments and investigate and obtain justification from department personnel for untimely certifications, as well as untimely adjustments and lack of supporting documentation for adjustments to enforce established policies. Management should ensure adequate design and operating effectiveness of controls over expenses, including P-Card expenses, charged to federal awards to verify allowability of costs in accordance with federal requirements and grant terms and conditions prior to requesting reimbursement. Management should also consider implementing other complementary controls such as preventing costs from being charged to projects in the accounting system beyond the approved budget or period of performance.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-52).
2022-035 - Weakness in Controls over Cash Management RequirementsAward Years: VariousAward Numbers: VariousCompliance Requirement: Cash ManagementRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:LSUHSC-S did not follow its prescribed controls over compliance with the cash management requirements of R&D programs. We reviewed a non-statistical sample of 25 federal R&D expense transactions resulting in reimbursement request support for two subaward invoice reconciliations and ten monthly direct award reconciliations, for the fiscal year ending June 30, 2022, from a population of 11,969 expense transactions. We also reviewed the two monthly reconciliations for July and November 2021 that were not selected from the expense transactions. We noted the following:? Four (29%) of 14 reconciliations had no evidence of review or approval by someone other than the preparer.? Ten (71%) of 14 approved reconciliations did not agree to the reimbursement request submitted to the grantor.Criteria:2 CFR 200.303 requires that non-federal entities establish and maintain 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.LSUHSC-S has established controls over cash management requirements, which consist of a monthly reconciliation of reimbursement requests for R&D expenses and includes the review and approval by someone other than the preparer.Cause:LSUHSC-S did not follow its established controls over monthly reconciliations.LSUHSC-S represented that the monthly reconciliations are the starting point in the process and additional determinations of which amounts should be drawn down are made after the reconciliation has been completed. LSUHSC-S did not provide any evidence that additional review and approval was performed prior to the reimbursement request.LSUHSC-S did not perform the drawdowns on a monthly basis when the reconciliations were performed. Drawdowns were performed in March and June 2022, and after fiscal year end in July, August, and October 2022 for expenses incurred during the fiscal year ending June 30, 2022. Management provided additional reconciliations for the draw down amounts, but there was no evidence of review and approval by someone other than the preparer.Effect:Failure to implement sufficient controls over cash management could result in LSUHSC-S requesting reimbursement for expenses not incurred prior to the request and place LSUHSC-S in noncompliance with federal regulations.Recommendation:LSUHSC-S should ensure that a review and approval is performed on the final amounts requested for reimbursement and evidence is maintained. LSUSHC-S should also ensure that established controls are followed to ensure the review and approval is performed by someone other than the preparer.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-55).
2022-005 - Noncompliance with and Weakness in Controls over Federal Research and Development ExpensesAward Years: VariousAward Numbers: VariousCompliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesPass-Through Entities: VariousRepeat Finding: Yes (Prior Year Finding No. 2021-007)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In addition, LSUHSC-S did not ensure that costs charged to federal awards were allowable in accordance with federal regulations and the terms and conditions of the award when requesting reimbursement.In a non-statistical random sample of 50 out of 10,798 expense transactions charged to R&D during the fiscal year ending June 30, 2022, the following exceptions were noted:? Three (6%) purchasing card (P-Card) transactions were not allowable in accordance with federal regulations and the terms and conditions of the award and are considered questioned costs totaling $1,073.? For five (10%) of 50 transactions tested, LSUHSC-S overstated expenses on the Schedule of Expenditures of Federal Awards because the award was fully funded, and expenses in excess of the award amount were not removed from the project used to identify expenditures to federal awards in the accounting records, or the expense was determined not allowable as noted above.? Seven (35%) of 20 time and effort certifications for salary and related benefit expenses tested were completed 119 to 461 days after the end of the quarter.We performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 838 (51%) out of 1,654 adjusting journal entries were made more than 90 days after the end of the quarter from the original transactions. The adjustments were made 97 to 1,026 days after the original transactions were recorded and 96 to 953 days after the end of the quarter.In a non-statistical random sample of 10 out of 1,654 payroll adjusting entries affecting R&D, tested by employee, project id (related to federal award), and journal id, six (60%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. Two of these adjusting entries added costs to the federal award projects and are considered questioned costs totaling $28,324.Criteria:2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity?s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments.Per LSUHSC-S?s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S?s policy, time and effort certifications should be completed within approximately 90 days of the end of the quarter. Management interprets the end of the quarter to be when the time and effort reports are sent to the departments once the last month of the quarter is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the quarterly reporting period, a payroll reallocation must be created within 30 days.Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework? issued by the Committee of Sponsoring Organizations of the Treadway Commission. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions.In addition, the National Institute of Health (NIH) is the grantor for the majority of the LSUHSC-S?s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made ?to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable.2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs.Cause:LSUHSC-S?s approval of P-Card transactions did not provide sufficient review of the allowability of expenses on federal awards. LSUHSC-S has procedures in place to review expenses prior to requesting reimbursement; however, it did not ensure that the necessary adjustments were made to the accounting system in a timely manner for expenses that were not allowed for reimbursement. In addition, training to emphasize accountability and the importance of completing time and effort certifications timely and accurately per policy was not completed as planned during fiscal year 2022 due to staffing shortages.LSUHSC-S is still in the process of implementing the corrective action outlined in the prior year to include documentation of adjusted effort and questions to address justification for the adjustment, errors, and timeliness on a modified Personnel Change form.Effect:Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects.In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor.Recommendation:Management should monitor time and effort certifications completed by the departments and investigate and obtain justification from department personnel for untimely certifications, as well as untimely adjustments and lack of supporting documentation for adjustments to enforce established policies. Management should ensure adequate design and operating effectiveness of controls over expenses, including P-Card expenses, charged to federal awards to verify allowability of costs in accordance with federal requirements and grant terms and conditions prior to requesting reimbursement. Management should also consider implementing other complementary controls such as preventing costs from being charged to projects in the accounting system beyond the approved budget or period of performance.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-52).
