Block Grants for Prevention and Treatment of Substance Abuse ALN No. 93.959 U.S. Department of Health and Human Services Opioid STR ALN No. 93.788 U.S. Department of Health and Human Services Criteria or Specific Requirement – Activities Allowed and Unallowed and Cost Principles – 2 CFR Part 200, Subpart E, and Period of Performance – 2 CFR sections 200.308, 200.309, and 200.403(h) Condition – A sample of 80 expenditures were selected from each of the following populations: • ALN No. 93.959 – 1,631 items totaling $1,399,666 • ALN No. 93.788 – 1,728 items totaling $2,664,710 The samples were not, and are not intended to be, statistically valid. Of the 80 expenditures tested from each grant program, the following were determined to lack appropriate supporting documentation to support being charged to grant program: • ALN No. 93.959 - 47 items totaling $48,756, including projected errors over the total population totaling $582,093 • ALN No. 93.788 - 7 items totaling $30,061, including projected errors over the total population totaling $138,133 The Organization did not have adequate supporting documentation demonstrating actual time and effort reporting and lacked evidence of supporting invoices. Cause – The Organization charged budgeted percentages to the grant programs without a system in place to monitor and track that actual time and effort was consistent with budgeted percentages. In addition, the Organization charged expenditures to the grant programs without evidence of supporting invoices. Effect or potential effect – Costs charged to the grant programs could have varied from actual time and effort. In addition, costs charged to the grant could not be supported by actual invoices. Questioned costs – • ALN No. 93.959 - $48,756 • ALN No. 93.788 - $30,061 Context – The Organization did not have a reasonable methodology of allocating costs to these grant programs and did not maintain proper supporting invoices. Identification as a repeat finding, if applicable – Repeat finding (2022-003). Recommendation – Management should implement policies and procedures that strengthen internal control over compliance in relation to activities allowed and cost principles. The policy and procedure should be designed to ensure that a reasonable allocation methodology is implemented and followed or that time and effort is certified by the employee on a regular basis. In addition, management should implement a document retention policy consistent with 2 CFR 200.334.
Block Grants for Prevention and Treatment of Substance Abuse ALN No. 93.959 U.S. Department of Health and Human Services Opioid STR ALN No. 93.788 U.S. Department of Health and Human Services Criteria or Specific Requirement – Activities Allowed and Unallowed and Cost Principles – 2 CFR Part 200, Subpart E, and Period of Performance – 2 CFR sections 200.308, 200.309, and 200.403(h) Condition – A sample of 80 expenditures were selected from each of the following populations: • ALN No. 93.959 – 1,631 items totaling $1,399,666 • ALN No. 93.788 – 1,728 items totaling $2,664,710 The samples were not, and are not intended to be, statistically valid. Of the 80 expenditures tested from each grant program, the following were determined to lack appropriate supporting documentation to support being charged to grant program: • ALN No. 93.959 - 47 items totaling $48,756, including projected errors over the total population totaling $582,093 • ALN No. 93.788 - 7 items totaling $30,061, including projected errors over the total population totaling $138,133 The Organization did not have adequate supporting documentation demonstrating actual time and effort reporting and lacked evidence of supporting invoices. Cause – The Organization charged budgeted percentages to the grant programs without a system in place to monitor and track that actual time and effort was consistent with budgeted percentages. In addition, the Organization charged expenditures to the grant programs without evidence of supporting invoices. Effect or potential effect – Costs charged to the grant programs could have varied from actual time and effort. In addition, costs charged to the grant could not be supported by actual invoices. Questioned costs – • ALN No. 93.959 - $48,756 • ALN No. 93.788 - $30,061 Context – The Organization did not have a reasonable methodology of allocating costs to these grant programs and did not maintain proper supporting invoices. Identification as a repeat finding, if applicable – Repeat finding (2022-003). Recommendation – Management should implement policies and procedures that strengthen internal control over compliance in relation to activities allowed and cost principles. The policy and procedure should be designed to ensure that a reasonable allocation methodology is implemented and followed or that time and effort is certified by the employee on a regular basis. In addition, management should implement a document retention policy consistent with 2 CFR 200.334.
US Department of Education Program Title: Education Stabilization Fund CFDA Number(s): 84.425C, 84.425D, 84.425U, 84.425W Federal Award Number: 201201-2122, 213712-2021, 213742-2122,213713-2122 & 2223 (COVID-19) Federal Award Year: July 1, 2022 to June 30, 2023 Pass-Through Entity: Passed-Through Michigan Department of Education Type of Compliance: Significant Deficiency (Activities Allowed/Unallowed and Allowable Costs) Criteria: The OMB requires that recipients of federal funds report deviations from the approved budget and request approvals from Federal awarding agencies for any revisions [2 CFR Part 200.308(b)]. Condition: The District submitted a final expenditure report to the State where certain line-item expenditures were reported in such a way that caused the report to appear over budget by greater than 10%. Cause: This condition was the result of the lack of oversight by appropriate personnel to review the final expenditure report before it was submitted to the State. Effect: As a result of this condition, the District did not fully comply with the budgeting requirement of expenditures being within 10% of the approved budget due to reporting expenditures in the wrong areas on the final expenditure report. Questioned Costs: None Perspective Information: The incident at hand appears to be an isolated instance as the business manager position has been turned over 3 times in the past 3 years. The District’s general ledger had expenditures that were properly spent in accordance with the approved budget and correctly classified in the general ledger, however, the District simply reported the wrong numbers on the Final Expenditure Report for certain Activities and Objects, but the correct amounts were spent in accordance with the approved budget. All of final expenditure report submissions after the incident did not have this same problem and were reported accurately. Recommendation: We recommend the District have appropriate personnel review the final expenditure report before final submission to the State. Views of Responsible Officials: There is a new business manager responsible for any future final expenditure report submissions. They will closely monitor this situation going forward to avoid this from happening in the future.
US Department of Education Program Title: Education Stabilization Fund CFDA Number(s): 84.425C, 84.425D, 84.425U, 84.425W Federal Award Number: 201201-2122, 213712-2021, 213742-2122,213713-2122 & 2223 (COVID-19) Federal Award Year: July 1, 2022 to June 30, 2023 Pass-Through Entity: Passed-Through Michigan Department of Education Type of Compliance: Significant Deficiency (Activities Allowed/Unallowed and Allowable Costs) Criteria: The OMB requires that recipients of federal funds report deviations from the approved budget and request approvals from Federal awarding agencies for any revisions [2 CFR Part 200.308(b)]. Condition: The District submitted a final expenditure report to the State where certain line-item expenditures were reported in such a way that caused the report to appear over budget by greater than 10%. Cause: This condition was the result of the lack of oversight by appropriate personnel to review the final expenditure report before it was submitted to the State. Effect: As a result of this condition, the District did not fully comply with the budgeting requirement of expenditures being within 10% of the approved budget due to reporting expenditures in the wrong areas on the final expenditure report. Questioned Costs: None Perspective Information: The incident at hand appears to be an isolated instance as the business manager position has been turned over 3 times in the past 3 years. The District’s general ledger had expenditures that were properly spent in accordance with the approved budget and correctly classified in the general ledger, however, the District simply reported the wrong numbers on the Final Expenditure Report for certain Activities and Objects, but the correct amounts were spent in accordance with the approved budget. All of final expenditure report submissions after the incident did not have this same problem and were reported accurately. Recommendation: We recommend the District have appropriate personnel review the final expenditure report before final submission to the State. Views of Responsible Officials: There is a new business manager responsible for any future final expenditure report submissions. They will closely monitor this situation going forward to avoid this from happening in the future.
US Department of Education Program Title: Education Stabilization Fund CFDA Number(s): 84.425C, 84.425D, 84.425U, 84.425W Federal Award Number: 201201-2122, 213712-2021, 213742-2122,213713-2122 & 2223 (COVID-19) Federal Award Year: July 1, 2022 to June 30, 2023 Pass-Through Entity: Passed-Through Michigan Department of Education Type of Compliance: Significant Deficiency (Activities Allowed/Unallowed and Allowable Costs) Criteria: The OMB requires that recipients of federal funds report deviations from the approved budget and request approvals from Federal awarding agencies for any revisions [2 CFR Part 200.308(b)]. Condition: The District submitted a final expenditure report to the State where certain line-item expenditures were reported in such a way that caused the report to appear over budget by greater than 10%. Cause: This condition was the result of the lack of oversight by appropriate personnel to review the final expenditure report before it was submitted to the State. Effect: As a result of this condition, the District did not fully comply with the budgeting requirement of expenditures being within 10% of the approved budget due to reporting expenditures in the wrong areas on the final expenditure report. Questioned Costs: None Perspective Information: The incident at hand appears to be an isolated instance as the business manager position has been turned over 3 times in the past 3 years. The District’s general ledger had expenditures that were properly spent in accordance with the approved budget and correctly classified in the general ledger, however, the District simply reported the wrong numbers on the Final Expenditure Report for certain Activities and Objects, but the correct amounts were spent in accordance with the approved budget. All of final expenditure report submissions after the incident did not have this same problem and were reported accurately. Recommendation: We recommend the District have appropriate personnel review the final expenditure report before final submission to the State. Views of Responsible Officials: There is a new business manager responsible for any future final expenditure report submissions. They will closely monitor this situation going forward to avoid this from happening in the future.
