Finding 2022-001: Cash Management ? Disbursement U.S. Department of Education ? Education Stabilization Fund COVID-19 Institutional Portion ? ALN 84.425F Criteria: Non-federal entities must minimize the time elapsing between the transfer of funds from the US Treasury or pass-through entity and disbursement by the non-federal entity for direct program or project costs and the proportionate share of allowable indirect costs, whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means (2 CFR section 200.305(b)). Condition: Management implemented a financial management system that meets the specified standards for fund control and accountability, but the system failed to ensure disbursement of funds within the required timeframe. Questioned Costs: None noted. Repeat Finding: This is not a repeat finding. Cause: Management did not accurately identify the required timeframe of disbursement for funds received under the Institutional Portion subprogram. A mitigating factor is the uniqueness of the Institutional Portion subprogram. Effect: Institutional Portion funds used to defray expenses associated with coronavirus was not disbursed within the required 3 calendar days of the drawdown from ED?s G5 grants system. Recommendation: Before drawing down from ED?s G5 grants system, management should familiarize themselves with the applicable terms, conditions, and requirements governing the organization?s use of the grant funds, and then implement a system of controls that will ensure compliance with those terms. Views of Responsible Parties and Corrective Action Plan: Management concurs with the finding. Since the program is not applicable to the organization after the issuance date of the financial statements, no corrective action is necessary.
2021-002 Overdrawing of federal funds Information on Federal Programs: Assistance Listing #: 93.421, 93.318, 93.185 Federal Agency: United States Department of Heath and Human Services Criteria: Cash management compliance requirements under Subpart B of 31 CFR Part 205 require that nonfederal entities minimize the time elapsing between the transfer of funds from the Payment Management System (PMS) or pass-through entity and disbursement by the non-federal entity for direct program or project costs and the proportionate share of allowable indirect costs, whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means. (2 CFR section 200.305(b)). Condition: There was an overdraw of funds of $200,000 where costs had not been incurred to support the draw, nor were all the funds spent prior within a reasonable time frame. Effect: There is a refundable advance on the books for $131,858 for funds that were drawn and unspent at year end. Cause: Due to changes in staffing around this time, a draw was made for part of the funds and then a second draw was made for the full amount of expenses, without accounting for the previously drawn funds. Recommendation: We recommend that the Organization ensure there controls in place for review and approval of all draws and a reconciliation be done at each draw to ensure that there are sufficient expenditures to support the draw. Any overdraws should be caught immediately and steps taken to remedy the draw or to expend the funds within a reasonable timeframe.
2021-002 Overdrawing of federal funds Information on Federal Programs: Assistance Listing #: 93.421, 93.318, 93.185 Federal Agency: United States Department of Heath and Human Services Criteria: Cash management compliance requirements under Subpart B of 31 CFR Part 205 require that nonfederal entities minimize the time elapsing between the transfer of funds from the Payment Management System (PMS) or pass-through entity and disbursement by the non-federal entity for direct program or project costs and the proportionate share of allowable indirect costs, whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means. (2 CFR section 200.305(b)). Condition: There was an overdraw of funds of $200,000 where costs had not been incurred to support the draw, nor were all the funds spent prior within a reasonable time frame. Effect: There is a refundable advance on the books for $131,858 for funds that were drawn and unspent at year end. Cause: Due to changes in staffing around this time, a draw was made for part of the funds and then a second draw was made for the full amount of expenses, without accounting for the previously drawn funds. Recommendation: We recommend that the Organization ensure there controls in place for review and approval of all draws and a reconciliation be done at each draw to ensure that there are sufficient expenditures to support the draw. Any overdraws should be caught immediately and steps taken to remedy the draw or to expend the funds within a reasonable timeframe.
2021-002 Overdrawing of federal funds Information on Federal Programs: Assistance Listing #: 93.421, 93.318, 93.185 Federal Agency: United States Department of Heath and Human Services Criteria: Cash management compliance requirements under Subpart B of 31 CFR Part 205 require that nonfederal entities minimize the time elapsing between the transfer of funds from the Payment Management System (PMS) or pass-through entity and disbursement by the non-federal entity for direct program or project costs and the proportionate share of allowable indirect costs, whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means. (2 CFR section 200.305(b)). Condition: There was an overdraw of funds of $200,000 where costs had not been incurred to support the draw, nor were all the funds spent prior within a reasonable time frame. Effect: There is a refundable advance on the books for $131,858 for funds that were drawn and unspent at year end. Cause: Due to changes in staffing around this time, a draw was made for part of the funds and then a second draw was made for the full amount of expenses, without accounting for the previously drawn funds. Recommendation: We recommend that the Organization ensure there controls in place for review and approval of all draws and a reconciliation be done at each draw to ensure that there are sufficient expenditures to support the draw. Any overdraws should be caught immediately and steps taken to remedy the draw or to expend the funds within a reasonable timeframe.
Finding 2022-001: Cash Management ? Disbursement U.S. Department of Education ? Education Stabilization Fund COVID-19 Supplemental Assistance to Institutions of Higher Education Program ? ALN 84.425S Criteria: Non-federal entities must minimize the time elapsing between the transfer of funds from the US Treasury or pass-through entity and disbursement by the non-federal entity for direct program or project costs and the proportionate share of allowable indirect costs, whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means (2 CFR section 200.305(b)). Condition: Management implemented a financial management system that meets the specified standards for fund control and accountability, but the system failed to ensure disbursement of funds within the required timeframe. Management self-identified the issue, and self-corrected as they became aware of the requirement. Questioned Costs: None noted. Repeat Finding: This is not a repeat finding. Cause: Management did not accurately identify the required timeframe of disbursement for funds received under the SAIHE subprogram. A mitigating factor is the uniqueness of the SAIHE subprogram. Effect: The portion of the SAIHE funds allocated to provide financial aid grants to students was not disbursed within the required 15 calendar days of the drawdown from ED?s G5 grants system. Recommendation: Before drawing down from ED?s G5 grants system, management should familiarize themselves with the applicable terms, conditions, and requirements governing the organization?s use of the grant funds, and then implement a system of controls that will ensure compliance with those terms. Views of Responsible Parties and Corrective Action Plan: Management concurs with the finding and has implemented a system to minimize the time elapsing between the transfer of funds from ED?s G5 grants system and disbursement by the organization for both institutional aid and student financial aid purposes. In addition, management has designated a responsible and capable employee to monitor the new system and to review the terms, conditions, and requirements governing any future grants to ensure the system?s compatibility. Implementation of the corrective action is further evidenced by timely disbursement of subsequent drawdowns from ED?s G5 grants system in FY22.
Finding No. 2022-001 Cash Management U.S. Department of the Education Upward Bound Program ? CFDA #84.047A Talent Search Program - CFDA #84.044A Criterion: Non-federal entities must minimize the time elapsing between the transfer of funds from the US Treasury or pass-through entity and disbursement by the non-federal entity for direct program project costs and the proportionate share of allowable indirect costs, whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means (2 CFR section 200.305(b)). Condition: Based upon our testwork, we noted the Organization did not have support for funds being drawndown on a consistent basis. Cause and Effect: Management did not follow the established process for drawdown requests to ensure that the amount of funds being drawn down were property supported to a specific federal program. Therefore, the resulting effect was excess funds on hands. Questioned Cost: None Recommendation: We recommend that management enhance the design of its control activities to ensure that the amount of funds being drawn down are properly allocated to the appropriate Federal programs. View of Responsible Officials: Management agrees with the findings and has hired a Contract Manager to oversee office management processes. In addition, all drawdowns in the future will be scheduled and done bi-monthly.
Finding No. 2022-001 Cash Management U.S. Department of the Education Upward Bound Program ? CFDA #84.047A Talent Search Program - CFDA #84.044A Criterion: Non-federal entities must minimize the time elapsing between the transfer of funds from the US Treasury or pass-through entity and disbursement by the non-federal entity for direct program project costs and the proportionate share of allowable indirect costs, whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means (2 CFR section 200.305(b)). Condition: Based upon our testwork, we noted the Organization did not have support for funds being drawndown on a consistent basis. Cause and Effect: Management did not follow the established process for drawdown requests to ensure that the amount of funds being drawn down were property supported to a specific federal program. Therefore, the resulting effect was excess funds on hands. Questioned Cost: None Recommendation: We recommend that management enhance the design of its control activities to ensure that the amount of funds being drawn down are properly allocated to the appropriate Federal programs. View of Responsible Officials: Management agrees with the findings and has hired a Contract Manager to oversee office management processes. In addition, all drawdowns in the future will be scheduled and done bi-monthly.
Finding No. 2022-001 Cash Management U.S. Department of the Education Upward Bound Program ? CFDA #84.047A Talent Search Program - CFDA #84.044A Criterion: Non-federal entities must minimize the time elapsing between the transfer of funds from the US Treasury or pass-through entity and disbursement by the non-federal entity for direct program project costs and the proportionate share of allowable indirect costs, whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means (2 CFR section 200.305(b)). Condition: Based upon our testwork, we noted the Organization did not have support for funds being drawndown on a consistent basis. Cause and Effect: Management did not follow the established process for drawdown requests to ensure that the amount of funds being drawn down were property supported to a specific federal program. Therefore, the resulting effect was excess funds on hands. Questioned Cost: None Recommendation: We recommend that management enhance the design of its control activities to ensure that the amount of funds being drawn down are properly allocated to the appropriate Federal programs. View of Responsible Officials: Management agrees with the findings and has hired a Contract Manager to oversee office management processes. In addition, all drawdowns in the future will be scheduled and done bi-monthly.
Finding No. 2022-001 Cash Management U.S. Department of the Education Upward Bound Program ? CFDA #84.047A Talent Search Program - CFDA #84.044A Criterion: Non-federal entities must minimize the time elapsing between the transfer of funds from the US Treasury or pass-through entity and disbursement by the non-federal entity for direct program project costs and the proportionate share of allowable indirect costs, whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means (2 CFR section 200.305(b)). Condition: Based upon our testwork, we noted the Organization did not have support for funds being drawndown on a consistent basis. Cause and Effect: Management did not follow the established process for drawdown requests to ensure that the amount of funds being drawn down were property supported to a specific federal program. Therefore, the resulting effect was excess funds on hands. Questioned Cost: None Recommendation: We recommend that management enhance the design of its control activities to ensure that the amount of funds being drawn down are properly allocated to the appropriate Federal programs. View of Responsible Officials: Management agrees with the findings and has hired a Contract Manager to oversee office management processes. In addition, all drawdowns in the future will be scheduled and done bi-monthly.
Finding No. 2022-001 Cash Management U.S. Department of the Education Upward Bound Program ? CFDA #84.047A Talent Search Program - CFDA #84.044A Criterion: Non-federal entities must minimize the time elapsing between the transfer of funds from the US Treasury or pass-through entity and disbursement by the non-federal entity for direct program project costs and the proportionate share of allowable indirect costs, whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means (2 CFR section 200.305(b)). Condition: Based upon our testwork, we noted the Organization did not have support for funds being drawndown on a consistent basis. Cause and Effect: Management did not follow the established process for drawdown requests to ensure that the amount of funds being drawn down were property supported to a specific federal program. Therefore, the resulting effect was excess funds on hands. Questioned Cost: None Recommendation: We recommend that management enhance the design of its control activities to ensure that the amount of funds being drawn down are properly allocated to the appropriate Federal programs. View of Responsible Officials: Management agrees with the findings and has hired a Contract Manager to oversee office management processes. In addition, all drawdowns in the future will be scheduled and done bi-monthly.
Condition: The Center?s written policies and procedures related to financial management do not meet the requirements of 2 CFR 200, Subpart D and Subpart E. Criteria: According to 2 CFR Section 200.302.b and 2 CFR Section 200.305 of the Uniform Guidance, the Center is required to have a written financial management policy. Cause: The Center was unaware of requirements regarding policies and procedures outlined in the Uniform Guidance. Effect: Written policies necessary for non-Federal entities receiving federal funds were not in place. Repeat Finding: No Questioned Costs: None reported Recommendation: We recommend that the Center update their written policies and procedures that meet the requirements of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Views of Responsible Officials and Planned Corrective Action: We concur with the auditor?s finding and will update the Center?s written policies and procedures for the Uniform Guidance requirements.
Finding 2022-001: Cash Management ? Disbursement U.S. Department of Education ? Education Stabilization Fund COVID-19 Institutional Portion ? ALN 84.425F Criteria: Non-federal entities must minimize the time elapsing between the transfer of funds from the US Treasury or pass-through entity and disbursement by the non-federal entity for direct program or project costs and the proportionate share of allowable indirect costs, whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means (2 CFR section 200.305(b)). Condition: Management implemented a financial management system that meets the specified standards for fund control and accountability, but the system failed to ensure disbursement of funds within the required timeframe. Questioned Costs: None noted. Repeat Finding: This is not a repeat finding. Cause: Management did not accurately identify the required timeframe of disbursement for funds received under the Institutional Portion subprogram. A mitigating factor is the uniqueness of the Institutional Portion subprogram. Effect: Institutional Portion funds used to defray expenses associated with coronavirus was not disbursed within the required 3 calendar days of the drawdown from ED?s G5 grants system. Recommendation: Before drawing down from ED?s G5 grants system, management should familiarize themselves with the applicable terms, conditions, and requirements governing the organization?s use of the grant funds, and then implement a system of controls that will ensure compliance with those terms. Views of Responsible Parties and Corrective Action Plan: Management concurs with the finding. Since the program is not applicable to the organization after the issuance date of the financial statements, no corrective action is necessary.