2022-005 - Noncompliance with and Weakness in Controls over Federal Research and Development ExpensesAward Years: VariousAward Numbers: VariousCompliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesPass-Through Entities: VariousRepeat Finding: Yes (Prior Year Finding No. 2021-007)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In addition, LSUHSC-S did not ensure that costs charged to federal awards were allowable in accordance with federal regulations and the terms and conditions of the award when requesting reimbursement.In a non-statistical random sample of 50 out of 10,798 expense transactions charged to R&D during the fiscal year ending June 30, 2022, the following exceptions were noted:? Three (6%) purchasing card (P-Card) transactions were not allowable in accordance with federal regulations and the terms and conditions of the award and are considered questioned costs totaling $1,073.? For five (10%) of 50 transactions tested, LSUHSC-S overstated expenses on the Schedule of Expenditures of Federal Awards because the award was fully funded, and expenses in excess of the award amount were not removed from the project used to identify expenditures to federal awards in the accounting records, or the expense was determined not allowable as noted above.? Seven (35%) of 20 time and effort certifications for salary and related benefit expenses tested were completed 119 to 461 days after the end of the quarter.We performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 838 (51%) out of 1,654 adjusting journal entries were made more than 90 days after the end of the quarter from the original transactions. The adjustments were made 97 to 1,026 days after the original transactions were recorded and 96 to 953 days after the end of the quarter.In a non-statistical random sample of 10 out of 1,654 payroll adjusting entries affecting R&D, tested by employee, project id (related to federal award), and journal id, six (60%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. Two of these adjusting entries added costs to the federal award projects and are considered questioned costs totaling $28,324.Criteria:2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity?s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments.Per LSUHSC-S?s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S?s policy, time and effort certifications should be completed within approximately 90 days of the end of the quarter. Management interprets the end of the quarter to be when the time and effort reports are sent to the departments once the last month of the quarter is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the quarterly reporting period, a payroll reallocation must be created within 30 days.Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework? issued by the Committee of Sponsoring Organizations of the Treadway Commission. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions.In addition, the National Institute of Health (NIH) is the grantor for the majority of the LSUHSC-S?s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made ?to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable.2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs.Cause:LSUHSC-S?s approval of P-Card transactions did not provide sufficient review of the allowability of expenses on federal awards. LSUHSC-S has procedures in place to review expenses prior to requesting reimbursement; however, it did not ensure that the necessary adjustments were made to the accounting system in a timely manner for expenses that were not allowed for reimbursement. In addition, training to emphasize accountability and the importance of completing time and effort certifications timely and accurately per policy was not completed as planned during fiscal year 2022 due to staffing shortages.LSUHSC-S is still in the process of implementing the corrective action outlined in the prior year to include documentation of adjusted effort and questions to address justification for the adjustment, errors, and timeliness on a modified Personnel Change form.Effect:Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects.In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor.Recommendation:Management should monitor time and effort certifications completed by the departments and investigate and obtain justification from department personnel for untimely certifications, as well as untimely adjustments and lack of supporting documentation for adjustments to enforce established policies. Management should ensure adequate design and operating effectiveness of controls over expenses, including P-Card expenses, charged to federal awards to verify allowability of costs in accordance with federal requirements and grant terms and conditions prior to requesting reimbursement. Management should also consider implementing other complementary controls such as preventing costs from being charged to projects in the accounting system beyond the approved budget or period of performance.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-52).
2022-035 - Weakness in Controls over Cash Management RequirementsAward Years: VariousAward Numbers: VariousCompliance Requirement: Cash ManagementRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:LSUHSC-S did not follow its prescribed controls over compliance with the cash management requirements of R&D programs. We reviewed a non-statistical sample of 25 federal R&D expense transactions resulting in reimbursement request support for two subaward invoice reconciliations and ten monthly direct award reconciliations, for the fiscal year ending June 30, 2022, from a population of 11,969 expense transactions. We also reviewed the two monthly reconciliations for July and November 2021 that were not selected from the expense transactions. We noted the following:? Four (29%) of 14 reconciliations had no evidence of review or approval by someone other than the preparer.? Ten (71%) of 14 approved reconciliations did not agree to the reimbursement request submitted to the grantor.Criteria:2 CFR 200.303 requires that non-federal entities establish and maintain 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.LSUHSC-S has established controls over cash management requirements, which consist of a monthly reconciliation of reimbursement requests for R&D expenses and includes the review and approval by someone other than the preparer.Cause:LSUHSC-S did not follow its established controls over monthly reconciliations.LSUHSC-S represented that the monthly reconciliations are the starting point in the process and additional determinations of which amounts should be drawn down are made after the reconciliation has been completed. LSUHSC-S did not provide any evidence that additional review and approval was performed prior to the reimbursement request.LSUHSC-S did not perform the drawdowns on a monthly basis when the reconciliations were performed. Drawdowns were performed in March and June 2022, and after fiscal year end in July, August, and October 2022 for expenses incurred during the fiscal year ending June 30, 2022. Management provided additional reconciliations for the draw down amounts, but there was no evidence of review and approval by someone other than the preparer.Effect:Failure to implement sufficient controls over cash management could result in LSUHSC-S requesting reimbursement for expenses not incurred prior to the request and place LSUHSC-S in noncompliance with federal regulations.Recommendation:LSUHSC-S should ensure that a review and approval is performed on the final amounts requested for reimbursement and evidence is maintained. LSUSHC-S should also ensure that established controls are followed to ensure the review and approval is performed by someone other than the preparer.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-55).
2022-005 - Noncompliance with and Weakness in Controls over Federal Research and Development ExpensesAward Years: VariousAward Numbers: VariousCompliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesPass-Through Entities: VariousRepeat Finding: Yes (Prior Year Finding No. 2021-007)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In addition, LSUHSC-S did not ensure that costs charged to federal awards were allowable in accordance with federal regulations and the terms and conditions of the award when requesting reimbursement.In a non-statistical random sample of 50 out of 10,798 expense transactions charged to R&D during the fiscal year ending June 30, 2022, the following exceptions were noted:? Three (6%) purchasing card (P-Card) transactions were not allowable in accordance with federal regulations and the terms and conditions of the award and are considered questioned costs totaling $1,073.? For five (10%) of 50 transactions tested, LSUHSC-S overstated expenses on the Schedule of Expenditures of Federal Awards because the award was fully funded, and expenses in excess of the award amount were not removed from the project used to identify expenditures to federal awards in the accounting records, or the expense was determined not allowable as noted above.? Seven (35%) of 20 time and effort certifications for salary and related benefit expenses tested were completed 119 to 461 days after the end of the quarter.We performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 838 (51%) out of 1,654 adjusting journal entries were made more than 90 days after the end of the quarter from the original transactions. The adjustments were made 97 to 1,026 days after the original transactions were recorded and 96 to 953 days after the end of the quarter.In a non-statistical random sample of 10 out of 1,654 payroll adjusting entries affecting R&D, tested by employee, project id (related to federal award), and journal id, six (60%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. Two of these adjusting entries added costs to the federal award projects and are considered questioned costs totaling $28,324.Criteria:2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity?s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments.Per LSUHSC-S?s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S?s policy, time and effort certifications should be completed within approximately 90 days of the end of the quarter. Management interprets the end of the quarter to be when the time and effort reports are sent to the departments once the last month of the quarter is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the quarterly reporting period, a payroll reallocation must be created within 30 days.Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework? issued by the Committee of Sponsoring Organizations of the Treadway Commission. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions.In addition, the National Institute of Health (NIH) is the grantor for the majority of the LSUHSC-S?s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made ?to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable.2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs.Cause:LSUHSC-S?s approval of P-Card transactions did not provide sufficient review of the allowability of expenses on federal awards. LSUHSC-S has procedures in place to review expenses prior to requesting reimbursement; however, it did not ensure that the necessary adjustments were made to the accounting system in a timely manner for expenses that were not allowed for reimbursement. In addition, training to emphasize accountability and the importance of completing time and effort certifications timely and accurately per policy was not completed as planned during fiscal year 2022 due to staffing shortages.LSUHSC-S is still in the process of implementing the corrective action outlined in the prior year to include documentation of adjusted effort and questions to address justification for the adjustment, errors, and timeliness on a modified Personnel Change form.Effect:Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects.In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor.Recommendation:Management should monitor time and effort certifications completed by the departments and investigate and obtain justification from department personnel for untimely certifications, as well as untimely adjustments and lack of supporting documentation for adjustments to enforce established policies. Management should ensure adequate design and operating effectiveness of controls over expenses, including P-Card expenses, charged to federal awards to verify allowability of costs in accordance with federal requirements and grant terms and conditions prior to requesting reimbursement. Management should also consider implementing other complementary controls such as preventing costs from being charged to projects in the accounting system beyond the approved budget or period of performance.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-52).
