Department of Justice Federal Financial Assistance Listing #16.812, 15PJDP-22-GG-03256-SCAX and 15PBJA-22-GG-04601-SCAX, 7/1/2023 – 6/30/2024 Second Chance Act Reentry Initiative Cash Management Material Weakness in Internal Control over Compliance and Other Noncompliance for a Non-Major Program Criteria: 2 CFR 200.303(a) states that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR 200.305 states that recipients’ payment methods must minimize the time elapsing between the transfer of funds from the Federal agency and the disbursement of funds by the recipient. Under Part 3, section C. of the Compliance supplement, for grants that are funded on a reimbursement basis, expenditures need to be incurred prior to the date of the reimbursement request. Condition: There were two months out of twelve where the draw request amount for the Second Chance Act Reentry program was switched with a draw request for another federal program. The draw request amount exceeded the actual expenditures incurred for these two months. Cause: The review and approval over the draw request did not identify the misclassification between the two grant programs. Effect: The draw request amounts for the Second Chance Act Reentry program exceeded the actual expenditures incurred for the two months by $55,054. Questioned Costs: $55,054. Context: A non-statistical sample of four out of twelve months were initially selected for testing. All draws submitted within the selected months were ultimately tested. Repeat Finding from Prior Year: No Recommendation: We acknowledge a review process is in place, however we recommend that management strengthen their controls surrounding the cash management process to ensure the review of funds being requested for reimbursement agree to the grant program supporting documentation. Views of Responsible Officials: Management is in agreement.
Assistance Listing Number, Federal Agency, and Program Name 10.500 U.S. Deptartment of Agriculture Cooperative Extension Services Research and Developement Cluster: 12.000, U.S. Department of Defense, U.S. Department of Defense 12.431, U.S. Department of Defense, Basic Scientific Research 47.041, National Science Foundation, Engineering Grants 47.070, National Science Foundation, Computer and Information Science and Engineering 81.049, U.S. Department of Energy, Office of Science Financial Assistance Program 93.855, U.S. Department of Health & Human Services, Allergy, Immunology and Transplantation Research 93.859, U.S. Department of Health & Human Services, Biomedical Research and Research Training 98.001, Agency for International Development, USAID Foreign Assistance for Programs Overseas Federal Award Identification Number and Year 10.500 2021 48762 35660, 2022 48703 38592, 2021 41590 34813 12.000 2021 21090200002 12.431 W52P1J 22 9 3009, W52P1J 20 9 3009 10 47.041 2129782 CMMI, 1647722 EEC, 2132142 EFMA 47.070 2333009 CCF 81.049 DE SC0019215 93.855 5R01AI146160 05 93.859 5R01GM143370 02 98.001 AID 7200AA18CA00009 Pass through Entity N/A Finding Type Significant deficiency Repeat Finding Yes 2023 001 Criteria As outlined in 2 CFR 200.305(b)(3), when the reimbursement method is used for payment, organizations must make a payment within 30 calendar days after receipt of the billing unless the federal awarding agency or pass through entity reasonably believes the request to be improper. Condition The University did not have adequate controls in place to ensure invoices to subrecipients were paid timely within the 30 calendar day requirement. Questioned Costs There were no questioned costs identified. Identification of How Questioned Costs Were Computed There were no questioned costs identified. Context Out of 60 payments to subrecipients that were tested related to the major programs tested, 21 were made after the 30 calendar day requirement. In all samples tested, payment was made to the subrecipient; however, the delayed payments ranged from 31 119 days between the invoice being received by the University and payment being made to the subrecipient. The University did implement new preventative controls in place effective December 31, 2023 in response to prior year finding (2023 001). Of the 21 payments made after the 30 calendar day requirement, 14 occured prior to December 31, 2023, and the remaining 7 occured after. Cause and Effect While the University had effective controls that were successful in achieving the 30 calendar day requirement for 39 samples, the University failed to provide supplemental support and preventive controls during a period when it was addressing an issue that prevented timely payment for certain subrecipients. Recommendation The University should ensure appropriate training of employees is taking place and a preventive control is implemented to ensure that payments are made within the required timeline. Views of Responsible Officials and Corrective Action Plan Purdue University will address the recommendations and implement the following preventative controls to ensure that payments are made within the required timeline. 1) The Office of Research will increase the priority around the 30-day processing deadline mandated by the Uniform Guidance 2 CFR 200.305 (b)(3). This will be accomplished through communications, training and expectation setting with the following audiences: a) Principal Investigators of active grants with sub-awards i) Blanket communication ii) Add the expected turnaround time on each sub-recipient communication when seeking principal investigator review and approval iii) Modify the workflow email to heighten the awareness and timeliness expectations of processing b) Sub-award Team in Sponsored Program Services i) Blanket communications to SPS, Research Account Specialists, Business Offices, Tax, Accounts Payable/Business Operations ii) Utilize a report developed for internal reporting and tracking of pending sub-invoices to improve follow-up on payments approaching the 30-day deadline iii) Increase the frequency of follow-up on outstanding invoices iv) Add the expected turnaround time to the expectations document for each Sub-Award Team Member v) Add sub-recipient payment deadlines to the mandatory training for the Sub-Award Team vi) Update payment terms to “Payable immediately Due net; Based on Doc Date” for all subrecipient invoices vii) Modify procedures for foreign sub payments to streamline the processing between tax and export control offices related to required screenings 2) Conduct semi-annual training/refresher with sub-award staff. The first training will be held January 2025. 3) Work with subaward team staff to ensure that adequate documentation is created and maintained related to the follow-up that occurs when issues are being investigated and resolved that causes a delay in processing. These include visual compliance screenings for foreign wire transfers and other situations where delays occur for justified reasons (performance issues, delay in progress reports, questionable charges, missing or incomplete information, line-item concerns, etc.). Maintain documentation in the grant or posting document file 4) Evaluate and continually monitor staffing levels on the sub-award team and seek supplemental staffing when warranted.
Assistance Listing Number, Federal Agency, and Program Name 10.500 U.S. Deptartment of Agriculture Cooperative Extension Services Research and Developement Cluster: 12.000, U.S. Department of Defense, U.S. Department of Defense 12.431, U.S. Department of Defense, Basic Scientific Research 47.041, National Science Foundation, Engineering Grants 47.070, National Science Foundation, Computer and Information Science and Engineering 81.049, U.S. Department of Energy, Office of Science Financial Assistance Program 93.855, U.S. Department of Health & Human Services, Allergy, Immunology and Transplantation Research 93.859, U.S. Department of Health & Human Services, Biomedical Research and Research Training 98.001, Agency for International Development, USAID Foreign Assistance for Programs Overseas Federal Award Identification Number and Year 10.500 2021 48762 35660, 2022 48703 38592, 2021 41590 34813 12.000 2021 21090200002 12.431 W52P1J 22 9 3009, W52P1J 20 9 3009 10 47.041 2129782 CMMI, 1647722 EEC, 2132142 EFMA 47.070 2333009 CCF 81.049 DE SC0019215 93.855 5R01AI146160 05 93.859 5R01GM143370 02 98.001 AID 7200AA18CA00009 Pass through Entity N/A Finding Type Significant deficiency Repeat Finding Yes 2023 001 Criteria As outlined in 2 CFR 200.305(b)(3), when the reimbursement method is used for payment, organizations must make a payment within 30 calendar days after receipt of the billing unless the federal awarding agency or pass through entity reasonably believes the request to be improper. Condition The University did not have adequate controls in place to ensure invoices to subrecipients were paid timely within the 30 calendar day requirement. Questioned Costs There were no questioned costs identified. Identification of How Questioned Costs Were Computed There were no questioned costs identified. Context Out of 60 payments to subrecipients that were tested related to the major programs tested, 21 were made after the 30 calendar day requirement. In all samples tested, payment was made to the subrecipient; however, the delayed payments ranged from 31 119 days between the invoice being received by the University and payment being made to the subrecipient. The University did implement new preventative controls in place effective December 31, 2023 in response to prior year finding (2023 001). Of the 21 payments made after the 30 calendar day requirement, 14 occured prior to December 31, 2023, and the remaining 7 occured after. Cause and Effect While the University had effective controls that were successful in achieving the 30 calendar day requirement for 39 samples, the University failed to provide supplemental support and preventive controls during a period when it was addressing an issue that prevented timely payment for certain subrecipients. Recommendation The University should ensure appropriate training of employees is taking place and a preventive control is implemented to ensure that payments are made within the required timeline. Views of Responsible Officials and Corrective Action Plan Purdue University will address the recommendations and implement the following preventative controls to ensure that payments are made within the required timeline. 1) The Office of Research will increase the priority around the 30-day processing deadline mandated by the Uniform Guidance 2 CFR 200.305 (b)(3). This will be accomplished through communications, training and expectation setting with the following audiences: a) Principal Investigators of active grants with sub-awards i) Blanket communication ii) Add the expected turnaround time on each sub-recipient communication when seeking principal investigator review and approval iii) Modify the workflow email to heighten the awareness and timeliness expectations of processing b) Sub-award Team in Sponsored Program Services i) Blanket communications to SPS, Research Account Specialists, Business Offices, Tax, Accounts Payable/Business Operations ii) Utilize a report developed for internal reporting and tracking of pending sub-invoices to improve follow-up on payments approaching the 30-day deadline iii) Increase the frequency of follow-up on outstanding invoices iv) Add the expected turnaround time to the expectations document for each Sub-Award Team Member v) Add sub-recipient payment deadlines to the mandatory training for the Sub-Award Team vi) Update payment terms to “Payable immediately Due net; Based on Doc Date” for all subrecipient invoices vii) Modify procedures for foreign sub payments to streamline the processing between tax and export control offices related to required screenings 2) Conduct semi-annual training/refresher with sub-award staff. The first training will be held January 2025. 3) Work with subaward team staff to ensure that adequate documentation is created and maintained related to the follow-up that occurs when issues are being investigated and resolved that causes a delay in processing. These include visual compliance screenings for foreign wire transfers and other situations where delays occur for justified reasons (performance issues, delay in progress reports, questionable charges, missing or incomplete information, line-item concerns, etc.). Maintain documentation in the grant or posting document file 4) Evaluate and continually monitor staffing levels on the sub-award team and seek supplemental staffing when warranted.
Assistance Listing Number, Federal Agency, and Program Name 10.500 U.S. Deptartment of Agriculture Cooperative Extension Services Research and Developement Cluster: 12.000, U.S. Department of Defense, U.S. Department of Defense 12.431, U.S. Department of Defense, Basic Scientific Research 47.041, National Science Foundation, Engineering Grants 47.070, National Science Foundation, Computer and Information Science and Engineering 81.049, U.S. Department of Energy, Office of Science Financial Assistance Program 93.855, U.S. Department of Health & Human Services, Allergy, Immunology and Transplantation Research 93.859, U.S. Department of Health & Human Services, Biomedical Research and Research Training 98.001, Agency for International Development, USAID Foreign Assistance for Programs Overseas Federal Award Identification Number and Year 10.500 2021 48762 35660, 2022 48703 38592, 2021 41590 34813 12.000 2021 21090200002 12.431 W52P1J 22 9 3009, W52P1J 20 9 3009 10 47.041 2129782 CMMI, 1647722 EEC, 2132142 EFMA 47.070 2333009 CCF 81.049 DE SC0019215 93.855 5R01AI146160 05 93.859 5R01GM143370 02 98.001 AID 7200AA18CA00009 Pass through Entity N/A Finding Type Significant deficiency Repeat Finding Yes 2023 001 Criteria As outlined in 2 CFR 200.305(b)(3), when the reimbursement method is used for payment, organizations must make a payment within 30 calendar days after receipt of the billing unless the federal awarding agency or pass through entity reasonably believes the request to be improper. Condition The University did not have adequate controls in place to ensure invoices to subrecipients were paid timely within the 30 calendar day requirement. Questioned Costs There were no questioned costs identified. Identification of How Questioned Costs Were Computed There were no questioned costs identified. Context Out of 60 payments to subrecipients that were tested related to the major programs tested, 21 were made after the 30 calendar day requirement. In all samples tested, payment was made to the subrecipient; however, the delayed payments ranged from 31 119 days between the invoice being received by the University and payment being made to the subrecipient. The University did implement new preventative controls in place effective December 31, 2023 in response to prior year finding (2023 001). Of the 21 payments made after the 30 calendar day requirement, 14 occured prior to December 31, 2023, and the remaining 7 occured after. Cause and Effect While the University had effective controls that were successful in achieving the 30 calendar day requirement for 39 samples, the University failed to provide supplemental support and preventive controls during a period when it was addressing an issue that prevented timely payment for certain subrecipients. Recommendation The University should ensure appropriate training of employees is taking place and a preventive control is implemented to ensure that payments are made within the required timeline. Views of Responsible Officials and Corrective Action Plan Purdue University will address the recommendations and implement the following preventative controls to ensure that payments are made within the required timeline. 1) The Office of Research will increase the priority around the 30-day processing deadline mandated by the Uniform Guidance 2 CFR 200.305 (b)(3). This will be accomplished through communications, training and expectation setting with the following audiences: a) Principal Investigators of active grants with sub-awards i) Blanket communication ii) Add the expected turnaround time on each sub-recipient communication when seeking principal investigator review and approval iii) Modify the workflow email to heighten the awareness and timeliness expectations of processing b) Sub-award Team in Sponsored Program Services i) Blanket communications to SPS, Research Account Specialists, Business Offices, Tax, Accounts Payable/Business Operations ii) Utilize a report developed for internal reporting and tracking of pending sub-invoices to improve follow-up on payments approaching the 30-day deadline iii) Increase the frequency of follow-up on outstanding invoices iv) Add the expected turnaround time to the expectations document for each Sub-Award Team Member v) Add sub-recipient payment deadlines to the mandatory training for the Sub-Award Team vi) Update payment terms to “Payable immediately Due net; Based on Doc Date” for all subrecipient invoices vii) Modify procedures for foreign sub payments to streamline the processing between tax and export control offices related to required screenings 2) Conduct semi-annual training/refresher with sub-award staff. The first training will be held January 2025. 3) Work with subaward team staff to ensure that adequate documentation is created and maintained related to the follow-up that occurs when issues are being investigated and resolved that causes a delay in processing. These include visual compliance screenings for foreign wire transfers and other situations where delays occur for justified reasons (performance issues, delay in progress reports, questionable charges, missing or incomplete information, line-item concerns, etc.). Maintain documentation in the grant or posting document file 4) Evaluate and continually monitor staffing levels on the sub-award team and seek supplemental staffing when warranted.
Assistance Listing Number, Federal Agency, and Program Name 10.500 U.S. Deptartment of Agriculture Cooperative Extension Services Research and Developement Cluster: 12.000, U.S. Department of Defense, U.S. Department of Defense 12.431, U.S. Department of Defense, Basic Scientific Research 47.041, National Science Foundation, Engineering Grants 47.070, National Science Foundation, Computer and Information Science and Engineering 81.049, U.S. Department of Energy, Office of Science Financial Assistance Program 93.855, U.S. Department of Health & Human Services, Allergy, Immunology and Transplantation Research 93.859, U.S. Department of Health & Human Services, Biomedical Research and Research Training 98.001, Agency for International Development, USAID Foreign Assistance for Programs Overseas Federal Award Identification Number and Year 10.500 2021 48762 35660, 2022 48703 38592, 2021 41590 34813 12.000 2021 21090200002 12.431 W52P1J 22 9 3009, W52P1J 20 9 3009 10 47.041 2129782 CMMI, 1647722 EEC, 2132142 EFMA 47.070 2333009 CCF 81.049 DE SC0019215 93.855 5R01AI146160 05 93.859 5R01GM143370 02 98.001 AID 7200AA18CA00009 Pass through Entity N/A Finding Type Significant deficiency Repeat Finding Yes 2023 001 Criteria As outlined in 2 CFR 200.305(b)(3), when the reimbursement method is used for payment, organizations must make a payment within 30 calendar days after receipt of the billing unless the federal awarding agency or pass through entity reasonably believes the request to be improper. Condition The University did not have adequate controls in place to ensure invoices to subrecipients were paid timely within the 30 calendar day requirement. Questioned Costs There were no questioned costs identified. Identification of How Questioned Costs Were Computed There were no questioned costs identified. Context Out of 60 payments to subrecipients that were tested related to the major programs tested, 21 were made after the 30 calendar day requirement. In all samples tested, payment was made to the subrecipient; however, the delayed payments ranged from 31 119 days between the invoice being received by the University and payment being made to the subrecipient. The University did implement new preventative controls in place effective December 31, 2023 in response to prior year finding (2023 001). Of the 21 payments made after the 30 calendar day requirement, 14 occured prior to December 31, 2023, and the remaining 7 occured after. Cause and Effect While the University had effective controls that were successful in achieving the 30 calendar day requirement for 39 samples, the University failed to provide supplemental support and preventive controls during a period when it was addressing an issue that prevented timely payment for certain subrecipients. Recommendation The University should ensure appropriate training of employees is taking place and a preventive control is implemented to ensure that payments are made within the required timeline. Views of Responsible Officials and Corrective Action Plan Purdue University will address the recommendations and implement the following preventative controls to ensure that payments are made within the required timeline. 1) The Office of Research will increase the priority around the 30-day processing deadline mandated by the Uniform Guidance 2 CFR 200.305 (b)(3). This will be accomplished through communications, training and expectation setting with the following audiences: a) Principal Investigators of active grants with sub-awards i) Blanket communication ii) Add the expected turnaround time on each sub-recipient communication when seeking principal investigator review and approval iii) Modify the workflow email to heighten the awareness and timeliness expectations of processing b) Sub-award Team in Sponsored Program Services i) Blanket communications to SPS, Research Account Specialists, Business Offices, Tax, Accounts Payable/Business Operations ii) Utilize a report developed for internal reporting and tracking of pending sub-invoices to improve follow-up on payments approaching the 30-day deadline iii) Increase the frequency of follow-up on outstanding invoices iv) Add the expected turnaround time to the expectations document for each Sub-Award Team Member v) Add sub-recipient payment deadlines to the mandatory training for the Sub-Award Team vi) Update payment terms to “Payable immediately Due net; Based on Doc Date” for all subrecipient invoices vii) Modify procedures for foreign sub payments to streamline the processing between tax and export control offices related to required screenings 2) Conduct semi-annual training/refresher with sub-award staff. The first training will be held January 2025. 3) Work with subaward team staff to ensure that adequate documentation is created and maintained related to the follow-up that occurs when issues are being investigated and resolved that causes a delay in processing. These include visual compliance screenings for foreign wire transfers and other situations where delays occur for justified reasons (performance issues, delay in progress reports, questionable charges, missing or incomplete information, line-item concerns, etc.). Maintain documentation in the grant or posting document file 4) Evaluate and continually monitor staffing levels on the sub-award team and seek supplemental staffing when warranted.