Federal programs: Education Stabilization Fund - Higher Education Emergency Relief Fund (HEERF) CFDA Number: 84.425E / 84.425F Federal award identification number: P425E205418 / P425F204999 Grant period: September 29, 2020 to June 30, 2023 and July 23, 2020 to May 23, 2022 Federal agency: U.S. Department of Education Pass-through entity: N/A Category: Internal Control Finding Type: Material Weakness Compliance requirement: Other ? Policies and procedures requirements Condition and context When obtaining an understanding of the internal controls, policies, and procedures regarding the administration of federal programs, and grant term and conditions, we noted the following deficiencies: a. There is no written policy, nor the procedures designed and implemented by the Institution related to Cash Management were documented. The Institution opted to request the funds on a reimbursement basis. b. There were no written procedures for determining the allowability of costs in accordance with 2 CFR 200 subpart E of this part and the terms and conditions of the Federal award. c. After examination of the Institution procurement policy, we noted that the document was not signed by all members required from management and was not dated. Upon inquiry, we noted that the procurement policy was drafted and submitted to the Institution for review in February 2023. Therefore, no written policy and formal procedures were designed and implemented for the procurement transactions tested for the fiscal year ended July 31, 2022 and thereafter. Criteria 2 CFR 200.302 (b) (6) and (7) establish that the financial management system of each non-Federal entity must provide for the following: written procedures to implement the requirements of ? 200.305, and written procedures for determining the allowability of costs in accordance with subpart E of this part and the terms and conditions of the Federal award. 2 CFR 200.303 establish that the non-Federal entity must: (a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO); (b) comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal awards; (c) evaluate and monitor the non-Federal entity's compliance with statutes, regulations and the terms and conditions of Federal awards; (d) take prompt action when instances of noncompliance are identified including noncompliance identified in audit findings; and (e) take reasonable measures to safeguard protected personally identifiable information and other information the Federal awarding agency or pass-through entity designates as sensitive or the non-Federal entity considers sensitive consistent with applicable Federal, State, local, and tribal laws regarding privacy and responsibility over confidentiality. 2 CFR 200.318 (a) establishes that the non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in 2 CFR 200.317 through 200.327. 2 CFR 200.400 (a) to (d) establish that the application of these cost principles is based on the fundamental premises that: (a) the non-Federal entity is responsible for the efficient and effective administration of the Federal award through the application of sound management practices; (b) the non-Federal entity assumes responsibility for administering Federal funds in a manner consistent with underlying agreements, program objectives, and the terms and conditions of the Federal award; (c) the non-Federal entity, in recognition of its own unique combination of staff, facilities, and experience, has the primary responsibility for employing whatever form of sound organization and management techniques may be necessary in order to assure proper and efficient administration of the Federal award; (d) the application of these cost principles should require no significant changes in the internal accounting policies and practices of the non-Federal entity. However, the accounting practices of the non-Federal entity must be consistent with these cost principles and support the accumulation of costs as required by the principles and must provide for adequate documentation to support costs charged to the Federal award. Cause The Institution?s federal programs received prior the fiscal year ended July 31, 2020 did not require the implementation of written procedures as mentioned in the condition and context section, except for Cash Management policies and procedures for the Student Financial Assistance Programs Cluster for which the Institution has designed and implemented written procedures for such compliance requirement. The Covid-19 pandemic related programs were the reason why this new federal program funds were received, and the entity failed to design and implement on a timely basis the required written documentation and procedures. Effect Noncompliance with the above-mentioned requirement could lead to administrative sanctions by the grantor, including disallowance of costs. It could also be interpreted as a failure to achieve the program?s objectives. Questioned costs None. Identification as a Repeat Finding No repeated finding. Recommendation We recommend the Institution to implement written policies and procedures needed for the administration of federal grants before the acceptance of new grants. Having well sounded policies and procedures will reduce the Institution risk of non-compliance with federal regulations and grants terms and conditions. Also, they will provide guidance to the Institution?s personnel on how to carry-out their responsibilities and functions in relation to the administration of federal programs transactions. Views of Responsible Officials Refer to the Institutional comments included in the Corrective Action Plan.
Assistance listing program: Education Stabilization Fund - Higher Education Emergency Relief Fund (HEERF) Assistance Listing Number: 84.425E / 84.425F Award identification number: P425F204999 / P425E205418 Award period: September 29, 2020 to June 30, 2023 and July 23, 2020 to May 23, 2022 Federal agency: U.S. Department of Education Pass-through entity: N/A Category: Internal Control Finding Type: Significant Deficiency Compliance requirement: Cash Management Condition and context In testing compliance and internal controls over cash management, we selected a sample of four (4) drawdowns which amounted to $342,787 of the total HEERF Institutional aid funds expenditures. Our sample was a statistically valid sample. During our test, we noted that in one (25%) of the four (4) drawdowns selected, for three payments made by the Institution the time elapsed between the receipt of funds and the check issuance was between 20 to 48 days. The total amount disbursed after the three elapsed days requirement was $4,020 from a drawdown total of $56,065. Criteria 2 CFR 200.302 (b) (6) requires written procedures to implement the requirements of 200.305. 2 CFR 200.305 (b) and (b) (1) establish that for non-Federal entities other than states, payments methods must minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-Federal entity whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means. See also 200.302(b)(6). Except as noted elsewhere in this part, Federal agencies must require recipients to use only OMB-approved, governmentwide information collection requests to request payment. The non-Federal entity 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 non-Federal entity, and financial management systems that meet the standards for fund control and accountability as established in this part. Advance payments to a non-Federal entity must be limited to the minimum amounts needed and be timed to be in accordance with the actual, immediate cash requirements of the non-Federal entity 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 non-Federal entity for direct program or project costs and the proportionate share of any allowable indirect costs. The non-Federal entity must make timely payment to contractors in accordance with the contract provisions. 2 CFR 200.303 (a) to (d) establish that the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal awards 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 awards. 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). (b) Comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal awards. (c) Evaluate and monitor the non-Federal entity's compliance with statutes, regulations and the terms and conditions of Federal awards. (d) Take prompt action when instances of noncompliance are identified including noncompliance identified in audit findings. Cause The Institution did not design and implemented internal controls and procedures for this compliance requirement, including written policies and procedures. Effect Noncompliance with the above-mentioned requirements could lead to administrative actions by the grantor. It could also be interpreted as a failure to manage federal awards in compliance with laws, regulations, and provisions of contracts and grant agreements. Questioned costs Likely questioned costs are less than $25,000. Identification as a Repeat Finding No repeated finding. Recommendations We recommend the Institution to design and implement written internal controls and procedures for the administration of federal funds requests in accordance with the requirements of grant agreements and 2 CFR 200. Internal controls and procedures must consider maintaining adequate documentation to support the petitions of funds and to maintain the audit trail of the payments that will be issued. The Institution shall request only the amount of funds necessary to meet its immediate cash needs to prevent excess cash balances. Whenever payment amounts are adjusted after the funds were requested or received, such excess cash should be returned to the federal agency immediately. Establishing reliable and thorough cash forecasting procedures and subjecting such forecasts to the formal review and approval of Institution?s management should meet this objective. Also, the Institution shall coordinate and provide pertinent training to the finance personnel regarding the federal regulations related to the cash management requirements. Views of Responsible Officials Refer to the Institutional comments included in the Corrective Action Plan.
Federal programs: Education Stabilization Fund - Higher Education Emergency Relief Fund (HEERF) CFDA Number: 84.425E / 84.425F Federal award identification number: P425E205418 / P425F204999 Grant period: September 29, 2020 to June 30, 2023 and July 23, 2020 to May 23, 2022 Federal agency: U.S. Department of Education Pass-through entity: N/A Category: Internal Control Finding Type: Material Weakness Compliance requirement: Other ? Policies and procedures requirements Condition and context When obtaining an understanding of the internal controls, policies, and procedures regarding the administration of federal programs, and grant term and conditions, we noted the following deficiencies: a. There is no written policy, nor the procedures designed and implemented by the Institution related to Cash Management were documented. The Institution opted to request the funds on a reimbursement basis. b. There were no written procedures for determining the allowability of costs in accordance with 2 CFR 200 subpart E of this part and the terms and conditions of the Federal award. c. After examination of the Institution procurement policy, we noted that the document was not signed by all members required from management and was not dated. Upon inquiry, we noted that the procurement policy was drafted and submitted to the Institution for review in February 2023. Therefore, no written policy and formal procedures were designed and implemented for the procurement transactions tested for the fiscal year ended July 31, 2022 and thereafter. Criteria 2 CFR 200.302 (b) (6) and (7) establish that the financial management system of each non-Federal entity must provide for the following: written procedures to implement the requirements of ? 200.305, and written procedures for determining the allowability of costs in accordance with subpart E of this part and the terms and conditions of the Federal award. 2 CFR 200.303 establish that the non-Federal entity must: (a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO); (b) comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal awards; (c) evaluate and monitor the non-Federal entity's compliance with statutes, regulations and the terms and conditions of Federal awards; (d) take prompt action when instances of noncompliance are identified including noncompliance identified in audit findings; and (e) take reasonable measures to safeguard protected personally identifiable information and other information the Federal awarding agency or pass-through entity designates as sensitive or the non-Federal entity considers sensitive consistent with applicable Federal, State, local, and tribal laws regarding privacy and responsibility over confidentiality. 2 CFR 200.318 (a) establishes that the non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in 2 CFR 200.317 through 200.327. 2 CFR 200.400 (a) to (d) establish that the application of these cost principles is based on the fundamental premises that: (a) the non-Federal entity is responsible for the efficient and effective administration of the Federal award through the application of sound management practices; (b) the non-Federal entity assumes responsibility for administering Federal funds in a manner consistent with underlying agreements, program objectives, and the terms and conditions of the Federal award; (c) the non-Federal entity, in recognition of its own unique combination of staff, facilities, and experience, has the primary responsibility for employing whatever form of sound organization and management techniques may be necessary in order to assure proper and efficient administration of the Federal award; (d) the application of these cost principles should require no significant changes in the internal accounting policies and practices of the non-Federal entity. However, the accounting practices of the non-Federal entity must be consistent with these cost principles and support the accumulation of costs as required by the principles and must provide for adequate documentation to support costs charged to the Federal award. Cause The Institution?s federal programs received prior the fiscal year ended July 31, 2020 did not require the implementation of written procedures as mentioned in the condition and context section, except for Cash Management policies and procedures for the Student Financial Assistance Programs Cluster for which the Institution has designed and implemented written procedures for such compliance requirement. The Covid-19 pandemic related programs were the reason why this new federal program funds were received, and the entity failed to design and implement on a timely basis the required written documentation and procedures. Effect Noncompliance with the above-mentioned requirement could lead to administrative sanctions by the grantor, including disallowance of costs. It could also be interpreted as a failure to achieve the program?s objectives. Questioned costs None. Identification as a Repeat Finding No repeated finding. Recommendation We recommend the Institution to implement written policies and procedures needed for the administration of federal grants before the acceptance of new grants. Having well sounded policies and procedures will reduce the Institution risk of non-compliance with federal regulations and grants terms and conditions. Also, they will provide guidance to the Institution?s personnel on how to carry-out their responsibilities and functions in relation to the administration of federal programs transactions. Views of Responsible Officials Refer to the Institutional comments included in the Corrective Action Plan.
Assistance listing program: Education Stabilization Fund - Higher Education Emergency Relief Fund (HEERF) Assistance Listing Number: 84.425E / 84.425F Award identification number: P425F204999 / P425E205418 Award period: September 29, 2020 to June 30, 2023 and July 23, 2020 to May 23, 2022 Federal agency: U.S. Department of Education Pass-through entity: N/A Category: Internal Control Finding Type: Significant Deficiency Compliance requirement: Cash Management Condition and context In testing compliance and internal controls over cash management, we selected a sample of four (4) drawdowns which amounted to $342,787 of the total HEERF Institutional aid funds expenditures. Our sample was a statistically valid sample. During our test, we noted that in one (25%) of the four (4) drawdowns selected, for three payments made by the Institution the time elapsed between the receipt of funds and the check issuance was between 20 to 48 days. The total amount disbursed after the three elapsed days requirement was $4,020 from a drawdown total of $56,065. Criteria 2 CFR 200.302 (b) (6) requires written procedures to implement the requirements of 200.305. 2 CFR 200.305 (b) and (b) (1) establish that for non-Federal entities other than states, payments methods must minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-Federal entity whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means. See also 200.302(b)(6). Except as noted elsewhere in this part, Federal agencies must require recipients to use only OMB-approved, governmentwide information collection requests to request payment. The non-Federal entity 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 non-Federal entity, and financial management systems that meet the standards for fund control and accountability as established in this part. Advance payments to a non-Federal entity must be limited to the minimum amounts needed and be timed to be in accordance with the actual, immediate cash requirements of the non-Federal entity 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 non-Federal entity for direct program or project costs and the proportionate share of any allowable indirect costs. The non-Federal entity must make timely payment to contractors in accordance with the contract provisions. 2 CFR 200.303 (a) to (d) establish that the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal awards 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 awards. 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). (b) Comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal awards. (c) Evaluate and monitor the non-Federal entity's compliance with statutes, regulations and the terms and conditions of Federal awards. (d) Take prompt action when instances of noncompliance are identified including noncompliance identified in audit findings. Cause The Institution did not design and implemented internal controls and procedures for this compliance requirement, including written policies and procedures. Effect Noncompliance with the above-mentioned requirements could lead to administrative actions by the grantor. It could also be interpreted as a failure to manage federal awards in compliance with laws, regulations, and provisions of contracts and grant agreements. Questioned costs Likely questioned costs are less than $25,000. Identification as a Repeat Finding No repeated finding. Recommendations We recommend the Institution to design and implement written internal controls and procedures for the administration of federal funds requests in accordance with the requirements of grant agreements and 2 CFR 200. Internal controls and procedures must consider maintaining adequate documentation to support the petitions of funds and to maintain the audit trail of the payments that will be issued. The Institution shall request only the amount of funds necessary to meet its immediate cash needs to prevent excess cash balances. Whenever payment amounts are adjusted after the funds were requested or received, such excess cash should be returned to the federal agency immediately. Establishing reliable and thorough cash forecasting procedures and subjecting such forecasts to the formal review and approval of Institution?s management should meet this objective. Also, the Institution shall coordinate and provide pertinent training to the finance personnel regarding the federal regulations related to the cash management requirements. Views of Responsible Officials Refer to the Institutional comments included in the Corrective Action Plan.
Criteria 2 CFR Part 200.305 The non-Federal entity may 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 non-Federal entity. There is also a need to maintain a financial management system that meets the standards for fund control and accountability as established in this part. Advance payments to a non-Federal entity must be limited to the minimum amounts needed and be timed to be in accordance with the actual, immediate cash requirements of the non-Federal entity 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 non-Federal entity for direct program or project costs and the proportionate share of any allowable indirect costs. The non-Federal entity must make timely payment to contractors in accordance with the contract provisions. Condition Higher Education Institutional Aid From a sample of twenty-five disbursements selected to test the time elapsing between the transfer of funds from the US Department of Education and the University's disbursement, we identified five instances in which the time elapsed exceeded what we understand is a reasonable time. For these five instances, the time elapsed ranged between eight days and two-hundred and twenty-three days since the transfer of funds. Higher Education Emergency Relief Fund From a sample of one hundred and one disbursements selected to test the time elapsing between the transfer of funds from the US Department of Education and the University's disbursement, we identified thirty instances in which the time elapsed exceeded what we understand is a reasonable time. For these thirty instances, the time elapsed ranged between seven days and two-hundred and eighty-five days since the transfer of funds was received. Cause The University requested the funds for the complete contract instead of requesting the funds when invoices were received. Although the University has written cash management procedures, they lack clear procedures to ascertain the timely disbursements of project liabilities after federal funds have been drawn down. Effect or Potential Effect If a non-Federal entity fails to comply with Federal statutes, regulations or the terms and conditions of a Federal award, the Federal awarding agency may impose additional conditions, such as requiring payments as reimbursements rather than as advances. Questioned Cost None Identification as a Repeated Finding Refer to Item No. 2021-003 in the Summary of Prior Year Audit Findings. Recommendation We recommend the University follow its cash management policies under Section 7.2 Drawdown of its External Funds Administration Policy and Procedures Manual by limiting their requests for the invoices received for payment and ascertaining payments are released one or two business days after the funds have been drawn. The University could process all disbursements before drawing down the federal funds; hence, once funds appear in the bank account, it is a matter of stamping the envelopes and mailing the checks. Views of Responsible Officials Refer to Unaudited Corrective Action Plan.