2022-005 - Noncompliance with and Weakness in Controls over Federal Research and Development ExpensesAward Years: VariousAward Numbers: VariousCompliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesPass-Through Entities: VariousRepeat Finding: Yes (Prior Year Finding No. 2021-007)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In addition, LSUHSC-S did not ensure that costs charged to federal awards were allowable in accordance with federal regulations and the terms and conditions of the award when requesting reimbursement.In a non-statistical random sample of 50 out of 10,798 expense transactions charged to R&D during the fiscal year ending June 30, 2022, the following exceptions were noted:? Three (6%) purchasing card (P-Card) transactions were not allowable in accordance with federal regulations and the terms and conditions of the award and are considered questioned costs totaling $1,073.? For five (10%) of 50 transactions tested, LSUHSC-S overstated expenses on the Schedule of Expenditures of Federal Awards because the award was fully funded, and expenses in excess of the award amount were not removed from the project used to identify expenditures to federal awards in the accounting records, or the expense was determined not allowable as noted above.? Seven (35%) of 20 time and effort certifications for salary and related benefit expenses tested were completed 119 to 461 days after the end of the quarter.We performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 838 (51%) out of 1,654 adjusting journal entries were made more than 90 days after the end of the quarter from the original transactions. The adjustments were made 97 to 1,026 days after the original transactions were recorded and 96 to 953 days after the end of the quarter.In a non-statistical random sample of 10 out of 1,654 payroll adjusting entries affecting R&D, tested by employee, project id (related to federal award), and journal id, six (60%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. Two of these adjusting entries added costs to the federal award projects and are considered questioned costs totaling $28,324.Criteria:2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity?s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments.Per LSUHSC-S?s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S?s policy, time and effort certifications should be completed within approximately 90 days of the end of the quarter. Management interprets the end of the quarter to be when the time and effort reports are sent to the departments once the last month of the quarter is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the quarterly reporting period, a payroll reallocation must be created within 30 days.Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework? issued by the Committee of Sponsoring Organizations of the Treadway Commission. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions.In addition, the National Institute of Health (NIH) is the grantor for the majority of the LSUHSC-S?s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made ?to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable.2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs.Cause:LSUHSC-S?s approval of P-Card transactions did not provide sufficient review of the allowability of expenses on federal awards. LSUHSC-S has procedures in place to review expenses prior to requesting reimbursement; however, it did not ensure that the necessary adjustments were made to the accounting system in a timely manner for expenses that were not allowed for reimbursement. In addition, training to emphasize accountability and the importance of completing time and effort certifications timely and accurately per policy was not completed as planned during fiscal year 2022 due to staffing shortages.LSUHSC-S is still in the process of implementing the corrective action outlined in the prior year to include documentation of adjusted effort and questions to address justification for the adjustment, errors, and timeliness on a modified Personnel Change form.Effect:Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects.In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor.Recommendation:Management should monitor time and effort certifications completed by the departments and investigate and obtain justification from department personnel for untimely certifications, as well as untimely adjustments and lack of supporting documentation for adjustments to enforce established policies. Management should ensure adequate design and operating effectiveness of controls over expenses, including P-Card expenses, charged to federal awards to verify allowability of costs in accordance with federal requirements and grant terms and conditions prior to requesting reimbursement. Management should also consider implementing other complementary controls such as preventing costs from being charged to projects in the accounting system beyond the approved budget or period of performance.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-52).
2022-005 - Noncompliance with and Weakness in Controls over Federal Research and Development ExpensesAward Years: VariousAward Numbers: VariousCompliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesPass-Through Entities: VariousRepeat Finding: Yes (Prior Year Finding No. 2021-007)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In addition, LSUHSC-S did not ensure that costs charged to federal awards were allowable in accordance with federal regulations and the terms and conditions of the award when requesting reimbursement.In a non-statistical random sample of 50 out of 10,798 expense transactions charged to R&D during the fiscal year ending June 30, 2022, the following exceptions were noted:? Three (6%) purchasing card (P-Card) transactions were not allowable in accordance with federal regulations and the terms and conditions of the award and are considered questioned costs totaling $1,073.? For five (10%) of 50 transactions tested, LSUHSC-S overstated expenses on the Schedule of Expenditures of Federal Awards because the award was fully funded, and expenses in excess of the award amount were not removed from the project used to identify expenditures to federal awards in the accounting records, or the expense was determined not allowable as noted above.? Seven (35%) of 20 time and effort certifications for salary and related benefit expenses tested were completed 119 to 461 days after the end of the quarter.We performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 838 (51%) out of 1,654 adjusting journal entries were made more than 90 days after the end of the quarter from the original transactions. The adjustments were made 97 to 1,026 days after the original transactions were recorded and 96 to 953 days after the end of the quarter.In a non-statistical random sample of 10 out of 1,654 payroll adjusting entries affecting R&D, tested by employee, project id (related to federal award), and journal id, six (60%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. Two of these adjusting entries added costs to the federal award projects and are considered questioned costs totaling $28,324.Criteria:2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity?s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments.Per LSUHSC-S?s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S?s policy, time and effort certifications should be completed within approximately 90 days of the end of the quarter. Management interprets the end of the quarter to be when the time and effort reports are sent to the departments once the last month of the quarter is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the quarterly reporting period, a payroll reallocation must be created within 30 days.Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework? issued by the Committee of Sponsoring Organizations of the Treadway Commission. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions.In addition, the National Institute of Health (NIH) is the grantor for the majority of the LSUHSC-S?s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made ?to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable.2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs.Cause:LSUHSC-S?s approval of P-Card transactions did not provide sufficient review of the allowability of expenses on federal awards. LSUHSC-S has procedures in place to review expenses prior to requesting reimbursement; however, it did not ensure that the necessary adjustments were made to the accounting system in a timely manner for expenses that were not allowed for reimbursement. In addition, training to emphasize accountability and the importance of completing time and effort certifications timely and accurately per policy was not completed as planned during fiscal year 2022 due to staffing shortages.LSUHSC-S is still in the process of implementing the corrective action outlined in the prior year to include documentation of adjusted effort and questions to address justification for the adjustment, errors, and timeliness on a modified Personnel Change form.Effect:Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects.In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor.Recommendation:Management should monitor time and effort certifications completed by the departments and investigate and obtain justification from department personnel for untimely certifications, as well as untimely adjustments and lack of supporting documentation for adjustments to enforce established policies. Management should ensure adequate design and operating effectiveness of controls over expenses, including P-Card expenses, charged to federal awards to verify allowability of costs in accordance with federal requirements and grant terms and conditions prior to requesting reimbursement. Management should also consider implementing other complementary controls such as preventing costs from being charged to projects in the accounting system beyond the approved budget or period of performance.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-52).