US Department of Education Program Title: Education Stabilization Fund CFDA Number(s): 84.425C, 84.425D, 84.425U, 84.425W Federal Award Number: 201201-2122, 213712-2021, 213742-2122,213713-2122 & 2223 (COVID-19) Federal Award Year: July 1, 2022 to June 30, 2023 Pass-Through Entity: Passed-Through Michigan Department of Education Type of Compliance: Significant Deficiency (Activities Allowed/Unallowed and Allowable Costs) Criteria: The OMB requires that recipients of federal funds report deviations from the approved budget and request approvals from Federal awarding agencies for any revisions [2 CFR Part 200.308(b)]. Condition: The District submitted a final expenditure report to the State where certain line-item expenditures were reported in such a way that caused the report to appear over budget by greater than 10%. Cause: This condition was the result of the lack of oversight by appropriate personnel to review the final expenditure report before it was submitted to the State. Effect: As a result of this condition, the District did not fully comply with the budgeting requirement of expenditures being within 10% of the approved budget due to reporting expenditures in the wrong areas on the final expenditure report. Questioned Costs: None Perspective Information: The incident at hand appears to be an isolated instance as the business manager position has been turned over 3 times in the past 3 years. The District’s general ledger had expenditures that were properly spent in accordance with the approved budget and correctly classified in the general ledger, however, the District simply reported the wrong numbers on the Final Expenditure Report for certain Activities and Objects, but the correct amounts were spent in accordance with the approved budget. All of final expenditure report submissions after the incident did not have this same problem and were reported accurately. Recommendation: We recommend the District have appropriate personnel review the final expenditure report before final submission to the State. Views of Responsible Officials: There is a new business manager responsible for any future final expenditure report submissions. They will closely monitor this situation going forward to avoid this from happening in the future.
2023-005 – PERIOD OF PERFORMANCE Type: Significant Deficiency in Internal Control / Non-compliance Program: ALN 84.425 Education Stabilization Fund, COVID-19 - ESSER II – Credit Recovery Criteria: As detailed by 2 CFR 200.308, 2 CFR 200.309, and 2 CFR 200 403(h), A non-federal entity may only charge allowable costs incurred 1) during the approved budget period, or 2) before the approved budget period if authorized by the federal awarding agency or pass-through entity. Condition: During testing of amounts charged to the grants, it was noted that an amount charged to the grant was incurred outside the approved budget period of performance. Cause/Effect: This condition appears to be the result of a misunderstanding of costs allowed under this grant. These costs were not in compliance with 2 CFR 200. Recommendation: We recommend that the District review all grant agreements to gain a thorough understanding of the period of performance for each grant and then establish/modify internal controls to assure that only costs incurred within the approved budget period of performance are charged to the grant. View of Responsible Official: Management is in agreement with this recommendation
2023 – 002 INTERNAL CONTROLS OVER DISBURSEMENTS Significant Deficiency U.S. DEPARTMENTS OF EDUCATION Federal Assistance No. 84.425U COVID-19: ARP - Elementary and Secondary Schools Emergency Relief Passthrough Agency: New Mexico Public Education Department Award Period: July 1, 2022 – June 30, 2023 Allowable Costs/Cost Principles Condition: During the testing there was an invoice in the amount of $299,271 that was paid of twice during June 2023. The expenditure was submitted for reimbursement from federal funds. The District was notified by the vendor of the double payment while asking to use it as credit against a separate invoice. Criteria: PART 200—UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS § 200.303 Internal controls. 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. (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. § 200.403 Factors affecting allowability of costs. Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non- Federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period. See also § 200.306(b). (g) Be adequately documented. See also § 200.300 through 200.309 of this part. (h) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to § 200.308(e)(3). Cause: The facilities department submitted the invoice to the finance department for payment at the beginning of June and towards the end of June. The accounts payable clerk bypassed the system error that the invoice number had been entered previously. Questioned costs: $299,271 was the amount of the duplicate payment. The expenditure from the duplicate payment was not reported in the schedule of expenditures in federal awards and was reported as a receivable from the vendor in the financial statements for Fund 24330. Effect or potential effect: Expenditures could be overstated, as well as revenues, if invoices are paid more than once and then also reimbursed. As a result, a receivable and unearned income must be recognized. Recommendation: Training should be given to accounts payable staff regarding the importance system warnings and the need to monitor invoices form the vendors. A tracking system should be implemented for tracking major projects to ensure than invoices are not reported more than once. Invoices should be stamped received upon receipt, marked when applied to a major project, and marked recorded once entered into the accounting system. Management’s response: Executive Director of Finance: Management agrees with this finding. The school district converted to a new financial ERP system as of July 1, 2023. The new ERP system flags any duplicate invoice numbers that maybe entered. The Accounts Payable (A/P) staff will verify if payment has already been made. On occasion, payment requests do not have an invoice number. To prevent duplicate payments, the Accounts Payable staff require original invoices and uses a system generated invoice number, or a will use a manual entry numbering convention to prevent duplicate invoice numbers. The invoice data is entered by an Accounts Payable specialist and reviewed by the Accounts Payable Manager. On occasion, A/P must request corrected invoices from vendors who try and reuse invoice numbers. The A/P Manager reviews invoice numbers during the check run for accuracy. Purchasing and A/P will also periodically review the vendor database for duplicate vendors. For construction projects that list a pay application number instead of an invoice number, A/P will implement a consistent invoice numbering convention to avoid duplicate payments. The A/P specialists will also review the PO payment history prior to processing. Responsible party(ies) for corrective action(s): Accounts Payable Manager Corrective action(s) timeline: December 1, 2023
2023 – 002 INTERNAL CONTROLS OVER DISBURSEMENTS Significant Deficiency U.S. DEPARTMENTS OF EDUCATION Federal Assistance No. 84.425U COVID-19: ARP - Elementary and Secondary Schools Emergency Relief Passthrough Agency: New Mexico Public Education Department Award Period: July 1, 2022 – June 30, 2023 Allowable Costs/Cost Principles Condition: During the testing there was an invoice in the amount of $299,271 that was paid of twice during June 2023. The expenditure was submitted for reimbursement from federal funds. The District was notified by the vendor of the double payment while asking to use it as credit against a separate invoice. Criteria: PART 200—UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS § 200.303 Internal controls. 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. (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. § 200.403 Factors affecting allowability of costs. Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non- Federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period. See also § 200.306(b). (g) Be adequately documented. See also § 200.300 through 200.309 of this part. (h) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to § 200.308(e)(3). Cause: The facilities department submitted the invoice to the finance department for payment at the beginning of June and towards the end of June. The accounts payable clerk bypassed the system error that the invoice number had been entered previously. Questioned costs: $299,271 was the amount of the duplicate payment. The expenditure from the duplicate payment was not reported in the schedule of expenditures in federal awards and was reported as a receivable from the vendor in the financial statements for Fund 24330. Effect or potential effect: Expenditures could be overstated, as well as revenues, if invoices are paid more than once and then also reimbursed. As a result, a receivable and unearned income must be recognized. Recommendation: Training should be given to accounts payable staff regarding the importance system warnings and the need to monitor invoices form the vendors. A tracking system should be implemented for tracking major projects to ensure than invoices are not reported more than once. Invoices should be stamped received upon receipt, marked when applied to a major project, and marked recorded once entered into the accounting system. Management’s response: Executive Director of Finance: Management agrees with this finding. The school district converted to a new financial ERP system as of July 1, 2023. The new ERP system flags any duplicate invoice numbers that maybe entered. The Accounts Payable (A/P) staff will verify if payment has already been made. On occasion, payment requests do not have an invoice number. To prevent duplicate payments, the Accounts Payable staff require original invoices and uses a system generated invoice number, or a will use a manual entry numbering convention to prevent duplicate invoice numbers. The invoice data is entered by an Accounts Payable specialist and reviewed by the Accounts Payable Manager. On occasion, A/P must request corrected invoices from vendors who try and reuse invoice numbers. The A/P Manager reviews invoice numbers during the check run for accuracy. Purchasing and A/P will also periodically review the vendor database for duplicate vendors. For construction projects that list a pay application number instead of an invoice number, A/P will implement a consistent invoice numbering convention to avoid duplicate payments. The A/P specialists will also review the PO payment history prior to processing. Responsible party(ies) for corrective action(s): Accounts Payable Manager Corrective action(s) timeline: December 1, 2023