Criteria 2 CFR Part 200.305 The non-Federal entity may 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 non-Federal entity. There is also a need to maintain a financial management system that meets the standards for fund control and accountability as established in this part. Advance payments to a non-Federal entity must be limited to the minimum amounts needed and be timed to be in accordance with the actual, immediate cash requirements of the non-Federal entity 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 non-Federal entity for direct program or project costs and the proportionate share of any allowable indirect costs. The non-Federal entity must make timely payment to contractors in accordance with the contract provisions. Condition Higher Education Institutional Aid From a sample of twenty-five disbursements selected to test the time elapsing between the transfer of funds from the US Department of Education and the University's disbursement, we identified five instances in which the time elapsed exceeded what we understand is a reasonable time. For these five instances, the time elapsed ranged between eight days and two-hundred and twenty-three days since the transfer of funds. Higher Education Emergency Relief Fund From a sample of one hundred and one disbursements selected to test the time elapsing between the transfer of funds from the US Department of Education and the University's disbursement, we identified thirty instances in which the time elapsed exceeded what we understand is a reasonable time. For these thirty instances, the time elapsed ranged between seven days and two-hundred and eighty-five days since the transfer of funds was received. Cause The University requested the funds for the complete contract instead of requesting the funds when invoices were received. Although the University has written cash management procedures, they lack clear procedures to ascertain the timely disbursements of project liabilities after federal funds have been drawn down. Effect or Potential Effect If a non-Federal entity fails to comply with Federal statutes, regulations or the terms and conditions of a Federal award, the Federal awarding agency may impose additional conditions, such as requiring payments as reimbursements rather than as advances. Questioned Cost None Identification as a Repeated Finding Refer to Item No. 2021-003 in the Summary of Prior Year Audit Findings. Recommendation We recommend the University follow its cash management policies under Section 7.2 Drawdown of its External Funds Administration Policy and Procedures Manual by limiting their requests for the invoices received for payment and ascertaining payments are released one or two business days after the funds have been drawn. The University could process all disbursements before drawing down the federal funds; hence, once funds appear in the bank account, it is a matter of stamping the envelopes and mailing the checks. Views of Responsible Officials Refer to Unaudited Corrective Action Plan.
Criteria 2 CFR Part 200.305 The non-Federal entity may 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 non-Federal entity. There is also a need to maintain a financial management system that meets the standards for fund control and accountability as established in this part. Advance payments to a non-Federal entity must be limited to the minimum amounts needed and be timed to be in accordance with the actual, immediate cash requirements of the non-Federal entity 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 non-Federal entity for direct program or project costs and the proportionate share of any allowable indirect costs. The non-Federal entity must make timely payment to contractors in accordance with the contract provisions. Condition Higher Education Institutional Aid From a sample of twenty-five disbursements selected to test the time elapsing between the transfer of funds from the US Department of Education and the University's disbursement, we identified five instances in which the time elapsed exceeded what we understand is a reasonable time. For these five instances, the time elapsed ranged between eight days and two-hundred and twenty-three days since the transfer of funds. Higher Education Emergency Relief Fund From a sample of one hundred and one disbursements selected to test the time elapsing between the transfer of funds from the US Department of Education and the University's disbursement, we identified thirty instances in which the time elapsed exceeded what we understand is a reasonable time. For these thirty instances, the time elapsed ranged between seven days and two-hundred and eighty-five days since the transfer of funds was received. Cause The University requested the funds for the complete contract instead of requesting the funds when invoices were received. Although the University has written cash management procedures, they lack clear procedures to ascertain the timely disbursements of project liabilities after federal funds have been drawn down. Effect or Potential Effect If a non-Federal entity fails to comply with Federal statutes, regulations or the terms and conditions of a Federal award, the Federal awarding agency may impose additional conditions, such as requiring payments as reimbursements rather than as advances. Questioned Cost None Identification as a Repeated Finding Refer to Item No. 2021-003 in the Summary of Prior Year Audit Findings. Recommendation We recommend the University follow its cash management policies under Section 7.2 Drawdown of its External Funds Administration Policy and Procedures Manual by limiting their requests for the invoices received for payment and ascertaining payments are released one or two business days after the funds have been drawn. The University could process all disbursements before drawing down the federal funds; hence, once funds appear in the bank account, it is a matter of stamping the envelopes and mailing the checks. Views of Responsible Officials Refer to Unaudited Corrective Action Plan.
Criteria 2 CFR Part 200.305 The non-Federal entity may 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 non-Federal entity. There is also a need to maintain a financial management system that meets the standards for fund control and accountability as established in this part. Advance payments to a non-Federal entity must be limited to the minimum amounts needed and be timed to be in accordance with the actual, immediate cash requirements of the non-Federal entity 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 non-Federal entity for direct program or project costs and the proportionate share of any allowable indirect costs. The non-Federal entity must make timely payment to contractors in accordance with the contract provisions. Condition Higher Education Institutional Aid From a sample of twenty-five disbursements selected to test the time elapsing between the transfer of funds from the US Department of Education and the University's disbursement, we identified five instances in which the time elapsed exceeded what we understand is a reasonable time. For these five instances, the time elapsed ranged between eight days and two-hundred and twenty-three days since the transfer of funds. Higher Education Emergency Relief Fund From a sample of one hundred and one disbursements selected to test the time elapsing between the transfer of funds from the US Department of Education and the University's disbursement, we identified thirty instances in which the time elapsed exceeded what we understand is a reasonable time. For these thirty instances, the time elapsed ranged between seven days and two-hundred and eighty-five days since the transfer of funds was received. Cause The University requested the funds for the complete contract instead of requesting the funds when invoices were received. Although the University has written cash management procedures, they lack clear procedures to ascertain the timely disbursements of project liabilities after federal funds have been drawn down. Effect or Potential Effect If a non-Federal entity fails to comply with Federal statutes, regulations or the terms and conditions of a Federal award, the Federal awarding agency may impose additional conditions, such as requiring payments as reimbursements rather than as advances. Questioned Cost None Identification as a Repeated Finding Refer to Item No. 2021-003 in the Summary of Prior Year Audit Findings. Recommendation We recommend the University follow its cash management policies under Section 7.2 Drawdown of its External Funds Administration Policy and Procedures Manual by limiting their requests for the invoices received for payment and ascertaining payments are released one or two business days after the funds have been drawn. The University could process all disbursements before drawing down the federal funds; hence, once funds appear in the bank account, it is a matter of stamping the envelopes and mailing the checks. Views of Responsible Officials Refer to Unaudited Corrective Action Plan.
Criteria 2 CFR Part 200.305 The non-Federal entity may 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 non-Federal entity. There is also a need to maintain a financial management system that meets the standards for fund control and accountability as established in this part. Advance payments to a non-Federal entity must be limited to the minimum amounts needed and be timed to be in accordance with the actual, immediate cash requirements of the non-Federal entity 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 non-Federal entity for direct program or project costs and the proportionate share of any allowable indirect costs. The non-Federal entity must make timely payment to contractors in accordance with the contract provisions. Condition Higher Education Institutional Aid From a sample of twenty-five disbursements selected to test the time elapsing between the transfer of funds from the US Department of Education and the University's disbursement, we identified five instances in which the time elapsed exceeded what we understand is a reasonable time. For these five instances, the time elapsed ranged between eight days and two-hundred and twenty-three days since the transfer of funds. Higher Education Emergency Relief Fund From a sample of one hundred and one disbursements selected to test the time elapsing between the transfer of funds from the US Department of Education and the University's disbursement, we identified thirty instances in which the time elapsed exceeded what we understand is a reasonable time. For these thirty instances, the time elapsed ranged between seven days and two-hundred and eighty-five days since the transfer of funds was received. Cause The University requested the funds for the complete contract instead of requesting the funds when invoices were received. Although the University has written cash management procedures, they lack clear procedures to ascertain the timely disbursements of project liabilities after federal funds have been drawn down. Effect or Potential Effect If a non-Federal entity fails to comply with Federal statutes, regulations or the terms and conditions of a Federal award, the Federal awarding agency may impose additional conditions, such as requiring payments as reimbursements rather than as advances. Questioned Cost None Identification as a Repeated Finding Refer to Item No. 2021-003 in the Summary of Prior Year Audit Findings. Recommendation We recommend the University follow its cash management policies under Section 7.2 Drawdown of its External Funds Administration Policy and Procedures Manual by limiting their requests for the invoices received for payment and ascertaining payments are released one or two business days after the funds have been drawn. The University could process all disbursements before drawing down the federal funds; hence, once funds appear in the bank account, it is a matter of stamping the envelopes and mailing the checks. Views of Responsible Officials Refer to Unaudited Corrective Action Plan.
Criteria 2 CFR Part 200.305 The non-Federal entity may 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 non-Federal entity. There is also a need to maintain a financial management system that meets the standards for fund control and accountability as established in this part. Advance payments to a non-Federal entity must be limited to the minimum amounts needed and be timed to be in accordance with the actual, immediate cash requirements of the non-Federal entity 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 non-Federal entity for direct program or project costs and the proportionate share of any allowable indirect costs. The non-Federal entity must make timely payment to contractors in accordance with the contract provisions. Condition Higher Education Institutional Aid From a sample of twenty-five disbursements selected to test the time elapsing between the transfer of funds from the US Department of Education and the University's disbursement, we identified five instances in which the time elapsed exceeded what we understand is a reasonable time. For these five instances, the time elapsed ranged between eight days and two-hundred and twenty-three days since the transfer of funds. Higher Education Emergency Relief Fund From a sample of one hundred and one disbursements selected to test the time elapsing between the transfer of funds from the US Department of Education and the University's disbursement, we identified thirty instances in which the time elapsed exceeded what we understand is a reasonable time. For these thirty instances, the time elapsed ranged between seven days and two-hundred and eighty-five days since the transfer of funds was received. Cause The University requested the funds for the complete contract instead of requesting the funds when invoices were received. Although the University has written cash management procedures, they lack clear procedures to ascertain the timely disbursements of project liabilities after federal funds have been drawn down. Effect or Potential Effect If a non-Federal entity fails to comply with Federal statutes, regulations or the terms and conditions of a Federal award, the Federal awarding agency may impose additional conditions, such as requiring payments as reimbursements rather than as advances. Questioned Cost None Identification as a Repeated Finding Refer to Item No. 2021-003 in the Summary of Prior Year Audit Findings. Recommendation We recommend the University follow its cash management policies under Section 7.2 Drawdown of its External Funds Administration Policy and Procedures Manual by limiting their requests for the invoices received for payment and ascertaining payments are released one or two business days after the funds have been drawn. The University could process all disbursements before drawing down the federal funds; hence, once funds appear in the bank account, it is a matter of stamping the envelopes and mailing the checks. Views of Responsible Officials Refer to Unaudited Corrective Action Plan.
Criteria 2 CFR Part 200.305 The non-Federal entity may 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 non-Federal entity. There is also a need to maintain a financial management system that meets the standards for fund control and accountability as established in this part. Advance payments to a non-Federal entity must be limited to the minimum amounts needed and be timed to be in accordance with the actual, immediate cash requirements of the non-Federal entity 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 non-Federal entity for direct program or project costs and the proportionate share of any allowable indirect costs. The non-Federal entity must make timely payment to contractors in accordance with the contract provisions. Condition Higher Education Institutional Aid From a sample of twenty-five disbursements selected to test the time elapsing between the transfer of funds from the US Department of Education and the University's disbursement, we identified five instances in which the time elapsed exceeded what we understand is a reasonable time. For these five instances, the time elapsed ranged between eight days and two-hundred and twenty-three days since the transfer of funds. Higher Education Emergency Relief Fund From a sample of one hundred and one disbursements selected to test the time elapsing between the transfer of funds from the US Department of Education and the University's disbursement, we identified thirty instances in which the time elapsed exceeded what we understand is a reasonable time. For these thirty instances, the time elapsed ranged between seven days and two-hundred and eighty-five days since the transfer of funds was received. Cause The University requested the funds for the complete contract instead of requesting the funds when invoices were received. Although the University has written cash management procedures, they lack clear procedures to ascertain the timely disbursements of project liabilities after federal funds have been drawn down. Effect or Potential Effect If a non-Federal entity fails to comply with Federal statutes, regulations or the terms and conditions of a Federal award, the Federal awarding agency may impose additional conditions, such as requiring payments as reimbursements rather than as advances. Questioned Cost None Identification as a Repeated Finding Refer to Item No. 2021-003 in the Summary of Prior Year Audit Findings. Recommendation We recommend the University follow its cash management policies under Section 7.2 Drawdown of its External Funds Administration Policy and Procedures Manual by limiting their requests for the invoices received for payment and ascertaining payments are released one or two business days after the funds have been drawn. The University could process all disbursements before drawing down the federal funds; hence, once funds appear in the bank account, it is a matter of stamping the envelopes and mailing the checks. Views of Responsible Officials Refer to Unaudited Corrective Action Plan.