Assistance Listing Number, Federal Agency, and Program Name 10.500 U.S. Deptartment of Agriculture Cooperative Extension Services Research and Developement Cluster: 12.000, U.S. Department of Defense, U.S. Department of Defense 12.431, U.S. Department of Defense, Basic Scientific Research 47.041, National Science Foundation, Engineering Grants 47.070, National Science Foundation, Computer and Information Science and Engineering 81.049, U.S. Department of Energy, Office of Science Financial Assistance Program 93.855, U.S. Department of Health & Human Services, Allergy, Immunology and Transplantation Research 93.859, U.S. Department of Health & Human Services, Biomedical Research and Research Training 98.001, Agency for International Development, USAID Foreign Assistance for Programs Overseas Federal Award Identification Number and Year 10.500 2021 48762 35660, 2022 48703 38592, 2021 41590 34813 12.000 2021 21090200002 12.431 W52P1J 22 9 3009, W52P1J 20 9 3009 10 47.041 2129782 CMMI, 1647722 EEC, 2132142 EFMA 47.070 2333009 CCF 81.049 DE SC0019215 93.855 5R01AI146160 05 93.859 5R01GM143370 02 98.001 AID 7200AA18CA00009 Pass through Entity N/A Finding Type Significant deficiency Repeat Finding Yes 2023 001 Criteria As outlined in 2 CFR 200.305(b)(3), when the reimbursement method is used for payment, organizations must make a payment within 30 calendar days after receipt of the billing unless the federal awarding agency or pass through entity reasonably believes the request to be improper. Condition The University did not have adequate controls in place to ensure invoices to subrecipients were paid timely within the 30 calendar day requirement. Questioned Costs There were no questioned costs identified. Identification of How Questioned Costs Were Computed There were no questioned costs identified. Context Out of 60 payments to subrecipients that were tested related to the major programs tested, 21 were made after the 30 calendar day requirement. In all samples tested, payment was made to the subrecipient; however, the delayed payments ranged from 31 119 days between the invoice being received by the University and payment being made to the subrecipient. The University did implement new preventative controls in place effective December 31, 2023 in response to prior year finding (2023 001). Of the 21 payments made after the 30 calendar day requirement, 14 occured prior to December 31, 2023, and the remaining 7 occured after. Cause and Effect While the University had effective controls that were successful in achieving the 30 calendar day requirement for 39 samples, the University failed to provide supplemental support and preventive controls during a period when it was addressing an issue that prevented timely payment for certain subrecipients. Recommendation The University should ensure appropriate training of employees is taking place and a preventive control is implemented to ensure that payments are made within the required timeline. Views of Responsible Officials and Corrective Action Plan Purdue University will address the recommendations and implement the following preventative controls to ensure that payments are made within the required timeline. 1) The Office of Research will increase the priority around the 30-day processing deadline mandated by the Uniform Guidance 2 CFR 200.305 (b)(3). This will be accomplished through communications, training and expectation setting with the following audiences: a) Principal Investigators of active grants with sub-awards i) Blanket communication ii) Add the expected turnaround time on each sub-recipient communication when seeking principal investigator review and approval iii) Modify the workflow email to heighten the awareness and timeliness expectations of processing b) Sub-award Team in Sponsored Program Services i) Blanket communications to SPS, Research Account Specialists, Business Offices, Tax, Accounts Payable/Business Operations ii) Utilize a report developed for internal reporting and tracking of pending sub-invoices to improve follow-up on payments approaching the 30-day deadline iii) Increase the frequency of follow-up on outstanding invoices iv) Add the expected turnaround time to the expectations document for each Sub-Award Team Member v) Add sub-recipient payment deadlines to the mandatory training for the Sub-Award Team vi) Update payment terms to “Payable immediately Due net; Based on Doc Date” for all subrecipient invoices vii) Modify procedures for foreign sub payments to streamline the processing between tax and export control offices related to required screenings 2) Conduct semi-annual training/refresher with sub-award staff. The first training will be held January 2025. 3) Work with subaward team staff to ensure that adequate documentation is created and maintained related to the follow-up that occurs when issues are being investigated and resolved that causes a delay in processing. These include visual compliance screenings for foreign wire transfers and other situations where delays occur for justified reasons (performance issues, delay in progress reports, questionable charges, missing or incomplete information, line-item concerns, etc.). Maintain documentation in the grant or posting document file 4) Evaluate and continually monitor staffing levels on the sub-award team and seek supplemental staffing when warranted.
Assistance Listing Number, Federal Agency, and Program Name 10.500 U.S. Deptartment of Agriculture Cooperative Extension Services Research and Developement Cluster: 12.000, U.S. Department of Defense, U.S. Department of Defense 12.431, U.S. Department of Defense, Basic Scientific Research 47.041, National Science Foundation, Engineering Grants 47.070, National Science Foundation, Computer and Information Science and Engineering 81.049, U.S. Department of Energy, Office of Science Financial Assistance Program 93.855, U.S. Department of Health & Human Services, Allergy, Immunology and Transplantation Research 93.859, U.S. Department of Health & Human Services, Biomedical Research and Research Training 98.001, Agency for International Development, USAID Foreign Assistance for Programs Overseas Federal Award Identification Number and Year 10.500 2021 48762 35660, 2022 48703 38592, 2021 41590 34813 12.000 2021 21090200002 12.431 W52P1J 22 9 3009, W52P1J 20 9 3009 10 47.041 2129782 CMMI, 1647722 EEC, 2132142 EFMA 47.070 2333009 CCF 81.049 DE SC0019215 93.855 5R01AI146160 05 93.859 5R01GM143370 02 98.001 AID 7200AA18CA00009 Pass through Entity N/A Finding Type Significant deficiency Repeat Finding Yes 2023 001 Criteria As outlined in 2 CFR 200.305(b)(3), when the reimbursement method is used for payment, organizations must make a payment within 30 calendar days after receipt of the billing unless the federal awarding agency or pass through entity reasonably believes the request to be improper. Condition The University did not have adequate controls in place to ensure invoices to subrecipients were paid timely within the 30 calendar day requirement. Questioned Costs There were no questioned costs identified. Identification of How Questioned Costs Were Computed There were no questioned costs identified. Context Out of 60 payments to subrecipients that were tested related to the major programs tested, 21 were made after the 30 calendar day requirement. In all samples tested, payment was made to the subrecipient; however, the delayed payments ranged from 31 119 days between the invoice being received by the University and payment being made to the subrecipient. The University did implement new preventative controls in place effective December 31, 2023 in response to prior year finding (2023 001). Of the 21 payments made after the 30 calendar day requirement, 14 occured prior to December 31, 2023, and the remaining 7 occured after. Cause and Effect While the University had effective controls that were successful in achieving the 30 calendar day requirement for 39 samples, the University failed to provide supplemental support and preventive controls during a period when it was addressing an issue that prevented timely payment for certain subrecipients. Recommendation The University should ensure appropriate training of employees is taking place and a preventive control is implemented to ensure that payments are made within the required timeline. Views of Responsible Officials and Corrective Action Plan Purdue University will address the recommendations and implement the following preventative controls to ensure that payments are made within the required timeline. 1) The Office of Research will increase the priority around the 30-day processing deadline mandated by the Uniform Guidance 2 CFR 200.305 (b)(3). This will be accomplished through communications, training and expectation setting with the following audiences: a) Principal Investigators of active grants with sub-awards i) Blanket communication ii) Add the expected turnaround time on each sub-recipient communication when seeking principal investigator review and approval iii) Modify the workflow email to heighten the awareness and timeliness expectations of processing b) Sub-award Team in Sponsored Program Services i) Blanket communications to SPS, Research Account Specialists, Business Offices, Tax, Accounts Payable/Business Operations ii) Utilize a report developed for internal reporting and tracking of pending sub-invoices to improve follow-up on payments approaching the 30-day deadline iii) Increase the frequency of follow-up on outstanding invoices iv) Add the expected turnaround time to the expectations document for each Sub-Award Team Member v) Add sub-recipient payment deadlines to the mandatory training for the Sub-Award Team vi) Update payment terms to “Payable immediately Due net; Based on Doc Date” for all subrecipient invoices vii) Modify procedures for foreign sub payments to streamline the processing between tax and export control offices related to required screenings 2) Conduct semi-annual training/refresher with sub-award staff. The first training will be held January 2025. 3) Work with subaward team staff to ensure that adequate documentation is created and maintained related to the follow-up that occurs when issues are being investigated and resolved that causes a delay in processing. These include visual compliance screenings for foreign wire transfers and other situations where delays occur for justified reasons (performance issues, delay in progress reports, questionable charges, missing or incomplete information, line-item concerns, etc.). Maintain documentation in the grant or posting document file 4) Evaluate and continually monitor staffing levels on the sub-award team and seek supplemental staffing when warranted.
Assistance Listing Number, Federal Agency, and Program Name 10.500 U.S. Deptartment of Agriculture Cooperative Extension Services Research and Developement Cluster: 12.000, U.S. Department of Defense, U.S. Department of Defense 12.431, U.S. Department of Defense, Basic Scientific Research 47.041, National Science Foundation, Engineering Grants 47.070, National Science Foundation, Computer and Information Science and Engineering 81.049, U.S. Department of Energy, Office of Science Financial Assistance Program 93.855, U.S. Department of Health & Human Services, Allergy, Immunology and Transplantation Research 93.859, U.S. Department of Health & Human Services, Biomedical Research and Research Training 98.001, Agency for International Development, USAID Foreign Assistance for Programs Overseas Federal Award Identification Number and Year 10.500 2021 48762 35660, 2022 48703 38592, 2021 41590 34813 12.000 2021 21090200002 12.431 W52P1J 22 9 3009, W52P1J 20 9 3009 10 47.041 2129782 CMMI, 1647722 EEC, 2132142 EFMA 47.070 2333009 CCF 81.049 DE SC0019215 93.855 5R01AI146160 05 93.859 5R01GM143370 02 98.001 AID 7200AA18CA00009 Pass through Entity N/A Finding Type Significant deficiency Repeat Finding Yes 2023 001 Criteria As outlined in 2 CFR 200.305(b)(3), when the reimbursement method is used for payment, organizations must make a payment within 30 calendar days after receipt of the billing unless the federal awarding agency or pass through entity reasonably believes the request to be improper. Condition The University did not have adequate controls in place to ensure invoices to subrecipients were paid timely within the 30 calendar day requirement. Questioned Costs There were no questioned costs identified. Identification of How Questioned Costs Were Computed There were no questioned costs identified. Context Out of 60 payments to subrecipients that were tested related to the major programs tested, 21 were made after the 30 calendar day requirement. In all samples tested, payment was made to the subrecipient; however, the delayed payments ranged from 31 119 days between the invoice being received by the University and payment being made to the subrecipient. The University did implement new preventative controls in place effective December 31, 2023 in response to prior year finding (2023 001). Of the 21 payments made after the 30 calendar day requirement, 14 occured prior to December 31, 2023, and the remaining 7 occured after. Cause and Effect While the University had effective controls that were successful in achieving the 30 calendar day requirement for 39 samples, the University failed to provide supplemental support and preventive controls during a period when it was addressing an issue that prevented timely payment for certain subrecipients. Recommendation The University should ensure appropriate training of employees is taking place and a preventive control is implemented to ensure that payments are made within the required timeline. Views of Responsible Officials and Corrective Action Plan Purdue University will address the recommendations and implement the following preventative controls to ensure that payments are made within the required timeline. 1) The Office of Research will increase the priority around the 30-day processing deadline mandated by the Uniform Guidance 2 CFR 200.305 (b)(3). This will be accomplished through communications, training and expectation setting with the following audiences: a) Principal Investigators of active grants with sub-awards i) Blanket communication ii) Add the expected turnaround time on each sub-recipient communication when seeking principal investigator review and approval iii) Modify the workflow email to heighten the awareness and timeliness expectations of processing b) Sub-award Team in Sponsored Program Services i) Blanket communications to SPS, Research Account Specialists, Business Offices, Tax, Accounts Payable/Business Operations ii) Utilize a report developed for internal reporting and tracking of pending sub-invoices to improve follow-up on payments approaching the 30-day deadline iii) Increase the frequency of follow-up on outstanding invoices iv) Add the expected turnaround time to the expectations document for each Sub-Award Team Member v) Add sub-recipient payment deadlines to the mandatory training for the Sub-Award Team vi) Update payment terms to “Payable immediately Due net; Based on Doc Date” for all subrecipient invoices vii) Modify procedures for foreign sub payments to streamline the processing between tax and export control offices related to required screenings 2) Conduct semi-annual training/refresher with sub-award staff. The first training will be held January 2025. 3) Work with subaward team staff to ensure that adequate documentation is created and maintained related to the follow-up that occurs when issues are being investigated and resolved that causes a delay in processing. These include visual compliance screenings for foreign wire transfers and other situations where delays occur for justified reasons (performance issues, delay in progress reports, questionable charges, missing or incomplete information, line-item concerns, etc.). Maintain documentation in the grant or posting document file 4) Evaluate and continually monitor staffing levels on the sub-award team and seek supplemental staffing when warranted.
Assistance Listing Number, Federal Agency, and Program Name 10.500 U.S. Deptartment of Agriculture Cooperative Extension Services Research and Developement Cluster: 12.000, U.S. Department of Defense, U.S. Department of Defense 12.431, U.S. Department of Defense, Basic Scientific Research 47.041, National Science Foundation, Engineering Grants 47.070, National Science Foundation, Computer and Information Science and Engineering 81.049, U.S. Department of Energy, Office of Science Financial Assistance Program 93.855, U.S. Department of Health & Human Services, Allergy, Immunology and Transplantation Research 93.859, U.S. Department of Health & Human Services, Biomedical Research and Research Training 98.001, Agency for International Development, USAID Foreign Assistance for Programs Overseas Federal Award Identification Number and Year 10.500 2021 48762 35660, 2022 48703 38592, 2021 41590 34813 12.000 2021 21090200002 12.431 W52P1J 22 9 3009, W52P1J 20 9 3009 10 47.041 2129782 CMMI, 1647722 EEC, 2132142 EFMA 47.070 2333009 CCF 81.049 DE SC0019215 93.855 5R01AI146160 05 93.859 5R01GM143370 02 98.001 AID 7200AA18CA00009 Pass through Entity N/A Finding Type Significant deficiency Repeat Finding Yes 2023 001 Criteria As outlined in 2 CFR 200.305(b)(3), when the reimbursement method is used for payment, organizations must make a payment within 30 calendar days after receipt of the billing unless the federal awarding agency or pass through entity reasonably believes the request to be improper. Condition The University did not have adequate controls in place to ensure invoices to subrecipients were paid timely within the 30 calendar day requirement. Questioned Costs There were no questioned costs identified. Identification of How Questioned Costs Were Computed There were no questioned costs identified. Context Out of 60 payments to subrecipients that were tested related to the major programs tested, 21 were made after the 30 calendar day requirement. In all samples tested, payment was made to the subrecipient; however, the delayed payments ranged from 31 119 days between the invoice being received by the University and payment being made to the subrecipient. The University did implement new preventative controls in place effective December 31, 2023 in response to prior year finding (2023 001). Of the 21 payments made after the 30 calendar day requirement, 14 occured prior to December 31, 2023, and the remaining 7 occured after. Cause and Effect While the University had effective controls that were successful in achieving the 30 calendar day requirement for 39 samples, the University failed to provide supplemental support and preventive controls during a period when it was addressing an issue that prevented timely payment for certain subrecipients. Recommendation The University should ensure appropriate training of employees is taking place and a preventive control is implemented to ensure that payments are made within the required timeline. Views of Responsible Officials and Corrective Action Plan Purdue University will address the recommendations and implement the following preventative controls to ensure that payments are made within the required timeline. 1) The Office of Research will increase the priority around the 30-day processing deadline mandated by the Uniform Guidance 2 CFR 200.305 (b)(3). This will be accomplished through communications, training and expectation setting with the following audiences: a) Principal Investigators of active grants with sub-awards i) Blanket communication ii) Add the expected turnaround time on each sub-recipient communication when seeking principal investigator review and approval iii) Modify the workflow email to heighten the awareness and timeliness expectations of processing b) Sub-award Team in Sponsored Program Services i) Blanket communications to SPS, Research Account Specialists, Business Offices, Tax, Accounts Payable/Business Operations ii) Utilize a report developed for internal reporting and tracking of pending sub-invoices to improve follow-up on payments approaching the 30-day deadline iii) Increase the frequency of follow-up on outstanding invoices iv) Add the expected turnaround time to the expectations document for each Sub-Award Team Member v) Add sub-recipient payment deadlines to the mandatory training for the Sub-Award Team vi) Update payment terms to “Payable immediately Due net; Based on Doc Date” for all subrecipient invoices vii) Modify procedures for foreign sub payments to streamline the processing between tax and export control offices related to required screenings 2) Conduct semi-annual training/refresher with sub-award staff. The first training will be held January 2025. 3) Work with subaward team staff to ensure that adequate documentation is created and maintained related to the follow-up that occurs when issues are being investigated and resolved that causes a delay in processing. These include visual compliance screenings for foreign wire transfers and other situations where delays occur for justified reasons (performance issues, delay in progress reports, questionable charges, missing or incomplete information, line-item concerns, etc.). Maintain documentation in the grant or posting document file 4) Evaluate and continually monitor staffing levels on the sub-award team and seek supplemental staffing when warranted.