2023 – 002 INTERNAL CONTROLS OVER DISBURSEMENTS Significant Deficiency U.S. DEPARTMENTS OF EDUCATION Federal Assistance No. 84.425U COVID-19: ARP - Elementary and Secondary Schools Emergency Relief Passthrough Agency: New Mexico Public Education Department Award Period: July 1, 2022 – June 30, 2023 Allowable Costs/Cost Principles Condition: During the testing there was an invoice in the amount of $299,271 that was paid of twice during June 2023. The expenditure was submitted for reimbursement from federal funds. The District was notified by the vendor of the double payment while asking to use it as credit against a separate invoice. Criteria: PART 200—UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS § 200.303 Internal controls. 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. (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. § 200.403 Factors affecting allowability of costs. Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non- Federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period. See also § 200.306(b). (g) Be adequately documented. See also § 200.300 through 200.309 of this part. (h) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to § 200.308(e)(3). Cause: The facilities department submitted the invoice to the finance department for payment at the beginning of June and towards the end of June. The accounts payable clerk bypassed the system error that the invoice number had been entered previously. Questioned costs: $299,271 was the amount of the duplicate payment. The expenditure from the duplicate payment was not reported in the schedule of expenditures in federal awards and was reported as a receivable from the vendor in the financial statements for Fund 24330. Effect or potential effect: Expenditures could be overstated, as well as revenues, if invoices are paid more than once and then also reimbursed. As a result, a receivable and unearned income must be recognized. Recommendation: Training should be given to accounts payable staff regarding the importance system warnings and the need to monitor invoices form the vendors. A tracking system should be implemented for tracking major projects to ensure than invoices are not reported more than once. Invoices should be stamped received upon receipt, marked when applied to a major project, and marked recorded once entered into the accounting system. Management’s response: Executive Director of Finance: Management agrees with this finding. The school district converted to a new financial ERP system as of July 1, 2023. The new ERP system flags any duplicate invoice numbers that maybe entered. The Accounts Payable (A/P) staff will verify if payment has already been made. On occasion, payment requests do not have an invoice number. To prevent duplicate payments, the Accounts Payable staff require original invoices and uses a system generated invoice number, or a will use a manual entry numbering convention to prevent duplicate invoice numbers. The invoice data is entered by an Accounts Payable specialist and reviewed by the Accounts Payable Manager. On occasion, A/P must request corrected invoices from vendors who try and reuse invoice numbers. The A/P Manager reviews invoice numbers during the check run for accuracy. Purchasing and A/P will also periodically review the vendor database for duplicate vendors. For construction projects that list a pay application number instead of an invoice number, A/P will implement a consistent invoice numbering convention to avoid duplicate payments. The A/P specialists will also review the PO payment history prior to processing. Responsible party(ies) for corrective action(s): Accounts Payable Manager Corrective action(s) timeline: December 1, 2023
2023 – 002 INTERNAL CONTROLS OVER DISBURSEMENTS Significant Deficiency U.S. DEPARTMENTS OF EDUCATION Federal Assistance No. 84.425U COVID-19: ARP - Elementary and Secondary Schools Emergency Relief Passthrough Agency: New Mexico Public Education Department Award Period: July 1, 2022 – June 30, 2023 Allowable Costs/Cost Principles Condition: During the testing there was an invoice in the amount of $299,271 that was paid of twice during June 2023. The expenditure was submitted for reimbursement from federal funds. The District was notified by the vendor of the double payment while asking to use it as credit against a separate invoice. Criteria: PART 200—UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS § 200.303 Internal controls. 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. (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. § 200.403 Factors affecting allowability of costs. Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non- Federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period. See also § 200.306(b). (g) Be adequately documented. See also § 200.300 through 200.309 of this part. (h) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to § 200.308(e)(3). Cause: The facilities department submitted the invoice to the finance department for payment at the beginning of June and towards the end of June. The accounts payable clerk bypassed the system error that the invoice number had been entered previously. Questioned costs: $299,271 was the amount of the duplicate payment. The expenditure from the duplicate payment was not reported in the schedule of expenditures in federal awards and was reported as a receivable from the vendor in the financial statements for Fund 24330. Effect or potential effect: Expenditures could be overstated, as well as revenues, if invoices are paid more than once and then also reimbursed. As a result, a receivable and unearned income must be recognized. Recommendation: Training should be given to accounts payable staff regarding the importance system warnings and the need to monitor invoices form the vendors. A tracking system should be implemented for tracking major projects to ensure than invoices are not reported more than once. Invoices should be stamped received upon receipt, marked when applied to a major project, and marked recorded once entered into the accounting system. Management’s response: Executive Director of Finance: Management agrees with this finding. The school district converted to a new financial ERP system as of July 1, 2023. The new ERP system flags any duplicate invoice numbers that maybe entered. The Accounts Payable (A/P) staff will verify if payment has already been made. On occasion, payment requests do not have an invoice number. To prevent duplicate payments, the Accounts Payable staff require original invoices and uses a system generated invoice number, or a will use a manual entry numbering convention to prevent duplicate invoice numbers. The invoice data is entered by an Accounts Payable specialist and reviewed by the Accounts Payable Manager. On occasion, A/P must request corrected invoices from vendors who try and reuse invoice numbers. The A/P Manager reviews invoice numbers during the check run for accuracy. Purchasing and A/P will also periodically review the vendor database for duplicate vendors. For construction projects that list a pay application number instead of an invoice number, A/P will implement a consistent invoice numbering convention to avoid duplicate payments. The A/P specialists will also review the PO payment history prior to processing. Responsible party(ies) for corrective action(s): Accounts Payable Manager Corrective action(s) timeline: December 1, 2023
2023 – 002 INTERNAL CONTROLS OVER DISBURSEMENTS Significant Deficiency U.S. DEPARTMENTS OF EDUCATION Federal Assistance No. 84.425U COVID-19: ARP - Elementary and Secondary Schools Emergency Relief Passthrough Agency: New Mexico Public Education Department Award Period: July 1, 2022 – June 30, 2023 Allowable Costs/Cost Principles Condition: During the testing there was an invoice in the amount of $299,271 that was paid of twice during June 2023. The expenditure was submitted for reimbursement from federal funds. The District was notified by the vendor of the double payment while asking to use it as credit against a separate invoice. Criteria: PART 200—UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS § 200.303 Internal controls. 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. (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. § 200.403 Factors affecting allowability of costs. Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non- Federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period. See also § 200.306(b). (g) Be adequately documented. See also § 200.300 through 200.309 of this part. (h) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to § 200.308(e)(3). Cause: The facilities department submitted the invoice to the finance department for payment at the beginning of June and towards the end of June. The accounts payable clerk bypassed the system error that the invoice number had been entered previously. Questioned costs: $299,271 was the amount of the duplicate payment. The expenditure from the duplicate payment was not reported in the schedule of expenditures in federal awards and was reported as a receivable from the vendor in the financial statements for Fund 24330. Effect or potential effect: Expenditures could be overstated, as well as revenues, if invoices are paid more than once and then also reimbursed. As a result, a receivable and unearned income must be recognized. Recommendation: Training should be given to accounts payable staff regarding the importance system warnings and the need to monitor invoices form the vendors. A tracking system should be implemented for tracking major projects to ensure than invoices are not reported more than once. Invoices should be stamped received upon receipt, marked when applied to a major project, and marked recorded once entered into the accounting system. Management’s response: Executive Director of Finance: Management agrees with this finding. The school district converted to a new financial ERP system as of July 1, 2023. The new ERP system flags any duplicate invoice numbers that maybe entered. The Accounts Payable (A/P) staff will verify if payment has already been made. On occasion, payment requests do not have an invoice number. To prevent duplicate payments, the Accounts Payable staff require original invoices and uses a system generated invoice number, or a will use a manual entry numbering convention to prevent duplicate invoice numbers. The invoice data is entered by an Accounts Payable specialist and reviewed by the Accounts Payable Manager. On occasion, A/P must request corrected invoices from vendors who try and reuse invoice numbers. The A/P Manager reviews invoice numbers during the check run for accuracy. Purchasing and A/P will also periodically review the vendor database for duplicate vendors. For construction projects that list a pay application number instead of an invoice number, A/P will implement a consistent invoice numbering convention to avoid duplicate payments. The A/P specialists will also review the PO payment history prior to processing. Responsible party(ies) for corrective action(s): Accounts Payable Manager Corrective action(s) timeline: December 1, 2023