2022-005 - Noncompliance with and Weakness in Controls over Federal Research and Development ExpensesAward Years: VariousAward Numbers: VariousCompliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesPass-Through Entities: VariousRepeat Finding: Yes (Prior Year Finding No. 2021-007)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In addition, LSUHSC-S did not ensure that costs charged to federal awards were allowable in accordance with federal regulations and the terms and conditions of the award when requesting reimbursement.In a non-statistical random sample of 50 out of 10,798 expense transactions charged to R&D during the fiscal year ending June 30, 2022, the following exceptions were noted:? Three (6%) purchasing card (P-Card) transactions were not allowable in accordance with federal regulations and the terms and conditions of the award and are considered questioned costs totaling $1,073.? For five (10%) of 50 transactions tested, LSUHSC-S overstated expenses on the Schedule of Expenditures of Federal Awards because the award was fully funded, and expenses in excess of the award amount were not removed from the project used to identify expenditures to federal awards in the accounting records, or the expense was determined not allowable as noted above.? Seven (35%) of 20 time and effort certifications for salary and related benefit expenses tested were completed 119 to 461 days after the end of the quarter.We performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 838 (51%) out of 1,654 adjusting journal entries were made more than 90 days after the end of the quarter from the original transactions. The adjustments were made 97 to 1,026 days after the original transactions were recorded and 96 to 953 days after the end of the quarter.In a non-statistical random sample of 10 out of 1,654 payroll adjusting entries affecting R&D, tested by employee, project id (related to federal award), and journal id, six (60%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. Two of these adjusting entries added costs to the federal award projects and are considered questioned costs totaling $28,324.Criteria:2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity?s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments.Per LSUHSC-S?s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S?s policy, time and effort certifications should be completed within approximately 90 days of the end of the quarter. Management interprets the end of the quarter to be when the time and effort reports are sent to the departments once the last month of the quarter is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the quarterly reporting period, a payroll reallocation must be created within 30 days.Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework? issued by the Committee of Sponsoring Organizations of the Treadway Commission. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions.In addition, the National Institute of Health (NIH) is the grantor for the majority of the LSUHSC-S?s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made ?to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable.2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs.Cause:LSUHSC-S?s approval of P-Card transactions did not provide sufficient review of the allowability of expenses on federal awards. LSUHSC-S has procedures in place to review expenses prior to requesting reimbursement; however, it did not ensure that the necessary adjustments were made to the accounting system in a timely manner for expenses that were not allowed for reimbursement. In addition, training to emphasize accountability and the importance of completing time and effort certifications timely and accurately per policy was not completed as planned during fiscal year 2022 due to staffing shortages.LSUHSC-S is still in the process of implementing the corrective action outlined in the prior year to include documentation of adjusted effort and questions to address justification for the adjustment, errors, and timeliness on a modified Personnel Change form.Effect:Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects.In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor.Recommendation:Management should monitor time and effort certifications completed by the departments and investigate and obtain justification from department personnel for untimely certifications, as well as untimely adjustments and lack of supporting documentation for adjustments to enforce established policies. Management should ensure adequate design and operating effectiveness of controls over expenses, including P-Card expenses, charged to federal awards to verify allowability of costs in accordance with federal requirements and grant terms and conditions prior to requesting reimbursement. Management should also consider implementing other complementary controls such as preventing costs from being charged to projects in the accounting system beyond the approved budget or period of performance.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-52).
2022-005 - Noncompliance with and Weakness in Controls over Federal Research and Development ExpensesAward Years: VariousAward Numbers: VariousCompliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesPass-Through Entities: VariousRepeat Finding: Yes (Prior Year Finding No. 2021-007)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In addition, LSUHSC-S did not ensure that costs charged to federal awards were allowable in accordance with federal regulations and the terms and conditions of the award when requesting reimbursement.In a non-statistical random sample of 50 out of 10,798 expense transactions charged to R&D during the fiscal year ending June 30, 2022, the following exceptions were noted:? Three (6%) purchasing card (P-Card) transactions were not allowable in accordance with federal regulations and the terms and conditions of the award and are considered questioned costs totaling $1,073.? For five (10%) of 50 transactions tested, LSUHSC-S overstated expenses on the Schedule of Expenditures of Federal Awards because the award was fully funded, and expenses in excess of the award amount were not removed from the project used to identify expenditures to federal awards in the accounting records, or the expense was determined not allowable as noted above.? Seven (35%) of 20 time and effort certifications for salary and related benefit expenses tested were completed 119 to 461 days after the end of the quarter.We performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 838 (51%) out of 1,654 adjusting journal entries were made more than 90 days after the end of the quarter from the original transactions. The adjustments were made 97 to 1,026 days after the original transactions were recorded and 96 to 953 days after the end of the quarter.In a non-statistical random sample of 10 out of 1,654 payroll adjusting entries affecting R&D, tested by employee, project id (related to federal award), and journal id, six (60%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. Two of these adjusting entries added costs to the federal award projects and are considered questioned costs totaling $28,324.Criteria:2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity?s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments.Per LSUHSC-S?s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S?s policy, time and effort certifications should be completed within approximately 90 days of the end of the quarter. Management interprets the end of the quarter to be when the time and effort reports are sent to the departments once the last month of the quarter is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the quarterly reporting period, a payroll reallocation must be created within 30 days.Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework? issued by the Committee of Sponsoring Organizations of the Treadway Commission. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions.In addition, the National Institute of Health (NIH) is the grantor for the majority of the LSUHSC-S?s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made ?to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable.2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs.Cause:LSUHSC-S?s approval of P-Card transactions did not provide sufficient review of the allowability of expenses on federal awards. LSUHSC-S has procedures in place to review expenses prior to requesting reimbursement; however, it did not ensure that the necessary adjustments were made to the accounting system in a timely manner for expenses that were not allowed for reimbursement. In addition, training to emphasize accountability and the importance of completing time and effort certifications timely and accurately per policy was not completed as planned during fiscal year 2022 due to staffing shortages.LSUHSC-S is still in the process of implementing the corrective action outlined in the prior year to include documentation of adjusted effort and questions to address justification for the adjustment, errors, and timeliness on a modified Personnel Change form.Effect:Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects.In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor.Recommendation:Management should monitor time and effort certifications completed by the departments and investigate and obtain justification from department personnel for untimely certifications, as well as untimely adjustments and lack of supporting documentation for adjustments to enforce established policies. Management should ensure adequate design and operating effectiveness of controls over expenses, including P-Card expenses, charged to federal awards to verify allowability of costs in accordance with federal requirements and grant terms and conditions prior to requesting reimbursement. Management should also consider implementing other complementary controls such as preventing costs from being charged to projects in the accounting system beyond the approved budget or period of performance.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-52).