Assistance Listing Number, Federal Agency, and Program Name 10.500 U.S. Deptartment of Agriculture Cooperative Extension Services Research and Developement Cluster: 12.000, U.S. Department of Defense, U.S. Department of Defense 12.431, U.S. Department of Defense, Basic Scientific Research 47.041, National Science Foundation, Engineering Grants 47.070, National Science Foundation, Computer and Information Science and Engineering 81.049, U.S. Department of Energy, Office of Science Financial Assistance Program 93.855, U.S. Department of Health & Human Services, Allergy, Immunology and Transplantation Research 93.859, U.S. Department of Health & Human Services, Biomedical Research and Research Training 98.001, Agency for International Development, USAID Foreign Assistance for Programs Overseas Federal Award Identification Number and Year 10.500 2021 48762 35660, 2022 48703 38592, 2021 41590 34813 12.000 2021 21090200002 12.431 W52P1J 22 9 3009, W52P1J 20 9 3009 10 47.041 2129782 CMMI, 1647722 EEC, 2132142 EFMA 47.070 2333009 CCF 81.049 DE SC0019215 93.855 5R01AI146160 05 93.859 5R01GM143370 02 98.001 AID 7200AA18CA00009 Pass through Entity N/A Finding Type Significant deficiency Repeat Finding Yes 2023 001 Criteria As outlined in 2 CFR 200.305(b)(3), when the reimbursement method is used for payment, organizations must make a payment within 30 calendar days after receipt of the billing unless the federal awarding agency or pass through entity reasonably believes the request to be improper. Condition The University did not have adequate controls in place to ensure invoices to subrecipients were paid timely within the 30 calendar day requirement. Questioned Costs There were no questioned costs identified. Identification of How Questioned Costs Were Computed There were no questioned costs identified. Context Out of 60 payments to subrecipients that were tested related to the major programs tested, 21 were made after the 30 calendar day requirement. In all samples tested, payment was made to the subrecipient; however, the delayed payments ranged from 31 119 days between the invoice being received by the University and payment being made to the subrecipient. The University did implement new preventative controls in place effective December 31, 2023 in response to prior year finding (2023 001). Of the 21 payments made after the 30 calendar day requirement, 14 occured prior to December 31, 2023, and the remaining 7 occured after. Cause and Effect While the University had effective controls that were successful in achieving the 30 calendar day requirement for 39 samples, the University failed to provide supplemental support and preventive controls during a period when it was addressing an issue that prevented timely payment for certain subrecipients. Recommendation The University should ensure appropriate training of employees is taking place and a preventive control is implemented to ensure that payments are made within the required timeline. Views of Responsible Officials and Corrective Action Plan Purdue University will address the recommendations and implement the following preventative controls to ensure that payments are made within the required timeline. 1) The Office of Research will increase the priority around the 30-day processing deadline mandated by the Uniform Guidance 2 CFR 200.305 (b)(3). This will be accomplished through communications, training and expectation setting with the following audiences: a) Principal Investigators of active grants with sub-awards i) Blanket communication ii) Add the expected turnaround time on each sub-recipient communication when seeking principal investigator review and approval iii) Modify the workflow email to heighten the awareness and timeliness expectations of processing b) Sub-award Team in Sponsored Program Services i) Blanket communications to SPS, Research Account Specialists, Business Offices, Tax, Accounts Payable/Business Operations ii) Utilize a report developed for internal reporting and tracking of pending sub-invoices to improve follow-up on payments approaching the 30-day deadline iii) Increase the frequency of follow-up on outstanding invoices iv) Add the expected turnaround time to the expectations document for each Sub-Award Team Member v) Add sub-recipient payment deadlines to the mandatory training for the Sub-Award Team vi) Update payment terms to “Payable immediately Due net; Based on Doc Date” for all subrecipient invoices vii) Modify procedures for foreign sub payments to streamline the processing between tax and export control offices related to required screenings 2) Conduct semi-annual training/refresher with sub-award staff. The first training will be held January 2025. 3) Work with subaward team staff to ensure that adequate documentation is created and maintained related to the follow-up that occurs when issues are being investigated and resolved that causes a delay in processing. These include visual compliance screenings for foreign wire transfers and other situations where delays occur for justified reasons (performance issues, delay in progress reports, questionable charges, missing or incomplete information, line-item concerns, etc.). Maintain documentation in the grant or posting document file 4) Evaluate and continually monitor staffing levels on the sub-award team and seek supplemental staffing when warranted.
Audit Finding 2024-002 – Return of Excess Interest Criteria: Code of Federal Regulations § 200.305 (b)(9) requires a recipient or subrecipient to retain up to $500 per year of interest earned on Federal funds to use for administrative expenses of the recipient or subrecipient. Any additional interest earned on Federal funds must be returned annually to the Department of Health and Human Services Payment Management System (PMS) through either the Automated Clearing House (ACH) network or a Fedwire Funds Service payment. Condition: During the audit, we noted the Authority did not pay back their excess interest income earned on Federal funds. Cause: The Authority was not aware it had to payback the excess interest earned on Federal funds. Effect: The Authority is not in compliance with Code of Federal Regulations § 200.305 (b)(9). Recommendation: We recommend that the Authority payback the excess interest and monitor the interest earned in the following years and payback any excess amounts. View of Responsible Officials: Management agrees with the finding.
Audit Finding 2024-003 – Timely Funds Disbursements Criteria: Code of Federal Regulations § 200.305 (b) requires that for recipients and subrecipients other than States, payment methods must minimize the time elapsing between the transfer of funds from the Federal agency or pass-through entity and the disbursement of funds by the recipient or subrecipient regardless of whether the payment is made by electronic funds transfer or by other means. Code of Federal Regulations § 200.305 (b)(1) requires that advance payments to a recipient or subrecipient must be limited to the minimum amounts needed and be timed with actual, immediate cash requirements of the recipient or subrecipient in carrying out the purpose of the approved program or project. The timing and amount of advance payments must be as close as is administratively feasible to the actual disbursements by the recipient or subrecipient for direct program or project costs and the proportionate share of any allowable indirect costs. Condition: During the audit, we noted the Authority did not disburse their funds within a timely manner. Cause: The Authority did not disburse the CFP funds held in unearned revenue before drawing new funds. Effect: The Authority is not in compliance with Code of Federal Regulations § 200.305 (b) and Code of Federal Regulations § 200.305 (b)(1). Recommendation: We recommend that the Authority disburse their funds in a timely manner. View of Responsible Officials: Management agrees with the finding.
Information on the federal program: Subject: Special Education Cluster – Internal Controls Federal Agency: Department of Education Federal Program: Special Education Cluster Assistance Listing Number: 84.027, 84.027X, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): 22611-122-PN01, 23611-122-PN01, 24611-122-PN01, 22611-122-ARP, 22619-122-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Cash Management Audit Finding: Significant Deficiency Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards 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). . . ." For grants and cooperative agreements to non-federal entities that are paid on a reimbursement basis, supporting documentation shows that the costs for which reimbursement was requested were paid prior to the date of the reimbursement request. Pass-through entities must monitor cash drawdowns by their subrecipients to ensure that the time elapsing between the transfer of federal funds to the subrecipient and their disbursement for program purposes is minimized as required by the applicable cash management requirements in the federal award to the recipient (2 CFR section 200.305(b)(1)). Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Cash Management compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with cash management for reimbursement grants. The School Corporation did not have a design control in place to ensure that service provider invoices were paid prior to the submitting reimbursements to the Indiana Department of Education (IDOE). Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. Questioned Costs: There were no questioned costs identified. Context: The School Corporation pays one hundred percent of its Special Education Cluster funding to one service provider, which totaled $3,782,381 for the audit period. For all invoices during the audit period, the School Corporation submitted and received reimbursement from the IDOE prior to paying the service provider, and then the School Corporation remitted payment to the service provider. There was significant delay in the time between the School Corporation was reimbursed by IDOE and when the School Corporation paid the service provider. The delay in payment was in the range of 2 – 4 months for the payments made during the audit period. Identification as a repeat finding: This is a repeat finding from the immediately prior audit. The prior finding number was 2022-003. Recommendation: We recommend the School Corporation implement procedures to ensure the invoices are paid before submitting draw requests and receiving funds from IDOE. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Information on the federal program: Subject: Special Education Cluster – Internal Controls Federal Agency: Department of Education Federal Program: Special Education Cluster Assistance Listing Number: 84.027, 84.027X, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): 22611-122-PN01, 23611-122-PN01, 24611-122-PN01, 22611-122-ARP, 22619-122-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Cash Management Audit Finding: Significant Deficiency Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards 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). . . ." For grants and cooperative agreements to non-federal entities that are paid on a reimbursement basis, supporting documentation shows that the costs for which reimbursement was requested were paid prior to the date of the reimbursement request. Pass-through entities must monitor cash drawdowns by their subrecipients to ensure that the time elapsing between the transfer of federal funds to the subrecipient and their disbursement for program purposes is minimized as required by the applicable cash management requirements in the federal award to the recipient (2 CFR section 200.305(b)(1)). Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Cash Management compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with cash management for reimbursement grants. The School Corporation did not have a design control in place to ensure that service provider invoices were paid prior to the submitting reimbursements to the Indiana Department of Education (IDOE). Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. Questioned Costs: There were no questioned costs identified. Context: The School Corporation pays one hundred percent of its Special Education Cluster funding to one service provider, which totaled $3,782,381 for the audit period. For all invoices during the audit period, the School Corporation submitted and received reimbursement from the IDOE prior to paying the service provider, and then the School Corporation remitted payment to the service provider. There was significant delay in the time between the School Corporation was reimbursed by IDOE and when the School Corporation paid the service provider. The delay in payment was in the range of 2 – 4 months for the payments made during the audit period. Identification as a repeat finding: This is a repeat finding from the immediately prior audit. The prior finding number was 2022-003. Recommendation: We recommend the School Corporation implement procedures to ensure the invoices are paid before submitting draw requests and receiving funds from IDOE. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Information on the federal program: Subject: Special Education Cluster – Internal Controls Federal Agency: Department of Education Federal Program: Special Education Cluster Assistance Listing Number: 84.027, 84.027X, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): 22611-122-PN01, 23611-122-PN01, 24611-122-PN01, 22611-122-ARP, 22619-122-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Cash Management Audit Finding: Significant Deficiency Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards 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). . . ." For grants and cooperative agreements to non-federal entities that are paid on a reimbursement basis, supporting documentation shows that the costs for which reimbursement was requested were paid prior to the date of the reimbursement request. Pass-through entities must monitor cash drawdowns by their subrecipients to ensure that the time elapsing between the transfer of federal funds to the subrecipient and their disbursement for program purposes is minimized as required by the applicable cash management requirements in the federal award to the recipient (2 CFR section 200.305(b)(1)). Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Cash Management compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with cash management for reimbursement grants. The School Corporation did not have a design control in place to ensure that service provider invoices were paid prior to the submitting reimbursements to the Indiana Department of Education (IDOE). Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. Questioned Costs: There were no questioned costs identified. Context: The School Corporation pays one hundred percent of its Special Education Cluster funding to one service provider, which totaled $3,782,381 for the audit period. For all invoices during the audit period, the School Corporation submitted and received reimbursement from the IDOE prior to paying the service provider, and then the School Corporation remitted payment to the service provider. There was significant delay in the time between the School Corporation was reimbursed by IDOE and when the School Corporation paid the service provider. The delay in payment was in the range of 2 – 4 months for the payments made during the audit period. Identification as a repeat finding: This is a repeat finding from the immediately prior audit. The prior finding number was 2022-003. Recommendation: We recommend the School Corporation implement procedures to ensure the invoices are paid before submitting draw requests and receiving funds from IDOE. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Information on the federal program: Subject: Special Education Cluster – Internal Controls Federal Agency: Department of Education Federal Program: Special Education Cluster Assistance Listing Number: 84.027, 84.027X, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): 22611-122-PN01, 23611-122-PN01, 24611-122-PN01, 22611-122-ARP, 22619-122-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Cash Management Audit Finding: Significant Deficiency Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards 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). . . ." For grants and cooperative agreements to non-federal entities that are paid on a reimbursement basis, supporting documentation shows that the costs for which reimbursement was requested were paid prior to the date of the reimbursement request. Pass-through entities must monitor cash drawdowns by their subrecipients to ensure that the time elapsing between the transfer of federal funds to the subrecipient and their disbursement for program purposes is minimized as required by the applicable cash management requirements in the federal award to the recipient (2 CFR section 200.305(b)(1)). Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Cash Management compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with cash management for reimbursement grants. The School Corporation did not have a design control in place to ensure that service provider invoices were paid prior to the submitting reimbursements to the Indiana Department of Education (IDOE). Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. Questioned Costs: There were no questioned costs identified. Context: The School Corporation pays one hundred percent of its Special Education Cluster funding to one service provider, which totaled $3,782,381 for the audit period. For all invoices during the audit period, the School Corporation submitted and received reimbursement from the IDOE prior to paying the service provider, and then the School Corporation remitted payment to the service provider. There was significant delay in the time between the School Corporation was reimbursed by IDOE and when the School Corporation paid the service provider. The delay in payment was in the range of 2 – 4 months for the payments made during the audit period. Identification as a repeat finding: This is a repeat finding from the immediately prior audit. The prior finding number was 2022-003. Recommendation: We recommend the School Corporation implement procedures to ensure the invoices are paid before submitting draw requests and receiving funds from IDOE. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Information on the federal program: Subject: Special Education Cluster – Internal Controls Federal Agency: Department of Education Federal Program: Special Education Cluster Assistance Listing Number: 84.027, 84.027X, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): 22611-122-PN01, 23611-122-PN01, 24611-122-PN01, 22611-122-ARP, 22619-122-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Cash Management Audit Finding: Significant Deficiency Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards 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). . . ." For grants and cooperative agreements to non-federal entities that are paid on a reimbursement basis, supporting documentation shows that the costs for which reimbursement was requested were paid prior to the date of the reimbursement request. Pass-through entities must monitor cash drawdowns by their subrecipients to ensure that the time elapsing between the transfer of federal funds to the subrecipient and their disbursement for program purposes is minimized as required by the applicable cash management requirements in the federal award to the recipient (2 CFR section 200.305(b)(1)). Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Cash Management compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with cash management for reimbursement grants. The School Corporation did not have a design control in place to ensure that service provider invoices were paid prior to the submitting reimbursements to the Indiana Department of Education (IDOE). Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. Questioned Costs: There were no questioned costs identified. Context: The School Corporation pays one hundred percent of its Special Education Cluster funding to one service provider, which totaled $3,782,381 for the audit period. For all invoices during the audit period, the School Corporation submitted and received reimbursement from the IDOE prior to paying the service provider, and then the School Corporation remitted payment to the service provider. There was significant delay in the time between the School Corporation was reimbursed by IDOE and when the School Corporation paid the service provider. The delay in payment was in the range of 2 – 4 months for the payments made during the audit period. Identification as a repeat finding: This is a repeat finding from the immediately prior audit. The prior finding number was 2022-003. Recommendation: We recommend the School Corporation implement procedures to ensure the invoices are paid before submitting draw requests and receiving funds from IDOE. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Federal Program – Department of Education, Developing Hispanic-Serving Institutions Program, 84.031S Program Year – July 1, 2023 – June 30, 2024 Criteria or Specific Requirement – Cash Management – The Uniform Guidance and the grant award notification signed by the College for this grant, by reference to the Uniform Guidance, state that the College must minimize the time elapsing between the transfer of funds from the United States Treasury to the College and the utilization or expenditure of those funds. The Uniform Guidance applies to any and all types of federal awards (2 CFR Section 200.305(b)). Condition – The time between the College’s draw-down of funds from the United States Treasury and utilization of those funds was not minimized as stated in the general cash management section of Uniform Guidance. Questioned Costs – None Context – The College drew down $600,000 of the HSI grant during the year ended June 30, 2024, of which $165,484 was not needed immediately (or within a minimum amount of time) for program costs at June 30, 2024. The funds draw-down were used for allowable purposes but time was not minimized between draw-down and use for program purposes. Cause and Effect – The College did not process these funds in accordance with cash management rules under the Uniform Guidance, applicable to these funds with respect to minimizing the time elapsed between the date of the initial transfer and the expenditure or utilization of these grant funds. Identification as a Repeat Finding – No Recommendation – We recommend that the College review its policies and procedures regarding draw-down of non-SFA federal grants to ensure they are in compliance with the cash management rules of the Uniform Guidance. Specifically ensuring the College’s policy minimizes the time between the draw-down and the use of the funds for program purposes. Views of Responsible Officials and Planned Corrective Action – In the first year of the grant award, we retained a consulting group to ensure that our processing and management of the grant complied with all relevant requirements. This was the first time all personnel at the college had dealt with this particular government grant and so guidance was followed by the grant mandated consultants regarding grant drawdowns. The interpretation from our grant mandated consultants was that so long as we did not have excessive drawdowns as defined by the Hispanic Serving Institution Grants manual, we would be in compliance with CFR 200.305(b). Given that guidance, we believed we were in compliance when the decision was made to drawdown grant funds for work that contractors were projected to complete in July. Our grant mandated consultants noted that while we were negotiating the timeline of the work, it was "administratively feasible" to draw funds as the work was to be completed over the summer by the end of July. The schedule ended up getting pushed to the end of August, but funds were anticipated to be drawn within a month of drawdown and they were fully expended by August 31--and payments started going out July 5th to contractors. The combination of the delay in the completion of the contracting work and the wider interpretation of CFR 200.305(b) from our mandated consultants than our auditors are the reason for the non-compliance finding.
Finding 2024-001 Payment to fraudulent subrecipient account - cyber incident Repeat Finding No Federal Program Title U.S. Department of Health and Human Services 93.600 Head Start Award # 05CH012065-02-00 Award Year 9/1/2022 – 8/31/2023 Finding In connection with a cyber incident at a subrecipient, Chicago Commons Association (Commons) sent two federal fund payments to a fraudulent party acting as the subrecipient. Criteria 2 CFR 200.305 (b) describes federal payments for recipients and subrecipients other than states, whether the payment is made by electronic funds transfer or by other means. Per 2 CFR 200.516(a), the auditor must report as an audit finding various items including known or likely fraud affecting a federal award. Audit finding detail and clarity is described in the next section, 2 CFR 200.516(b), which requires specific information to be included such as “(3) The condition found, including facts that support the deficiency found in the audit finding.” Condition The design and execution of certain internal controls were not successful in preventing or detecting Commons’ payments to a bank account controlled by a fraudulent party posing as a subrecipient. This resulted from a scheme related to a cyber incident at the subrecipient. Gads Hill Center (GHC), a nonprofit after-school program located in Chicago and a subrecipient/delegate agency of Commons, was victim to a cyber incident whereby a fraudulent party was able to take control of GHC’s email and telephone systems. This fraudulent party then contacted Commons AP manager via email on August 7, 2023, posing as the GHC Chief Financial Officer. Through email communications with the Commons AP manager and VP of Finance, this fraudulent party submitted updated banking/ACH information for GHC to change their ACH information from Fifth Third Bank (the valid GHC bank account) to Truist Bank (the fraudulent party’s bank account). An email was sent from the Commons AP manager to the Commons VP of Finance to have the information updated in the system. Commons’ policies require that a request received for this type of change to be substantiated through a direct phone call to the subrecipient. The Commons AP manager called the GHC CFO (the number used was Pilsen location shown on the GHC website) but the call went unanswered (and voicemail was full). The AP manager and GHC CFO scheduled a call for the next week and the AP manager received a phone call from an identical phone number from an individual who identified himself as the GHC CFO, and completed the verification process. New banking information was then entered and approved in Commons’ primary banking partner’s system (US Bank). These emails and calls happened between August 7 and August 15, 2023. Commons received a voucher from GHC and made a $70,121.99 payment to Truist Bank on August 17, using the updated ACH information. The primary banking partner of Commons flagged this payment as potentially fraudulent because the name on the ACH payment did not match the name listed on the bank account, and contacted Commons. Commons communicated that the banking information was correct, and the payment was then released on August 22. Another GHC-submitted voucher was received, and $640,318.83 was also paid to Truist Bank on August 24, 2023. The payments were not received by GHC. GHC subsequently contacted Commons to follow up about the status of the payments due and through the ensuing discussion the payments to the fraudulent Truist Bank account were ultimately discovered. The two submitted vouchers for expenses incurred by GHC were valid, in connection with program services performed by GHC. Commons reviewed, approved and submitted the two vouchers to the U.S. Department of Health and Human Services (the funder) for reimbursement. The funder approved the expenses, funds were released to Commons and then disbursed by Commons to the Truist Bank account which management believed belonged to GHC. Commons recorded and reported revenue and expense (payment to subrecipient) for the amounts of the vouchers received and paid. Because GHC incurred the expenses but never received the reimbursement funds, GHC absorbed the loss. Cause Commons personnel had followed established processes and internal controls as intended. However, the design and execution of the controls were not successful in preventing or detecting payments to a fraudulent account. Management believes the sophistication of the fraud scheme exceeded the effectiveness of the controls. Effect The change in ACH information resulted in two Commons’ payments of federal funds totaling $710,440.82 made to a bank account controlled by the fraudulent party acting as the subrecipient. Context Chicago Commons made us aware of this matter which appears to be an isolated incident for the year ended June 30, 2024. Questioned Costs There were no known questioned costs. Recommendation We recommend that Commons strengthens its internal controls in verifying a requested bank account change. For example, the procedure can include a requirement for the phone call to be made by an individual at Commons with personal knowledge and familiarity with a specific individual at the organization requesting the change. Views of Responsible Officials Management is in agreement with this finding. See corrective action plan.