2023 – 002 INTERNAL CONTROLS OVER DISBURSEMENTS Significant Deficiency U.S. DEPARTMENTS OF EDUCATION Federal Assistance No. 84.425U COVID-19: ARP - Elementary and Secondary Schools Emergency Relief Passthrough Agency: New Mexico Public Education Department Award Period: July 1, 2022 – June 30, 2023 Allowable Costs/Cost Principles Condition: During the testing there was an invoice in the amount of $299,271 that was paid of twice during June 2023. The expenditure was submitted for reimbursement from federal funds. The District was notified by the vendor of the double payment while asking to use it as credit against a separate invoice. Criteria: PART 200—UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS § 200.303 Internal controls. 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. (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. § 200.403 Factors affecting allowability of costs. Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non- Federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period. See also § 200.306(b). (g) Be adequately documented. See also § 200.300 through 200.309 of this part. (h) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to § 200.308(e)(3). Cause: The facilities department submitted the invoice to the finance department for payment at the beginning of June and towards the end of June. The accounts payable clerk bypassed the system error that the invoice number had been entered previously. Questioned costs: $299,271 was the amount of the duplicate payment. The expenditure from the duplicate payment was not reported in the schedule of expenditures in federal awards and was reported as a receivable from the vendor in the financial statements for Fund 24330. Effect or potential effect: Expenditures could be overstated, as well as revenues, if invoices are paid more than once and then also reimbursed. As a result, a receivable and unearned income must be recognized. Recommendation: Training should be given to accounts payable staff regarding the importance system warnings and the need to monitor invoices form the vendors. A tracking system should be implemented for tracking major projects to ensure than invoices are not reported more than once. Invoices should be stamped received upon receipt, marked when applied to a major project, and marked recorded once entered into the accounting system. Management’s response: Executive Director of Finance: Management agrees with this finding. The school district converted to a new financial ERP system as of July 1, 2023. The new ERP system flags any duplicate invoice numbers that maybe entered. The Accounts Payable (A/P) staff will verify if payment has already been made. On occasion, payment requests do not have an invoice number. To prevent duplicate payments, the Accounts Payable staff require original invoices and uses a system generated invoice number, or a will use a manual entry numbering convention to prevent duplicate invoice numbers. The invoice data is entered by an Accounts Payable specialist and reviewed by the Accounts Payable Manager. On occasion, A/P must request corrected invoices from vendors who try and reuse invoice numbers. The A/P Manager reviews invoice numbers during the check run for accuracy. Purchasing and A/P will also periodically review the vendor database for duplicate vendors. For construction projects that list a pay application number instead of an invoice number, A/P will implement a consistent invoice numbering convention to avoid duplicate payments. The A/P specialists will also review the PO payment history prior to processing. Responsible party(ies) for corrective action(s): Accounts Payable Manager Corrective action(s) timeline: December 1, 2023
2023 – 002 INTERNAL CONTROLS OVER DISBURSEMENTS Significant Deficiency U.S. DEPARTMENTS OF EDUCATION Federal Assistance No. 84.425U COVID-19: ARP - Elementary and Secondary Schools Emergency Relief Passthrough Agency: New Mexico Public Education Department Award Period: July 1, 2022 – June 30, 2023 Allowable Costs/Cost Principles Condition: During the testing there was an invoice in the amount of $299,271 that was paid of twice during June 2023. The expenditure was submitted for reimbursement from federal funds. The District was notified by the vendor of the double payment while asking to use it as credit against a separate invoice. Criteria: PART 200—UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS § 200.303 Internal controls. 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. (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. § 200.403 Factors affecting allowability of costs. Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non- Federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period. See also § 200.306(b). (g) Be adequately documented. See also § 200.300 through 200.309 of this part. (h) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to § 200.308(e)(3). Cause: The facilities department submitted the invoice to the finance department for payment at the beginning of June and towards the end of June. The accounts payable clerk bypassed the system error that the invoice number had been entered previously. Questioned costs: $299,271 was the amount of the duplicate payment. The expenditure from the duplicate payment was not reported in the schedule of expenditures in federal awards and was reported as a receivable from the vendor in the financial statements for Fund 24330. Effect or potential effect: Expenditures could be overstated, as well as revenues, if invoices are paid more than once and then also reimbursed. As a result, a receivable and unearned income must be recognized. Recommendation: Training should be given to accounts payable staff regarding the importance system warnings and the need to monitor invoices form the vendors. A tracking system should be implemented for tracking major projects to ensure than invoices are not reported more than once. Invoices should be stamped received upon receipt, marked when applied to a major project, and marked recorded once entered into the accounting system. Management’s response: Executive Director of Finance: Management agrees with this finding. The school district converted to a new financial ERP system as of July 1, 2023. The new ERP system flags any duplicate invoice numbers that maybe entered. The Accounts Payable (A/P) staff will verify if payment has already been made. On occasion, payment requests do not have an invoice number. To prevent duplicate payments, the Accounts Payable staff require original invoices and uses a system generated invoice number, or a will use a manual entry numbering convention to prevent duplicate invoice numbers. The invoice data is entered by an Accounts Payable specialist and reviewed by the Accounts Payable Manager. On occasion, A/P must request corrected invoices from vendors who try and reuse invoice numbers. The A/P Manager reviews invoice numbers during the check run for accuracy. Purchasing and A/P will also periodically review the vendor database for duplicate vendors. For construction projects that list a pay application number instead of an invoice number, A/P will implement a consistent invoice numbering convention to avoid duplicate payments. The A/P specialists will also review the PO payment history prior to processing. Responsible party(ies) for corrective action(s): Accounts Payable Manager Corrective action(s) timeline: December 1, 2023
2023 – 002 INTERNAL CONTROLS OVER DISBURSEMENTS Significant Deficiency U.S. DEPARTMENTS OF EDUCATION Federal Assistance No. 84.425U COVID-19: ARP - Elementary and Secondary Schools Emergency Relief Passthrough Agency: New Mexico Public Education Department Award Period: July 1, 2022 – June 30, 2023 Allowable Costs/Cost Principles Condition: During the testing there was an invoice in the amount of $299,271 that was paid of twice during June 2023. The expenditure was submitted for reimbursement from federal funds. The District was notified by the vendor of the double payment while asking to use it as credit against a separate invoice. Criteria: PART 200—UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS § 200.303 Internal controls. 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. (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. § 200.403 Factors affecting allowability of costs. Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non- Federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period. See also § 200.306(b). (g) Be adequately documented. See also § 200.300 through 200.309 of this part. (h) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to § 200.308(e)(3). Cause: The facilities department submitted the invoice to the finance department for payment at the beginning of June and towards the end of June. The accounts payable clerk bypassed the system error that the invoice number had been entered previously. Questioned costs: $299,271 was the amount of the duplicate payment. The expenditure from the duplicate payment was not reported in the schedule of expenditures in federal awards and was reported as a receivable from the vendor in the financial statements for Fund 24330. Effect or potential effect: Expenditures could be overstated, as well as revenues, if invoices are paid more than once and then also reimbursed. As a result, a receivable and unearned income must be recognized. Recommendation: Training should be given to accounts payable staff regarding the importance system warnings and the need to monitor invoices form the vendors. A tracking system should be implemented for tracking major projects to ensure than invoices are not reported more than once. Invoices should be stamped received upon receipt, marked when applied to a major project, and marked recorded once entered into the accounting system. Management’s response: Executive Director of Finance: Management agrees with this finding. The school district converted to a new financial ERP system as of July 1, 2023. The new ERP system flags any duplicate invoice numbers that maybe entered. The Accounts Payable (A/P) staff will verify if payment has already been made. On occasion, payment requests do not have an invoice number. To prevent duplicate payments, the Accounts Payable staff require original invoices and uses a system generated invoice number, or a will use a manual entry numbering convention to prevent duplicate invoice numbers. The invoice data is entered by an Accounts Payable specialist and reviewed by the Accounts Payable Manager. On occasion, A/P must request corrected invoices from vendors who try and reuse invoice numbers. The A/P Manager reviews invoice numbers during the check run for accuracy. Purchasing and A/P will also periodically review the vendor database for duplicate vendors. For construction projects that list a pay application number instead of an invoice number, A/P will implement a consistent invoice numbering convention to avoid duplicate payments. The A/P specialists will also review the PO payment history prior to processing. Responsible party(ies) for corrective action(s): Accounts Payable Manager Corrective action(s) timeline: December 1, 2023
FINDING 2023-001 Federal Program Information: Research and Development Cluster (ALN: 47.047) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): H. Period of Performance - Per Uniform Guidance, (2 CFR sections 200.308), the auditee may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance. Condition: During our testing of research and development expenditures, we noted the following exception: • For 1 of the 25 selected research and development cluster grants had certain expenditures reported on the 2023 schedule of expenditures of federal awards that were incurred subsequent to the period of performance end date. Cause: Administrative oversight with respect to period of performance requirements. Effect or Potential Effect: The School is not properly following its policies and procedures in place to ensure compliance with period of performance requirements. Questioned Costs: $40,147 Context: We tested a sample of 25 research and development cluster grants and found 1 exception as noted in the condition with a total impact of $40,147. This is a condition identified per review of the School’s compliance with specific requirements using a statistically valid sample. Identification as a Repeat Finding: No similar findings noted in the prior year. Recommendation: We recommend that the School enhance its policies and procedures to ensure that expenditures are incurred and recorded during each grants’ respective performance period. Views of Responsible Officials and Planned Corrective Actions: We agree. The expenditures were reported on the schedule of expenditures for federal awards subsequent to the period of performance end date. These funds were not charged to the agency and are considered cost share for the grant as the work on the grant continued past the grant end date. We will review our grant close-out procedures to ensure that grants are closed out in a timely manner based on the grant end date preventing subsequent charges to the grant award.