Federal programs: Education Stabilization Fund - Higher Education Emergency Relief Fund (HEERF) CFDA Number: 84.425E / 84.425F Federal award identification number: P425E205418 / P425F204999 Grant period: September 29, 2020 to June 30, 2023 and July 23, 2020 to May 23, 2022 Federal agency: U.S. Department of Education Pass-through entity: N/A Category: Internal Control Finding Type: Material Weakness Compliance requirement: Other ? Policies and procedures requirements Condition and context When obtaining an understanding of the internal controls, policies, and procedures regarding the administration of federal programs, and grant term and conditions, we noted the following deficiencies: a. There is no written policy, nor the procedures designed and implemented by the Institution related to Cash Management were documented. The Institution opted to request the funds on a reimbursement basis. b. There were no written procedures for determining the allowability of costs in accordance with 2 CFR 200 subpart E of this part and the terms and conditions of the Federal award. c. After examination of the Institution procurement policy, we noted that the document was not signed by all members required from management and was not dated. Upon inquiry, we noted that the procurement policy was drafted and submitted to the Institution for review in February 2023. Therefore, no written policy and formal procedures were designed and implemented for the procurement transactions tested for the fiscal year ended July 31, 2022 and thereafter. Criteria 2 CFR 200.302 (b) (6) and (7) establish that the financial management system of each non-Federal entity must provide for the following: written procedures to implement the requirements of ? 200.305, and written procedures for determining the allowability of costs in accordance with subpart E of this part and the terms and conditions of the Federal award. 2 CFR 200.303 establish that the non-Federal entity must: (a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO); (b) comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal awards; (c) evaluate and monitor the non-Federal entity's compliance with statutes, regulations and the terms and conditions of Federal awards; (d) take prompt action when instances of noncompliance are identified including noncompliance identified in audit findings; and (e) take reasonable measures to safeguard protected personally identifiable information and other information the Federal awarding agency or pass-through entity designates as sensitive or the non-Federal entity considers sensitive consistent with applicable Federal, State, local, and tribal laws regarding privacy and responsibility over confidentiality. 2 CFR 200.318 (a) establishes that the non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in 2 CFR 200.317 through 200.327. 2 CFR 200.400 (a) to (d) establish that the application of these cost principles is based on the fundamental premises that: (a) the non-Federal entity is responsible for the efficient and effective administration of the Federal award through the application of sound management practices; (b) the non-Federal entity assumes responsibility for administering Federal funds in a manner consistent with underlying agreements, program objectives, and the terms and conditions of the Federal award; (c) the non-Federal entity, in recognition of its own unique combination of staff, facilities, and experience, has the primary responsibility for employing whatever form of sound organization and management techniques may be necessary in order to assure proper and efficient administration of the Federal award; (d) the application of these cost principles should require no significant changes in the internal accounting policies and practices of the non-Federal entity. However, the accounting practices of the non-Federal entity must be consistent with these cost principles and support the accumulation of costs as required by the principles and must provide for adequate documentation to support costs charged to the Federal award. Cause The Institution?s federal programs received prior the fiscal year ended July 31, 2020 did not require the implementation of written procedures as mentioned in the condition and context section, except for Cash Management policies and procedures for the Student Financial Assistance Programs Cluster for which the Institution has designed and implemented written procedures for such compliance requirement. The Covid-19 pandemic related programs were the reason why this new federal program funds were received, and the entity failed to design and implement on a timely basis the required written documentation and procedures. Effect Noncompliance with the above-mentioned requirement could lead to administrative sanctions by the grantor, including disallowance of costs. It could also be interpreted as a failure to achieve the program?s objectives. Questioned costs None. Identification as a Repeat Finding No repeated finding. Recommendation We recommend the Institution to implement written policies and procedures needed for the administration of federal grants before the acceptance of new grants. Having well sounded policies and procedures will reduce the Institution risk of non-compliance with federal regulations and grants terms and conditions. Also, they will provide guidance to the Institution?s personnel on how to carry-out their responsibilities and functions in relation to the administration of federal programs transactions. Views of Responsible Officials Refer to the Institutional comments included in the Corrective Action Plan.
Assistance listing program: Education Stabilization Fund - Higher Education Emergency Relief Fund (HEERF) Assistance Listing Number: 84.425E / 84.425F Award identification number: P425F204999 / P425E205418 Award period: September 29, 2020 to June 30, 2023 and July 23, 2020 to May 23, 2022 Federal agency: U.S. Department of Education Pass-through entity: N/A Category: Internal Control Finding Type: Significant Deficiency Compliance requirement: Cash Management Condition and context In testing compliance and internal controls over cash management, we selected a sample of four (4) drawdowns which amounted to $342,787 of the total HEERF Institutional aid funds expenditures. Our sample was a statistically valid sample. During our test, we noted that in one (25%) of the four (4) drawdowns selected, for three payments made by the Institution the time elapsed between the receipt of funds and the check issuance was between 20 to 48 days. The total amount disbursed after the three elapsed days requirement was $4,020 from a drawdown total of $56,065. Criteria 2 CFR 200.302 (b) (6) requires written procedures to implement the requirements of 200.305. 2 CFR 200.305 (b) and (b) (1) establish that for non-Federal entities other than states, payments methods must minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-Federal entity whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means. See also 200.302(b)(6). Except as noted elsewhere in this part, Federal agencies must require recipients to use only OMB-approved, governmentwide information collection requests to request payment. The non-Federal entity 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 non-Federal entity, and financial management systems that meet the standards for fund control and accountability as established in this part. Advance payments to a non-Federal entity must be limited to the minimum amounts needed and be timed to be in accordance with the actual, immediate cash requirements of the non-Federal entity 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 non-Federal entity for direct program or project costs and the proportionate share of any allowable indirect costs. The non-Federal entity must make timely payment to contractors in accordance with the contract provisions. 2 CFR 200.303 (a) to (d) establish that the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal awards 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 awards. 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). (b) Comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal awards. (c) Evaluate and monitor the non-Federal entity's compliance with statutes, regulations and the terms and conditions of Federal awards. (d) Take prompt action when instances of noncompliance are identified including noncompliance identified in audit findings. Cause The Institution did not design and implemented internal controls and procedures for this compliance requirement, including written policies and procedures. Effect Noncompliance with the above-mentioned requirements could lead to administrative actions by the grantor. It could also be interpreted as a failure to manage federal awards in compliance with laws, regulations, and provisions of contracts and grant agreements. Questioned costs Likely questioned costs are less than $25,000. Identification as a Repeat Finding No repeated finding. Recommendations We recommend the Institution to design and implement written internal controls and procedures for the administration of federal funds requests in accordance with the requirements of grant agreements and 2 CFR 200. Internal controls and procedures must consider maintaining adequate documentation to support the petitions of funds and to maintain the audit trail of the payments that will be issued. The Institution shall request only the amount of funds necessary to meet its immediate cash needs to prevent excess cash balances. Whenever payment amounts are adjusted after the funds were requested or received, such excess cash should be returned to the federal agency immediately. Establishing reliable and thorough cash forecasting procedures and subjecting such forecasts to the formal review and approval of Institution?s management should meet this objective. Also, the Institution shall coordinate and provide pertinent training to the finance personnel regarding the federal regulations related to the cash management requirements. Views of Responsible Officials Refer to the Institutional comments included in the Corrective Action Plan.
Federal programs: Education Stabilization Fund - Higher Education Emergency Relief Fund (HEERF) CFDA Number: 84.425E / 84.425F Federal award identification number: P425E205418 / P425F204999 Grant period: September 29, 2020 to June 30, 2023 and July 23, 2020 to May 23, 2022 Federal agency: U.S. Department of Education Pass-through entity: N/A Category: Internal Control Finding Type: Material Weakness Compliance requirement: Other ? Policies and procedures requirements Condition and context When obtaining an understanding of the internal controls, policies, and procedures regarding the administration of federal programs, and grant term and conditions, we noted the following deficiencies: a. There is no written policy, nor the procedures designed and implemented by the Institution related to Cash Management were documented. The Institution opted to request the funds on a reimbursement basis. b. There were no written procedures for determining the allowability of costs in accordance with 2 CFR 200 subpart E of this part and the terms and conditions of the Federal award. c. After examination of the Institution procurement policy, we noted that the document was not signed by all members required from management and was not dated. Upon inquiry, we noted that the procurement policy was drafted and submitted to the Institution for review in February 2023. Therefore, no written policy and formal procedures were designed and implemented for the procurement transactions tested for the fiscal year ended July 31, 2022 and thereafter. Criteria 2 CFR 200.302 (b) (6) and (7) establish that the financial management system of each non-Federal entity must provide for the following: written procedures to implement the requirements of ? 200.305, and written procedures for determining the allowability of costs in accordance with subpart E of this part and the terms and conditions of the Federal award. 2 CFR 200.303 establish that the non-Federal entity must: (a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO); (b) comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal awards; (c) evaluate and monitor the non-Federal entity's compliance with statutes, regulations and the terms and conditions of Federal awards; (d) take prompt action when instances of noncompliance are identified including noncompliance identified in audit findings; and (e) take reasonable measures to safeguard protected personally identifiable information and other information the Federal awarding agency or pass-through entity designates as sensitive or the non-Federal entity considers sensitive consistent with applicable Federal, State, local, and tribal laws regarding privacy and responsibility over confidentiality. 2 CFR 200.318 (a) establishes that the non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in 2 CFR 200.317 through 200.327. 2 CFR 200.400 (a) to (d) establish that the application of these cost principles is based on the fundamental premises that: (a) the non-Federal entity is responsible for the efficient and effective administration of the Federal award through the application of sound management practices; (b) the non-Federal entity assumes responsibility for administering Federal funds in a manner consistent with underlying agreements, program objectives, and the terms and conditions of the Federal award; (c) the non-Federal entity, in recognition of its own unique combination of staff, facilities, and experience, has the primary responsibility for employing whatever form of sound organization and management techniques may be necessary in order to assure proper and efficient administration of the Federal award; (d) the application of these cost principles should require no significant changes in the internal accounting policies and practices of the non-Federal entity. However, the accounting practices of the non-Federal entity must be consistent with these cost principles and support the accumulation of costs as required by the principles and must provide for adequate documentation to support costs charged to the Federal award. Cause The Institution?s federal programs received prior the fiscal year ended July 31, 2020 did not require the implementation of written procedures as mentioned in the condition and context section, except for Cash Management policies and procedures for the Student Financial Assistance Programs Cluster for which the Institution has designed and implemented written procedures for such compliance requirement. The Covid-19 pandemic related programs were the reason why this new federal program funds were received, and the entity failed to design and implement on a timely basis the required written documentation and procedures. Effect Noncompliance with the above-mentioned requirement could lead to administrative sanctions by the grantor, including disallowance of costs. It could also be interpreted as a failure to achieve the program?s objectives. Questioned costs None. Identification as a Repeat Finding No repeated finding. Recommendation We recommend the Institution to implement written policies and procedures needed for the administration of federal grants before the acceptance of new grants. Having well sounded policies and procedures will reduce the Institution risk of non-compliance with federal regulations and grants terms and conditions. Also, they will provide guidance to the Institution?s personnel on how to carry-out their responsibilities and functions in relation to the administration of federal programs transactions. Views of Responsible Officials Refer to the Institutional comments included in the Corrective Action Plan.
Assistance listing program: Education Stabilization Fund - Higher Education Emergency Relief Fund (HEERF) Assistance Listing Number: 84.425E / 84.425F Award identification number: P425F204999 / P425E205418 Award period: September 29, 2020 to June 30, 2023 and July 23, 2020 to May 23, 2022 Federal agency: U.S. Department of Education Pass-through entity: N/A Category: Internal Control Finding Type: Significant Deficiency Compliance requirement: Cash Management Condition and context In testing compliance and internal controls over cash management, we selected a sample of four (4) drawdowns which amounted to $342,787 of the total HEERF Institutional aid funds expenditures. Our sample was a statistically valid sample. During our test, we noted that in one (25%) of the four (4) drawdowns selected, for three payments made by the Institution the time elapsed between the receipt of funds and the check issuance was between 20 to 48 days. The total amount disbursed after the three elapsed days requirement was $4,020 from a drawdown total of $56,065. Criteria 2 CFR 200.302 (b) (6) requires written procedures to implement the requirements of 200.305. 2 CFR 200.305 (b) and (b) (1) establish that for non-Federal entities other than states, payments methods must minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-Federal entity whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means. See also 200.302(b)(6). Except as noted elsewhere in this part, Federal agencies must require recipients to use only OMB-approved, governmentwide information collection requests to request payment. The non-Federal entity 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 non-Federal entity, and financial management systems that meet the standards for fund control and accountability as established in this part. Advance payments to a non-Federal entity must be limited to the minimum amounts needed and be timed to be in accordance with the actual, immediate cash requirements of the non-Federal entity 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 non-Federal entity for direct program or project costs and the proportionate share of any allowable indirect costs. The non-Federal entity must make timely payment to contractors in accordance with the contract provisions. 2 CFR 200.303 (a) to (d) establish that the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal awards 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 awards. 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). (b) Comply with the U.S. Constitution, Federal statutes, regulations, and the terms and conditions of the Federal awards. (c) Evaluate and monitor the non-Federal entity's compliance with statutes, regulations and the terms and conditions of Federal awards. (d) Take prompt action when instances of noncompliance are identified including noncompliance identified in audit findings. Cause The Institution did not design and implemented internal controls and procedures for this compliance requirement, including written policies and procedures. Effect Noncompliance with the above-mentioned requirements could lead to administrative actions by the grantor. It could also be interpreted as a failure to manage federal awards in compliance with laws, regulations, and provisions of contracts and grant agreements. Questioned costs Likely questioned costs are less than $25,000. Identification as a Repeat Finding No repeated finding. Recommendations We recommend the Institution to design and implement written internal controls and procedures for the administration of federal funds requests in accordance with the requirements of grant agreements and 2 CFR 200. Internal controls and procedures must consider maintaining adequate documentation to support the petitions of funds and to maintain the audit trail of the payments that will be issued. The Institution shall request only the amount of funds necessary to meet its immediate cash needs to prevent excess cash balances. Whenever payment amounts are adjusted after the funds were requested or received, such excess cash should be returned to the federal agency immediately. Establishing reliable and thorough cash forecasting procedures and subjecting such forecasts to the formal review and approval of Institution?s management should meet this objective. Also, the Institution shall coordinate and provide pertinent training to the finance personnel regarding the federal regulations related to the cash management requirements. Views of Responsible Officials Refer to the Institutional comments included in the Corrective Action Plan.