Federal Agencies: US Department of Defense (DoD); US Department of Energy (DOE); US Health and Human Services (HHS) Program Names: Research & Development Cluster: Basic, Applied and Advanced Research in Science and Engineering; Fossil Energy Research and Development; COVID19 – Discovery and Applied Research for Technological Innovations to Improve Human Health; Research and Technology Development; Office of Science and Financial Assistance Program; Air Force Defense Research Sciences Program; Cardiovascular Diseases Research; Health Center Program Cluster: Community Health Centers; and AIDS Education and Training Centers ALN #s: 12.630; 81.089; 93.286; 12.910; 81.049; 12.800; 93.837; 93.224; and 93.145 Award Numbers: ARMY W911NF-17-2-0196; DOE DE-FE0031581; DOE DE-FE0032049; NIH 1 R21 EB031310A; DARPA HR011-23-2-0004; DOE DE-SC0018420; AF FA9550-23-1-0609; SNAP 5R01HL152692-04; HRSA 5 U1OHA29293-09-03; and HRSA 5 U1OHA32109-07 Federal Award Year 2023 – 2024 Questioned Costs: None 2024-002. Finding: Cash Management – Timeliness of Subrecipient Payments The University of Illinois Urbana-Champaign and the University of Illinois Chicago did not make certain subrecipient payments timely and the controls in place did not identify the late payments. Condition: Out of thirty-two subrecipient payments tested which were made by the University of Illinois at Urbana-Champaign under the Research & Development Cluster, twelve payments (38%) were not submitted within 30 days after receipt of the billing from the subrecipient. The payments ranged from 35-201 days after receipt of the billing from the subrecipients. The sample was not intended to be, and was not, a statistically valid sample. Out of eight subrecipient payments tested which were made by the University of Illinois Chicago under the Research & Development Cluster, one payment (13%) was not submitted within 30 days after receipt of the billing from the subrecipient. The payment was 32 days after the receipt of billing from the subrecipient. The sample was not intended to be, and was not, a statistically valid sample. Out of eighteen subrecipient payments tested which were made by the University of Illinois Chicago under the Health Center Program Cluster: Community Health Centers and AIDS Education and Training Centers, five payments (28%) were not submitted within 30 days after receipt of the billing from the subrecipient. The payments ranged from 42-120 days after the receipt of billing from the subrecipients. The sample was not intended to be, and was not, a statistically valid sample. 2024-002. Finding: Cash Management – Timeliness of Subrecipient Payments (Continued) Criteria: Under Uniform Guidance (2 CFR 200.305(b)(3)), when the reimbursement method is used, the Federal awarding agency or pass-through entity must make payment within 30 calendar days after receipt of the billing, unless the Federal awarding agency or pass-through entity reasonably believes the request to be improper. Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls deigned to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure subrecipient payments are made timely. Cause: University of Illinois Urbana-Champaign officials stated the multi-layered review and approval process along with staffing deficiencies and workload challenges caused the situations for the exceptions noted. University of Illinois Chicago officials stated the one payment was paid 32 days from receipt of the invoice due to high volumes of invoice processing at fiscal year end and the payment due date coinciding with a holiday. The five other subrecipient payments were due to high staff workloads and occurred prior to the fiscal year 2023 corrective action implementation. Effect: Without proper program cash management processes and procedures, late subrecipient payments could result in the loss of future funding. (Finding Code No. 2024-002; 2023-006; 2022-008) Recommendation: We recommend the University of Illinois Urbana-Champaign and the University of Illinois Chicago review current processes, policies and procedures to minimize the time elapsing between the transfer of federal funds to the subrecipient. University Response: Accepted. The University will take steps to address the recommendation in this finding.
Federal Agencies: US Department of Defense (DoD); US Department of Energy (DOE); US Health and Human Services (HHS) Program Names: Research & Development Cluster: Basic, Applied and Advanced Research in Science and Engineering; Fossil Energy Research and Development; COVID19 – Discovery and Applied Research for Technological Innovations to Improve Human Health; Research and Technology Development; Office of Science and Financial Assistance Program; Air Force Defense Research Sciences Program; Cardiovascular Diseases Research; Health Center Program Cluster: Community Health Centers; and AIDS Education and Training Centers ALN #s: 12.630; 81.089; 93.286; 12.910; 81.049; 12.800; 93.837; 93.224; and 93.145 Award Numbers: ARMY W911NF-17-2-0196; DOE DE-FE0031581; DOE DE-FE0032049; NIH 1 R21 EB031310A; DARPA HR011-23-2-0004; DOE DE-SC0018420; AF FA9550-23-1-0609; SNAP 5R01HL152692-04; HRSA 5 U1OHA29293-09-03; and HRSA 5 U1OHA32109-07 Federal Award Year 2023 – 2024 Questioned Costs: None 2024-002. Finding: Cash Management – Timeliness of Subrecipient Payments The University of Illinois Urbana-Champaign and the University of Illinois Chicago did not make certain subrecipient payments timely and the controls in place did not identify the late payments. Condition: Out of thirty-two subrecipient payments tested which were made by the University of Illinois at Urbana-Champaign under the Research & Development Cluster, twelve payments (38%) were not submitted within 30 days after receipt of the billing from the subrecipient. The payments ranged from 35-201 days after receipt of the billing from the subrecipients. The sample was not intended to be, and was not, a statistically valid sample. Out of eight subrecipient payments tested which were made by the University of Illinois Chicago under the Research & Development Cluster, one payment (13%) was not submitted within 30 days after receipt of the billing from the subrecipient. The payment was 32 days after the receipt of billing from the subrecipient. The sample was not intended to be, and was not, a statistically valid sample. Out of eighteen subrecipient payments tested which were made by the University of Illinois Chicago under the Health Center Program Cluster: Community Health Centers and AIDS Education and Training Centers, five payments (28%) were not submitted within 30 days after receipt of the billing from the subrecipient. The payments ranged from 42-120 days after the receipt of billing from the subrecipients. The sample was not intended to be, and was not, a statistically valid sample. 2024-002. Finding: Cash Management – Timeliness of Subrecipient Payments (Continued) Criteria: Under Uniform Guidance (2 CFR 200.305(b)(3)), when the reimbursement method is used, the Federal awarding agency or pass-through entity must make payment within 30 calendar days after receipt of the billing, unless the Federal awarding agency or pass-through entity reasonably believes the request to be improper. Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls deigned to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure subrecipient payments are made timely. Cause: University of Illinois Urbana-Champaign officials stated the multi-layered review and approval process along with staffing deficiencies and workload challenges caused the situations for the exceptions noted. University of Illinois Chicago officials stated the one payment was paid 32 days from receipt of the invoice due to high volumes of invoice processing at fiscal year end and the payment due date coinciding with a holiday. The five other subrecipient payments were due to high staff workloads and occurred prior to the fiscal year 2023 corrective action implementation. Effect: Without proper program cash management processes and procedures, late subrecipient payments could result in the loss of future funding. (Finding Code No. 2024-002; 2023-006; 2022-008) Recommendation: We recommend the University of Illinois Urbana-Champaign and the University of Illinois Chicago review current processes, policies and procedures to minimize the time elapsing between the transfer of federal funds to the subrecipient. University Response: Accepted. The University will take steps to address the recommendation in this finding.
Federal Agencies: US Department of Defense (DoD); US Department of Energy (DOE); US Health and Human Services (HHS) Program Names: Research & Development Cluster: Basic, Applied and Advanced Research in Science and Engineering; Fossil Energy Research and Development; COVID19 – Discovery and Applied Research for Technological Innovations to Improve Human Health; Research and Technology Development; Office of Science and Financial Assistance Program; Air Force Defense Research Sciences Program; Cardiovascular Diseases Research; Health Center Program Cluster: Community Health Centers; and AIDS Education and Training Centers ALN #s: 12.630; 81.089; 93.286; 12.910; 81.049; 12.800; 93.837; 93.224; and 93.145 Award Numbers: ARMY W911NF-17-2-0196; DOE DE-FE0031581; DOE DE-FE0032049; NIH 1 R21 EB031310A; DARPA HR011-23-2-0004; DOE DE-SC0018420; AF FA9550-23-1-0609; SNAP 5R01HL152692-04; HRSA 5 U1OHA29293-09-03; and HRSA 5 U1OHA32109-07 Federal Award Year 2023 – 2024 Questioned Costs: None 2024-002. Finding: Cash Management – Timeliness of Subrecipient Payments The University of Illinois Urbana-Champaign and the University of Illinois Chicago did not make certain subrecipient payments timely and the controls in place did not identify the late payments. Condition: Out of thirty-two subrecipient payments tested which were made by the University of Illinois at Urbana-Champaign under the Research & Development Cluster, twelve payments (38%) were not submitted within 30 days after receipt of the billing from the subrecipient. The payments ranged from 35-201 days after receipt of the billing from the subrecipients. The sample was not intended to be, and was not, a statistically valid sample. Out of eight subrecipient payments tested which were made by the University of Illinois Chicago under the Research & Development Cluster, one payment (13%) was not submitted within 30 days after receipt of the billing from the subrecipient. The payment was 32 days after the receipt of billing from the subrecipient. The sample was not intended to be, and was not, a statistically valid sample. Out of eighteen subrecipient payments tested which were made by the University of Illinois Chicago under the Health Center Program Cluster: Community Health Centers and AIDS Education and Training Centers, five payments (28%) were not submitted within 30 days after receipt of the billing from the subrecipient. The payments ranged from 42-120 days after the receipt of billing from the subrecipients. The sample was not intended to be, and was not, a statistically valid sample. 2024-002. Finding: Cash Management – Timeliness of Subrecipient Payments (Continued) Criteria: Under Uniform Guidance (2 CFR 200.305(b)(3)), when the reimbursement method is used, the Federal awarding agency or pass-through entity must make payment within 30 calendar days after receipt of the billing, unless the Federal awarding agency or pass-through entity reasonably believes the request to be improper. Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls deigned to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure subrecipient payments are made timely. Cause: University of Illinois Urbana-Champaign officials stated the multi-layered review and approval process along with staffing deficiencies and workload challenges caused the situations for the exceptions noted. University of Illinois Chicago officials stated the one payment was paid 32 days from receipt of the invoice due to high volumes of invoice processing at fiscal year end and the payment due date coinciding with a holiday. The five other subrecipient payments were due to high staff workloads and occurred prior to the fiscal year 2023 corrective action implementation. Effect: Without proper program cash management processes and procedures, late subrecipient payments could result in the loss of future funding. (Finding Code No. 2024-002; 2023-006; 2022-008) Recommendation: We recommend the University of Illinois Urbana-Champaign and the University of Illinois Chicago review current processes, policies and procedures to minimize the time elapsing between the transfer of federal funds to the subrecipient. University Response: Accepted. The University will take steps to address the recommendation in this finding.
Federal Agencies: US Department of Defense (DoD); US Department of Energy (DOE); US Health and Human Services (HHS) Program Names: Research & Development Cluster: Basic, Applied and Advanced Research in Science and Engineering; Fossil Energy Research and Development; COVID19 – Discovery and Applied Research for Technological Innovations to Improve Human Health; Research and Technology Development; Office of Science and Financial Assistance Program; Air Force Defense Research Sciences Program; Cardiovascular Diseases Research; Health Center Program Cluster: Community Health Centers; and AIDS Education and Training Centers ALN #s: 12.630; 81.089; 93.286; 12.910; 81.049; 12.800; 93.837; 93.224; and 93.145 Award Numbers: ARMY W911NF-17-2-0196; DOE DE-FE0031581; DOE DE-FE0032049; NIH 1 R21 EB031310A; DARPA HR011-23-2-0004; DOE DE-SC0018420; AF FA9550-23-1-0609; SNAP 5R01HL152692-04; HRSA 5 U1OHA29293-09-03; and HRSA 5 U1OHA32109-07 Federal Award Year 2023 – 2024 Questioned Costs: None 2024-002. Finding: Cash Management – Timeliness of Subrecipient Payments The University of Illinois Urbana-Champaign and the University of Illinois Chicago did not make certain subrecipient payments timely and the controls in place did not identify the late payments. Condition: Out of thirty-two subrecipient payments tested which were made by the University of Illinois at Urbana-Champaign under the Research & Development Cluster, twelve payments (38%) were not submitted within 30 days after receipt of the billing from the subrecipient. The payments ranged from 35-201 days after receipt of the billing from the subrecipients. The sample was not intended to be, and was not, a statistically valid sample. Out of eight subrecipient payments tested which were made by the University of Illinois Chicago under the Research & Development Cluster, one payment (13%) was not submitted within 30 days after receipt of the billing from the subrecipient. The payment was 32 days after the receipt of billing from the subrecipient. The sample was not intended to be, and was not, a statistically valid sample. Out of eighteen subrecipient payments tested which were made by the University of Illinois Chicago under the Health Center Program Cluster: Community Health Centers and AIDS Education and Training Centers, five payments (28%) were not submitted within 30 days after receipt of the billing from the subrecipient. The payments ranged from 42-120 days after the receipt of billing from the subrecipients. The sample was not intended to be, and was not, a statistically valid sample. 2024-002. Finding: Cash Management – Timeliness of Subrecipient Payments (Continued) Criteria: Under Uniform Guidance (2 CFR 200.305(b)(3)), when the reimbursement method is used, the Federal awarding agency or pass-through entity must make payment within 30 calendar days after receipt of the billing, unless the Federal awarding agency or pass-through entity reasonably believes the request to be improper. Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls deigned to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure subrecipient payments are made timely. Cause: University of Illinois Urbana-Champaign officials stated the multi-layered review and approval process along with staffing deficiencies and workload challenges caused the situations for the exceptions noted. University of Illinois Chicago officials stated the one payment was paid 32 days from receipt of the invoice due to high volumes of invoice processing at fiscal year end and the payment due date coinciding with a holiday. The five other subrecipient payments were due to high staff workloads and occurred prior to the fiscal year 2023 corrective action implementation. Effect: Without proper program cash management processes and procedures, late subrecipient payments could result in the loss of future funding. (Finding Code No. 2024-002; 2023-006; 2022-008) Recommendation: We recommend the University of Illinois Urbana-Champaign and the University of Illinois Chicago review current processes, policies and procedures to minimize the time elapsing between the transfer of federal funds to the subrecipient. University Response: Accepted. The University will take steps to address the recommendation in this finding.
Federal Agencies: US Department of Defense (DoD); US Department of Energy (DOE); US Health and Human Services (HHS) Program Names: Research & Development Cluster: Basic, Applied and Advanced Research in Science and Engineering; Fossil Energy Research and Development; COVID19 – Discovery and Applied Research for Technological Innovations to Improve Human Health; Research and Technology Development; Office of Science and Financial Assistance Program; Air Force Defense Research Sciences Program; Cardiovascular Diseases Research; Health Center Program Cluster: Community Health Centers; and AIDS Education and Training Centers ALN #s: 12.630; 81.089; 93.286; 12.910; 81.049; 12.800; 93.837; 93.224; and 93.145 Award Numbers: ARMY W911NF-17-2-0196; DOE DE-FE0031581; DOE DE-FE0032049; NIH 1 R21 EB031310A; DARPA HR011-23-2-0004; DOE DE-SC0018420; AF FA9550-23-1-0609; SNAP 5R01HL152692-04; HRSA 5 U1OHA29293-09-03; and HRSA 5 U1OHA32109-07 Federal Award Year 2023 – 2024 Questioned Costs: None 2024-002. Finding: Cash Management – Timeliness of Subrecipient Payments The University of Illinois Urbana-Champaign and the University of Illinois Chicago did not make certain subrecipient payments timely and the controls in place did not identify the late payments. Condition: Out of thirty-two subrecipient payments tested which were made by the University of Illinois at Urbana-Champaign under the Research & Development Cluster, twelve payments (38%) were not submitted within 30 days after receipt of the billing from the subrecipient. The payments ranged from 35-201 days after receipt of the billing from the subrecipients. The sample was not intended to be, and was not, a statistically valid sample. Out of eight subrecipient payments tested which were made by the University of Illinois Chicago under the Research & Development Cluster, one payment (13%) was not submitted within 30 days after receipt of the billing from the subrecipient. The payment was 32 days after the receipt of billing from the subrecipient. The sample was not intended to be, and was not, a statistically valid sample. Out of eighteen subrecipient payments tested which were made by the University of Illinois Chicago under the Health Center Program Cluster: Community Health Centers and AIDS Education and Training Centers, five payments (28%) were not submitted within 30 days after receipt of the billing from the subrecipient. The payments ranged from 42-120 days after the receipt of billing from the subrecipients. The sample was not intended to be, and was not, a statistically valid sample. 2024-002. Finding: Cash Management – Timeliness of Subrecipient Payments (Continued) Criteria: Under Uniform Guidance (2 CFR 200.305(b)(3)), when the reimbursement method is used, the Federal awarding agency or pass-through entity must make payment within 30 calendar days after receipt of the billing, unless the Federal awarding agency or pass-through entity reasonably believes the request to be improper. Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls deigned to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure subrecipient payments are made timely. Cause: University of Illinois Urbana-Champaign officials stated the multi-layered review and approval process along with staffing deficiencies and workload challenges caused the situations for the exceptions noted. University of Illinois Chicago officials stated the one payment was paid 32 days from receipt of the invoice due to high volumes of invoice processing at fiscal year end and the payment due date coinciding with a holiday. The five other subrecipient payments were due to high staff workloads and occurred prior to the fiscal year 2023 corrective action implementation. Effect: Without proper program cash management processes and procedures, late subrecipient payments could result in the loss of future funding. (Finding Code No. 2024-002; 2023-006; 2022-008) Recommendation: We recommend the University of Illinois Urbana-Champaign and the University of Illinois Chicago review current processes, policies and procedures to minimize the time elapsing between the transfer of federal funds to the subrecipient. University Response: Accepted. The University will take steps to address the recommendation in this finding.