Finding 2023-002: Questioned Cost – Material Weakness Criteria: A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity (2 CFR sections 200.308 200.309 and 200.403(h)). Also, costs should not be included as a cost of any other federally financed programs in either the current or prior period. Costs charged to federal grants should be reviewed by an individual familiar with the Cost Principles for Nonprofit Organizations contained in 2 CFR, Section 200 as part of the SEFA review process. Condition: Costs for US Department of Transportation, Mobility Management Grant 20.507 Section 5307 included a $30,000 charge for use of the Data Management System (DMS). The charge is based on a contract rate charged to outside entities that varies depending on the number of users. Management stated the charge was to recoup costs for use of the DMS. Costs for the DMS consist of historical costs to get the system functioning, along with current personnel costs to operate the system and provide the contracted training. The historical costs occurred outside the period of performance and are thus unallowable. Personnel costs are already being charged to the grant through the allocated payroll and benefits of trainers and other personnel, and thus should not also be charged through the contract rate. In addition, if the contract rate includes a profit component this would also be unallowable to charge to the grant. We also noted the same $30,000 charge was included in US Department of Transportation, Enhanced Mobility of Seniors and Individuals with Disabilities, Section 5310. Cause: Paratransit’s internal controls over the determination of allowable costs were not operating effectively. Effect: The DMS costs were removed and replaced with an allowable 10% de minimus overhead charge. Recommendation: We recommend that costs charged to federal grants be reviewed by an individual familiar with the Cost Principles for Nonprofit Organizations contained in 2 CFR, Section 200 as part of the SEFA review process. Management’s Response: See corrective action plan.
2023-001 ALLOWABLE COST, CASH MANAGEMENT, AND PERIOD OF PERFORMANCE - SIGNIFICANT DEFICIENCY Federal Program Unaccompanied Alien Children Program ALN 93.676 Criteria Part 3 of the Compliance Supplement indicates 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)). Part 3 of the Compliance Supplement indicates a non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity (2 CFR sections 200.308 200.309 and 200.403(h)). A period of performance may contain one or more budget periods. Condition/Cause In July 2022, the Home requested reimbursement and received funding to cover costs that had not yet been incurred or paid for as of June 30, 2023. Effect The Home was reimbursed for costs that were not incurred during the budget period. Additionally, the Home has held onto grant funds for twelve plus months. Questioned Costs Known questioned costs are $52,841. Context The Home budgeted to have new fire alarms installed in the cottages during the July 1, 2021 - June 30, 2022 grant budget period. Due to supply chain issues and labor shortages the alarms were not installed until the Fall of 2023 at which time the Home paid the contractor. Repeat Finding No. Recommendation We recommend the Home contact the funding agency to inquire about returning the funds and any interest earned. We also recommend that the Home revisit and strengthen internal controls over allowable activities, allowable costs, cash management, and period of availability related to grant programs. Management Response See corrective action plan included in this report package.
Reference Number: 2023-008 Prior Year Finding: 2022-017 Federal Agency: U.S. Department of Labor State Agency: Vermont Department of Labor Federal Program: Unemployment Insurance, COVID-19 – Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: UI393532355A50 (10/1/2022 – 12/31/2025) Compliance Requirement: Period of Performance Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: Compliance: A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity (2 CFR sections 200.308 200.309 and 200.403(h)). A period of performance may contain one or more budget periods. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Labor (Department) charged costs to the federal grant prior to the allowable start of the period of performance. Payments were also issued without review and approval by supervisory staff. Context: Sixty transactions were selected for testing and the following exceptions were noted: • Five of sixty transactions were charged to the award before the allowable period of performance. The grant award start date was October 1, 2022 but costs, totaling $2,277, were incurred in June, July and September 2022. • The Department’s key control is that all payments are supported by an invoice approved by a program manager who is aware of the grant’s period of performance. Four of sixty transactions did not have evidence of supervisory approval prior to issuance of payment. Section III – Findings and Questioned Costs – Major Federal Programs (Continued) Cause: The Department’s procedures and internal controls were not operating sufficiently to ensure that expenditures charged to the program were incurred within the award’s period of performance. Effect: Costs could be deemed unallowable by the awarding agency if funds are expended outside of the allowable period of performance. Questioned costs: Below the reportable limit. Recommendation: The Department should review and enhance its procedures and internal controls to ensure that it charges expenditures to the program that are incurred within an award’s allowable period of performance. Views of responsible officials: The Department acknowledges and accepts this finding.
Reference Number: 2023-008 Prior Year Finding: 2022-017 Federal Agency: U.S. Department of Labor State Agency: Vermont Department of Labor Federal Program: Unemployment Insurance, COVID-19 – Unemployment Insurance Assistance Listing Number: 17.225 Award Number and Year: UI393532355A50 (10/1/2022 – 12/31/2025) Compliance Requirement: Period of Performance Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: Compliance: A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity (2 CFR sections 200.308 200.309 and 200.403(h)). A period of performance may contain one or more budget periods. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Labor (Department) charged costs to the federal grant prior to the allowable start of the period of performance. Payments were also issued without review and approval by supervisory staff. Context: Sixty transactions were selected for testing and the following exceptions were noted: • Five of sixty transactions were charged to the award before the allowable period of performance. The grant award start date was October 1, 2022 but costs, totaling $2,277, were incurred in June, July and September 2022. • The Department’s key control is that all payments are supported by an invoice approved by a program manager who is aware of the grant’s period of performance. Four of sixty transactions did not have evidence of supervisory approval prior to issuance of payment. Section III – Findings and Questioned Costs – Major Federal Programs (Continued) Cause: The Department’s procedures and internal controls were not operating sufficiently to ensure that expenditures charged to the program were incurred within the award’s period of performance. Effect: Costs could be deemed unallowable by the awarding agency if funds are expended outside of the allowable period of performance. Questioned costs: Below the reportable limit. Recommendation: The Department should review and enhance its procedures and internal controls to ensure that it charges expenditures to the program that are incurred within an award’s allowable period of performance. Views of responsible officials: The Department acknowledges and accepts this finding.
Finding Number: 2023-001 – Period of Performance Information on Federal Program: National Endowment for the Humanities ALN: 45.309 ALN Name: Museum Grants for African American History and Culture Context: During testing we identified a 2024 expense in the amount of $24,323 which was inaccurately recorded in fiscal year 2023. Criteria: An entity may charge to the Federal award only allowable costs incurred during the approved budget period of a Federal award’s period of performance (2 CFR sections 200.308, 200.309, and 200.403(h)). Condition: A fiscal year 2024 expense in the amount of $24,323 was inaccurately recorded in fiscal year 2023. Cause: Policies and procedures were not adhered to ensure expenses are recorded in the correct period. Effect or Potential Effect: Expenses of $24,323 were improperly recorded in fiscal year 2023. Questioned Costs: N/A Recommendation: We recommend that the Library ensure its policies and procedures are followed on a consistent basis to ensure the proper recording of expenses in the correct period. Views of Responsible Officials: The Library agrees with the finding. The Library continues to take steps to improve this process. See the Library’s further response to this finding as described in the accompanying management's planned corrective actions, Appendix A.
FINDING: 2023-004 – Internal Control and Compliance over Period of Performance Federal Agency: Department of Health and Human Services Pass-through Agency: Pennsylvania Department of Community and Economic Development Program: 93.569 Community Services Block Grant and 93.569 COVID-19: Community Services Block Grant Statement of Condition: The Partnership drew federal CSBG funds in December 2022 in the amount of $36,853 to be used for an equipment purchase. The funds were not yet obligated for the purchase, as no contract was in place and Board approval was not yet obtained. In accordance with compliance requirements for CSBG funds, funds granted by the state to subgrantees are available to the subgrantee for obligation during the federal fiscal year that the grant was made and in the following federal fiscal year. Funds were not obligated within the appropriate time period (as of December 31, 2023). Criteria: In accordance with Uniform Guidance period of performance requirements found in 2 CFR section 200.1, 200.308, 200.309, and 200.344, the Partnership is required to ensure that funds are obligated with the required time frame of the period of performance. Effect: The Partnership was not in compliance with the period of performance requirements of the Uniform Guidance. Cause: Procedures in place to ensure that funds were utilized in the proper period of performance were not adequate. Questioned Costs: Unknown Repeat Finding: This is not a repeat finding. Recommendation: We recommend the Partnership establish procedures to ensure the funds are obligated and utilized in the proper period of performance. Views of responsible officials and planned corrective action: Management agrees with the finding. See attached corrective action plan.