2022-005 - Noncompliance with and Weakness in Controls over Federal Research and Development ExpensesAward Years: VariousAward Numbers: VariousCompliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesPass-Through Entities: VariousRepeat Finding: Yes (Prior Year Finding No. 2021-007)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In addition, LSUHSC-S did not ensure that costs charged to federal awards were allowable in accordance with federal regulations and the terms and conditions of the award when requesting reimbursement.In a non-statistical random sample of 50 out of 10,798 expense transactions charged to R&D during the fiscal year ending June 30, 2022, the following exceptions were noted:? Three (6%) purchasing card (P-Card) transactions were not allowable in accordance with federal regulations and the terms and conditions of the award and are considered questioned costs totaling $1,073.? For five (10%) of 50 transactions tested, LSUHSC-S overstated expenses on the Schedule of Expenditures of Federal Awards because the award was fully funded, and expenses in excess of the award amount were not removed from the project used to identify expenditures to federal awards in the accounting records, or the expense was determined not allowable as noted above.? Seven (35%) of 20 time and effort certifications for salary and related benefit expenses tested were completed 119 to 461 days after the end of the quarter.We performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 838 (51%) out of 1,654 adjusting journal entries were made more than 90 days after the end of the quarter from the original transactions. The adjustments were made 97 to 1,026 days after the original transactions were recorded and 96 to 953 days after the end of the quarter.In a non-statistical random sample of 10 out of 1,654 payroll adjusting entries affecting R&D, tested by employee, project id (related to federal award), and journal id, six (60%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. Two of these adjusting entries added costs to the federal award projects and are considered questioned costs totaling $28,324.Criteria:2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity?s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments.Per LSUHSC-S?s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S?s policy, time and effort certifications should be completed within approximately 90 days of the end of the quarter. Management interprets the end of the quarter to be when the time and effort reports are sent to the departments once the last month of the quarter is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the quarterly reporting period, a payroll reallocation must be created within 30 days.Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework? issued by the Committee of Sponsoring Organizations of the Treadway Commission. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions.In addition, the National Institute of Health (NIH) is the grantor for the majority of the LSUHSC-S?s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made ?to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable.2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs.Cause:LSUHSC-S?s approval of P-Card transactions did not provide sufficient review of the allowability of expenses on federal awards. LSUHSC-S has procedures in place to review expenses prior to requesting reimbursement; however, it did not ensure that the necessary adjustments were made to the accounting system in a timely manner for expenses that were not allowed for reimbursement. In addition, training to emphasize accountability and the importance of completing time and effort certifications timely and accurately per policy was not completed as planned during fiscal year 2022 due to staffing shortages.LSUHSC-S is still in the process of implementing the corrective action outlined in the prior year to include documentation of adjusted effort and questions to address justification for the adjustment, errors, and timeliness on a modified Personnel Change form.Effect:Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects.In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor.Recommendation:Management should monitor time and effort certifications completed by the departments and investigate and obtain justification from department personnel for untimely certifications, as well as untimely adjustments and lack of supporting documentation for adjustments to enforce established policies. Management should ensure adequate design and operating effectiveness of controls over expenses, including P-Card expenses, charged to federal awards to verify allowability of costs in accordance with federal requirements and grant terms and conditions prior to requesting reimbursement. Management should also consider implementing other complementary controls such as preventing costs from being charged to projects in the accounting system beyond the approved budget or period of performance.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-52).
2022-035 - Weakness in Controls over Cash Management RequirementsAward Years: VariousAward Numbers: VariousCompliance Requirement: Cash ManagementRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:LSUHSC-S did not follow its prescribed controls over compliance with the cash management requirements of R&D programs. We reviewed a non-statistical sample of 25 federal R&D expense transactions resulting in reimbursement request support for two subaward invoice reconciliations and ten monthly direct award reconciliations, for the fiscal year ending June 30, 2022, from a population of 11,969 expense transactions. We also reviewed the two monthly reconciliations for July and November 2021 that were not selected from the expense transactions. We noted the following:? Four (29%) of 14 reconciliations had no evidence of review or approval by someone other than the preparer.? Ten (71%) of 14 approved reconciliations did not agree to the reimbursement request submitted to the grantor.Criteria:2 CFR 200.303 requires that non-federal entities establish and maintain 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.LSUHSC-S has established controls over cash management requirements, which consist of a monthly reconciliation of reimbursement requests for R&D expenses and includes the review and approval by someone other than the preparer.Cause:LSUHSC-S did not follow its established controls over monthly reconciliations.LSUHSC-S represented that the monthly reconciliations are the starting point in the process and additional determinations of which amounts should be drawn down are made after the reconciliation has been completed. LSUHSC-S did not provide any evidence that additional review and approval was performed prior to the reimbursement request.LSUHSC-S did not perform the drawdowns on a monthly basis when the reconciliations were performed. Drawdowns were performed in March and June 2022, and after fiscal year end in July, August, and October 2022 for expenses incurred during the fiscal year ending June 30, 2022. Management provided additional reconciliations for the draw down amounts, but there was no evidence of review and approval by someone other than the preparer.Effect:Failure to implement sufficient controls over cash management could result in LSUHSC-S requesting reimbursement for expenses not incurred prior to the request and place LSUHSC-S in noncompliance with federal regulations.Recommendation:LSUHSC-S should ensure that a review and approval is performed on the final amounts requested for reimbursement and evidence is maintained. LSUSHC-S should also ensure that established controls are followed to ensure the review and approval is performed by someone other than the preparer.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-55).
2022-005 - Noncompliance with and Weakness in Controls over Federal Research and Development ExpensesAward Years: VariousAward Numbers: VariousCompliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesPass-Through Entities: VariousRepeat Finding: Yes (Prior Year Finding No. 2021-007)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In addition, LSUHSC-S did not ensure that costs charged to federal awards were allowable in accordance with federal regulations and the terms and conditions of the award when requesting reimbursement.In a non-statistical random sample of 50 out of 10,798 expense transactions charged to R&D during the fiscal year ending June 30, 2022, the following exceptions were noted:? Three (6%) purchasing card (P-Card) transactions were not allowable in accordance with federal regulations and the terms and conditions of the award and are considered questioned costs totaling $1,073.? For five (10%) of 50 transactions tested, LSUHSC-S overstated expenses on the Schedule of Expenditures of Federal Awards because the award was fully funded, and expenses in excess of the award amount were not removed from the project used to identify expenditures to federal awards in the accounting records, or the expense was determined not allowable as noted above.? Seven (35%) of 20 time and effort certifications for salary and related benefit expenses tested were completed 119 to 461 days after the end of the quarter.We performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 838 (51%) out of 1,654 adjusting journal entries were made more than 90 days after the end of the quarter from the original transactions. The adjustments were made 97 to 1,026 days after the original transactions were recorded and 96 to 953 days after the end of the quarter.In a non-statistical random sample of 10 out of 1,654 payroll adjusting entries affecting R&D, tested by employee, project id (related to federal award), and journal id, six (60%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. Two of these adjusting entries added costs to the federal award projects and are considered questioned costs totaling $28,324.Criteria:2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity?s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments.Per LSUHSC-S?s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S?s policy, time and effort certifications should be completed within approximately 90 days of the end of the quarter. Management interprets the end of the quarter to be when the time and effort reports are sent to the departments once the last month of the quarter is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the quarterly reporting period, a payroll reallocation must be created within 30 days.Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework? issued by the Committee of Sponsoring Organizations of the Treadway Commission. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions.In addition, the National Institute of Health (NIH) is the grantor for the majority of the LSUHSC-S?s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made ?to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable.2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs.Cause:LSUHSC-S?s approval of P-Card transactions did not provide sufficient review of the allowability of expenses on federal awards. LSUHSC-S has procedures in place to review expenses prior to requesting reimbursement; however, it did not ensure that the necessary adjustments were made to the accounting system in a timely manner for expenses that were not allowed for reimbursement. In addition, training to emphasize accountability and the importance of completing time and effort certifications timely and accurately per policy was not completed as planned during fiscal year 2022 due to staffing shortages.LSUHSC-S is still in the process of implementing the corrective action outlined in the prior year to include documentation of adjusted effort and questions to address justification for the adjustment, errors, and timeliness on a modified Personnel Change form.Effect:Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects.In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor.Recommendation:Management should monitor time and effort certifications completed by the departments and investigate and obtain justification from department personnel for untimely certifications, as well as untimely adjustments and lack of supporting documentation for adjustments to enforce established policies. Management should ensure adequate design and operating effectiveness of controls over expenses, including P-Card expenses, charged to federal awards to verify allowability of costs in accordance with federal requirements and grant terms and conditions prior to requesting reimbursement. Management should also consider implementing other complementary controls such as preventing costs from being charged to projects in the accounting system beyond the approved budget or period of performance.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-52).