Criteria 2 CFR Part 200.305 The non-Federal entity may 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 non-Federal entity. There is also a need to maintain a financial management system that meets the standards for fund control and accountability as established in this part. Advance payments to a non-Federal entity must be limited to the minimum amounts needed and be timed to be in accordance with the actual, immediate cash requirements of the non-Federal entity 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 non-Federal entity for direct program or project costs and the proportionate share of any allowable indirect costs. The non-Federal entity must make timely payment to contractors in accordance with the contract provisions. Condition Higher Education Institutional Aid From a sample of twenty-five disbursements selected to test the time elapsing between the transfer of funds from the US Department of Education and the University's disbursement, we identified five instances in which the time elapsed exceeded what we understand is a reasonable time. For these five instances, the time elapsed ranged between eight days and two-hundred and twenty-three days since the transfer of funds. Higher Education Emergency Relief Fund From a sample of one hundred and one disbursements selected to test the time elapsing between the transfer of funds from the US Department of Education and the University's disbursement, we identified thirty instances in which the time elapsed exceeded what we understand is a reasonable time. For these thirty instances, the time elapsed ranged between seven days and two-hundred and eighty-five days since the transfer of funds was received. Cause The University requested the funds for the complete contract instead of requesting the funds when invoices were received. Although the University has written cash management procedures, they lack clear procedures to ascertain the timely disbursements of project liabilities after federal funds have been drawn down. Effect or Potential Effect If a non-Federal entity fails to comply with Federal statutes, regulations or the terms and conditions of a Federal award, the Federal awarding agency may impose additional conditions, such as requiring payments as reimbursements rather than as advances. Questioned Cost None Identification as a Repeated Finding Refer to Item No. 2021-003 in the Summary of Prior Year Audit Findings. Recommendation We recommend the University follow its cash management policies under Section 7.2 Drawdown of its External Funds Administration Policy and Procedures Manual by limiting their requests for the invoices received for payment and ascertaining payments are released one or two business days after the funds have been drawn. The University could process all disbursements before drawing down the federal funds; hence, once funds appear in the bank account, it is a matter of stamping the envelopes and mailing the checks. Views of Responsible Officials Refer to Unaudited Corrective Action Plan.
Criteria 2 CFR Part 200.305 The non-Federal entity may 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 non-Federal entity. There is also a need to maintain a financial management system that meets the standards for fund control and accountability as established in this part. Advance payments to a non-Federal entity must be limited to the minimum amounts needed and be timed to be in accordance with the actual, immediate cash requirements of the non-Federal entity 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 non-Federal entity for direct program or project costs and the proportionate share of any allowable indirect costs. The non-Federal entity must make timely payment to contractors in accordance with the contract provisions. Condition Higher Education Institutional Aid From a sample of twenty-five disbursements selected to test the time elapsing between the transfer of funds from the US Department of Education and the University's disbursement, we identified five instances in which the time elapsed exceeded what we understand is a reasonable time. For these five instances, the time elapsed ranged between eight days and two-hundred and twenty-three days since the transfer of funds. Higher Education Emergency Relief Fund From a sample of one hundred and one disbursements selected to test the time elapsing between the transfer of funds from the US Department of Education and the University's disbursement, we identified thirty instances in which the time elapsed exceeded what we understand is a reasonable time. For these thirty instances, the time elapsed ranged between seven days and two-hundred and eighty-five days since the transfer of funds was received. Cause The University requested the funds for the complete contract instead of requesting the funds when invoices were received. Although the University has written cash management procedures, they lack clear procedures to ascertain the timely disbursements of project liabilities after federal funds have been drawn down. Effect or Potential Effect If a non-Federal entity fails to comply with Federal statutes, regulations or the terms and conditions of a Federal award, the Federal awarding agency may impose additional conditions, such as requiring payments as reimbursements rather than as advances. Questioned Cost None Identification as a Repeated Finding Refer to Item No. 2021-003 in the Summary of Prior Year Audit Findings. Recommendation We recommend the University follow its cash management policies under Section 7.2 Drawdown of its External Funds Administration Policy and Procedures Manual by limiting their requests for the invoices received for payment and ascertaining payments are released one or two business days after the funds have been drawn. The University could process all disbursements before drawing down the federal funds; hence, once funds appear in the bank account, it is a matter of stamping the envelopes and mailing the checks. Views of Responsible Officials Refer to Unaudited Corrective Action Plan.
Criteria 2 CFR Part 200.305 The non-Federal entity may 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 non-Federal entity. There is also a need to maintain a financial management system that meets the standards for fund control and accountability as established in this part. Advance payments to a non-Federal entity must be limited to the minimum amounts needed and be timed to be in accordance with the actual, immediate cash requirements of the non-Federal entity 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 non-Federal entity for direct program or project costs and the proportionate share of any allowable indirect costs. The non-Federal entity must make timely payment to contractors in accordance with the contract provisions. Condition Higher Education Institutional Aid From a sample of twenty-five disbursements selected to test the time elapsing between the transfer of funds from the US Department of Education and the University's disbursement, we identified five instances in which the time elapsed exceeded what we understand is a reasonable time. For these five instances, the time elapsed ranged between eight days and two-hundred and twenty-three days since the transfer of funds. Higher Education Emergency Relief Fund From a sample of one hundred and one disbursements selected to test the time elapsing between the transfer of funds from the US Department of Education and the University's disbursement, we identified thirty instances in which the time elapsed exceeded what we understand is a reasonable time. For these thirty instances, the time elapsed ranged between seven days and two-hundred and eighty-five days since the transfer of funds was received. Cause The University requested the funds for the complete contract instead of requesting the funds when invoices were received. Although the University has written cash management procedures, they lack clear procedures to ascertain the timely disbursements of project liabilities after federal funds have been drawn down. Effect or Potential Effect If a non-Federal entity fails to comply with Federal statutes, regulations or the terms and conditions of a Federal award, the Federal awarding agency may impose additional conditions, such as requiring payments as reimbursements rather than as advances. Questioned Cost None Identification as a Repeated Finding Refer to Item No. 2021-003 in the Summary of Prior Year Audit Findings. Recommendation We recommend the University follow its cash management policies under Section 7.2 Drawdown of its External Funds Administration Policy and Procedures Manual by limiting their requests for the invoices received for payment and ascertaining payments are released one or two business days after the funds have been drawn. The University could process all disbursements before drawing down the federal funds; hence, once funds appear in the bank account, it is a matter of stamping the envelopes and mailing the checks. Views of Responsible Officials Refer to Unaudited Corrective Action Plan.
Criteria 2 CFR Part 200.305 The non-Federal entity may 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 non-Federal entity. There is also a need to maintain a financial management system that meets the standards for fund control and accountability as established in this part. Advance payments to a non-Federal entity must be limited to the minimum amounts needed and be timed to be in accordance with the actual, immediate cash requirements of the non-Federal entity 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 non-Federal entity for direct program or project costs and the proportionate share of any allowable indirect costs. The non-Federal entity must make timely payment to contractors in accordance with the contract provisions. Condition Higher Education Institutional Aid From a sample of twenty-five disbursements selected to test the time elapsing between the transfer of funds from the US Department of Education and the University's disbursement, we identified five instances in which the time elapsed exceeded what we understand is a reasonable time. For these five instances, the time elapsed ranged between eight days and two-hundred and twenty-three days since the transfer of funds. Higher Education Emergency Relief Fund From a sample of one hundred and one disbursements selected to test the time elapsing between the transfer of funds from the US Department of Education and the University's disbursement, we identified thirty instances in which the time elapsed exceeded what we understand is a reasonable time. For these thirty instances, the time elapsed ranged between seven days and two-hundred and eighty-five days since the transfer of funds was received. Cause The University requested the funds for the complete contract instead of requesting the funds when invoices were received. Although the University has written cash management procedures, they lack clear procedures to ascertain the timely disbursements of project liabilities after federal funds have been drawn down. Effect or Potential Effect If a non-Federal entity fails to comply with Federal statutes, regulations or the terms and conditions of a Federal award, the Federal awarding agency may impose additional conditions, such as requiring payments as reimbursements rather than as advances. Questioned Cost None Identification as a Repeated Finding Refer to Item No. 2021-003 in the Summary of Prior Year Audit Findings. Recommendation We recommend the University follow its cash management policies under Section 7.2 Drawdown of its External Funds Administration Policy and Procedures Manual by limiting their requests for the invoices received for payment and ascertaining payments are released one or two business days after the funds have been drawn. The University could process all disbursements before drawing down the federal funds; hence, once funds appear in the bank account, it is a matter of stamping the envelopes and mailing the checks. Views of Responsible Officials Refer to Unaudited Corrective Action Plan.
Criteria 2 CFR Part 200.305 The non-Federal entity may 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 non-Federal entity. There is also a need to maintain a financial management system that meets the standards for fund control and accountability as established in this part. Advance payments to a non-Federal entity must be limited to the minimum amounts needed and be timed to be in accordance with the actual, immediate cash requirements of the non-Federal entity 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 non-Federal entity for direct program or project costs and the proportionate share of any allowable indirect costs. The non-Federal entity must make timely payment to contractors in accordance with the contract provisions. Condition Higher Education Institutional Aid From a sample of twenty-five disbursements selected to test the time elapsing between the transfer of funds from the US Department of Education and the University's disbursement, we identified five instances in which the time elapsed exceeded what we understand is a reasonable time. For these five instances, the time elapsed ranged between eight days and two-hundred and twenty-three days since the transfer of funds. Higher Education Emergency Relief Fund From a sample of one hundred and one disbursements selected to test the time elapsing between the transfer of funds from the US Department of Education and the University's disbursement, we identified thirty instances in which the time elapsed exceeded what we understand is a reasonable time. For these thirty instances, the time elapsed ranged between seven days and two-hundred and eighty-five days since the transfer of funds was received. Cause The University requested the funds for the complete contract instead of requesting the funds when invoices were received. Although the University has written cash management procedures, they lack clear procedures to ascertain the timely disbursements of project liabilities after federal funds have been drawn down. Effect or Potential Effect If a non-Federal entity fails to comply with Federal statutes, regulations or the terms and conditions of a Federal award, the Federal awarding agency may impose additional conditions, such as requiring payments as reimbursements rather than as advances. Questioned Cost None Identification as a Repeated Finding Refer to Item No. 2021-003 in the Summary of Prior Year Audit Findings. Recommendation We recommend the University follow its cash management policies under Section 7.2 Drawdown of its External Funds Administration Policy and Procedures Manual by limiting their requests for the invoices received for payment and ascertaining payments are released one or two business days after the funds have been drawn. The University could process all disbursements before drawing down the federal funds; hence, once funds appear in the bank account, it is a matter of stamping the envelopes and mailing the checks. Views of Responsible Officials Refer to Unaudited Corrective Action Plan.
Criteria 2 CFR Part 200.305 The non-Federal entity may 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 non-Federal entity. There is also a need to maintain a financial management system that meets the standards for fund control and accountability as established in this part. Advance payments to a non-Federal entity must be limited to the minimum amounts needed and be timed to be in accordance with the actual, immediate cash requirements of the non-Federal entity 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 non-Federal entity for direct program or project costs and the proportionate share of any allowable indirect costs. The non-Federal entity must make timely payment to contractors in accordance with the contract provisions. Condition Higher Education Institutional Aid From a sample of twenty-five disbursements selected to test the time elapsing between the transfer of funds from the US Department of Education and the University's disbursement, we identified five instances in which the time elapsed exceeded what we understand is a reasonable time. For these five instances, the time elapsed ranged between eight days and two-hundred and twenty-three days since the transfer of funds. Higher Education Emergency Relief Fund From a sample of one hundred and one disbursements selected to test the time elapsing between the transfer of funds from the US Department of Education and the University's disbursement, we identified thirty instances in which the time elapsed exceeded what we understand is a reasonable time. For these thirty instances, the time elapsed ranged between seven days and two-hundred and eighty-five days since the transfer of funds was received. Cause The University requested the funds for the complete contract instead of requesting the funds when invoices were received. Although the University has written cash management procedures, they lack clear procedures to ascertain the timely disbursements of project liabilities after federal funds have been drawn down. Effect or Potential Effect If a non-Federal entity fails to comply with Federal statutes, regulations or the terms and conditions of a Federal award, the Federal awarding agency may impose additional conditions, such as requiring payments as reimbursements rather than as advances. Questioned Cost None Identification as a Repeated Finding Refer to Item No. 2021-003 in the Summary of Prior Year Audit Findings. Recommendation We recommend the University follow its cash management policies under Section 7.2 Drawdown of its External Funds Administration Policy and Procedures Manual by limiting their requests for the invoices received for payment and ascertaining payments are released one or two business days after the funds have been drawn. The University could process all disbursements before drawing down the federal funds; hence, once funds appear in the bank account, it is a matter of stamping the envelopes and mailing the checks. Views of Responsible Officials Refer to Unaudited Corrective Action Plan.
Criteria 2 CFR Part 200.305 The non-Federal entity may 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 non-Federal entity. There is also a need to maintain a financial management system that meets the standards for fund control and accountability as established in this part. Advance payments to a non-Federal entity must be limited to the minimum amounts needed and be timed to be in accordance with the actual, immediate cash requirements of the non-Federal entity 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 non-Federal entity for direct program or project costs and the proportionate share of any allowable indirect costs. The non-Federal entity must make timely payment to contractors in accordance with the contract provisions. Condition Higher Education Institutional Aid From a sample of twenty-five disbursements selected to test the time elapsing between the transfer of funds from the US Department of Education and the University's disbursement, we identified five instances in which the time elapsed exceeded what we understand is a reasonable time. For these five instances, the time elapsed ranged between eight days and two-hundred and twenty-three days since the transfer of funds. Higher Education Emergency Relief Fund From a sample of one hundred and one disbursements selected to test the time elapsing between the transfer of funds from the US Department of Education and the University's disbursement, we identified thirty instances in which the time elapsed exceeded what we understand is a reasonable time. For these thirty instances, the time elapsed ranged between seven days and two-hundred and eighty-five days since the transfer of funds was received. Cause The University requested the funds for the complete contract instead of requesting the funds when invoices were received. Although the University has written cash management procedures, they lack clear procedures to ascertain the timely disbursements of project liabilities after federal funds have been drawn down. Effect or Potential Effect If a non-Federal entity fails to comply with Federal statutes, regulations or the terms and conditions of a Federal award, the Federal awarding agency may impose additional conditions, such as requiring payments as reimbursements rather than as advances. Questioned Cost None Identification as a Repeated Finding Refer to Item No. 2021-003 in the Summary of Prior Year Audit Findings. Recommendation We recommend the University follow its cash management policies under Section 7.2 Drawdown of its External Funds Administration Policy and Procedures Manual by limiting their requests for the invoices received for payment and ascertaining payments are released one or two business days after the funds have been drawn. The University could process all disbursements before drawing down the federal funds; hence, once funds appear in the bank account, it is a matter of stamping the envelopes and mailing the checks. Views of Responsible Officials Refer to Unaudited Corrective Action Plan.