Federal Agencies: US Department of Defense (DoD); US Department of Energy (DOE); US Health and Human Services (HHS) Program Names: Research & Development Cluster: Basic, Applied and Advanced Research in Science and Engineering; Fossil Energy Research and Development; COVID19 – Discovery and Applied Research for Technological Innovations to Improve Human Health; Research and Technology Development; Office of Science and Financial Assistance Program; Air Force Defense Research Sciences Program; Cardiovascular Diseases Research; Health Center Program Cluster: Community Health Centers; and AIDS Education and Training Centers ALN #s: 12.630; 81.089; 93.286; 12.910; 81.049; 12.800; 93.837; 93.224; and 93.145 Award Numbers: ARMY W911NF-17-2-0196; DOE DE-FE0031581; DOE DE-FE0032049; NIH 1 R21 EB031310A; DARPA HR011-23-2-0004; DOE DE-SC0018420; AF FA9550-23-1-0609; SNAP 5R01HL152692-04; HRSA 5 U1OHA29293-09-03; and HRSA 5 U1OHA32109-07 Federal Award Year 2023 – 2024 Questioned Costs: None 2024-002. Finding: Cash Management – Timeliness of Subrecipient Payments The University of Illinois Urbana-Champaign and the University of Illinois Chicago did not make certain subrecipient payments timely and the controls in place did not identify the late payments. Condition: Out of thirty-two subrecipient payments tested which were made by the University of Illinois at Urbana-Champaign under the Research & Development Cluster, twelve payments (38%) were not submitted within 30 days after receipt of the billing from the subrecipient. The payments ranged from 35-201 days after receipt of the billing from the subrecipients. The sample was not intended to be, and was not, a statistically valid sample. Out of eight subrecipient payments tested which were made by the University of Illinois Chicago under the Research & Development Cluster, one payment (13%) was not submitted within 30 days after receipt of the billing from the subrecipient. The payment was 32 days after the receipt of billing from the subrecipient. The sample was not intended to be, and was not, a statistically valid sample. Out of eighteen subrecipient payments tested which were made by the University of Illinois Chicago under the Health Center Program Cluster: Community Health Centers and AIDS Education and Training Centers, five payments (28%) were not submitted within 30 days after receipt of the billing from the subrecipient. The payments ranged from 42-120 days after the receipt of billing from the subrecipients. The sample was not intended to be, and was not, a statistically valid sample. 2024-002. Finding: Cash Management – Timeliness of Subrecipient Payments (Continued) Criteria: Under Uniform Guidance (2 CFR 200.305(b)(3)), when the reimbursement method is used, the Federal awarding agency or pass-through entity must make payment within 30 calendar days after receipt of the billing, unless the Federal awarding agency or pass-through entity reasonably believes the request to be improper. Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls deigned to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure subrecipient payments are made timely. Cause: University of Illinois Urbana-Champaign officials stated the multi-layered review and approval process along with staffing deficiencies and workload challenges caused the situations for the exceptions noted. University of Illinois Chicago officials stated the one payment was paid 32 days from receipt of the invoice due to high volumes of invoice processing at fiscal year end and the payment due date coinciding with a holiday. The five other subrecipient payments were due to high staff workloads and occurred prior to the fiscal year 2023 corrective action implementation. Effect: Without proper program cash management processes and procedures, late subrecipient payments could result in the loss of future funding. (Finding Code No. 2024-002; 2023-006; 2022-008) Recommendation: We recommend the University of Illinois Urbana-Champaign and the University of Illinois Chicago review current processes, policies and procedures to minimize the time elapsing between the transfer of federal funds to the subrecipient. University Response: Accepted. The University will take steps to address the recommendation in this finding.
Federal Agencies: US Department of Defense (DoD); US Department of Energy (DOE); US Health and Human Services (HHS) Program Names: Research & Development Cluster: Basic, Applied and Advanced Research in Science and Engineering; Fossil Energy Research and Development; COVID19 – Discovery and Applied Research for Technological Innovations to Improve Human Health; Research and Technology Development; Office of Science and Financial Assistance Program; Air Force Defense Research Sciences Program; Cardiovascular Diseases Research; Health Center Program Cluster: Community Health Centers; and AIDS Education and Training Centers ALN #s: 12.630; 81.089; 93.286; 12.910; 81.049; 12.800; 93.837; 93.224; and 93.145 Award Numbers: ARMY W911NF-17-2-0196; DOE DE-FE0031581; DOE DE-FE0032049; NIH 1 R21 EB031310A; DARPA HR011-23-2-0004; DOE DE-SC0018420; AF FA9550-23-1-0609; SNAP 5R01HL152692-04; HRSA 5 U1OHA29293-09-03; and HRSA 5 U1OHA32109-07 Federal Award Year 2023 – 2024 Questioned Costs: None 2024-002. Finding: Cash Management – Timeliness of Subrecipient Payments The University of Illinois Urbana-Champaign and the University of Illinois Chicago did not make certain subrecipient payments timely and the controls in place did not identify the late payments. Condition: Out of thirty-two subrecipient payments tested which were made by the University of Illinois at Urbana-Champaign under the Research & Development Cluster, twelve payments (38%) were not submitted within 30 days after receipt of the billing from the subrecipient. The payments ranged from 35-201 days after receipt of the billing from the subrecipients. The sample was not intended to be, and was not, a statistically valid sample. Out of eight subrecipient payments tested which were made by the University of Illinois Chicago under the Research & Development Cluster, one payment (13%) was not submitted within 30 days after receipt of the billing from the subrecipient. The payment was 32 days after the receipt of billing from the subrecipient. The sample was not intended to be, and was not, a statistically valid sample. Out of eighteen subrecipient payments tested which were made by the University of Illinois Chicago under the Health Center Program Cluster: Community Health Centers and AIDS Education and Training Centers, five payments (28%) were not submitted within 30 days after receipt of the billing from the subrecipient. The payments ranged from 42-120 days after the receipt of billing from the subrecipients. The sample was not intended to be, and was not, a statistically valid sample. 2024-002. Finding: Cash Management – Timeliness of Subrecipient Payments (Continued) Criteria: Under Uniform Guidance (2 CFR 200.305(b)(3)), when the reimbursement method is used, the Federal awarding agency or pass-through entity must make payment within 30 calendar days after receipt of the billing, unless the Federal awarding agency or pass-through entity reasonably believes the request to be improper. Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls deigned to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure subrecipient payments are made timely. Cause: University of Illinois Urbana-Champaign officials stated the multi-layered review and approval process along with staffing deficiencies and workload challenges caused the situations for the exceptions noted. University of Illinois Chicago officials stated the one payment was paid 32 days from receipt of the invoice due to high volumes of invoice processing at fiscal year end and the payment due date coinciding with a holiday. The five other subrecipient payments were due to high staff workloads and occurred prior to the fiscal year 2023 corrective action implementation. Effect: Without proper program cash management processes and procedures, late subrecipient payments could result in the loss of future funding. (Finding Code No. 2024-002; 2023-006; 2022-008) Recommendation: We recommend the University of Illinois Urbana-Champaign and the University of Illinois Chicago review current processes, policies and procedures to minimize the time elapsing between the transfer of federal funds to the subrecipient. University Response: Accepted. The University will take steps to address the recommendation in this finding.
Federal Agencies: US Department of Defense (DoD); US Department of Energy (DOE); US Health and Human Services (HHS) Program Names: Research & Development Cluster: Basic, Applied and Advanced Research in Science and Engineering; Fossil Energy Research and Development; COVID19 – Discovery and Applied Research for Technological Innovations to Improve Human Health; Research and Technology Development; Office of Science and Financial Assistance Program; Air Force Defense Research Sciences Program; Cardiovascular Diseases Research; Health Center Program Cluster: Community Health Centers; and AIDS Education and Training Centers ALN #s: 12.630; 81.089; 93.286; 12.910; 81.049; 12.800; 93.837; 93.224; and 93.145 Award Numbers: ARMY W911NF-17-2-0196; DOE DE-FE0031581; DOE DE-FE0032049; NIH 1 R21 EB031310A; DARPA HR011-23-2-0004; DOE DE-SC0018420; AF FA9550-23-1-0609; SNAP 5R01HL152692-04; HRSA 5 U1OHA29293-09-03; and HRSA 5 U1OHA32109-07 Federal Award Year 2023 – 2024 Questioned Costs: None 2024-002. Finding: Cash Management – Timeliness of Subrecipient Payments The University of Illinois Urbana-Champaign and the University of Illinois Chicago did not make certain subrecipient payments timely and the controls in place did not identify the late payments. Condition: Out of thirty-two subrecipient payments tested which were made by the University of Illinois at Urbana-Champaign under the Research & Development Cluster, twelve payments (38%) were not submitted within 30 days after receipt of the billing from the subrecipient. The payments ranged from 35-201 days after receipt of the billing from the subrecipients. The sample was not intended to be, and was not, a statistically valid sample. Out of eight subrecipient payments tested which were made by the University of Illinois Chicago under the Research & Development Cluster, one payment (13%) was not submitted within 30 days after receipt of the billing from the subrecipient. The payment was 32 days after the receipt of billing from the subrecipient. The sample was not intended to be, and was not, a statistically valid sample. Out of eighteen subrecipient payments tested which were made by the University of Illinois Chicago under the Health Center Program Cluster: Community Health Centers and AIDS Education and Training Centers, five payments (28%) were not submitted within 30 days after receipt of the billing from the subrecipient. The payments ranged from 42-120 days after the receipt of billing from the subrecipients. The sample was not intended to be, and was not, a statistically valid sample. 2024-002. Finding: Cash Management – Timeliness of Subrecipient Payments (Continued) Criteria: Under Uniform Guidance (2 CFR 200.305(b)(3)), when the reimbursement method is used, the Federal awarding agency or pass-through entity must make payment within 30 calendar days after receipt of the billing, unless the Federal awarding agency or pass-through entity reasonably believes the request to be improper. Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls deigned to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure subrecipient payments are made timely. Cause: University of Illinois Urbana-Champaign officials stated the multi-layered review and approval process along with staffing deficiencies and workload challenges caused the situations for the exceptions noted. University of Illinois Chicago officials stated the one payment was paid 32 days from receipt of the invoice due to high volumes of invoice processing at fiscal year end and the payment due date coinciding with a holiday. The five other subrecipient payments were due to high staff workloads and occurred prior to the fiscal year 2023 corrective action implementation. Effect: Without proper program cash management processes and procedures, late subrecipient payments could result in the loss of future funding. (Finding Code No. 2024-002; 2023-006; 2022-008) Recommendation: We recommend the University of Illinois Urbana-Champaign and the University of Illinois Chicago review current processes, policies and procedures to minimize the time elapsing between the transfer of federal funds to the subrecipient. University Response: Accepted. The University will take steps to address the recommendation in this finding.
Federal Agencies: US Department of Defense (DoD); US Department of Energy (DOE); US Health and Human Services (HHS) Program Names: Research & Development Cluster: Basic, Applied and Advanced Research in Science and Engineering; Fossil Energy Research and Development; COVID19 – Discovery and Applied Research for Technological Innovations to Improve Human Health; Research and Technology Development; Office of Science and Financial Assistance Program; Air Force Defense Research Sciences Program; Cardiovascular Diseases Research; Health Center Program Cluster: Community Health Centers; and AIDS Education and Training Centers ALN #s: 12.630; 81.089; 93.286; 12.910; 81.049; 12.800; 93.837; 93.224; and 93.145 Award Numbers: ARMY W911NF-17-2-0196; DOE DE-FE0031581; DOE DE-FE0032049; NIH 1 R21 EB031310A; DARPA HR011-23-2-0004; DOE DE-SC0018420; AF FA9550-23-1-0609; SNAP 5R01HL152692-04; HRSA 5 U1OHA29293-09-03; and HRSA 5 U1OHA32109-07 Federal Award Year 2023 – 2024 Questioned Costs: None 2024-002. Finding: Cash Management – Timeliness of Subrecipient Payments The University of Illinois Urbana-Champaign and the University of Illinois Chicago did not make certain subrecipient payments timely and the controls in place did not identify the late payments. Condition: Out of thirty-two subrecipient payments tested which were made by the University of Illinois at Urbana-Champaign under the Research & Development Cluster, twelve payments (38%) were not submitted within 30 days after receipt of the billing from the subrecipient. The payments ranged from 35-201 days after receipt of the billing from the subrecipients. The sample was not intended to be, and was not, a statistically valid sample. Out of eight subrecipient payments tested which were made by the University of Illinois Chicago under the Research & Development Cluster, one payment (13%) was not submitted within 30 days after receipt of the billing from the subrecipient. The payment was 32 days after the receipt of billing from the subrecipient. The sample was not intended to be, and was not, a statistically valid sample. Out of eighteen subrecipient payments tested which were made by the University of Illinois Chicago under the Health Center Program Cluster: Community Health Centers and AIDS Education and Training Centers, five payments (28%) were not submitted within 30 days after receipt of the billing from the subrecipient. The payments ranged from 42-120 days after the receipt of billing from the subrecipients. The sample was not intended to be, and was not, a statistically valid sample. 2024-002. Finding: Cash Management – Timeliness of Subrecipient Payments (Continued) Criteria: Under Uniform Guidance (2 CFR 200.305(b)(3)), when the reimbursement method is used, the Federal awarding agency or pass-through entity must make payment within 30 calendar days after receipt of the billing, unless the Federal awarding agency or pass-through entity reasonably believes the request to be improper. Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls deigned to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure subrecipient payments are made timely. Cause: University of Illinois Urbana-Champaign officials stated the multi-layered review and approval process along with staffing deficiencies and workload challenges caused the situations for the exceptions noted. University of Illinois Chicago officials stated the one payment was paid 32 days from receipt of the invoice due to high volumes of invoice processing at fiscal year end and the payment due date coinciding with a holiday. The five other subrecipient payments were due to high staff workloads and occurred prior to the fiscal year 2023 corrective action implementation. Effect: Without proper program cash management processes and procedures, late subrecipient payments could result in the loss of future funding. (Finding Code No. 2024-002; 2023-006; 2022-008) Recommendation: We recommend the University of Illinois Urbana-Champaign and the University of Illinois Chicago review current processes, policies and procedures to minimize the time elapsing between the transfer of federal funds to the subrecipient. University Response: Accepted. The University will take steps to address the recommendation in this finding.
Assistance Listing, Federal Agency, and Program Name - 19.510, Department of State, U.S. Refugee Admissions Program, Federal Award Identification Number and Year - SPRMCO23CA0007; SPRMCO23CA0371; SPRMCO23CA0368; SPRMCO23CA0189 Pass through Entity - HIAS, Inc. Finding Type - Significant deficiency Repeat Finding - No Criteria - 2 CFR 200.303 requires that recipients of federal awards establish, document and maintain effective internal control that provides reasonable assurance that the recipient is managing the federal award in compliance with federal statutes, regulations and the terms and conditions of the federal award. 2 CFR 200 Appendix XI Part 3. Cash Management requires that recipients establish written procedures to meet the requirements of 2 CFR 200.305 and the terms of the grant award, expenditures must be incurred before reimbursement of federal funds is requested. 2 CFR 200 subpart E Cost Principles requires recipients to follow allowability requirements as defined in the grant award and within general cost principles. 2 CFR 200 requires that costs be expended in accordance with the period of performance defined within the award agreement. Condition - In performing our audit procedures, there was no evidence of a system of internal control over the cash management requirements, including a written policy, related to reimbursement of funds on a per refugee basis. In addition, we noted that reimbursement was requested prior to incurring expenses on a per refugee basis. There were also refugee costs coded incorrectly within the general ledger. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - When gaining an understanding of internal control over compliance for cash management, we noted a lack of internal controls in place to ensure that expenses on a per refugee basis were incurred prior to requesting reimbursement. In testing the compliance requirements for cash management, we were unable to test compliance on a per refugee basis. Each month, funds become available based on the number of refugees who arrived and been allocated to the program. We noted that in one month, $5,300 was available to be spent on new arrivals; however, only $2,285 was spent on the new arrivals and $3,015 was improperly spent on refugees who had arrived previously and for which reimbursement had already been received. In total, over the entire term of the grant, and based on the total number of refugees served, the appropriate amount of funds were requested for reimbursement. In addition, we noted one instance where refugee costs were applied to an incorrect award based on the period of performance and the allowable 90-day resettlement period. These costs were within the total amount allowed for each of the awards, but were not assigned correctly within the general ledger. Cause and Effect - There was not a sufficient cash management policy in place and there were no internal controls in place to ensure reimbursement requests were made only after expenses had been incurred on a per refugee basis. Recommendation - The organization should establish a written cash management policy which encompasses per refugee spending and ensure there is an effective review process in place to ensure that reimbursement is not requested prior to funds being incurred on a per refugee basis. This process should ensure that general ledger expenses are reconciled to per refugee spending and that the correct award funds are utilized for the specified refugee. In addition, the general ledger expenses should be coded in such a manner to facilitate this review on a per-refugee basis. These improvements will ensure that only allowable costs are recorded in the federal grant general ledger codes and are requested for reimbursement. Views of Responsible Officials and Corrective Action Plan - Agree with finding. Financial policies will be updated to include cash management requirements to ensure expenditures are incurred, including any required per client expenditures, prior to reimbursement requests. During the year under audit, there was not a reconciliation between individual refugee spending and the general ledger expenses. Subsequent to year end a new process was put in place to compare the individual refugee ledgers to the reimbursement request to ensure no expenditures were requested in advance and that refugee spending is coded to the appropriate general ledger account based on the specific award funding.