2022-005 - Noncompliance with and Weakness in Controls over Federal Research and Development ExpensesAward Years: VariousAward Numbers: VariousCompliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesPass-Through Entities: VariousRepeat Finding: Yes (Prior Year Finding No. 2021-007)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In addition, LSUHSC-S did not ensure that costs charged to federal awards were allowable in accordance with federal regulations and the terms and conditions of the award when requesting reimbursement.In a non-statistical random sample of 50 out of 10,798 expense transactions charged to R&D during the fiscal year ending June 30, 2022, the following exceptions were noted:? Three (6%) purchasing card (P-Card) transactions were not allowable in accordance with federal regulations and the terms and conditions of the award and are considered questioned costs totaling $1,073.? For five (10%) of 50 transactions tested, LSUHSC-S overstated expenses on the Schedule of Expenditures of Federal Awards because the award was fully funded, and expenses in excess of the award amount were not removed from the project used to identify expenditures to federal awards in the accounting records, or the expense was determined not allowable as noted above.? Seven (35%) of 20 time and effort certifications for salary and related benefit expenses tested were completed 119 to 461 days after the end of the quarter.We performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 838 (51%) out of 1,654 adjusting journal entries were made more than 90 days after the end of the quarter from the original transactions. The adjustments were made 97 to 1,026 days after the original transactions were recorded and 96 to 953 days after the end of the quarter.In a non-statistical random sample of 10 out of 1,654 payroll adjusting entries affecting R&D, tested by employee, project id (related to federal award), and journal id, six (60%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. Two of these adjusting entries added costs to the federal award projects and are considered questioned costs totaling $28,324.Criteria:2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity?s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments.Per LSUHSC-S?s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S?s policy, time and effort certifications should be completed within approximately 90 days of the end of the quarter. Management interprets the end of the quarter to be when the time and effort reports are sent to the departments once the last month of the quarter is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the quarterly reporting period, a payroll reallocation must be created within 30 days.Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework? issued by the Committee of Sponsoring Organizations of the Treadway Commission. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions.In addition, the National Institute of Health (NIH) is the grantor for the majority of the LSUHSC-S?s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made ?to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable.2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs.Cause:LSUHSC-S?s approval of P-Card transactions did not provide sufficient review of the allowability of expenses on federal awards. LSUHSC-S has procedures in place to review expenses prior to requesting reimbursement; however, it did not ensure that the necessary adjustments were made to the accounting system in a timely manner for expenses that were not allowed for reimbursement. In addition, training to emphasize accountability and the importance of completing time and effort certifications timely and accurately per policy was not completed as planned during fiscal year 2022 due to staffing shortages.LSUHSC-S is still in the process of implementing the corrective action outlined in the prior year to include documentation of adjusted effort and questions to address justification for the adjustment, errors, and timeliness on a modified Personnel Change form.Effect:Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects.In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor.Recommendation:Management should monitor time and effort certifications completed by the departments and investigate and obtain justification from department personnel for untimely certifications, as well as untimely adjustments and lack of supporting documentation for adjustments to enforce established policies. Management should ensure adequate design and operating effectiveness of controls over expenses, including P-Card expenses, charged to federal awards to verify allowability of costs in accordance with federal requirements and grant terms and conditions prior to requesting reimbursement. Management should also consider implementing other complementary controls such as preventing costs from being charged to projects in the accounting system beyond the approved budget or period of performance.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-52).
2022-035 - Weakness in Controls over Cash Management RequirementsAward Years: VariousAward Numbers: VariousCompliance Requirement: Cash ManagementRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:LSUHSC-S did not follow its prescribed controls over compliance with the cash management requirements of R&D programs. We reviewed a non-statistical sample of 25 federal R&D expense transactions resulting in reimbursement request support for two subaward invoice reconciliations and ten monthly direct award reconciliations, for the fiscal year ending June 30, 2022, from a population of 11,969 expense transactions. We also reviewed the two monthly reconciliations for July and November 2021 that were not selected from the expense transactions. We noted the following:? Four (29%) of 14 reconciliations had no evidence of review or approval by someone other than the preparer.? Ten (71%) of 14 approved reconciliations did not agree to the reimbursement request submitted to the grantor.Criteria:2 CFR 200.303 requires that non-federal entities establish and maintain 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.LSUHSC-S has established controls over cash management requirements, which consist of a monthly reconciliation of reimbursement requests for R&D expenses and includes the review and approval by someone other than the preparer.Cause:LSUHSC-S did not follow its established controls over monthly reconciliations.LSUHSC-S represented that the monthly reconciliations are the starting point in the process and additional determinations of which amounts should be drawn down are made after the reconciliation has been completed. LSUHSC-S did not provide any evidence that additional review and approval was performed prior to the reimbursement request.LSUHSC-S did not perform the drawdowns on a monthly basis when the reconciliations were performed. Drawdowns were performed in March and June 2022, and after fiscal year end in July, August, and October 2022 for expenses incurred during the fiscal year ending June 30, 2022. Management provided additional reconciliations for the draw down amounts, but there was no evidence of review and approval by someone other than the preparer.Effect:Failure to implement sufficient controls over cash management could result in LSUHSC-S requesting reimbursement for expenses not incurred prior to the request and place LSUHSC-S in noncompliance with federal regulations.Recommendation:LSUHSC-S should ensure that a review and approval is performed on the final amounts requested for reimbursement and evidence is maintained. LSUSHC-S should also ensure that established controls are followed to ensure the review and approval is performed by someone other than the preparer.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-55).