2022-005 - Internal Control Over Compliance and Compliance – Cash Management Program- U.S. Department of Energy, Environmental Monitoring/Cleanup, Cultural and Resource Management Emergency Response Research, Outreach, Technical Analysis ALN: 81.214, Award #: DE-EM0005173, Award Year: 04/23/2018 – 06/30/2023 Program- U.S. Department of Health and Human Services, Strengthening Public Health Systems and Services through National Partnerships to Improve and Protect the Nation’s Health ALN: 93.421, Award #: Various, Award Year: 08/01/2018 – 07/31/2023 Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. In accordance with 2 CFR Section 200.305(b)(3), for non-Federal entities funded under the reimbursement method, reimbursement requests should be supported by documentation to verify that the entity paid for the costs for which reimbursement was requested prior to the date of the reimbursement request. Condition – During our cash management testing for major program ALN 81.214, we noted the following: • For three (3) out of four (4) samples selected for testing, NGA Center was unable to provide documentation showing review and approval of the cash drawdown requests. • For one (1) out of four (4) sample selected for testing, NGA Center was unable to provide the supporting calculation of the cash drawdown request. • In addition, expenditures reflected in the cash drawdown requests were not reconciled with the general ledger. For the first three quarters of fiscal year 2022, the compensated absences and fringe benefits were included in the cash drawdown requests, however, NGA Center did not record the transactions in the general ledger during those quarters. Also, certain contractual services recorded in the general ledger during the last quarter of fiscal year 2022 were excluded on the cash drawdown request. During our cash management testing for major program ALN 93.421, we noted the following: • For two (2) out of two (2) samples selected for testing, NGA Center was unable to provide documentation showing review and approval of the cash drawdown requests. • For one (1) out of two (2) samples selected for testing, NGA Center was unable to provide the supporting calculation of the cash drawdown request. • In addition, expenditures reflected in the cash drawdown requests are not reconciled with the general ledger. During the first half of fiscal year 2022, compensated absences and fringe benefits were included in the cash drawdown request, however, NGA Center did not record the transactions in the general ledger during that period. Also, certain contractual services recorded in the general ledger during the last three quarters were excluded on the cash drawdown requests. Questioned Costs – Not determinable. Context – This is a condition identified per review of NGA Center’s compliance with the provisions of the grant agreements and general compliance principles. Cause – NGA Center did not appear to exercise due diligence in requesting Federal funds consistent with the grant agreements and its actual cash needs. Effect – NGA Center is not in compliance with the stated provisions. The opportunity to use the money for other immediate cash needs is unnecessarily delayed when funds are not requested timely. Repeat Finding – This is not a repeat finding. Recommendation - We recommend that NGA Center comply with the provisions of the grant agreements and request Federal funds consistent with the grant agreement funding techniques and clearance patterns for these programs. Views of Responsible Officials – NGA Center agrees with the finding and recommendations of this finding set forth within and has developed a corrective action plan to address the lapse in the prescribed internal controls.
2022-005 - Internal Control Over Compliance and Compliance – Cash Management Program- U.S. Department of Energy, Environmental Monitoring/Cleanup, Cultural and Resource Management Emergency Response Research, Outreach, Technical Analysis ALN: 81.214, Award #: DE-EM0005173, Award Year: 04/23/2018 – 06/30/2023 Program- U.S. Department of Health and Human Services, Strengthening Public Health Systems and Services through National Partnerships to Improve and Protect the Nation’s Health ALN: 93.421, Award #: Various, Award Year: 08/01/2018 – 07/31/2023 Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. In accordance with 2 CFR Section 200.305(b)(3), for non-Federal entities funded under the reimbursement method, reimbursement requests should be supported by documentation to verify that the entity paid for the costs for which reimbursement was requested prior to the date of the reimbursement request. Condition – During our cash management testing for major program ALN 81.214, we noted the following: • For three (3) out of four (4) samples selected for testing, NGA Center was unable to provide documentation showing review and approval of the cash drawdown requests. • For one (1) out of four (4) sample selected for testing, NGA Center was unable to provide the supporting calculation of the cash drawdown request. • In addition, expenditures reflected in the cash drawdown requests were not reconciled with the general ledger. For the first three quarters of fiscal year 2022, the compensated absences and fringe benefits were included in the cash drawdown requests, however, NGA Center did not record the transactions in the general ledger during those quarters. Also, certain contractual services recorded in the general ledger during the last quarter of fiscal year 2022 were excluded on the cash drawdown request. During our cash management testing for major program ALN 93.421, we noted the following: • For two (2) out of two (2) samples selected for testing, NGA Center was unable to provide documentation showing review and approval of the cash drawdown requests. • For one (1) out of two (2) samples selected for testing, NGA Center was unable to provide the supporting calculation of the cash drawdown request. • In addition, expenditures reflected in the cash drawdown requests are not reconciled with the general ledger. During the first half of fiscal year 2022, compensated absences and fringe benefits were included in the cash drawdown request, however, NGA Center did not record the transactions in the general ledger during that period. Also, certain contractual services recorded in the general ledger during the last three quarters were excluded on the cash drawdown requests. Questioned Costs – Not determinable. Context – This is a condition identified per review of NGA Center’s compliance with the provisions of the grant agreements and general compliance principles. Cause – NGA Center did not appear to exercise due diligence in requesting Federal funds consistent with the grant agreements and its actual cash needs. Effect – NGA Center is not in compliance with the stated provisions. The opportunity to use the money for other immediate cash needs is unnecessarily delayed when funds are not requested timely. Repeat Finding – This is not a repeat finding. Recommendation - We recommend that NGA Center comply with the provisions of the grant agreements and request Federal funds consistent with the grant agreement funding techniques and clearance patterns for these programs. Views of Responsible Officials – NGA Center agrees with the finding and recommendations of this finding set forth within and has developed a corrective action plan to address the lapse in the prescribed internal controls.
2022-005 - Internal Control Over Compliance and Compliance – Cash Management Program- U.S. Department of Energy, Environmental Monitoring/Cleanup, Cultural and Resource Management Emergency Response Research, Outreach, Technical Analysis ALN: 81.214, Award #: DE-EM0005173, Award Year: 04/23/2018 – 06/30/2023 Program- U.S. Department of Health and Human Services, Strengthening Public Health Systems and Services through National Partnerships to Improve and Protect the Nation’s Health ALN: 93.421, Award #: Various, Award Year: 08/01/2018 – 07/31/2023 Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. In accordance with 2 CFR Section 200.305(b)(3), for non-Federal entities funded under the reimbursement method, reimbursement requests should be supported by documentation to verify that the entity paid for the costs for which reimbursement was requested prior to the date of the reimbursement request. Condition – During our cash management testing for major program ALN 81.214, we noted the following: • For three (3) out of four (4) samples selected for testing, NGA Center was unable to provide documentation showing review and approval of the cash drawdown requests. • For one (1) out of four (4) sample selected for testing, NGA Center was unable to provide the supporting calculation of the cash drawdown request. • In addition, expenditures reflected in the cash drawdown requests were not reconciled with the general ledger. For the first three quarters of fiscal year 2022, the compensated absences and fringe benefits were included in the cash drawdown requests, however, NGA Center did not record the transactions in the general ledger during those quarters. Also, certain contractual services recorded in the general ledger during the last quarter of fiscal year 2022 were excluded on the cash drawdown request. During our cash management testing for major program ALN 93.421, we noted the following: • For two (2) out of two (2) samples selected for testing, NGA Center was unable to provide documentation showing review and approval of the cash drawdown requests. • For one (1) out of two (2) samples selected for testing, NGA Center was unable to provide the supporting calculation of the cash drawdown request. • In addition, expenditures reflected in the cash drawdown requests are not reconciled with the general ledger. During the first half of fiscal year 2022, compensated absences and fringe benefits were included in the cash drawdown request, however, NGA Center did not record the transactions in the general ledger during that period. Also, certain contractual services recorded in the general ledger during the last three quarters were excluded on the cash drawdown requests. Questioned Costs – Not determinable. Context – This is a condition identified per review of NGA Center’s compliance with the provisions of the grant agreements and general compliance principles. Cause – NGA Center did not appear to exercise due diligence in requesting Federal funds consistent with the grant agreements and its actual cash needs. Effect – NGA Center is not in compliance with the stated provisions. The opportunity to use the money for other immediate cash needs is unnecessarily delayed when funds are not requested timely. Repeat Finding – This is not a repeat finding. Recommendation - We recommend that NGA Center comply with the provisions of the grant agreements and request Federal funds consistent with the grant agreement funding techniques and clearance patterns for these programs. Views of Responsible Officials – NGA Center agrees with the finding and recommendations of this finding set forth within and has developed a corrective action plan to address the lapse in the prescribed internal controls.
2022-005 - Internal Control Over Compliance and Compliance – Cash Management Program- U.S. Department of Energy, Environmental Monitoring/Cleanup, Cultural and Resource Management Emergency Response Research, Outreach, Technical Analysis ALN: 81.214, Award #: DE-EM0005173, Award Year: 04/23/2018 – 06/30/2023 Program- U.S. Department of Health and Human Services, Strengthening Public Health Systems and Services through National Partnerships to Improve and Protect the Nation’s Health ALN: 93.421, Award #: Various, Award Year: 08/01/2018 – 07/31/2023 Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. In accordance with 2 CFR Section 200.305(b)(3), for non-Federal entities funded under the reimbursement method, reimbursement requests should be supported by documentation to verify that the entity paid for the costs for which reimbursement was requested prior to the date of the reimbursement request. Condition – During our cash management testing for major program ALN 81.214, we noted the following: • For three (3) out of four (4) samples selected for testing, NGA Center was unable to provide documentation showing review and approval of the cash drawdown requests. • For one (1) out of four (4) sample selected for testing, NGA Center was unable to provide the supporting calculation of the cash drawdown request. • In addition, expenditures reflected in the cash drawdown requests were not reconciled with the general ledger. For the first three quarters of fiscal year 2022, the compensated absences and fringe benefits were included in the cash drawdown requests, however, NGA Center did not record the transactions in the general ledger during those quarters. Also, certain contractual services recorded in the general ledger during the last quarter of fiscal year 2022 were excluded on the cash drawdown request. During our cash management testing for major program ALN 93.421, we noted the following: • For two (2) out of two (2) samples selected for testing, NGA Center was unable to provide documentation showing review and approval of the cash drawdown requests. • For one (1) out of two (2) samples selected for testing, NGA Center was unable to provide the supporting calculation of the cash drawdown request. • In addition, expenditures reflected in the cash drawdown requests are not reconciled with the general ledger. During the first half of fiscal year 2022, compensated absences and fringe benefits were included in the cash drawdown request, however, NGA Center did not record the transactions in the general ledger during that period. Also, certain contractual services recorded in the general ledger during the last three quarters were excluded on the cash drawdown requests. Questioned Costs – Not determinable. Context – This is a condition identified per review of NGA Center’s compliance with the provisions of the grant agreements and general compliance principles. Cause – NGA Center did not appear to exercise due diligence in requesting Federal funds consistent with the grant agreements and its actual cash needs. Effect – NGA Center is not in compliance with the stated provisions. The opportunity to use the money for other immediate cash needs is unnecessarily delayed when funds are not requested timely. Repeat Finding – This is not a repeat finding. Recommendation - We recommend that NGA Center comply with the provisions of the grant agreements and request Federal funds consistent with the grant agreement funding techniques and clearance patterns for these programs. Views of Responsible Officials – NGA Center agrees with the finding and recommendations of this finding set forth within and has developed a corrective action plan to address the lapse in the prescribed internal controls.
2022-005 - Internal Control Over Compliance and Compliance – Cash Management Program- U.S. Department of Energy, Environmental Monitoring/Cleanup, Cultural and Resource Management Emergency Response Research, Outreach, Technical Analysis ALN: 81.214, Award #: DE-EM0005173, Award Year: 04/23/2018 – 06/30/2023 Program- U.S. Department of Health and Human Services, Strengthening Public Health Systems and Services through National Partnerships to Improve and Protect the Nation’s Health ALN: 93.421, Award #: Various, Award Year: 08/01/2018 – 07/31/2023 Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. In accordance with 2 CFR Section 200.305(b)(3), for non-Federal entities funded under the reimbursement method, reimbursement requests should be supported by documentation to verify that the entity paid for the costs for which reimbursement was requested prior to the date of the reimbursement request. Condition – During our cash management testing for major program ALN 81.214, we noted the following: • For three (3) out of four (4) samples selected for testing, NGA Center was unable to provide documentation showing review and approval of the cash drawdown requests. • For one (1) out of four (4) sample selected for testing, NGA Center was unable to provide the supporting calculation of the cash drawdown request. • In addition, expenditures reflected in the cash drawdown requests were not reconciled with the general ledger. For the first three quarters of fiscal year 2022, the compensated absences and fringe benefits were included in the cash drawdown requests, however, NGA Center did not record the transactions in the general ledger during those quarters. Also, certain contractual services recorded in the general ledger during the last quarter of fiscal year 2022 were excluded on the cash drawdown request. During our cash management testing for major program ALN 93.421, we noted the following: • For two (2) out of two (2) samples selected for testing, NGA Center was unable to provide documentation showing review and approval of the cash drawdown requests. • For one (1) out of two (2) samples selected for testing, NGA Center was unable to provide the supporting calculation of the cash drawdown request. • In addition, expenditures reflected in the cash drawdown requests are not reconciled with the general ledger. During the first half of fiscal year 2022, compensated absences and fringe benefits were included in the cash drawdown request, however, NGA Center did not record the transactions in the general ledger during that period. Also, certain contractual services recorded in the general ledger during the last three quarters were excluded on the cash drawdown requests. Questioned Costs – Not determinable. Context – This is a condition identified per review of NGA Center’s compliance with the provisions of the grant agreements and general compliance principles. Cause – NGA Center did not appear to exercise due diligence in requesting Federal funds consistent with the grant agreements and its actual cash needs. Effect – NGA Center is not in compliance with the stated provisions. The opportunity to use the money for other immediate cash needs is unnecessarily delayed when funds are not requested timely. Repeat Finding – This is not a repeat finding. Recommendation - We recommend that NGA Center comply with the provisions of the grant agreements and request Federal funds consistent with the grant agreement funding techniques and clearance patterns for these programs. Views of Responsible Officials – NGA Center agrees with the finding and recommendations of this finding set forth within and has developed a corrective action plan to address the lapse in the prescribed internal controls.