Assistance Listing, Federal Agency, and Program Name - 19.510, Department of State, U.S. Refugee Admissions Program, Federal Award Identification Number and Year - SPRMCO23CA0007; SPRMCO23CA0371; SPRMCO23CA0368; SPRMCO23CA0189 Pass through Entity - HIAS, Inc. Finding Type - Significant deficiency Repeat Finding - No Criteria - 2 CFR 200.303 requires that recipients of federal awards establish, document and maintain effective internal control that provides reasonable assurance that the recipient is managing the federal award in compliance with federal statutes, regulations and the terms and conditions of the federal award. 2 CFR 200 Appendix XI Part 3. Cash Management requires that recipients establish written procedures to meet the requirements of 2 CFR 200.305 and the terms of the grant award, expenditures must be incurred before reimbursement of federal funds is requested. 2 CFR 200 subpart E Cost Principles requires recipients to follow allowability requirements as defined in the grant award and within general cost principles. 2 CFR 200 requires that costs be expended in accordance with the period of performance defined within the award agreement. Condition - In performing our audit procedures, there was no evidence of a system of internal control over the cash management requirements, including a written policy, related to reimbursement of funds on a per refugee basis. In addition, we noted that reimbursement was requested prior to incurring expenses on a per refugee basis. There were also refugee costs coded incorrectly within the general ledger. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - When gaining an understanding of internal control over compliance for cash management, we noted a lack of internal controls in place to ensure that expenses on a per refugee basis were incurred prior to requesting reimbursement. In testing the compliance requirements for cash management, we were unable to test compliance on a per refugee basis. Each month, funds become available based on the number of refugees who arrived and been allocated to the program. We noted that in one month, $5,300 was available to be spent on new arrivals; however, only $2,285 was spent on the new arrivals and $3,015 was improperly spent on refugees who had arrived previously and for which reimbursement had already been received. In total, over the entire term of the grant, and based on the total number of refugees served, the appropriate amount of funds were requested for reimbursement. In addition, we noted one instance where refugee costs were applied to an incorrect award based on the period of performance and the allowable 90-day resettlement period. These costs were within the total amount allowed for each of the awards, but were not assigned correctly within the general ledger. Cause and Effect - There was not a sufficient cash management policy in place and there were no internal controls in place to ensure reimbursement requests were made only after expenses had been incurred on a per refugee basis. Recommendation - The organization should establish a written cash management policy which encompasses per refugee spending and ensure there is an effective review process in place to ensure that reimbursement is not requested prior to funds being incurred on a per refugee basis. This process should ensure that general ledger expenses are reconciled to per refugee spending and that the correct award funds are utilized for the specified refugee. In addition, the general ledger expenses should be coded in such a manner to facilitate this review on a per-refugee basis. These improvements will ensure that only allowable costs are recorded in the federal grant general ledger codes and are requested for reimbursement. Views of Responsible Officials and Corrective Action Plan - Agree with finding. Financial policies will be updated to include cash management requirements to ensure expenditures are incurred, including any required per client expenditures, prior to reimbursement requests. During the year under audit, there was not a reconciliation between individual refugee spending and the general ledger expenses. Subsequent to year end a new process was put in place to compare the individual refugee ledgers to the reimbursement request to ensure no expenditures were requested in advance and that refugee spending is coded to the appropriate general ledger account based on the specific award funding.
Assistance Listing, Federal Agency, and Program Name - 19.510, Department of State, U.S. Refugee Admissions Program, Federal Award Identification Number and Year - SPRMCO23CA0007; SPRMCO23CA0371; SPRMCO23CA0368; SPRMCO23CA0189 Pass through Entity - HIAS, Inc. Finding Type - Significant deficiency Repeat Finding - No Criteria - 2 CFR 200.303 requires that recipients of federal awards establish, document and maintain effective internal control that provides reasonable assurance that the recipient is managing the federal award in compliance with federal statutes, regulations and the terms and conditions of the federal award. 2 CFR 200 Appendix XI Part 3. Cash Management requires that recipients establish written procedures to meet the requirements of 2 CFR 200.305 and the terms of the grant award, expenditures must be incurred before reimbursement of federal funds is requested. 2 CFR 200 subpart E Cost Principles requires recipients to follow allowability requirements as defined in the grant award and within general cost principles. 2 CFR 200 requires that costs be expended in accordance with the period of performance defined within the award agreement. Condition - In performing our audit procedures, there was no evidence of a system of internal control over the cash management requirements, including a written policy, related to reimbursement of funds on a per refugee basis. In addition, we noted that reimbursement was requested prior to incurring expenses on a per refugee basis. There were also refugee costs coded incorrectly within the general ledger. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - When gaining an understanding of internal control over compliance for cash management, we noted a lack of internal controls in place to ensure that expenses on a per refugee basis were incurred prior to requesting reimbursement. In testing the compliance requirements for cash management, we were unable to test compliance on a per refugee basis. Each month, funds become available based on the number of refugees who arrived and been allocated to the program. We noted that in one month, $5,300 was available to be spent on new arrivals; however, only $2,285 was spent on the new arrivals and $3,015 was improperly spent on refugees who had arrived previously and for which reimbursement had already been received. In total, over the entire term of the grant, and based on the total number of refugees served, the appropriate amount of funds were requested for reimbursement. In addition, we noted one instance where refugee costs were applied to an incorrect award based on the period of performance and the allowable 90-day resettlement period. These costs were within the total amount allowed for each of the awards, but were not assigned correctly within the general ledger. Cause and Effect - There was not a sufficient cash management policy in place and there were no internal controls in place to ensure reimbursement requests were made only after expenses had been incurred on a per refugee basis. Recommendation - The organization should establish a written cash management policy which encompasses per refugee spending and ensure there is an effective review process in place to ensure that reimbursement is not requested prior to funds being incurred on a per refugee basis. This process should ensure that general ledger expenses are reconciled to per refugee spending and that the correct award funds are utilized for the specified refugee. In addition, the general ledger expenses should be coded in such a manner to facilitate this review on a per-refugee basis. These improvements will ensure that only allowable costs are recorded in the federal grant general ledger codes and are requested for reimbursement. Views of Responsible Officials and Corrective Action Plan - Agree with finding. Financial policies will be updated to include cash management requirements to ensure expenditures are incurred, including any required per client expenditures, prior to reimbursement requests. During the year under audit, there was not a reconciliation between individual refugee spending and the general ledger expenses. Subsequent to year end a new process was put in place to compare the individual refugee ledgers to the reimbursement request to ensure no expenditures were requested in advance and that refugee spending is coded to the appropriate general ledger account based on the specific award funding.
Assistance Listing, Federal Agency, and Program Name - 19.510, Department of State, U.S. Refugee Admissions Program, Federal Award Identification Number and Year - SPRMCO23CA0007; SPRMCO23CA0371; SPRMCO23CA0368; SPRMCO23CA0189 Pass through Entity - HIAS, Inc. Finding Type - Significant deficiency Repeat Finding - No Criteria - 2 CFR 200.303 requires that recipients of federal awards establish, document and maintain effective internal control that provides reasonable assurance that the recipient is managing the federal award in compliance with federal statutes, regulations and the terms and conditions of the federal award. 2 CFR 200 Appendix XI Part 3. Cash Management requires that recipients establish written procedures to meet the requirements of 2 CFR 200.305 and the terms of the grant award, expenditures must be incurred before reimbursement of federal funds is requested. 2 CFR 200 subpart E Cost Principles requires recipients to follow allowability requirements as defined in the grant award and within general cost principles. 2 CFR 200 requires that costs be expended in accordance with the period of performance defined within the award agreement. Condition - In performing our audit procedures, there was no evidence of a system of internal control over the cash management requirements, including a written policy, related to reimbursement of funds on a per refugee basis. In addition, we noted that reimbursement was requested prior to incurring expenses on a per refugee basis. There were also refugee costs coded incorrectly within the general ledger. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - When gaining an understanding of internal control over compliance for cash management, we noted a lack of internal controls in place to ensure that expenses on a per refugee basis were incurred prior to requesting reimbursement. In testing the compliance requirements for cash management, we were unable to test compliance on a per refugee basis. Each month, funds become available based on the number of refugees who arrived and been allocated to the program. We noted that in one month, $5,300 was available to be spent on new arrivals; however, only $2,285 was spent on the new arrivals and $3,015 was improperly spent on refugees who had arrived previously and for which reimbursement had already been received. In total, over the entire term of the grant, and based on the total number of refugees served, the appropriate amount of funds were requested for reimbursement. In addition, we noted one instance where refugee costs were applied to an incorrect award based on the period of performance and the allowable 90-day resettlement period. These costs were within the total amount allowed for each of the awards, but were not assigned correctly within the general ledger. Cause and Effect - There was not a sufficient cash management policy in place and there were no internal controls in place to ensure reimbursement requests were made only after expenses had been incurred on a per refugee basis. Recommendation - The organization should establish a written cash management policy which encompasses per refugee spending and ensure there is an effective review process in place to ensure that reimbursement is not requested prior to funds being incurred on a per refugee basis. This process should ensure that general ledger expenses are reconciled to per refugee spending and that the correct award funds are utilized for the specified refugee. In addition, the general ledger expenses should be coded in such a manner to facilitate this review on a per-refugee basis. These improvements will ensure that only allowable costs are recorded in the federal grant general ledger codes and are requested for reimbursement. Views of Responsible Officials and Corrective Action Plan - Agree with finding. Financial policies will be updated to include cash management requirements to ensure expenditures are incurred, including any required per client expenditures, prior to reimbursement requests. During the year under audit, there was not a reconciliation between individual refugee spending and the general ledger expenses. Subsequent to year end a new process was put in place to compare the individual refugee ledgers to the reimbursement request to ensure no expenditures were requested in advance and that refugee spending is coded to the appropriate general ledger account based on the specific award funding.
Program AL# 93.224/93.527 Health Center Cluster Program - Cash Management - Significant Deficiency in Internal Control over Compliance Criteria - Health centers are required to maintain written procedures that minimize the time elapsing between the transfer of funds from the U.S. Treasury and disbursement of funds by the non-Federal entity (2 CFR section 200.305). Condition - During audit procedures of federal draw downs we noted several significant delays in performing the draw down request. Context - During audit procedures, we tested payments received by the center to verify procedures were followed to minimize the time elapsed between the date payroll is processed and funds are requested. We noted 25 payments that were request greater than one week after the pay date that doesn’t appear to follow the Center’s written procedures. Effect - Delay in drawing down funds could lead to incorrect Federal Financial Report (SF-425) and compliance requirements with reporting. Incorrect financial reports could result in lost funding. Questioned Costs - There were no questioned cost regarding this finding. Cause - The delay in processing federal draw downs is due to lack of adequate review procedures. Recommendation - We recommend the Center’s management to monitor and evaluate the performance of their accounting staff and to make improvements to prevent and/or detect noncompliance when necessary. Additionally, the Center should provide training to all personnel involved in accounting for federal awards. Views of Responsible Officials - We concur with the audit finding. The Center hired and filled a key financial position subsequent to the year end. Management believes a lack of permanent staff a significant factor in causing this finding. The Center has established proper accounting procedures and controls, and with the key postion being filled, federal draw downs will be perfomed according the Center's policy.
Program AL# 93.224/93.527 Health Center Cluster Program - Cash Management - Significant Deficiency in Internal Control over Compliance Criteria - Health centers are required to maintain written procedures that minimize the time elapsing between the transfer of funds from the U.S. Treasury and disbursement of funds by the non-Federal entity (2 CFR section 200.305). Condition - During audit procedures of federal draw downs we noted several significant delays in performing the draw down request. Context - During audit procedures, we tested payments received by the center to verify procedures were followed to minimize the time elapsed between the date payroll is processed and funds are requested. We noted 25 payments that were request greater than one week after the pay date that doesn’t appear to follow the Center’s written procedures. Effect - Delay in drawing down funds could lead to incorrect Federal Financial Report (SF-425) and compliance requirements with reporting. Incorrect financial reports could result in lost funding. Questioned Costs - There were no questioned cost regarding this finding. Cause - The delay in processing federal draw downs is due to lack of adequate review procedures. Recommendation - We recommend the Center’s management to monitor and evaluate the performance of their accounting staff and to make improvements to prevent and/or detect noncompliance when necessary. Additionally, the Center should provide training to all personnel involved in accounting for federal awards. Views of Responsible Officials - We concur with the audit finding. The Center hired and filled a key financial position subsequent to the year end. Management believes a lack of permanent staff a significant factor in causing this finding. The Center has established proper accounting procedures and controls, and with the key postion being filled, federal draw downs will be perfomed according the Center's policy.
Program: AL 12.401 – National Guard Military Operations and Maintenance (O&M) Projects – Cash Management & Reporting Grant Number & Year: Appendices – W91243-22-2-1001, FFY 2022; W91243-23-2-1001, FFY 2023; W91243-24-2-1001, FFY 2024; W91243-24-2-1021, FFY 2024; W91243-24-2-1024, FFY 2024 Federal Grantor Agency: U.S. Department of Defense Criteria: Per 2 CFR § 1128.100 and 2 CFR § 1128.200 (January 1, 2024), the Department of Defense adopted the Uniform Administrative Requirements, Cost Principles, and Audit Requirements set forth at 2 CFR parts 200.302, 200.303, and 200.305. Per 2 CFR § 200.303 (January 1, 2024): 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. Title 2 CFR § 200.302 (January 1, 2024) requires financial management systems of the State sufficient to permit preparation of required reports and permit the tracing of funds to expenditures adequate to establish the use of these funds were in accordance with applicable regulations. EnterpriseOne is the official accounting system for the State of Nebraska, and all expenditures are generated from it. Title 2 CFR § 200.305(a) (January 1, 2024) states, in part, “For states, payments are governed by Treasury-State Cash Management Improvement Act (CMIA) agreements and default procedures codified at 31 CFR part 205 . . . .” National Guard Policy (NG Policy) 5-1, National Guard Grants and Cooperative Agreements, Section 11-5, Advance Payment Method, Section (5), states, in part, “[T]he grantee agrees to minimize the time elapsing between the transfer of funds from the U.S. Treasury and their disbursement by the State. (no more than 45 days).” Grants and agreements Policy Letter (GCAPL) 20-02 AQ-A Policy (February 4, 2020) turned NGR 5-1 into NG Policy 5-1. It generally maintained the principles and operational aspects of NGR 5-1, except as provisions of the document were adjusted in the AQ-A Policy. The AQ-A Policy did not make any changes to the 45-day requirement found in NGR 5-1. The instructions for OMB Standard Form 270 (REV. 1/2016) include the following for line 11a: Enter program outlays to date (net of refunds, rebates, and discounts), in the appropriate columns. For requests prepared on a cash basis, outlays are the sum of actual cash disbursements for goods and services, the amount of indirect expenses charged, the value of in- kind contributions applied, and the amount of cash advances and payments made to subcontractors and subrecipients. A good internal control plan would include procedures to ensure the time between the drawdown of Federal funds and disbursements are minimized and in compliance with National Guard regulations. Condition: The Agency was not in compliance with the Federal cash management requirements during the fiscal year and did not properly report program outlays on the OMB Standard Form (SF) 270. A similar finding was noted in the prior audit. Repeat Finding: 2023-057 Questioned Costs: None Statistical Sample: No Context: We tested five drawdowns of Federal funds to support the Agency’s operations. We tested to determine whether the Agency had expended the cumulative amounts drawn down for the awards tested within the required timeframe and noted the following: • Three drawdowns were not in compliance with NG Policy 5-1. Cumulative drawdowns for two of the draws tested were expended 49 and 62 days after the drawdown of Federal funds. Cumulative draws for the other draw tested had yet to be fully expended as of January 7, 2025. The table below provides a summary of the three draws: See Schedule of Findings and Questioned Costs for chart/table. • For five of five SF-270s tested, the Agency did not properly report total program outlays on the OMB SF-270 report. The Agency reported the total drawdowns for the program to date, rather than actual cash disbursements, as total program outlays. The variance between what was reported and what should have been reported ranged from an underreporting of $265,642 to an overreporting of $660,608, with a net total overreporting of expenditures by $1,090,090 for the five reports tested. Cause: Inadequate procedures for estimating fund needs for the upcoming month. Regarding SF-270 reporting, the Agency has stated it agrees with the finding; however, it has yet to implement corrective action. Effect: The Agency is not in compliance with Federal cash management and reporting requirements, which could result in sanctions. Additionally, there is an increased risk for the loss of Federal funding. Recommendation: We recommend the Agency ensure the amount of time between the Federal draw and the disbursement of funds by the State is minimized and in compliance with National Guard requirements. We also recommend the Agency report total program outlays in compliance with Federal requirements. Management Response: The Agency agrees with the finding. The drawdown timeline is a partial result of the variances in federal reimbursement functionalities and the advance state requirement function. The agency has reduced the Average # of Days to spend Total Draws by 23 for those draws in which drawdown timing was reported, indicating a general improvement over the prior year finding.
2024-001 U.S. Department of the Interior Fish and Wildlife Management Assistance – ALN 15.608 Criteria: Per 2 CFR section 200.305(b), payment methods must minimize the time elapsing between the transfer of funds from the Federal agency or the pass-through entity and the disbursement of funds by the recipient or subrecipient regardless of whether the payment is made by electronic funds transfer or by other means. Condition: For six months during the fiscal year the Town maintained a surplus cash balance of over 50 percent of the amount drawn down and maintained a surplus cash balance of $580,531.07 at year-end. Cause: The Town is utilizing Federal, state and local funds for the same project and did not estimate its cash needs properly. Effect: The Town is not in compliance with Federal cash management requirements. Questioned Costs: None Repeat Finding from Prior Year: No. Recommendation: The Town should implement procedures to more accurately estimate its cash needs in order to minimize the time elapsing between receipt of grants funds and payment of the vendors. Views of Responsible Official: Management agrees with the finding.
Finding 2024-001: Timely Remittance of Earned Interest Federal Programs ALN: 93.575, 93.596, 93.558, and 93.667 Criteria: The Organization is required to remit all interest earned on federally funded advances to DEL within 30 days after the fiscal year end per DEL Program Guidance 240.01 Cash Management and 2 CFR 200.305(9). Condition: The Organization failed to remit all earned interest to DEL within the 31 day deadline in accordance with the grant agreement. Cause: The Organization experienced high management turnover which delayed the calculation of interest earned and remittance to DEL. Effect: The Organization did not meet the remittance submission deadline requirement as set forth by DEL Program Guidance 240.01 Cash Management and 2 CFR 200.305(9). The earned interest was remitted on March 11, 2025. Recommendation: We recommend the Organization designate an individual to calculate interest earned and closely monitor the submission deadline.
Finding 2024-001: Timely Remittance of Earned Interest Federal Programs ALN: 93.575, 93.596, 93.558, and 93.667 Criteria: The Organization is required to remit all interest earned on federally funded advances to DEL within 30 days after the fiscal year end per DEL Program Guidance 240.01 Cash Management and 2 CFR 200.305(9). Condition: The Organization failed to remit all earned interest to DEL within the 31 day deadline in accordance with the grant agreement. Cause: The Organization experienced high management turnover which delayed the calculation of interest earned and remittance to DEL. Effect: The Organization did not meet the remittance submission deadline requirement as set forth by DEL Program Guidance 240.01 Cash Management and 2 CFR 200.305(9). The earned interest was remitted on March 11, 2025. Recommendation: We recommend the Organization designate an individual to calculate interest earned and closely monitor the submission deadline.
Finding 2024-001: Timely Remittance of Earned Interest Federal Programs ALN: 93.575, 93.596, 93.558, and 93.667 Criteria: The Organization is required to remit all interest earned on federally funded advances to DEL within 30 days after the fiscal year end per DEL Program Guidance 240.01 Cash Management and 2 CFR 200.305(9). Condition: The Organization failed to remit all earned interest to DEL within the 31 day deadline in accordance with the grant agreement. Cause: The Organization experienced high management turnover which delayed the calculation of interest earned and remittance to DEL. Effect: The Organization did not meet the remittance submission deadline requirement as set forth by DEL Program Guidance 240.01 Cash Management and 2 CFR 200.305(9). The earned interest was remitted on March 11, 2025. Recommendation: We recommend the Organization designate an individual to calculate interest earned and closely monitor the submission deadline.