2022-005 - Noncompliance with and Weakness in Controls over Federal Research and Development ExpensesAward Years: VariousAward Numbers: VariousCompliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesPass-Through Entities: VariousRepeat Finding: Yes (Prior Year Finding No. 2021-007)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In addition, LSUHSC-S did not ensure that costs charged to federal awards were allowable in accordance with federal regulations and the terms and conditions of the award when requesting reimbursement.In a non-statistical random sample of 50 out of 10,798 expense transactions charged to R&D during the fiscal year ending June 30, 2022, the following exceptions were noted:? Three (6%) purchasing card (P-Card) transactions were not allowable in accordance with federal regulations and the terms and conditions of the award and are considered questioned costs totaling $1,073.? For five (10%) of 50 transactions tested, LSUHSC-S overstated expenses on the Schedule of Expenditures of Federal Awards because the award was fully funded, and expenses in excess of the award amount were not removed from the project used to identify expenditures to federal awards in the accounting records, or the expense was determined not allowable as noted above.? Seven (35%) of 20 time and effort certifications for salary and related benefit expenses tested were completed 119 to 461 days after the end of the quarter.We performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 838 (51%) out of 1,654 adjusting journal entries were made more than 90 days after the end of the quarter from the original transactions. The adjustments were made 97 to 1,026 days after the original transactions were recorded and 96 to 953 days after the end of the quarter.In a non-statistical random sample of 10 out of 1,654 payroll adjusting entries affecting R&D, tested by employee, project id (related to federal award), and journal id, six (60%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. Two of these adjusting entries added costs to the federal award projects and are considered questioned costs totaling $28,324.Criteria:2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity?s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments.Per LSUHSC-S?s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S?s policy, time and effort certifications should be completed within approximately 90 days of the end of the quarter. Management interprets the end of the quarter to be when the time and effort reports are sent to the departments once the last month of the quarter is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the quarterly reporting period, a payroll reallocation must be created within 30 days.Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework? issued by the Committee of Sponsoring Organizations of the Treadway Commission. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions.In addition, the National Institute of Health (NIH) is the grantor for the majority of the LSUHSC-S?s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made ?to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable.2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs.Cause:LSUHSC-S?s approval of P-Card transactions did not provide sufficient review of the allowability of expenses on federal awards. LSUHSC-S has procedures in place to review expenses prior to requesting reimbursement; however, it did not ensure that the necessary adjustments were made to the accounting system in a timely manner for expenses that were not allowed for reimbursement. In addition, training to emphasize accountability and the importance of completing time and effort certifications timely and accurately per policy was not completed as planned during fiscal year 2022 due to staffing shortages.LSUHSC-S is still in the process of implementing the corrective action outlined in the prior year to include documentation of adjusted effort and questions to address justification for the adjustment, errors, and timeliness on a modified Personnel Change form.Effect:Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects.In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor.Recommendation:Management should monitor time and effort certifications completed by the departments and investigate and obtain justification from department personnel for untimely certifications, as well as untimely adjustments and lack of supporting documentation for adjustments to enforce established policies. Management should ensure adequate design and operating effectiveness of controls over expenses, including P-Card expenses, charged to federal awards to verify allowability of costs in accordance with federal requirements and grant terms and conditions prior to requesting reimbursement. Management should also consider implementing other complementary controls such as preventing costs from being charged to projects in the accounting system beyond the approved budget or period of performance.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-52).
2022-005 - Noncompliance with and Weakness in Controls over Federal Research and Development ExpensesAward Years: VariousAward Numbers: VariousCompliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesPass-Through Entities: VariousRepeat Finding: Yes (Prior Year Finding No. 2021-007)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In addition, LSUHSC-S did not ensure that costs charged to federal awards were allowable in accordance with federal regulations and the terms and conditions of the award when requesting reimbursement.In a non-statistical random sample of 50 out of 10,798 expense transactions charged to R&D during the fiscal year ending June 30, 2022, the following exceptions were noted:? Three (6%) purchasing card (P-Card) transactions were not allowable in accordance with federal regulations and the terms and conditions of the award and are considered questioned costs totaling $1,073.? For five (10%) of 50 transactions tested, LSUHSC-S overstated expenses on the Schedule of Expenditures of Federal Awards because the award was fully funded, and expenses in excess of the award amount were not removed from the project used to identify expenditures to federal awards in the accounting records, or the expense was determined not allowable as noted above.? Seven (35%) of 20 time and effort certifications for salary and related benefit expenses tested were completed 119 to 461 days after the end of the quarter.We performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 838 (51%) out of 1,654 adjusting journal entries were made more than 90 days after the end of the quarter from the original transactions. The adjustments were made 97 to 1,026 days after the original transactions were recorded and 96 to 953 days after the end of the quarter.In a non-statistical random sample of 10 out of 1,654 payroll adjusting entries affecting R&D, tested by employee, project id (related to federal award), and journal id, six (60%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. Two of these adjusting entries added costs to the federal award projects and are considered questioned costs totaling $28,324.Criteria:2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity?s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments.Per LSUHSC-S?s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S?s policy, time and effort certifications should be completed within approximately 90 days of the end of the quarter. Management interprets the end of the quarter to be when the time and effort reports are sent to the departments once the last month of the quarter is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the quarterly reporting period, a payroll reallocation must be created within 30 days.Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework? issued by the Committee of Sponsoring Organizations of the Treadway Commission. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions.In addition, the National Institute of Health (NIH) is the grantor for the majority of the LSUHSC-S?s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made ?to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable.2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs.Cause:LSUHSC-S?s approval of P-Card transactions did not provide sufficient review of the allowability of expenses on federal awards. LSUHSC-S has procedures in place to review expenses prior to requesting reimbursement; however, it did not ensure that the necessary adjustments were made to the accounting system in a timely manner for expenses that were not allowed for reimbursement. In addition, training to emphasize accountability and the importance of completing time and effort certifications timely and accurately per policy was not completed as planned during fiscal year 2022 due to staffing shortages.LSUHSC-S is still in the process of implementing the corrective action outlined in the prior year to include documentation of adjusted effort and questions to address justification for the adjustment, errors, and timeliness on a modified Personnel Change form.Effect:Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects.In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor.Recommendation:Management should monitor time and effort certifications completed by the departments and investigate and obtain justification from department personnel for untimely certifications, as well as untimely adjustments and lack of supporting documentation for adjustments to enforce established policies. Management should ensure adequate design and operating effectiveness of controls over expenses, including P-Card expenses, charged to federal awards to verify allowability of costs in accordance with federal requirements and grant terms and conditions prior to requesting reimbursement. Management should also consider implementing other complementary controls such as preventing costs from being charged to projects in the accounting system beyond the approved budget or period of performance.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-52).
2022-035 - Weakness in Controls over Cash Management RequirementsAward Years: VariousAward Numbers: VariousCompliance Requirement: Cash ManagementRepeat Finding: NoSee Schedule of Findings and Questioned Costs for chart/tableCondition:LSUHSC-S did not follow its prescribed controls over compliance with the cash management requirements of R&D programs. We reviewed a non-statistical sample of 25 federal R&D expense transactions resulting in reimbursement request support for two subaward invoice reconciliations and ten monthly direct award reconciliations, for the fiscal year ending June 30, 2022, from a population of 11,969 expense transactions. We also reviewed the two monthly reconciliations for July and November 2021 that were not selected from the expense transactions. We noted the following:? Four (29%) of 14 reconciliations had no evidence of review or approval by someone other than the preparer.? Ten (71%) of 14 approved reconciliations did not agree to the reimbursement request submitted to the grantor.Criteria:2 CFR 200.303 requires that non-federal entities establish and maintain 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.LSUHSC-S has established controls over cash management requirements, which consist of a monthly reconciliation of reimbursement requests for R&D expenses and includes the review and approval by someone other than the preparer.Cause:LSUHSC-S did not follow its established controls over monthly reconciliations.LSUHSC-S represented that the monthly reconciliations are the starting point in the process and additional determinations of which amounts should be drawn down are made after the reconciliation has been completed. LSUHSC-S did not provide any evidence that additional review and approval was performed prior to the reimbursement request.LSUHSC-S did not perform the drawdowns on a monthly basis when the reconciliations were performed. Drawdowns were performed in March and June 2022, and after fiscal year end in July, August, and October 2022 for expenses incurred during the fiscal year ending June 30, 2022. Management provided additional reconciliations for the draw down amounts, but there was no evidence of review and approval by someone other than the preparer.Effect:Failure to implement sufficient controls over cash management could result in LSUHSC-S requesting reimbursement for expenses not incurred prior to the request and place LSUHSC-S in noncompliance with federal regulations.Recommendation:LSUHSC-S should ensure that a review and approval is performed on the final amounts requested for reimbursement and evidence is maintained. LSUSHC-S should also ensure that established controls are followed to ensure the review and approval is performed by someone other than the preparer.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-55).