2022-005 - Internal Control Over Compliance and Compliance – Cash Management Program- U.S. Department of Energy, Environmental Monitoring/Cleanup, Cultural and Resource Management Emergency Response Research, Outreach, Technical Analysis ALN: 81.214, Award #: DE-EM0005173, Award Year: 04/23/2018 – 06/30/2023 Program- U.S. Department of Health and Human Services, Strengthening Public Health Systems and Services through National Partnerships to Improve and Protect the Nation’s Health ALN: 93.421, Award #: Various, Award Year: 08/01/2018 – 07/31/2023 Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. In accordance with 2 CFR Section 200.305(b)(3), for non-Federal entities funded under the reimbursement method, reimbursement requests should be supported by documentation to verify that the entity paid for the costs for which reimbursement was requested prior to the date of the reimbursement request. Condition – During our cash management testing for major program ALN 81.214, we noted the following: • For three (3) out of four (4) samples selected for testing, NGA Center was unable to provide documentation showing review and approval of the cash drawdown requests. • For one (1) out of four (4) sample selected for testing, NGA Center was unable to provide the supporting calculation of the cash drawdown request. • In addition, expenditures reflected in the cash drawdown requests were not reconciled with the general ledger. For the first three quarters of fiscal year 2022, the compensated absences and fringe benefits were included in the cash drawdown requests, however, NGA Center did not record the transactions in the general ledger during those quarters. Also, certain contractual services recorded in the general ledger during the last quarter of fiscal year 2022 were excluded on the cash drawdown request. During our cash management testing for major program ALN 93.421, we noted the following: • For two (2) out of two (2) samples selected for testing, NGA Center was unable to provide documentation showing review and approval of the cash drawdown requests. • For one (1) out of two (2) samples selected for testing, NGA Center was unable to provide the supporting calculation of the cash drawdown request. • In addition, expenditures reflected in the cash drawdown requests are not reconciled with the general ledger. During the first half of fiscal year 2022, compensated absences and fringe benefits were included in the cash drawdown request, however, NGA Center did not record the transactions in the general ledger during that period. Also, certain contractual services recorded in the general ledger during the last three quarters were excluded on the cash drawdown requests. Questioned Costs – Not determinable. Context – This is a condition identified per review of NGA Center’s compliance with the provisions of the grant agreements and general compliance principles. Cause – NGA Center did not appear to exercise due diligence in requesting Federal funds consistent with the grant agreements and its actual cash needs. Effect – NGA Center is not in compliance with the stated provisions. The opportunity to use the money for other immediate cash needs is unnecessarily delayed when funds are not requested timely. Repeat Finding – This is not a repeat finding. Recommendation - We recommend that NGA Center comply with the provisions of the grant agreements and request Federal funds consistent with the grant agreement funding techniques and clearance patterns for these programs. Views of Responsible Officials – NGA Center agrees with the finding and recommendations of this finding set forth within and has developed a corrective action plan to address the lapse in the prescribed internal controls.
2022-005 - Internal Control Over Compliance and Compliance – Cash Management Program- U.S. Department of Energy, Environmental Monitoring/Cleanup, Cultural and Resource Management Emergency Response Research, Outreach, Technical Analysis ALN: 81.214, Award #: DE-EM0005173, Award Year: 04/23/2018 – 06/30/2023 Program- U.S. Department of Health and Human Services, Strengthening Public Health Systems and Services through National Partnerships to Improve and Protect the Nation’s Health ALN: 93.421, Award #: Various, Award Year: 08/01/2018 – 07/31/2023 Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. In accordance with 2 CFR Section 200.305(b)(3), for non-Federal entities funded under the reimbursement method, reimbursement requests should be supported by documentation to verify that the entity paid for the costs for which reimbursement was requested prior to the date of the reimbursement request. Condition – During our cash management testing for major program ALN 81.214, we noted the following: • For three (3) out of four (4) samples selected for testing, NGA Center was unable to provide documentation showing review and approval of the cash drawdown requests. • For one (1) out of four (4) sample selected for testing, NGA Center was unable to provide the supporting calculation of the cash drawdown request. • In addition, expenditures reflected in the cash drawdown requests were not reconciled with the general ledger. For the first three quarters of fiscal year 2022, the compensated absences and fringe benefits were included in the cash drawdown requests, however, NGA Center did not record the transactions in the general ledger during those quarters. Also, certain contractual services recorded in the general ledger during the last quarter of fiscal year 2022 were excluded on the cash drawdown request. During our cash management testing for major program ALN 93.421, we noted the following: • For two (2) out of two (2) samples selected for testing, NGA Center was unable to provide documentation showing review and approval of the cash drawdown requests. • For one (1) out of two (2) samples selected for testing, NGA Center was unable to provide the supporting calculation of the cash drawdown request. • In addition, expenditures reflected in the cash drawdown requests are not reconciled with the general ledger. During the first half of fiscal year 2022, compensated absences and fringe benefits were included in the cash drawdown request, however, NGA Center did not record the transactions in the general ledger during that period. Also, certain contractual services recorded in the general ledger during the last three quarters were excluded on the cash drawdown requests. Questioned Costs – Not determinable. Context – This is a condition identified per review of NGA Center’s compliance with the provisions of the grant agreements and general compliance principles. Cause – NGA Center did not appear to exercise due diligence in requesting Federal funds consistent with the grant agreements and its actual cash needs. Effect – NGA Center is not in compliance with the stated provisions. The opportunity to use the money for other immediate cash needs is unnecessarily delayed when funds are not requested timely. Repeat Finding – This is not a repeat finding. Recommendation - We recommend that NGA Center comply with the provisions of the grant agreements and request Federal funds consistent with the grant agreement funding techniques and clearance patterns for these programs. Views of Responsible Officials – NGA Center agrees with the finding and recommendations of this finding set forth within and has developed a corrective action plan to address the lapse in the prescribed internal controls.
2022-005 - Internal Control Over Compliance and Compliance – Cash Management Program- U.S. Department of Energy, Environmental Monitoring/Cleanup, Cultural and Resource Management Emergency Response Research, Outreach, Technical Analysis ALN: 81.214, Award #: DE-EM0005173, Award Year: 04/23/2018 – 06/30/2023 Program- U.S. Department of Health and Human Services, Strengthening Public Health Systems and Services through National Partnerships to Improve and Protect the Nation’s Health ALN: 93.421, Award #: Various, Award Year: 08/01/2018 – 07/31/2023 Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. In accordance with 2 CFR Section 200.305(b)(3), for non-Federal entities funded under the reimbursement method, reimbursement requests should be supported by documentation to verify that the entity paid for the costs for which reimbursement was requested prior to the date of the reimbursement request. Condition – During our cash management testing for major program ALN 81.214, we noted the following: • For three (3) out of four (4) samples selected for testing, NGA Center was unable to provide documentation showing review and approval of the cash drawdown requests. • For one (1) out of four (4) sample selected for testing, NGA Center was unable to provide the supporting calculation of the cash drawdown request. • In addition, expenditures reflected in the cash drawdown requests were not reconciled with the general ledger. For the first three quarters of fiscal year 2022, the compensated absences and fringe benefits were included in the cash drawdown requests, however, NGA Center did not record the transactions in the general ledger during those quarters. Also, certain contractual services recorded in the general ledger during the last quarter of fiscal year 2022 were excluded on the cash drawdown request. During our cash management testing for major program ALN 93.421, we noted the following: • For two (2) out of two (2) samples selected for testing, NGA Center was unable to provide documentation showing review and approval of the cash drawdown requests. • For one (1) out of two (2) samples selected for testing, NGA Center was unable to provide the supporting calculation of the cash drawdown request. • In addition, expenditures reflected in the cash drawdown requests are not reconciled with the general ledger. During the first half of fiscal year 2022, compensated absences and fringe benefits were included in the cash drawdown request, however, NGA Center did not record the transactions in the general ledger during that period. Also, certain contractual services recorded in the general ledger during the last three quarters were excluded on the cash drawdown requests. Questioned Costs – Not determinable. Context – This is a condition identified per review of NGA Center’s compliance with the provisions of the grant agreements and general compliance principles. Cause – NGA Center did not appear to exercise due diligence in requesting Federal funds consistent with the grant agreements and its actual cash needs. Effect – NGA Center is not in compliance with the stated provisions. The opportunity to use the money for other immediate cash needs is unnecessarily delayed when funds are not requested timely. Repeat Finding – This is not a repeat finding. Recommendation - We recommend that NGA Center comply with the provisions of the grant agreements and request Federal funds consistent with the grant agreement funding techniques and clearance patterns for these programs. Views of Responsible Officials – NGA Center agrees with the finding and recommendations of this finding set forth within and has developed a corrective action plan to address the lapse in the prescribed internal controls.
Assistance Listing Number(s): 93.959 Name of Federal Program or Cluster: Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing Number(s): 93.788 Name of Federal Program or Cluster: State Targeted Response to the Opioid Crisis Grants Name of Federal Agency: Department of Health and Human Services Criteria or Specific Requirement: Non-Federal entities must minimize the time elapsing between the transfer of funds from the U.S. Treasury or pass-through entity and disbursement by the non-Federal entity for direct program or project costs and the proportionate share of allowable indirect costs (2 CFR section 200.305(b)). Condition and Context: The balance of refundable advances was not reconciled during the fiscal period, which should have informed the process for matching funding with expenses and the calculation of amounts requested to draw for contract expenses. Cause: Routines and habits lapsed during the changes in operations, staffing and management. Changes in key management positions has reduced the institutional knowledge and experience in this area. Effect or Potential Effect: Grant funding for reimbursement of expenses are not supported in the contract period and funds might be required to be returned to grantors. Repeat Finding: No Recommendation: For each contract, ARC must reconcile refundable advances routinely and in coordination with the recognition and allocation of allowable costs and to inform the determination of draw request amounts. While this did not occur during the year ended June 30, 2022, steps have been taken to reconcile all accounts subsequent to the report date. Views of Responsible Officials: A formalized and monitored process was implemented to reconcile refundable advances routinely and in coordination with the recognition and allocation of allowable costs effective August of 2023.
Assistance Listing Number(s): 93.959 Name of Federal Program or Cluster: Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing Number(s): 93.788 Name of Federal Program or Cluster: State Targeted Response to the Opioid Crisis Grants Name of Federal Agency: Department of Health and Human Services Criteria or Specific Requirement: Non-Federal entities must minimize the time elapsing between the transfer of funds from the U.S. Treasury or pass-through entity and disbursement by the non-Federal entity for direct program or project costs and the proportionate share of allowable indirect costs (2 CFR section 200.305(b)). Condition and Context: The balance of refundable advances was not reconciled during the fiscal period, which should have informed the process for matching funding with expenses and the calculation of amounts requested to draw for contract expenses. Cause: Routines and habits lapsed during the changes in operations, staffing and management. Changes in key management positions has reduced the institutional knowledge and experience in this area. Effect or Potential Effect: Grant funding for reimbursement of expenses are not supported in the contract period and funds might be required to be returned to grantors. Repeat Finding: No Recommendation: For each contract, ARC must reconcile refundable advances routinely and in coordination with the recognition and allocation of allowable costs and to inform the determination of draw request amounts. While this did not occur during the year ended June 30, 2022, steps have been taken to reconcile all accounts subsequent to the report date. Views of Responsible Officials: A formalized and monitored process was implemented to reconcile refundable advances routinely and in coordination with the recognition and allocation of allowable costs effective August of 2023.
Assistance Listings number and name: 84.425F COVID-19 Education Stabilization Fund—Institutional Portion Award number and year: P425F200677, May 4, 2020 through June 30, 2023 Federal agency: U.S. Department of Education Compliance requirements: Allowable costs/cost principles and cash management Questioned costs: $10,217,259 Condition—Contrary to federal guidance and regulations and Northern Arizona University’s (University) federal indirect cost agreement, for fiscal years 2020 through 2022, the University incorrectly calculated its federal indirect costs by applying its indirect cost rate to capital expenditures and lost revenues and requested and received reimbursement for direct program expenditures it did not incur. Effect—The University overcharged $10,217,259 of unallowed costs to its HEERF program’s institutional portion for fiscal years 2020 through 2022, resulting in less monies available to spend on allowable program costs for addressing institutional needs, such as defraying costs associated with COVID-19 (including lost revenue and payroll). These unallowed costs included $2,473,496 in indirect costs related to capital expenditures, $7,449,036 in indirect costs related to lost revenues, and $294,727 for direct expenditures it did not incur and that comprised 8.5 percent of the University’s portion of the program’s total federal award expenditures for fiscal years 2020 through 2022. The University returned these unallowed costs to the U.S. Department of Education (ED) on August 18, 2023. Cause—The University did not properly train the individual administering the program or require secondary reviews of indirect-cost calculations and reimbursement requests. Specifically, despite the requirements in its federal indirect cost rate agreement and ED’s guidance, the University’s administration reported that the individual performing the indirect-cost calculation was not properly trained on calculating indirect costs and therefore, did not realize that the indirect cost rate should not have been applied to capital expenditures and lost revenues. Also, the University did not follow written policy and have a second employee who was knowledgeable about the program review and approve the indirect-cost calculation for accuracy. Similarly, a second employee did not review reimbursement requests or reconcile program expenditures to its financial accounting system, and the University’s policy lacked such requirements. Criteria—Federal guidance and regulations require the University to follow its federal indirect cost agreement to apply and calculate indirect costs allocated to federal programs at the specific percentages for specific costs that comprise the program’s base expenditures.1 The University’s federal indirect cost agreement and ED’s guidance does not allow the University to apply an indirect cost rate to its capital expenditures and estimated amount of lost revenue.2 In addition, University policy requires an independent review and approval of all transactions recorded in its accounting system, including indirect-cost calculations, to ensure that they are appropriate, accurate, and comply with applicable laws and regulations (Northern Arizona University Comptroller Manual, CMP 603). Further, federal regulation requires the University to use the reimbursement method to administer the program, whereby the Office is reimbursed with federal program monies only after it spends its own monies for authorized program purposes and requests reimbursement from the federal grantor (2 CFR §200.305[b][3]). Finally, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—The University should: 1. Correctly calculate federal indirect costs by: a. Training employees responsible for calculating federal program indirect costs to properly apply the award’s indirect cost rate to only allowable program expenditures as outlined in the indirect cost agreement and grant awards. b. Following written policy for reviewing federal program transactions, including ensuring indirect-cost calculations are properly reviewed and approved. 2. Ensure only federal program costs incurred are requested for reimbursement by improving its written policy to require a second employee to reconcile program expenditures recorded on its financial accounting system to the reimbursement request before approving the request to be submitted to the federal grantor. The University’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy. 1 U.S. Department of Education. (2021). Higher Education Emergency Relief Fund III—Frequently Asked Questions, Question 43. Retrieved 5/19/2023 from https://www2.ed.gov/about/offices/list/ope/arpfaq.pdf. U.S. Office of Management and Budget. (2021). Appendix III to 2 CFR Part 200—Indirect (F&A) Costs Identification and Assignment, and Rate Determinations for Institutions of Higher Education. Retrieved 5/19/2023 from https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200/appendix-Appendix%20III%20to%20Part%20200. 2 Executive Office of the President, Office of Management and Budget. 2 CFR Part 200, Appendix XI Compliance Supplement, page 4-84.425-ESF-38. (2002). Retrieved 5/19/2023 from https://www.whitehouse.gov/wp-content/uploads/2022/05/2022-Compliance-Supplement_PDF_Rev_05.11.22.pdf.