Finding 2024-001: Timely Remittance of Earned Interest Federal Programs ALN: 93.575, 93.596, 93.558, and 93.667 Criteria: The Organization is required to remit all interest earned on federally funded advances to DEL within 30 days after the fiscal year end per DEL Program Guidance 240.01 Cash Management and 2 CFR 200.305(9). Condition: The Organization failed to remit all earned interest to DEL within the 31 day deadline in accordance with the grant agreement. Cause: The Organization experienced high management turnover which delayed the calculation of interest earned and remittance to DEL. Effect: The Organization did not meet the remittance submission deadline requirement as set forth by DEL Program Guidance 240.01 Cash Management and 2 CFR 200.305(9). The earned interest was remitted on March 11, 2025. Recommendation: We recommend the Organization designate an individual to calculate interest earned and closely monitor the submission deadline.
Finding 2024-001: Timely Remittance of Earned Interest Federal Programs ALN: 93.575, 93.596, 93.558, and 93.667 Criteria: The Organization is required to remit all interest earned on federally funded advances to DEL within 30 days after the fiscal year end per DEL Program Guidance 240.01 Cash Management and 2 CFR 200.305(9). Condition: The Organization failed to remit all earned interest to DEL within the 31 day deadline in accordance with the grant agreement. Cause: The Organization experienced high management turnover which delayed the calculation of interest earned and remittance to DEL. Effect: The Organization did not meet the remittance submission deadline requirement as set forth by DEL Program Guidance 240.01 Cash Management and 2 CFR 200.305(9). The earned interest was remitted on March 11, 2025. Recommendation: We recommend the Organization designate an individual to calculate interest earned and closely monitor the submission deadline.
Finding 2024-001: Timely Remittance of Earned Interest Federal Programs ALN: 93.575, 93.596, 93.558, and 93.667 Criteria: The Organization is required to remit all interest earned on federally funded advances to DEL within 30 days after the fiscal year end per DEL Program Guidance 240.01 Cash Management and 2 CFR 200.305(9). Condition: The Organization failed to remit all earned interest to DEL within the 31 day deadline in accordance with the grant agreement. Cause: The Organization experienced high management turnover which delayed the calculation of interest earned and remittance to DEL. Effect: The Organization did not meet the remittance submission deadline requirement as set forth by DEL Program Guidance 240.01 Cash Management and 2 CFR 200.305(9). The earned interest was remitted on March 11, 2025. Recommendation: We recommend the Organization designate an individual to calculate interest earned and closely monitor the submission deadline.
Finding 2024-001: Timely Remittance of Earned Interest Federal Programs ALN: 93.575, 93.596, 93.558, and 93.667 Criteria: The Organization is required to remit all interest earned on federally funded advances to DEL within 30 days after the fiscal year end per DEL Program Guidance 240.01 Cash Management and 2 CFR 200.305(9). Condition: The Organization failed to remit all earned interest to DEL within the 31 day deadline in accordance with the grant agreement. Cause: The Organization experienced high management turnover which delayed the calculation of interest earned and remittance to DEL. Effect: The Organization did not meet the remittance submission deadline requirement as set forth by DEL Program Guidance 240.01 Cash Management and 2 CFR 200.305(9). The earned interest was remitted on March 11, 2025. Recommendation: We recommend the Organization designate an individual to calculate interest earned and closely monitor the submission deadline.
Finding 2024-001: Timely Remittance of Earned Interest Federal Programs ALN: 93.575, 93.596, 93.558, and 93.667 Criteria: The Organization is required to remit all interest earned on federally funded advances to DEL within 30 days after the fiscal year end per DEL Program Guidance 240.01 Cash Management and 2 CFR 200.305(9). Condition: The Organization failed to remit all earned interest to DEL within the 31 day deadline in accordance with the grant agreement. Cause: The Organization experienced high management turnover which delayed the calculation of interest earned and remittance to DEL. Effect: The Organization did not meet the remittance submission deadline requirement as set forth by DEL Program Guidance 240.01 Cash Management and 2 CFR 200.305(9). The earned interest was remitted on March 11, 2025. Recommendation: We recommend the Organization designate an individual to calculate interest earned and closely monitor the submission deadline.
(2024-037) Title: Internal control over WIC subrecipient cash management needs improvement Prior Year Findings: See schedule of Findings and Questioned Costs for chart/table State Department: Health and Human Services State Bureau: Division of Contract Management Maine Center for Disease Control & Prevention Federal Agency: U.S. Department of Agriculture Assistance Listing Title: Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) (COVID-19) Assistance Listing Number: 10.557 Federal Award Identification Number: See E-77 to E-78 Compliance Area: Cash management Subrecipient monitoring Type of Finding: Significant deficiency Questioned Costs: None Criteria: 2 CFR 200.303; 2 CFR 200.305 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. The Department is required to monitor cash drawdowns by their subrecipients to ensure that the time elapsing between the payment of Federal funds to the subrecipient and the subrecipient’s actual disbursement for program purposes is minimized. Condition: The Department’s Division of Contract Management (DCM) has three methods for providing payments to subrecipients: cost-settled, cost-settled by invoice, and fee-for-service subawards. • For cost-settled subawards, DCM procedures include making equal advance monthly payments and then reconciling those amounts to the quarterly financial reports submitted by the subrecipient. This procedure does not take into consideration the time elapsing between the payment of Federal funds to the subrecipient and the subrecipient’s actual disbursement for program purposes. • For “cost-settled by invoice” (reimbursement) subawards, DCM procedures do not require subrecipients to include supporting documentation with monthly requests for reimbursement nor do they request supporting documentation at a subsequent date. This procedure does not take into consideration the time elapsing between the payment of Federal funds to the subrecipient and the subrecipient’s actual disbursement for program purposes. • Cash management requirements are not applicable for fee-for-service subawards. Maine Center for Disease Control & Prevention (MeCDC) is responsible for ensuring the WIC program’s subrecipients comply with Federal requirements; however, MeCDC’s subrecipient monitoring procedures do not include review of subrecipient compliance with cash management requirements. All of WIC’s subawards are cost-settled. Therefore, DCM and MeCDC procedures do not support that subrecipient cash management is properly monitored as required by Federal regulations. Context: In fiscal year 2024, the Department provided $5.9 million to subrecipients from WIC grant funds totaling $22.8 million. Cause: • Lack of adequate subrecipient monitoring procedures • Lack of centralized oversight of subrecipient monitoring Effect: • Noncompliance with Federal regulations • Federal programs may not be effectively and efficiently administered. • The Federal government may require the implementation of more stringent subrecipient cash management procedures. Recommendation: We recommend that MeCDC collaborate with DCM to implement monitoring procedures over subrecipient cash management requirements to ensure that the time elapsing between the payment of Federal funds to the subrecipient and the subrecipient’s actual disbursement for program purposes is minimized for the WIC program. Corrective Action Plan: See F-18 Management’s Response: The Department disagrees with this finding. The Department is in compliance with the requirement for minimizing the time between payments to our subrecipients and the disbursement of the funds. Payments are made as close as administratively feasible. The Compliance Supplement suggested audit procedures for Cash Management for pass-through entities refers to 200.305(b)(1)...that same paragraph states that the timing and amount of advance payments must be as close as is administratively feasible. Contact: Anthony Madden, Deputy Director, Division of Audit, DHHS, 207-287-2834 Auditor’s Concluding Remarks: The Department’s interpretation of the applicable Federal regulation selectively emphasizes a single sentence from the broader paragraph, omitting critical context that informs the regulation’s full intent. According to the 2024 Compliance Supplement, pass-through entities must monitor cash drawdowns by their subrecipients to ensure that the time elapsing between the transfer of Federal funds to the subrecipient and their disbursement for program purposes is minimized as required by the applicable cash management requirements in the Federal award to the recipient (2 CFR section 200.305(b)(1)). 2 CFR section 200.305(b)(1) states that the recipient or subrecipient must be paid in advance, provided it maintains or demonstrates the willingness to maintain both written procedures that minimize the time elapsing between the transfer of funds and disbursement by the recipient or subrecipient, and financial management systems that meet the standards for fund control and accountability as established in this part. Advance payments to a recipient or subrecipient must be limited to the minimum amounts needed and be timed with actual, immediate cash requirements of the recipient or subrecipient in carrying out the purpose of the approved program or project. The timing and amount of advance payments must be as close as is administratively feasible to the actual disbursements by the recipient or subrecipient for direct program or project costs and the proportionate share of any allowable indirect costs. The recipient or subrecipient must make timely payments to contractors in accordance with the contract provisions. The Department references the phrase “as close as is administratively feasible” to justify their current process; however, this phrase is part of a broader requirement that establishes specific conditions for advance payments. The regulation requires that the timing between when the subrecipient receives Federal funds from the State and when the subrecipient disburses those funds is closely monitored to ensure that disbursements align with actual, immediate cash needs. A full reading of the provision indicates that “administratively feasible” does not negate the obligation to implement effective controls that minimize this gap, nor does it permit delays or inadequate oversight in Federal cash management. The Department could not provide evidence to demonstrate that they adequately monitored subrecipient cash drawdowns to ensure alignment with actual, immediate cash needs. Additionally, the Department does not require subrecipients to submit invoice documentation to substantiate the timing, amount, or nature of expenditures included in the request of Federal funds. As a result, the Department cannot demonstrate an adequate level of monitoring, as there is no evidence that they collect the necessary information to ensure compliance with Federal cash management requirements. The finding remains as stated. (State Number: 24-1113-03)
(2024-037) Title: Internal control over WIC subrecipient cash management needs improvement Prior Year Findings: See schedule of Findings and Questioned Costs for chart/table State Department: Health and Human Services State Bureau: Division of Contract Management Maine Center for Disease Control & Prevention Federal Agency: U.S. Department of Agriculture Assistance Listing Title: Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) (COVID-19) Assistance Listing Number: 10.557 Federal Award Identification Number: See E-77 to E-78 Compliance Area: Cash management Subrecipient monitoring Type of Finding: Significant deficiency Questioned Costs: None Criteria: 2 CFR 200.303; 2 CFR 200.305 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. The Department is required to monitor cash drawdowns by their subrecipients to ensure that the time elapsing between the payment of Federal funds to the subrecipient and the subrecipient’s actual disbursement for program purposes is minimized. Condition: The Department’s Division of Contract Management (DCM) has three methods for providing payments to subrecipients: cost-settled, cost-settled by invoice, and fee-for-service subawards. • For cost-settled subawards, DCM procedures include making equal advance monthly payments and then reconciling those amounts to the quarterly financial reports submitted by the subrecipient. This procedure does not take into consideration the time elapsing between the payment of Federal funds to the subrecipient and the subrecipient’s actual disbursement for program purposes. • For “cost-settled by invoice” (reimbursement) subawards, DCM procedures do not require subrecipients to include supporting documentation with monthly requests for reimbursement nor do they request supporting documentation at a subsequent date. This procedure does not take into consideration the time elapsing between the payment of Federal funds to the subrecipient and the subrecipient’s actual disbursement for program purposes. • Cash management requirements are not applicable for fee-for-service subawards. Maine Center for Disease Control & Prevention (MeCDC) is responsible for ensuring the WIC program’s subrecipients comply with Federal requirements; however, MeCDC’s subrecipient monitoring procedures do not include review of subrecipient compliance with cash management requirements. All of WIC’s subawards are cost-settled. Therefore, DCM and MeCDC procedures do not support that subrecipient cash management is properly monitored as required by Federal regulations. Context: In fiscal year 2024, the Department provided $5.9 million to subrecipients from WIC grant funds totaling $22.8 million. Cause: • Lack of adequate subrecipient monitoring procedures • Lack of centralized oversight of subrecipient monitoring Effect: • Noncompliance with Federal regulations • Federal programs may not be effectively and efficiently administered. • The Federal government may require the implementation of more stringent subrecipient cash management procedures. Recommendation: We recommend that MeCDC collaborate with DCM to implement monitoring procedures over subrecipient cash management requirements to ensure that the time elapsing between the payment of Federal funds to the subrecipient and the subrecipient’s actual disbursement for program purposes is minimized for the WIC program. Corrective Action Plan: See F-18 Management’s Response: The Department disagrees with this finding. The Department is in compliance with the requirement for minimizing the time between payments to our subrecipients and the disbursement of the funds. Payments are made as close as administratively feasible. The Compliance Supplement suggested audit procedures for Cash Management for pass-through entities refers to 200.305(b)(1)...that same paragraph states that the timing and amount of advance payments must be as close as is administratively feasible. Contact: Anthony Madden, Deputy Director, Division of Audit, DHHS, 207-287-2834 Auditor’s Concluding Remarks: The Department’s interpretation of the applicable Federal regulation selectively emphasizes a single sentence from the broader paragraph, omitting critical context that informs the regulation’s full intent. According to the 2024 Compliance Supplement, pass-through entities must monitor cash drawdowns by their subrecipients to ensure that the time elapsing between the transfer of Federal funds to the subrecipient and their disbursement for program purposes is minimized as required by the applicable cash management requirements in the Federal award to the recipient (2 CFR section 200.305(b)(1)). 2 CFR section 200.305(b)(1) states that the recipient or subrecipient must be paid in advance, provided it maintains or demonstrates the willingness to maintain both written procedures that minimize the time elapsing between the transfer of funds and disbursement by the recipient or subrecipient, and financial management systems that meet the standards for fund control and accountability as established in this part. Advance payments to a recipient or subrecipient must be limited to the minimum amounts needed and be timed with actual, immediate cash requirements of the recipient or subrecipient in carrying out the purpose of the approved program or project. The timing and amount of advance payments must be as close as is administratively feasible to the actual disbursements by the recipient or subrecipient for direct program or project costs and the proportionate share of any allowable indirect costs. The recipient or subrecipient must make timely payments to contractors in accordance with the contract provisions. The Department references the phrase “as close as is administratively feasible” to justify their current process; however, this phrase is part of a broader requirement that establishes specific conditions for advance payments. The regulation requires that the timing between when the subrecipient receives Federal funds from the State and when the subrecipient disburses those funds is closely monitored to ensure that disbursements align with actual, immediate cash needs. A full reading of the provision indicates that “administratively feasible” does not negate the obligation to implement effective controls that minimize this gap, nor does it permit delays or inadequate oversight in Federal cash management. The Department could not provide evidence to demonstrate that they adequately monitored subrecipient cash drawdowns to ensure alignment with actual, immediate cash needs. Additionally, the Department does not require subrecipients to submit invoice documentation to substantiate the timing, amount, or nature of expenditures included in the request of Federal funds. As a result, the Department cannot demonstrate an adequate level of monitoring, as there is no evidence that they collect the necessary information to ensure compliance with Federal cash management requirements. The finding remains as stated. (State Number: 24-1113-03)
(2024-046) Title: Internal control over CSLFRF subrecipient cash management needs improvement Prior Year Findings: None State Department: Health and Human Services State Bureau: Division of Contract Management Office of Aging and Disability Services Federal Agency: U.S. Department of the Treasury Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Funds (COVID-19) Assistance Listing Number: 21.027 Federal Award Identification Number: See E-77 to E-78 Compliance Area: Cash management Subrecipient monitoring Type of Finding: Significant deficiency Questioned Costs: None Criteria: 2 CFR 200.303; 2 CFR 200.305 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. The Department is required to monitor cash drawdowns by their subrecipients to ensure that the time elapsing between the payment of Federal funds to the subrecipient and the subrecipient’s actual disbursement for program purposes is minimized. Condition: The Department’s Division of Contract Management (DCM) has three methods for providing payments to subrecipients: cost-settled, cost-settled by invoice, and fee-for-service subawards. • For cost-settled subawards, DCM procedures include making equal advance monthly payments and then reconciling those amounts to the quarterly financial reports submitted by the subrecipient. This procedure does not take into consideration the time elapsing between the payment of Federal funds to the subrecipient and the subrecipient’s actual disbursement for program purposes. • For “cost-settled by invoice” (reimbursement) subawards, DCM procedures do not require subrecipients to include supporting documentation with monthly requests for reimbursement nor do they request supporting documentation at a subsequent date. This procedure does not take into consideration the time elapsing between the payment of Federal funds to the subrecipient and the subrecipient’s actual disbursement for program purposes. • Cash management requirements are not applicable for fee-for-service subawards. The Office of Aging and Disability Services (OADS) is responsible for ensuring its subrecipients that received Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) comply with Federal requirements; however, OADS’ subrecipient monitoring procedures do not include review of subrecipient compliance with cash management requirements. All of the CSLFRF subawards from OADS are cost-settled. Therefore, DCM and OADS procedures do not support that subrecipient cash management is properly monitored as required by Federal regulations. Context: In fiscal year 2024, the Department provided $1.5 million to OADS subrecipients from CSLFRF grant funds totaling $209.6 million. Cause: • Lack of adequate subrecipient monitoring procedures • Lack of centralized oversight of subrecipient monitoring Effect: • Noncompliance with Federal regulations • Federal programs may not be effectively and efficiently administered. • The Federal government may require the implementation of more stringent subrecipient cash management procedures. Recommendation: We recommend that OADS collaborate with DCM to implement monitoring procedures over subrecipient cash management requirements to ensure that the time elapsing between the payment of Federal funds to the subrecipient and the subrecipient’s actual disbursement for program purposes is minimized for the CSLFRF program. Corrective Action Plan: See F-20 Management’s Response: The Department disagrees with this finding. The Department is in compliance with the requirement for minimizing the time between payments to our subrecipients and the disbursement of funds. Payments are made as close as administratively feasible. The Compliance Supplement suggested audit procedures for Cash Management for pass-through entities refers to 200.305(b)(1)...that same paragraph states that the timing and amount of advance payments must be as close as is administratively feasible. Contact: Anthony Madden, Deputy Director, Division of Audit, DHHS, 207-287-2834 Auditor’s Concluding Remarks: The Department’s interpretation of the applicable Federal regulation selectively emphasizes a single sentence from the broader paragraph, omitting critical context that informs the regulation’s full intent. According to the 2024 Compliance Supplement, pass-through entities must monitor cash drawdowns by their subrecipients to ensure that the time elapsing between the transfer of Federal funds to the subrecipient and their disbursement for program purposes is minimized as required by the applicable cash management requirements in the Federal award to the recipient (2 CFR section 200.305(b)(1)). 2 CFR section 200.305(b)(1) states that the recipient or subrecipient must be paid in advance, provided it maintains or demonstrates the willingness to maintain both written procedures that minimize the time elapsing between the transfer of funds and disbursement by the recipient or subrecipient, and financial management systems that meet the standards for fund control and accountability as established in this part. Advance payments to a recipient or subrecipient must be limited to the minimum amounts needed and be timed with actual, immediate cash requirements of the recipient or subrecipient in carrying out the purpose of the approved program or project. The timing and amount of advance payments must be as close as is administratively feasible to the actual disbursements by the recipient or subrecipient for direct program or project costs and the proportionate share of any allowable indirect costs. The recipient or subrecipient must make timely payments to contractors in accordance with the contract provisions. The Department references the phrase “as close as is administratively feasible” to justify their current process; however, this phrase is part of a broader requirement that establishes specific conditions for advance payments. The regulation requires that the timing between when the subrecipient receives Federal funds from the State and when the subrecipient disburses those funds is closely monitored to ensure that disbursements align with actual, immediate cash needs. A full reading of the provision indicates that “administratively feasible” does not negate the obligation to implement effective controls that minimize this gap, nor does it permit delays or inadequate oversight in Federal cash management. The Department could not provide evidence to demonstrate that they adequately monitored subrecipient cash drawdowns to ensure alignment with actual, immediate cash needs. Additionally, the Department does not require subrecipients to submit invoice documentation to substantiate the timing, amount, or nature of expenditures included in the request of Federal funds. As a result, the Department cannot demonstrate an adequate level of monitoring, as there is no evidence that they collect the necessary information to ensure compliance with Federal cash management requirements. The finding remains as stated. (State Number: 24-1699-05)