2022-005 - Noncompliance with and Weakness in Controls over Federal Research and Development ExpensesAward Years: VariousAward Numbers: VariousCompliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesPass-Through Entities: VariousRepeat Finding: Yes (Prior Year Finding No. 2021-007)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In addition, LSUHSC-S did not ensure that costs charged to federal awards were allowable in accordance with federal regulations and the terms and conditions of the award when requesting reimbursement.In a non-statistical random sample of 50 out of 10,798 expense transactions charged to R&D during the fiscal year ending June 30, 2022, the following exceptions were noted:? Three (6%) purchasing card (P-Card) transactions were not allowable in accordance with federal regulations and the terms and conditions of the award and are considered questioned costs totaling $1,073.? For five (10%) of 50 transactions tested, LSUHSC-S overstated expenses on the Schedule of Expenditures of Federal Awards because the award was fully funded, and expenses in excess of the award amount were not removed from the project used to identify expenditures to federal awards in the accounting records, or the expense was determined not allowable as noted above.? Seven (35%) of 20 time and effort certifications for salary and related benefit expenses tested were completed 119 to 461 days after the end of the quarter.We performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 838 (51%) out of 1,654 adjusting journal entries were made more than 90 days after the end of the quarter from the original transactions. The adjustments were made 97 to 1,026 days after the original transactions were recorded and 96 to 953 days after the end of the quarter.In a non-statistical random sample of 10 out of 1,654 payroll adjusting entries affecting R&D, tested by employee, project id (related to federal award), and journal id, six (60%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. Two of these adjusting entries added costs to the federal award projects and are considered questioned costs totaling $28,324.Criteria:2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity?s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments.Per LSUHSC-S?s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S?s policy, time and effort certifications should be completed within approximately 90 days of the end of the quarter. Management interprets the end of the quarter to be when the time and effort reports are sent to the departments once the last month of the quarter is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the quarterly reporting period, a payroll reallocation must be created within 30 days.Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework? issued by the Committee of Sponsoring Organizations of the Treadway Commission. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions.In addition, the National Institute of Health (NIH) is the grantor for the majority of the LSUHSC-S?s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made ?to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable.2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs.Cause:LSUHSC-S?s approval of P-Card transactions did not provide sufficient review of the allowability of expenses on federal awards. LSUHSC-S has procedures in place to review expenses prior to requesting reimbursement; however, it did not ensure that the necessary adjustments were made to the accounting system in a timely manner for expenses that were not allowed for reimbursement. In addition, training to emphasize accountability and the importance of completing time and effort certifications timely and accurately per policy was not completed as planned during fiscal year 2022 due to staffing shortages.LSUHSC-S is still in the process of implementing the corrective action outlined in the prior year to include documentation of adjusted effort and questions to address justification for the adjustment, errors, and timeliness on a modified Personnel Change form.Effect:Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects.In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor.Recommendation:Management should monitor time and effort certifications completed by the departments and investigate and obtain justification from department personnel for untimely certifications, as well as untimely adjustments and lack of supporting documentation for adjustments to enforce established policies. Management should ensure adequate design and operating effectiveness of controls over expenses, including P-Card expenses, charged to federal awards to verify allowability of costs in accordance with federal requirements and grant terms and conditions prior to requesting reimbursement. Management should also consider implementing other complementary controls such as preventing costs from being charged to projects in the accounting system beyond the approved budget or period of performance.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-52).
2022-005 - Noncompliance with and Weakness in Controls over Federal Research and Development ExpensesAward Years: VariousAward Numbers: VariousCompliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost PrinciplesPass-Through Entities: VariousRepeat Finding: Yes (Prior Year Finding No. 2021-007)See Schedule of Findings and Questioned Costs for chart/tableCondition:For the fourth consecutive year, Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In addition, LSUHSC-S did not ensure that costs charged to federal awards were allowable in accordance with federal regulations and the terms and conditions of the award when requesting reimbursement.In a non-statistical random sample of 50 out of 10,798 expense transactions charged to R&D during the fiscal year ending June 30, 2022, the following exceptions were noted:? Three (6%) purchasing card (P-Card) transactions were not allowable in accordance with federal regulations and the terms and conditions of the award and are considered questioned costs totaling $1,073.? For five (10%) of 50 transactions tested, LSUHSC-S overstated expenses on the Schedule of Expenditures of Federal Awards because the award was fully funded, and expenses in excess of the award amount were not removed from the project used to identify expenditures to federal awards in the accounting records, or the expense was determined not allowable as noted above.? Seven (35%) of 20 time and effort certifications for salary and related benefit expenses tested were completed 119 to 461 days after the end of the quarter.We performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 838 (51%) out of 1,654 adjusting journal entries were made more than 90 days after the end of the quarter from the original transactions. The adjustments were made 97 to 1,026 days after the original transactions were recorded and 96 to 953 days after the end of the quarter.In a non-statistical random sample of 10 out of 1,654 payroll adjusting entries affecting R&D, tested by employee, project id (related to federal award), and journal id, six (60%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. Two of these adjusting entries added costs to the federal award projects and are considered questioned costs totaling $28,324.Criteria:2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity?s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments.Per LSUHSC-S?s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S?s policy, time and effort certifications should be completed within approximately 90 days of the end of the quarter. Management interprets the end of the quarter to be when the time and effort reports are sent to the departments once the last month of the quarter is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the quarterly reporting period, a payroll reallocation must be created within 30 days.Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework? issued by the Committee of Sponsoring Organizations of the Treadway Commission. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions.In addition, the National Institute of Health (NIH) is the grantor for the majority of the LSUHSC-S?s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made ?to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable.2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs.Cause:LSUHSC-S?s approval of P-Card transactions did not provide sufficient review of the allowability of expenses on federal awards. LSUHSC-S has procedures in place to review expenses prior to requesting reimbursement; however, it did not ensure that the necessary adjustments were made to the accounting system in a timely manner for expenses that were not allowed for reimbursement. In addition, training to emphasize accountability and the importance of completing time and effort certifications timely and accurately per policy was not completed as planned during fiscal year 2022 due to staffing shortages.LSUHSC-S is still in the process of implementing the corrective action outlined in the prior year to include documentation of adjusted effort and questions to address justification for the adjustment, errors, and timeliness on a modified Personnel Change form.Effect:Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects.In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor.Recommendation:Management should monitor time and effort certifications completed by the departments and investigate and obtain justification from department personnel for untimely certifications, as well as untimely adjustments and lack of supporting documentation for adjustments to enforce established policies. Management should ensure adequate design and operating effectiveness of controls over expenses, including P-Card expenses, charged to federal awards to verify allowability of costs in accordance with federal requirements and grant terms and conditions prior to requesting reimbursement. Management should also consider implementing other complementary controls such as preventing costs from being charged to projects in the accounting system beyond the approved budget or period of performance.Management?s Response and Corrective Action Plan:Management concurred with the finding and outlined a plan of corrective action (B-52).