FINDING: 2023-004 – Internal Control and Compliance over Period of Performance Federal Agency: Department of Health and Human Services Pass-through Agency: Pennsylvania Department of Community and Economic Development Program: 93.569 Community Services Block Grant and 93.569 COVID-19: Community Services Block Grant Statement of Condition: The Partnership drew federal CSBG funds in December 2022 in the amount of $36,853 to be used for an equipment purchase. The funds were not yet obligated for the purchase, as no contract was in place and Board approval was not yet obtained. In accordance with compliance requirements for CSBG funds, funds granted by the state to subgrantees are available to the subgrantee for obligation during the federal fiscal year that the grant was made and in the following federal fiscal year. Funds were not obligated within the appropriate time period (as of December 31, 2023). Criteria: In accordance with Uniform Guidance period of performance requirements found in 2 CFR section 200.1, 200.308, 200.309, and 200.344, the Partnership is required to ensure that funds are obligated with the required time frame of the period of performance. Effect: The Partnership was not in compliance with the period of performance requirements of the Uniform Guidance. Cause: Procedures in place to ensure that funds were utilized in the proper period of performance were not adequate. Questioned Costs: Unknown Repeat Finding: This is not a repeat finding. Recommendation: We recommend the Partnership establish procedures to ensure the funds are obligated and utilized in the proper period of performance. Views of responsible officials and planned corrective action: Management agrees with the finding. See attached corrective action plan.
Federal Agency: U.S. Department of Homeland Security Federal Program Name: Staffing for Adequate Fire and Emergency Response ALN: 97.083 Award Period: March 14, 2023 – March 13, 2026 Compliance Requirement: Period of Performance Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Prior Year Finding: No Criteria or specific requirement: Compliance – A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity (2 CFR sections 200.308 200.309 and 200.403(h)). A period of performance may contain one or more budget periods. Social Services Block Grant funds must be expended by the state in the fiscal year allotted or in the succeeding fiscal year. Control – Per 2 CFR Section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Homeland Security charged costs to the program that were incurred outside of the grant award’s period of performance. Context: One of the six pay-periods selected for testing, had expenditures totaling $19,871, that were incurred on March 13, 2023, which is prior to the award’s period of performance start date of March 14, 2023. Questioned costs: Known costs of $19,871. Cause: Personnel Costs for March 13, 2023 embedded in the pay period report of March 13, 2023 through March 26, 2023 were submitted as expenditures before the period of performance start date of March 14, 2023. This was caused by an oversight of removing the first day of employment March 13, 2023 from the expenditures when the first reimbursement was submitted for payment to FEMA. Effect: The Department was not compliant with the grant’s period of performance which could result in the grantor’s disallowance of the costs. Recommendation: We recommend that the Department review and enhance its procedures and controls to ensure that expenditures charged to the program are incurred within the grant’s period of performance. Views of responsible officials: We concur with your finding and have taken the following corrective action: 1. The error has been reported to FEMA and the transaction for correcting this error will be submitted with the next reimbursement request as a negative adjustment. 2. We are continuously monitoring the expenditure consistency with the grant award timeline. 3. We are working with our Grant Coordinator to ensure that all of our grants are consistent with the requirements of the award.
Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing Number: 93.959 Federal Award Identification Number and Year: 4512-9069 – 2023 Pass-Through Agency: Commonwealth of Massachusetts – Department of Public Health Pass-Through Number(s): SUBABUSETSSFY2300000702 Award Period: July 1, 2022 - June 30, 2024 Type of Finding: Period of Performance Significant Deficiency in Internal Control over Compliance Other Matters Criteria or specific requirement: 2 CFR sections 200.308, 200.309 and 200.403(h) states a non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity. Condition: Internal controls were not in place to ensure that grant expenses charged to the grant were during the approved federal award's period of performance. Questioned costs: None reportable. Context: For 7 of the 8 transactions tested, we identified the Commission charged expenditures to the grant that were incurred outside of the period of performance, prior to the start date of the grant. Cause: Procedures were not in place to ensure expenditures charged to the grant were incurred during the period of performance. Effect: The expenditures incurred before the period of performance are subject to disallowance and are considered questioned costs. Recommendation: We recommend procedures be implemented to ensure that all costs charged to the grant are incurred within the grant period of performance. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing Number: 93.959 Federal Award Identification Number and Year: 4512-9069 – 2023 Pass-Through Agency: Commonwealth of Massachusetts – Department of Public Health Pass-Through Number(s): SUBABUSETSSFY2300000702 Award Period: July 1, 2022 - June 30, 2024 Type of Finding: Period of Performance Significant Deficiency in Internal Control over Compliance Other Matters Criteria or specific requirement: 2 CFR sections 200.308, 200.309 and 200.403(h) states a non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity. Condition: Internal controls were not in place to ensure that grant expenses charged to the grant were during the approved federal award's period of performance. Questioned costs: None reportable. Context: For 7 of the 8 transactions tested, we identified the Commission charged expenditures to the grant that were incurred outside of the period of performance, prior to the start date of the grant. Cause: Procedures were not in place to ensure expenditures charged to the grant were incurred during the period of performance. Effect: The expenditures incurred before the period of performance are subject to disallowance and are considered questioned costs. Recommendation: We recommend procedures be implemented to ensure that all costs charged to the grant are incurred within the grant period of performance. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing Number: 93.959 Federal Award Identification Number and Year: 4512-9069 – 2023 Pass-Through Agency: Commonwealth of Massachusetts – Department of Public Health Pass-Through Number(s): SUBABUSETSSFY2300000702 Award Period: July 1, 2022 - June 30, 2024 Type of Finding: Period of Performance Significant Deficiency in Internal Control over Compliance Other Matters Criteria or specific requirement: 2 CFR sections 200.308, 200.309 and 200.403(h) states a non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity. Condition: Internal controls were not in place to ensure that grant expenses charged to the grant were during the approved federal award's period of performance. Questioned costs: None reportable. Context: For 7 of the 8 transactions tested, we identified the Commission charged expenditures to the grant that were incurred outside of the period of performance, prior to the start date of the grant. Cause: Procedures were not in place to ensure expenditures charged to the grant were incurred during the period of performance. Effect: The expenditures incurred before the period of performance are subject to disallowance and are considered questioned costs. Recommendation: We recommend procedures be implemented to ensure that all costs charged to the grant are incurred within the grant period of performance. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing Number: 93.959 Federal Award Identification Number and Year: 4512-9069 – 2023 Pass-Through Agency: Commonwealth of Massachusetts – Department of Public Health Pass-Through Number(s): SUBABUSETSSFY2300000702 Award Period: July 1, 2022 - June 30, 2024 Type of Finding: Period of Performance Significant Deficiency in Internal Control over Compliance Other Matters Criteria or specific requirement: 2 CFR sections 200.308, 200.309 and 200.403(h) states a non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity. Condition: Internal controls were not in place to ensure that grant expenses charged to the grant were during the approved federal award's period of performance. Questioned costs: None reportable. Context: For 7 of the 8 transactions tested, we identified the Commission charged expenditures to the grant that were incurred outside of the period of performance, prior to the start date of the grant. Cause: Procedures were not in place to ensure expenditures charged to the grant were incurred during the period of performance. Effect: The expenditures incurred before the period of performance are subject to disallowance and are considered questioned costs. Recommendation: We recommend procedures be implemented to ensure that all costs charged to the grant are incurred within the grant period of performance. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing Number: 93.959 Federal Award Identification Number and Year: 4512-9069 – 2023 Pass-Through Agency: Commonwealth of Massachusetts – Department of Public Health Pass-Through Number(s): SUBABUSETSSFY2300000702 Award Period: July 1, 2022 - June 30, 2024 Type of Finding: Period of Performance Significant Deficiency in Internal Control over Compliance Other Matters Criteria or specific requirement: 2 CFR sections 200.308, 200.309 and 200.403(h) states a non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity. Condition: Internal controls were not in place to ensure that grant expenses charged to the grant were during the approved federal award's period of performance. Questioned costs: None reportable. Context: For 7 of the 8 transactions tested, we identified the Commission charged expenditures to the grant that were incurred outside of the period of performance, prior to the start date of the grant. Cause: Procedures were not in place to ensure expenditures charged to the grant were incurred during the period of performance. Effect: The expenditures incurred before the period of performance are subject to disallowance and are considered questioned costs. Recommendation: We recommend procedures be implemented to ensure that all costs charged to the grant are incurred within the grant period of performance. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing Number: 93.959 Federal Award Identification Number and Year: 4512-9069 – 2023 Pass-Through Agency: Commonwealth of Massachusetts – Department of Public Health Pass-Through Number(s): SUBABUSETSSFY2300000702 Award Period: July 1, 2022 - June 30, 2024 Type of Finding: Period of Performance Significant Deficiency in Internal Control over Compliance Other Matters Criteria or specific requirement: 2 CFR sections 200.308, 200.309 and 200.403(h) states a non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity. Condition: Internal controls were not in place to ensure that grant expenses charged to the grant were during the approved federal award's period of performance. Questioned costs: None reportable. Context: For 7 of the 8 transactions tested, we identified the Commission charged expenditures to the grant that were incurred outside of the period of performance, prior to the start date of the grant. Cause: Procedures were not in place to ensure expenditures charged to the grant were incurred during the period of performance. Effect: The expenditures incurred before the period of performance are subject to disallowance and are considered questioned costs. Recommendation: We recommend procedures be implemented to ensure that all costs charged to the grant are incurred within the grant period of performance. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing Number: 93.959 Federal Award Identification Number and Year: 4512-9069 – 2023 Pass-Through Agency: Commonwealth of Massachusetts – Department of Public Health Pass-Through Number(s): SUBABUSETSSFY2300000702 Award Period: July 1, 2022 - June 30, 2024 Type of Finding: Period of Performance Significant Deficiency in Internal Control over Compliance Other Matters Criteria or specific requirement: 2 CFR sections 200.308, 200.309 and 200.403(h) states a non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity. Condition: Internal controls were not in place to ensure that grant expenses charged to the grant were during the approved federal award's period of performance. Questioned costs: None reportable. Context: For 7 of the 8 transactions tested, we identified the Commission charged expenditures to the grant that were incurred outside of the period of performance, prior to the start date of the grant. Cause: Procedures were not in place to ensure expenditures charged to the grant were incurred during the period of performance. Effect: The expenditures incurred before the period of performance are subject to disallowance and are considered questioned costs. Recommendation: We recommend procedures be implemented to ensure that all costs charged to the grant are incurred within the grant period of performance. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing Number: 93.959 Federal Award Identification Number and Year: 4512-9069 – 2023 Pass-Through Agency: Commonwealth of Massachusetts – Department of Public Health Pass-Through Number(s): SUBABUSETSSFY2300000702 Award Period: July 1, 2022 - June 30, 2024 Type of Finding: Period of Performance Significant Deficiency in Internal Control over Compliance Other Matters Criteria or specific requirement: 2 CFR sections 200.308, 200.309 and 200.403(h) states a non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity. Condition: Internal controls were not in place to ensure that grant expenses charged to the grant were during the approved federal award's period of performance. Questioned costs: None reportable. Context: For 7 of the 8 transactions tested, we identified the Commission charged expenditures to the grant that were incurred outside of the period of performance, prior to the start date of the grant. Cause: Procedures were not in place to ensure expenditures charged to the grant were incurred during the period of performance. Effect: The expenditures incurred before the period of performance are subject to disallowance and are considered questioned costs. Recommendation: We recommend procedures be implemented to ensure that all costs charged to the grant are incurred within the grant period of performance. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing Number: 93.959 Federal Award Identification Number and Year: 4512-9069 – 2023 Pass-Through Agency: Commonwealth of Massachusetts – Department of Public Health Pass-Through Number(s): SUBABUSETSSFY2300000702 Award Period: July 1, 2022 - June 30, 2024 Type of Finding: Period of Performance Significant Deficiency in Internal Control over Compliance Other Matters Criteria or specific requirement: 2 CFR sections 200.308, 200.309 and 200.403(h) states a non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity. Condition: Internal controls were not in place to ensure that grant expenses charged to the grant were during the approved federal award's period of performance. Questioned costs: None reportable. Context: For 7 of the 8 transactions tested, we identified the Commission charged expenditures to the grant that were incurred outside of the period of performance, prior to the start date of the grant. Cause: Procedures were not in place to ensure expenditures charged to the grant were incurred during the period of performance. Effect: The expenditures incurred before the period of performance are subject to disallowance and are considered questioned costs. Recommendation: We recommend procedures be implemented to ensure that all costs charged to the grant are incurred within the grant period of performance. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing Number: 93.959 Federal Award Identification Number and Year: 4512-9069 – 2023 Pass-Through Agency: Commonwealth of Massachusetts – Department of Public Health Pass-Through Number(s): SUBABUSETSSFY2300000702 Award Period: July 1, 2022 - June 30, 2024 Type of Finding: Period of Performance Significant Deficiency in Internal Control over Compliance Other Matters Criteria or specific requirement: 2 CFR sections 200.308, 200.309 and 200.403(h) states a non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity. Condition: Internal controls were not in place to ensure that grant expenses charged to the grant were during the approved federal award's period of performance. Questioned costs: None reportable. Context: For 7 of the 8 transactions tested, we identified the Commission charged expenditures to the grant that were incurred outside of the period of performance, prior to the start date of the grant. Cause: Procedures were not in place to ensure expenditures charged to the grant were incurred during the period of performance. Effect: The expenditures incurred before the period of performance are subject to disallowance and are considered questioned costs. Recommendation: We recommend procedures be implemented to ensure that all costs charged to the grant are incurred within the grant period of performance. Views of responsible officials: There is no disagreement with the audit finding.
2023-007 - Control Weakness and Noncompliance with Personnel Expenses Charged to Federal Awards Award Years: 2018, 2020, 2021, 2022 Award Numbers: 1815976, 2033380, 2117785, 2120015, 2000629518, 22-PA-11080600-187, 5U19AI142636-05, 75N93020D00008/75N93020F00004, DE-AC07-05ID14517, DE-SC0019956, EMW-2021-SS-00019-S01, NA20OAR4310253C Compliance Requirements: Allowable Costs/Cost Principles, Special Tests and Provisions Pass-Through Entities: Battelle Energy Alliance, Norwich Technologies Inc., University Corporation for Atmospheric Research Repeat Finding: Yes (Prior Year Finding No. 2022-006) See Schedule of Findings and Questioned Costs for chart/table Condition: For the third consecutive year, the University of Louisiana at Lafayette (UL Lafayette) did not have adequate controls in place to ensure personnel expenses charged to federal R&D awards accurately reflected work performed. From a population of 28,301 payroll and non-payroll expenses charged to R&D grants for the fiscal year ended June 30, 2023, a non-statistical sample of 25 transactions were tested for compliance with allowable costs and cost principles requirements. For five (20%) of the transactions, UL Lafayette was unable to provide documentation to show that personnel related expenses totaling $612 were supported by time and effort certifications to ensure the accuracy of budget estimates charged to federal awards as required by federal regulations. We reviewed 15 grant awards corresponding to the expense transactions selected and evaluated documentation to support the level of effort for each award and the 20 key personnel assigned to the selected awards. For 13 (65%) of the key personnel, UL Lafayette was unable to provide documentation that the key personnel complied with the effort required by the grant award. Criteria: 2 CFR 200.430(i) specifies the documentation standards for personnel expenses. In order to be allowable, charges to federal awards for personnel expenses must be based on records that accurately reflect the work performed and must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Budget estimates alone do not qualify as support for charges to federal awards, but can be used for interim accounting purposes provided that internal controls include an after-the fact review to confirm the accuracy of final amounts charged to federal awards. Prior approval requirements related to key personnel effort are contained in 2 CFR 200.308(c) and within grant terms and conditions. A reduction of 25% or greater in time devoted to the project from key personnel requires prior approval as does disengagement of key personnel from the project for three or more months. Cause: UL Lafayette noted in their prior-year corrective action plan and in a draft effort reporting policy that certifications for employees charging time to federal awards would be required quarterly. For the fiscal year ended June 30, 2023, certifications were only requested in July 2023, after the fiscal year-end, and were required to be returned within 30 days. Annual certifications are not sufficient to timely detect changes in key personnel effort and ensure prior approvals are obtained when applicable. Effect: Inadequate controls related to federal documentation standards for personnel expenses could result in noncompliance with federal allowable costs and cost principles, as well as noncompliance with special tests and provisions related to key personnel effort. Recommendation: Management should strengthen internal controls to ensure that personnel expenses charged to the federal awards are supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Additionally, management should revise the Time and Effort Certification policy or implement alternative controls designed to ensure compliance with special tests and provisions requirements. Management should monitor changes in effort for key personnel and ensure that prior written approval is obtained from the federal grantor for changes that exceed the thresholds set in federal regulations. Management’s Response and Corrective Action Plan: Management concurred with the finding and outlined a plan of corrective action (B-59).