(2024-050) Title: Internal control over ICA program subrecipient cash management needs improvement Prior Year Findings: See schedule of Findings and Questioned costs for chart/table State Department: Health and Human Services State Bureau: Division of Contract Management Maine Center for Disease Control & Prevention Federal Agency: U.S. Department of Health and Human Services Assistance Listing Title: Immunization Cooperative Agreements (COVID-19) Assistance Listing Number: 93.268 Federal Award Identification Number: See E-77 to E-78 Compliance Area: Cash management Subrecipient monitoring Type of Finding: Significant deficiency Questioned Costs: None Criteria: 2 CFR 200.303; 2 CFR 200.305; 2 CFR 200.332 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. The Department is required to monitor cash drawdowns by their subrecipients to ensure that the time elapsing between the payment of Federal funds to the subrecipient and the subrecipient’s actual disbursement for program purposes is minimized. The Department must monitor the activities of the subrecipient as necessary to ensure that subawards are used for authorized purposes and in compliance with Federal statutes, regulations, and the terms and conditions of the subaward. Condition: The Department’s Division of Contract Management (DCM) has three methods for providing payments to subrecipients: cost-settled, cost-settled by invoice, and fee-for-service subawards. • For cost-settled subawards, DCM procedures include making equal advance monthly payments and then reconciling those amounts to the quarterly financial reports submitted by the subrecipient. This procedure does not take into consideration the time elapsing between the payment of Federal funds to the subrecipient and the subrecipient’s actual disbursement for program purposes. • For “cost-settled by invoice” (reimbursement) subawards, DCM procedures do not require subrecipients to include supporting documentation with monthly requests for reimbursement nor do they request supporting documentation at a subsequent date. This procedure does not take into consideration the time elapsing between the payment of Federal funds to the subrecipient and the subrecipient’s actual disbursement for program purposes. • Cash management requirements are not applicable for fee-for-service subawards. Maine Center for Disease Control & Prevention (MeCDC) is responsible for ensuring the Immunization Cooperative Agreement (ICA) program’s subrecipients comply with Federal requirements; however, MeCDC’s subrecipient monitoring procedures do not include review of subrecipient compliance with cash management requirements. The ICA program’s subawards are either cost-settled or cost-settled by invoice. Therefore, DCM and MeCDC procedures do not support that subrecipient cash management is properly monitored as required by Federal regulations. Additionally, MeCDC’s monitoring procedures do not include review of subrecipient invoices to ensure ICA grant funds are used for allowable purposes. Context: In fiscal year 2024, the Department provided $1.9 million to subrecipients from ICA grant funds totaling $31.1 million. Cause: • Lack of adequate subrecipient monitoring procedures • Lack of centralized oversight of subrecipient monitoring Effect: • Noncompliance with Federal regulations • Federal programs may not be effectively and efficiently administered. • The Federal government may require the implementation of more stringent subrecipient cash management procedures. Recommendation: We recommend that MeCDC: • collaborate with DCM to implement monitoring procedures over subrecipient cash management requirements to ensure that the time elapsing between the payment of Federal funds to the subrecipient and the subrecipient’s actual disbursement for program purposes is minimized for the ICA program. • implement monitoring procedures over ICA program subrecipients to ensure that grant funds are used for allowable purposes. Corrective Action Plan: See F-22 Management’s Response: The Department disagrees with this finding. The Department is in compliance with the requirement for minimizing the time between payments to our subrecipients and the disbursement of funds. Payments are made as close as administratively feasible. The Compliance Supplement suggested audit procedures for Cash Management for pass-through entities refers to 200.305(b)(1)...that same paragraph states that the timing and amount of advance payments must be as close as is administratively feasible. Contact: Anthony Madden, Deputy Director, Division of Audit, DHHS, 207-287-2834 Auditor’s Concluding Remarks: The Department’s interpretation of the applicable Federal regulation selectively emphasizes a single sentence from the broader paragraph, omitting critical context that informs the regulation’s full intent. According to the 2024 Compliance Supplement, pass-through entities must monitor cash drawdowns by their subrecipients to ensure that the time elapsing between the transfer of Federal funds to the subrecipient and their disbursement for program purposes is minimized as required by the applicable cash management requirements in the Federal award to the recipient (2 CFR section 200.305(b)(1)). 2 CFR section 200.305(b)(1) states that the recipient or subrecipient must be paid in advance, provided it maintains or demonstrates the willingness to maintain both written procedures that minimize the time elapsing between the transfer of funds and disbursement by the recipient or subrecipient, and financial management systems that meet the standards for fund control and accountability as established in this part. Advance payments to a recipient or subrecipient must be limited to the minimum amounts needed and be timed with actual, immediate cash requirements of the recipient or subrecipient in carrying out the purpose of the approved program or project. The timing and amount of advance payments must be as close as is administratively feasible to the actual disbursements by the recipient or subrecipient for direct program or project costs and the proportionate share of any allowable indirect costs. The recipient or subrecipient must make timely payments to contractors in accordance with the contract provisions. The Department references the phrase “as close as is administratively feasible” to justify their current process; however, this phrase is part of a broader requirement that establishes specific conditions for advance payments. The regulation requires that the timing between when the subrecipient receives Federal funds from the State and when the subrecipient disburses those funds is closely monitored to ensure that disbursements align with actual, immediate cash needs. A full reading of the provision indicates that “administratively feasible” does not negate the obligation to implement effective controls that minimize this gap, nor does it permit delays or inadequate oversight in Federal cash management. The Department could not provide evidence to demonstrate that they adequately monitored subrecipient cash drawdowns to ensure alignment with actual, immediate cash needs. Additionally, the Department does not require subrecipients to submit invoice documentation to substantiate the timing, amount, or nature of expenditures included in the request of Federal funds. As a result, the Department cannot demonstrate an adequate level of monitoring, as there is no evidence that they collect the necessary information to ensure compliance with Federal cash management requirements. Furthermore, the Department did not comment on the lack of monitoring procedures over subrecipient invoices to ensure Federal grant funds are used for allowable purposes. The finding remains as stated. (State Number: 24-1118-01)
(2024-050) Title: Internal control over ICA program subrecipient cash management needs improvement Prior Year Findings: See schedule of Findings and Questioned costs for chart/table State Department: Health and Human Services State Bureau: Division of Contract Management Maine Center for Disease Control & Prevention Federal Agency: U.S. Department of Health and Human Services Assistance Listing Title: Immunization Cooperative Agreements (COVID-19) Assistance Listing Number: 93.268 Federal Award Identification Number: See E-77 to E-78 Compliance Area: Cash management Subrecipient monitoring Type of Finding: Significant deficiency Questioned Costs: None Criteria: 2 CFR 200.303; 2 CFR 200.305; 2 CFR 200.332 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. The Department is required to monitor cash drawdowns by their subrecipients to ensure that the time elapsing between the payment of Federal funds to the subrecipient and the subrecipient’s actual disbursement for program purposes is minimized. The Department must monitor the activities of the subrecipient as necessary to ensure that subawards are used for authorized purposes and in compliance with Federal statutes, regulations, and the terms and conditions of the subaward. Condition: The Department’s Division of Contract Management (DCM) has three methods for providing payments to subrecipients: cost-settled, cost-settled by invoice, and fee-for-service subawards. • For cost-settled subawards, DCM procedures include making equal advance monthly payments and then reconciling those amounts to the quarterly financial reports submitted by the subrecipient. This procedure does not take into consideration the time elapsing between the payment of Federal funds to the subrecipient and the subrecipient’s actual disbursement for program purposes. • For “cost-settled by invoice” (reimbursement) subawards, DCM procedures do not require subrecipients to include supporting documentation with monthly requests for reimbursement nor do they request supporting documentation at a subsequent date. This procedure does not take into consideration the time elapsing between the payment of Federal funds to the subrecipient and the subrecipient’s actual disbursement for program purposes. • Cash management requirements are not applicable for fee-for-service subawards. Maine Center for Disease Control & Prevention (MeCDC) is responsible for ensuring the Immunization Cooperative Agreement (ICA) program’s subrecipients comply with Federal requirements; however, MeCDC’s subrecipient monitoring procedures do not include review of subrecipient compliance with cash management requirements. The ICA program’s subawards are either cost-settled or cost-settled by invoice. Therefore, DCM and MeCDC procedures do not support that subrecipient cash management is properly monitored as required by Federal regulations. Additionally, MeCDC’s monitoring procedures do not include review of subrecipient invoices to ensure ICA grant funds are used for allowable purposes. Context: In fiscal year 2024, the Department provided $1.9 million to subrecipients from ICA grant funds totaling $31.1 million. Cause: • Lack of adequate subrecipient monitoring procedures • Lack of centralized oversight of subrecipient monitoring Effect: • Noncompliance with Federal regulations • Federal programs may not be effectively and efficiently administered. • The Federal government may require the implementation of more stringent subrecipient cash management procedures. Recommendation: We recommend that MeCDC: • collaborate with DCM to implement monitoring procedures over subrecipient cash management requirements to ensure that the time elapsing between the payment of Federal funds to the subrecipient and the subrecipient’s actual disbursement for program purposes is minimized for the ICA program. • implement monitoring procedures over ICA program subrecipients to ensure that grant funds are used for allowable purposes. Corrective Action Plan: See F-22 Management’s Response: The Department disagrees with this finding. The Department is in compliance with the requirement for minimizing the time between payments to our subrecipients and the disbursement of funds. Payments are made as close as administratively feasible. The Compliance Supplement suggested audit procedures for Cash Management for pass-through entities refers to 200.305(b)(1)...that same paragraph states that the timing and amount of advance payments must be as close as is administratively feasible. Contact: Anthony Madden, Deputy Director, Division of Audit, DHHS, 207-287-2834 Auditor’s Concluding Remarks: The Department’s interpretation of the applicable Federal regulation selectively emphasizes a single sentence from the broader paragraph, omitting critical context that informs the regulation’s full intent. According to the 2024 Compliance Supplement, pass-through entities must monitor cash drawdowns by their subrecipients to ensure that the time elapsing between the transfer of Federal funds to the subrecipient and their disbursement for program purposes is minimized as required by the applicable cash management requirements in the Federal award to the recipient (2 CFR section 200.305(b)(1)). 2 CFR section 200.305(b)(1) states that the recipient or subrecipient must be paid in advance, provided it maintains or demonstrates the willingness to maintain both written procedures that minimize the time elapsing between the transfer of funds and disbursement by the recipient or subrecipient, and financial management systems that meet the standards for fund control and accountability as established in this part. Advance payments to a recipient or subrecipient must be limited to the minimum amounts needed and be timed with actual, immediate cash requirements of the recipient or subrecipient in carrying out the purpose of the approved program or project. The timing and amount of advance payments must be as close as is administratively feasible to the actual disbursements by the recipient or subrecipient for direct program or project costs and the proportionate share of any allowable indirect costs. The recipient or subrecipient must make timely payments to contractors in accordance with the contract provisions. The Department references the phrase “as close as is administratively feasible” to justify their current process; however, this phrase is part of a broader requirement that establishes specific conditions for advance payments. The regulation requires that the timing between when the subrecipient receives Federal funds from the State and when the subrecipient disburses those funds is closely monitored to ensure that disbursements align with actual, immediate cash needs. A full reading of the provision indicates that “administratively feasible” does not negate the obligation to implement effective controls that minimize this gap, nor does it permit delays or inadequate oversight in Federal cash management. The Department could not provide evidence to demonstrate that they adequately monitored subrecipient cash drawdowns to ensure alignment with actual, immediate cash needs. Additionally, the Department does not require subrecipients to submit invoice documentation to substantiate the timing, amount, or nature of expenditures included in the request of Federal funds. As a result, the Department cannot demonstrate an adequate level of monitoring, as there is no evidence that they collect the necessary information to ensure compliance with Federal cash management requirements. Furthermore, the Department did not comment on the lack of monitoring procedures over subrecipient invoices to ensure Federal grant funds are used for allowable purposes. The finding remains as stated. (State Number: 24-1118-01)
(2024-055) Title: Internal control over TANF program subrecipient cash management needs improvement Prior Year Findings: See schedule of Findings and Questioned costs for chart/table State Department: Health and Human Services State Bureau: Division of Contract Management Office for Family Independence Federal Agency: U.S. Department of Health and Human Services Assistance Listing Title: Temporary Assistance for Needy Families (TANF) Assistance Listing Number: 93.558 Federal Award Identification Number: See E-77 to E-78 Compliance Area: Cash management Subrecipient monitoring Type of Finding: Significant deficiency Questioned Costs: None Criteria: 2 CFR 200.303; 2 CFR 200.305; 2 CFR 200.332 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. The Department is required to monitor cash drawdowns by their subrecipients to ensure that the time elapsing between the payment of Federal funds to the subrecipient and the subrecipient’s actual disbursement for program purposes is minimized. The Department must monitor the activities of the subrecipient as necessary to ensure that subawards are used for authorized purposes and in compliance with Federal statutes, regulations, and the terms and conditions of the subaward. Condition: The Department’s Division of Contract Management (DCM) has three methods for providing payments to subrecipients: cost-settled, cost-settled by invoice, and fee-for-service subawards. • For cost-settled subawards, DCM procedures include making equal advance monthly payments and then reconciling those amounts to the quarterly financial reports submitted by the subrecipient. This procedure does not take into consideration the time elapsing between the payment of Federal funds to the subrecipient and the subrecipient’s actual disbursement for program purposes. • For “cost-settled by invoice” (reimbursement) subawards, DCM procedures do not require subrecipients to include supporting documentation with monthly requests for reimbursement nor do they request supporting documentation at a subsequent date. This procedure does not take into consideration the time elapsing between the payment of Federal funds to the subrecipient and the subrecipient’s actual disbursement for program purposes. • Cash management requirements are not applicable for fee-for-service subawards. The Office for Family Independence (OFI) is responsible for ensuring the Temporary Assistance for Needy Families (TANF) program’s subrecipients comply with Federal requirements; however, OFI’s subrecipient monitoring procedures do not include review of subrecipient compliance with cash management requirements. The TANF program’s subawards are cost-settled, cost-settled by invoice, or fee-for-service. Therefore, DCM and OFI procedures do not support that subrecipient cash management is properly monitored as required by Federal regulations. Additionally, OFI’s monitoring procedures do not include review of subrecipient invoices to ensure TANF grant funds are used for allowable purposes. Context: In fiscal year 2024, the Department provided $34.2 million to subrecipients from TANF grant funds totaling $92.4 million. Cause: • Lack of adequate subrecipient monitoring procedures • Lack of centralized oversight of subrecipient monitoring Effect: • Noncompliance with Federal regulations • Federal programs may not be effectively and efficiently administered. • The Federal government may require the implementation of more stringent subrecipient cash management procedures. Recommendation: We recommend that OFI: • collaborate with DCM to implement monitoring procedures over subrecipient cash management requirements to ensure that the time elapsing between the payment of Federal funds to the subrecipient and the subrecipient’s actual disbursement for program purposes is minimized for the TANF program. • implement monitoring procedures over TANF program subrecipients to ensure that grant funds are used for allowable purposes. Corrective Action Plan: See F-23 Management’s Response: The Department disagrees with this finding. The Department is in compliance with the requirement for minimizing the time between payments to our subrecipients and the disbursement of the funds. Payments are made as close as administratively feasible. The Compliance Supplement suggested audit procedures for Cash Management for pass-through entities refers to 200.305(b)(1)...that same paragraph states that the timing and amount of advance payments must be as close as is administratively feasible. Contact: Anthony Madden, Deputy Director, Division of Audit, DHHS, 207-287-2834 Auditor’s Concluding Remarks: The Department’s interpretation of the applicable Federal regulation selectively emphasizes a single sentence from the broader paragraph, omitting critical context that informs the regulation’s full intent. According to the 2024 Compliance Supplement, pass-through entities must monitor cash drawdowns by their subrecipients to ensure that the time elapsing between the transfer of Federal funds to the subrecipient and their disbursement for program purposes is minimized as required by the applicable cash management requirements in the Federal award to the recipient (2 CFR section 200.305(b)(1)). 2 CFR section 200.305(b)(1) states that the recipient or subrecipient must be paid in advance, provided it maintains or demonstrates the willingness to maintain both written procedures that minimize the time elapsing between the transfer of funds and disbursement by the recipient or subrecipient, and financial management systems that meet the standards for fund control and accountability as established in this part. Advance payments to a recipient or subrecipient must be limited to the minimum amounts needed and be timed with actual, immediate cash requirements of the recipient or subrecipient in carrying out the purpose of the approved program or project. The timing and amount of advance payments must be as close as is administratively feasible to the actual disbursements by the recipient or subrecipient for direct program or project costs and the proportionate share of any allowable indirect costs. The recipient or subrecipient must make timely payments to contractors in accordance with the contract provisions. The Department references the phrase “as close as is administratively feasible” to justify their current process; however, this phrase is part of a broader requirement that establishes specific conditions for advance payments. The regulation requires that the timing between when the subrecipient receives Federal funds from the State and when the subrecipient disburses those funds is closely monitored to ensure that disbursements align with actual, immediate cash needs. A full reading of the provision indicates that “administratively feasible” does not negate the obligation to implement effective controls that minimize this gap, nor does it permit delays or inadequate oversight in Federal cash management. The Department could not provide evidence to demonstrate that they adequately monitored subrecipient cash drawdowns to ensure alignment with actual, immediate cash needs. Additionally, the Department does not require subrecipients to submit invoice documentation to substantiate the timing, amount, or nature of expenditures included in the request of Federal funds. As a result, the Department cannot demonstrate an adequate level of monitoring, as there is no evidence that they collect the necessary information to ensure compliance with Federal cash management requirements. Furthermore, the Department did not comment on the lack of monitoring procedures over subrecipient invoices to ensure Federal grant funds are used for allowable purposes. The finding remains as stated. (State Number: 24-1111-04)