Assistance Listings number and name: 84.425F COVID-19 Education Stabilization Fund—Institutional Portion Award number and year: P425F200677, May 4, 2020 through June 30, 2023 Federal agency: U.S. Department of Education Compliance requirements: Allowable costs/cost principles and cash management Questioned costs: $10,217,259 Condition—Contrary to federal guidance and regulations and Northern Arizona University’s (University) federal indirect cost agreement, for fiscal years 2020 through 2022, the University incorrectly calculated its federal indirect costs by applying its indirect cost rate to capital expenditures and lost revenues and requested and received reimbursement for direct program expenditures it did not incur. Effect—The University overcharged $10,217,259 of unallowed costs to its HEERF program’s institutional portion for fiscal years 2020 through 2022, resulting in less monies available to spend on allowable program costs for addressing institutional needs, such as defraying costs associated with COVID-19 (including lost revenue and payroll). These unallowed costs included $2,473,496 in indirect costs related to capital expenditures, $7,449,036 in indirect costs related to lost revenues, and $294,727 for direct expenditures it did not incur and that comprised 8.5 percent of the University’s portion of the program’s total federal award expenditures for fiscal years 2020 through 2022. The University returned these unallowed costs to the U.S. Department of Education (ED) on August 18, 2023. Cause—The University did not properly train the individual administering the program or require secondary reviews of indirect-cost calculations and reimbursement requests. Specifically, despite the requirements in its federal indirect cost rate agreement and ED’s guidance, the University’s administration reported that the individual performing the indirect-cost calculation was not properly trained on calculating indirect costs and therefore, did not realize that the indirect cost rate should not have been applied to capital expenditures and lost revenues. Also, the University did not follow written policy and have a second employee who was knowledgeable about the program review and approve the indirect-cost calculation for accuracy. Similarly, a second employee did not review reimbursement requests or reconcile program expenditures to its financial accounting system, and the University’s policy lacked such requirements. Criteria—Federal guidance and regulations require the University to follow its federal indirect cost agreement to apply and calculate indirect costs allocated to federal programs at the specific percentages for specific costs that comprise the program’s base expenditures.1 The University’s federal indirect cost agreement and ED’s guidance does not allow the University to apply an indirect cost rate to its capital expenditures and estimated amount of lost revenue.2 In addition, University policy requires an independent review and approval of all transactions recorded in its accounting system, including indirect-cost calculations, to ensure that they are appropriate, accurate, and comply with applicable laws and regulations (Northern Arizona University Comptroller Manual, CMP 603). Further, federal regulation requires the University to use the reimbursement method to administer the program, whereby the Office is reimbursed with federal program monies only after it spends its own monies for authorized program purposes and requests reimbursement from the federal grantor (2 CFR §200.305[b][3]). Finally, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—The University should: 1. Correctly calculate federal indirect costs by: a. Training employees responsible for calculating federal program indirect costs to properly apply the award’s indirect cost rate to only allowable program expenditures as outlined in the indirect cost agreement and grant awards. b. Following written policy for reviewing federal program transactions, including ensuring indirect-cost calculations are properly reviewed and approved. 2. Ensure only federal program costs incurred are requested for reimbursement by improving its written policy to require a second employee to reconcile program expenditures recorded on its financial accounting system to the reimbursement request before approving the request to be submitted to the federal grantor. The University’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy. 1 U.S. Department of Education. (2021). Higher Education Emergency Relief Fund III—Frequently Asked Questions, Question 43. Retrieved 5/19/2023 from https://www2.ed.gov/about/offices/list/ope/arpfaq.pdf. U.S. Office of Management and Budget. (2021). Appendix III to 2 CFR Part 200—Indirect (F&A) Costs Identification and Assignment, and Rate Determinations for Institutions of Higher Education. Retrieved 5/19/2023 from https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200/appendix-Appendix%20III%20to%20Part%20200. 2 Executive Office of the President, Office of Management and Budget. 2 CFR Part 200, Appendix XI Compliance Supplement, page 4-84.425-ESF-38. (2002). Retrieved 5/19/2023 from https://www.whitehouse.gov/wp-content/uploads/2022/05/2022-Compliance-Supplement_PDF_Rev_05.11.22.pdf.
Assistance Listings number and name: 84.425F COVID-19 Education Stabilization Fund—Institutional Portion Award number and year: P425F200677, May 4, 2020 through June 30, 2023 Federal agency: U.S. Department of Education Compliance requirements: Allowable costs/cost principles and cash management Questioned costs: $10,217,259 Condition—Contrary to federal guidance and regulations and Northern Arizona University’s (University) federal indirect cost agreement, for fiscal years 2020 through 2022, the University incorrectly calculated its federal indirect costs by applying its indirect cost rate to capital expenditures and lost revenues and requested and received reimbursement for direct program expenditures it did not incur. Effect—The University overcharged $10,217,259 of unallowed costs to its HEERF program’s institutional portion for fiscal years 2020 through 2022, resulting in less monies available to spend on allowable program costs for addressing institutional needs, such as defraying costs associated with COVID-19 (including lost revenue and payroll). These unallowed costs included $2,473,496 in indirect costs related to capital expenditures, $7,449,036 in indirect costs related to lost revenues, and $294,727 for direct expenditures it did not incur and that comprised 8.5 percent of the University’s portion of the program’s total federal award expenditures for fiscal years 2020 through 2022. The University returned these unallowed costs to the U.S. Department of Education (ED) on August 18, 2023. Cause—The University did not properly train the individual administering the program or require secondary reviews of indirect-cost calculations and reimbursement requests. Specifically, despite the requirements in its federal indirect cost rate agreement and ED’s guidance, the University’s administration reported that the individual performing the indirect-cost calculation was not properly trained on calculating indirect costs and therefore, did not realize that the indirect cost rate should not have been applied to capital expenditures and lost revenues. Also, the University did not follow written policy and have a second employee who was knowledgeable about the program review and approve the indirect-cost calculation for accuracy. Similarly, a second employee did not review reimbursement requests or reconcile program expenditures to its financial accounting system, and the University’s policy lacked such requirements. Criteria—Federal guidance and regulations require the University to follow its federal indirect cost agreement to apply and calculate indirect costs allocated to federal programs at the specific percentages for specific costs that comprise the program’s base expenditures.1 The University’s federal indirect cost agreement and ED’s guidance does not allow the University to apply an indirect cost rate to its capital expenditures and estimated amount of lost revenue.2 In addition, University policy requires an independent review and approval of all transactions recorded in its accounting system, including indirect-cost calculations, to ensure that they are appropriate, accurate, and comply with applicable laws and regulations (Northern Arizona University Comptroller Manual, CMP 603). Further, federal regulation requires the University to use the reimbursement method to administer the program, whereby the Office is reimbursed with federal program monies only after it spends its own monies for authorized program purposes and requests reimbursement from the federal grantor (2 CFR §200.305[b][3]). Finally, federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303). Recommendations—The University should: 1. Correctly calculate federal indirect costs by: a. Training employees responsible for calculating federal program indirect costs to properly apply the award’s indirect cost rate to only allowable program expenditures as outlined in the indirect cost agreement and grant awards. b. Following written policy for reviewing federal program transactions, including ensuring indirect-cost calculations are properly reviewed and approved. 2. Ensure only federal program costs incurred are requested for reimbursement by improving its written policy to require a second employee to reconcile program expenditures recorded on its financial accounting system to the reimbursement request before approving the request to be submitted to the federal grantor. The University’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy. 1 U.S. Department of Education. (2021). Higher Education Emergency Relief Fund III—Frequently Asked Questions, Question 43. Retrieved 5/19/2023 from https://www2.ed.gov/about/offices/list/ope/arpfaq.pdf. U.S. Office of Management and Budget. (2021). Appendix III to 2 CFR Part 200—Indirect (F&A) Costs Identification and Assignment, and Rate Determinations for Institutions of Higher Education. Retrieved 5/19/2023 from https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200/appendix-Appendix%20III%20to%20Part%20200. 2 Executive Office of the President, Office of Management and Budget. 2 CFR Part 200, Appendix XI Compliance Supplement, page 4-84.425-ESF-38. (2002). Retrieved 5/19/2023 from https://www.whitehouse.gov/wp-content/uploads/2022/05/2022-Compliance-Supplement_PDF_Rev_05.11.22.pdf.
Description: Cash Management for Subrecipient Expenditures Repeat Finding: No Type of Finding: Material weakness in internal controls and material non-compliance with the cash management compliance requirement Questioned Costs: None Major Program: AL # 64.033, VA Supportive Services for Veteran Families Program, #20-OR-430 and #20-OR-430-C3. Condition: During the year ended June 30, 2022, the Organization regularly drew down cash from the Payment Management System (PMS) for subrecipient expenditures but did not remit the related payments to the subrecipients in a timely manner. Review of supporting documentation submitted by subrecipients for their expenditures did not occur prior to drawing down the cash from PMS for the related expenditures. Criteria: Non-federal entities must minimize the time elapsing between the transfer of funds from the US Treasury or pass-through entity and disbursement by the non-federal entity (2 CFR section 200.305(b)). Cause: The Organization did not ensure its service provider was properly managing subrecipient cash requests and disbursements throughout the year and was not consistently reviewing subrecipient expenditure requests in a timely manner. Effect: As a result of the matter identified in the condition paragraph, a material weakness in the Organization’s internal controls over compliance and a material non-compliance exist for the cash management compliance requirement. Recommendation: We recommend the Organization implements procedures to ensure it is properly managing the timing of subrecipient cash requests and disbursements to comply with the cash management requirement. View of responsible officials: Management agrees with the assessment and has committed to a corrective action plan.
State Agency: Illinois Department of Revenue (IDOR) Federal Agency: U.S. Department of Treasury (Treasury) Program Name: COVID-19 – Homeowner Assistance Fund ALN and Program Expenditures: 21.026 ($209,795,189) Award Numbers: Various – See schedule of award numbers Federal Award Year: Various – See schedule of award numbers Questioned Costs: None Compliance Requirement: Cash Management Finding 2022-003: Failure to Monitor Subrecipient Cash Draws Type of Finding: Adverse opinion and material weaknessCondition Found: IDOR passed through most of the advance drawn funds to its subrecipient while reporting no activity had occurred for the COVID–19 – Homeowner Assistance Fund (HAF) program in the special report prepared during fiscal year 2022. The State designated IDOR as the State agency responsible for fiscal activities of the COVID-19 – HAF program. IDOR passed funding through to the Illinois Housing Development Authority (IHDA) (a component unit of the State) who works directly with program beneficiaries (eligible homeowners or subrecipients). During our audit procedures, we noted the State received $211,309,688 of COVID-19 – HAF program funding from the U.S. Treasury in January 2022. At the time of the January 2022 cash receipt, we noted IDOR had passed through $32,886,765 to IHDA. During our review of subrecipient payments (totaling $209,795,189) made to IHDA during the year ended June 30, 2022, we noted IHDA had only reported expenditures of $6,901,019 during the year ended June 30, 2022. Accordingly, IDOR had provided HAF program advances totaling $202,894,170 during the year ended June 30, 2022. IDOR did not have procedures in place to monitor whether IHDA had incurred or would be incurring program expenditures to minimize federal cash on hand. Additionally, the State prepared and submitted a one-time special report (Interim Report 1505-0269) that covered the reporting period beginning on the date of the COVID-19 – HAF program award (May 3, 2021) through January 31, 2022. The key line items in the special report included the following: • Number of unique Homeowners that received HAF assistance and subset(s) that are classified as Socially Disadvantaged and 100 percent Area Median Income (AMI) or less • Homeowners that received HAF assistance disaggregated by Program Design Element • Amount of assistance provided to Homeowners disaggregated by Program Design Element During our testing of the COVID-19 – HAF program special report, we noted the State did not report activity data for any of the key line items. Total subrecipient expenditures for the HAF program administered by the State were $209,795,189 during the year end June 30, 2022.Criteria or Requirement: 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)). In addition, 2 CFR 200.303 requires non-federal entities receiving Federal awards to establish and maintain internal control designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include establishing procedures to minimize the time elapsing between the transfer of funds to subrecipients and the subrecipient’s actual cash outlay for program costs. Cause: The State’s relationship with IHDA is a multi-agency initiative. IDOR’s role has historically been statutorily limited to funding agent. This role does not include expenditure monitoring or reporting responsibilities. There was confusion in fiscal year 2022 regarding which state agency would perform these tasks for the COVID grant money awarded to IHDA. Possible Asserted Effect: Failure to monitor whether subrecipients minimize the time between the receipt of federal funds and expenditure for program purposes may result in advance funding in excess of immediate cash needs. Additionally, failure to properly report program activities in required special reports inhibits the U.S. Treasury from properly monitoring program activities and progress. Repeat Finding: A similar finding was not reported in a prior year audit. (Finding Code No. 2022-003) Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend IDOR implement procedures to monitor subrecipients to ensure funds are requested only for expenditures which have been incurred or will be incurred within a reasonable time period to minimize federal cash on hand. Additionally, the State should implement procedures to ensure the COVID-19 – HAF program special report completely and accurately describes required program activities. Views of IDOR Officials: The IHDA Act was updated to allow IDOR to disburse COVID money. However, the language for the tasks to be performed by the funding agent was left unchanged. This ambiguity along with the reporting IHDA does to other agencies contributed to confusion regarding which agency was responsible for the grant expenditure monitoring and reporting. IDOR pursued legislative clarification. This resulted in the decision to transition the funding agent role to DHS.
Condition: The Center?s written policies and procedures related to financial management do not meet the requirements of 2 CFR 200, Subpart D and Subpart E. Criteria: According to 2 CFR Section 200.302.b and 2 CFR Section 200.305 of the Uniform Guidance, the Center is required to have a written financial management policy. Cause: The Center was unaware of requirements regarding policies and procedures outlined in the Uniform Guidance. Effect: Written policies necessary for non-Federal entities receiving federal funds were not in place. Repeat Finding: No Questioned Costs: None reported Recommendation: We recommend that the Center update their written policies and procedures that meet the requirements of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Views of Responsible Officials and Planned Corrective Action: We concur with the auditor?s finding and will update the Center?s written policies and procedures for the Uniform Guidance requirements.