2023-007 - Control Weakness and Noncompliance with Personnel Expenses Charged to Federal Awards Award Years: 2018, 2020, 2021, 2022 Award Numbers: 1815976, 2033380, 2117785, 2120015, 2000629518, 22-PA-11080600-187, 5U19AI142636-05, 75N93020D00008/75N93020F00004, DE-AC07-05ID14517, DE-SC0019956, EMW-2021-SS-00019-S01, NA20OAR4310253C Compliance Requirements: Allowable Costs/Cost Principles, Special Tests and Provisions Pass-Through Entities: Battelle Energy Alliance, Norwich Technologies Inc., University Corporation for Atmospheric Research Repeat Finding: Yes (Prior Year Finding No. 2022-006) See Schedule of Findings and Questioned Costs for chart/table Condition: For the third consecutive year, the University of Louisiana at Lafayette (UL Lafayette) did not have adequate controls in place to ensure personnel expenses charged to federal R&D awards accurately reflected work performed. From a population of 28,301 payroll and non-payroll expenses charged to R&D grants for the fiscal year ended June 30, 2023, a non-statistical sample of 25 transactions were tested for compliance with allowable costs and cost principles requirements. For five (20%) of the transactions, UL Lafayette was unable to provide documentation to show that personnel related expenses totaling $612 were supported by time and effort certifications to ensure the accuracy of budget estimates charged to federal awards as required by federal regulations. We reviewed 15 grant awards corresponding to the expense transactions selected and evaluated documentation to support the level of effort for each award and the 20 key personnel assigned to the selected awards. For 13 (65%) of the key personnel, UL Lafayette was unable to provide documentation that the key personnel complied with the effort required by the grant award. Criteria: 2 CFR 200.430(i) specifies the documentation standards for personnel expenses. In order to be allowable, charges to federal awards for personnel expenses must be based on records that accurately reflect the work performed and must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Budget estimates alone do not qualify as support for charges to federal awards, but can be used for interim accounting purposes provided that internal controls include an after-the fact review to confirm the accuracy of final amounts charged to federal awards. Prior approval requirements related to key personnel effort are contained in 2 CFR 200.308(c) and within grant terms and conditions. A reduction of 25% or greater in time devoted to the project from key personnel requires prior approval as does disengagement of key personnel from the project for three or more months. Cause: UL Lafayette noted in their prior-year corrective action plan and in a draft effort reporting policy that certifications for employees charging time to federal awards would be required quarterly. For the fiscal year ended June 30, 2023, certifications were only requested in July 2023, after the fiscal year-end, and were required to be returned within 30 days. Annual certifications are not sufficient to timely detect changes in key personnel effort and ensure prior approvals are obtained when applicable. Effect: Inadequate controls related to federal documentation standards for personnel expenses could result in noncompliance with federal allowable costs and cost principles, as well as noncompliance with special tests and provisions related to key personnel effort. Recommendation: Management should strengthen internal controls to ensure that personnel expenses charged to the federal awards are supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Additionally, management should revise the Time and Effort Certification policy or implement alternative controls designed to ensure compliance with special tests and provisions requirements. Management should monitor changes in effort for key personnel and ensure that prior written approval is obtained from the federal grantor for changes that exceed the thresholds set in federal regulations. Management’s Response and Corrective Action Plan: Management concurred with the finding and outlined a plan of corrective action (B-59).
2023-007 - Control Weakness and Noncompliance with Personnel Expenses Charged to Federal Awards Award Years: 2018, 2020, 2021, 2022 Award Numbers: 1815976, 2033380, 2117785, 2120015, 2000629518, 22-PA-11080600-187, 5U19AI142636-05, 75N93020D00008/75N93020F00004, DE-AC07-05ID14517, DE-SC0019956, EMW-2021-SS-00019-S01, NA20OAR4310253C Compliance Requirements: Allowable Costs/Cost Principles, Special Tests and Provisions Pass-Through Entities: Battelle Energy Alliance, Norwich Technologies Inc., University Corporation for Atmospheric Research Repeat Finding: Yes (Prior Year Finding No. 2022-006) See Schedule of Findings and Questioned Costs for chart/table Condition: For the third consecutive year, the University of Louisiana at Lafayette (UL Lafayette) did not have adequate controls in place to ensure personnel expenses charged to federal R&D awards accurately reflected work performed. From a population of 28,301 payroll and non-payroll expenses charged to R&D grants for the fiscal year ended June 30, 2023, a non-statistical sample of 25 transactions were tested for compliance with allowable costs and cost principles requirements. For five (20%) of the transactions, UL Lafayette was unable to provide documentation to show that personnel related expenses totaling $612 were supported by time and effort certifications to ensure the accuracy of budget estimates charged to federal awards as required by federal regulations. We reviewed 15 grant awards corresponding to the expense transactions selected and evaluated documentation to support the level of effort for each award and the 20 key personnel assigned to the selected awards. For 13 (65%) of the key personnel, UL Lafayette was unable to provide documentation that the key personnel complied with the effort required by the grant award. Criteria: 2 CFR 200.430(i) specifies the documentation standards for personnel expenses. In order to be allowable, charges to federal awards for personnel expenses must be based on records that accurately reflect the work performed and must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Budget estimates alone do not qualify as support for charges to federal awards, but can be used for interim accounting purposes provided that internal controls include an after-the fact review to confirm the accuracy of final amounts charged to federal awards. Prior approval requirements related to key personnel effort are contained in 2 CFR 200.308(c) and within grant terms and conditions. A reduction of 25% or greater in time devoted to the project from key personnel requires prior approval as does disengagement of key personnel from the project for three or more months. Cause: UL Lafayette noted in their prior-year corrective action plan and in a draft effort reporting policy that certifications for employees charging time to federal awards would be required quarterly. For the fiscal year ended June 30, 2023, certifications were only requested in July 2023, after the fiscal year-end, and were required to be returned within 30 days. Annual certifications are not sufficient to timely detect changes in key personnel effort and ensure prior approvals are obtained when applicable. Effect: Inadequate controls related to federal documentation standards for personnel expenses could result in noncompliance with federal allowable costs and cost principles, as well as noncompliance with special tests and provisions related to key personnel effort. Recommendation: Management should strengthen internal controls to ensure that personnel expenses charged to the federal awards are supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Additionally, management should revise the Time and Effort Certification policy or implement alternative controls designed to ensure compliance with special tests and provisions requirements. Management should monitor changes in effort for key personnel and ensure that prior written approval is obtained from the federal grantor for changes that exceed the thresholds set in federal regulations. Management’s Response and Corrective Action Plan: Management concurred with the finding and outlined a plan of corrective action (B-59).
2023-007 - Control Weakness and Noncompliance with Personnel Expenses Charged to Federal Awards Award Years: 2018, 2020, 2021, 2022 Award Numbers: 1815976, 2033380, 2117785, 2120015, 2000629518, 22-PA-11080600-187, 5U19AI142636-05, 75N93020D00008/75N93020F00004, DE-AC07-05ID14517, DE-SC0019956, EMW-2021-SS-00019-S01, NA20OAR4310253C Compliance Requirements: Allowable Costs/Cost Principles, Special Tests and Provisions Pass-Through Entities: Battelle Energy Alliance, Norwich Technologies Inc., University Corporation for Atmospheric Research Repeat Finding: Yes (Prior Year Finding No. 2022-006) See Schedule of Findings and Questioned Costs for chart/table Condition: For the third consecutive year, the University of Louisiana at Lafayette (UL Lafayette) did not have adequate controls in place to ensure personnel expenses charged to federal R&D awards accurately reflected work performed. From a population of 28,301 payroll and non-payroll expenses charged to R&D grants for the fiscal year ended June 30, 2023, a non-statistical sample of 25 transactions were tested for compliance with allowable costs and cost principles requirements. For five (20%) of the transactions, UL Lafayette was unable to provide documentation to show that personnel related expenses totaling $612 were supported by time and effort certifications to ensure the accuracy of budget estimates charged to federal awards as required by federal regulations. We reviewed 15 grant awards corresponding to the expense transactions selected and evaluated documentation to support the level of effort for each award and the 20 key personnel assigned to the selected awards. For 13 (65%) of the key personnel, UL Lafayette was unable to provide documentation that the key personnel complied with the effort required by the grant award. Criteria: 2 CFR 200.430(i) specifies the documentation standards for personnel expenses. In order to be allowable, charges to federal awards for personnel expenses must be based on records that accurately reflect the work performed and must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Budget estimates alone do not qualify as support for charges to federal awards, but can be used for interim accounting purposes provided that internal controls include an after-the fact review to confirm the accuracy of final amounts charged to federal awards. Prior approval requirements related to key personnel effort are contained in 2 CFR 200.308(c) and within grant terms and conditions. A reduction of 25% or greater in time devoted to the project from key personnel requires prior approval as does disengagement of key personnel from the project for three or more months. Cause: UL Lafayette noted in their prior-year corrective action plan and in a draft effort reporting policy that certifications for employees charging time to federal awards would be required quarterly. For the fiscal year ended June 30, 2023, certifications were only requested in July 2023, after the fiscal year-end, and were required to be returned within 30 days. Annual certifications are not sufficient to timely detect changes in key personnel effort and ensure prior approvals are obtained when applicable. Effect: Inadequate controls related to federal documentation standards for personnel expenses could result in noncompliance with federal allowable costs and cost principles, as well as noncompliance with special tests and provisions related to key personnel effort. Recommendation: Management should strengthen internal controls to ensure that personnel expenses charged to the federal awards are supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Additionally, management should revise the Time and Effort Certification policy or implement alternative controls designed to ensure compliance with special tests and provisions requirements. Management should monitor changes in effort for key personnel and ensure that prior written approval is obtained from the federal grantor for changes that exceed the thresholds set in federal regulations. Management’s Response and Corrective Action Plan: Management concurred with the finding and outlined a plan of corrective action (B-59).
2023-007 - Control Weakness and Noncompliance with Personnel Expenses Charged to Federal Awards Award Years: 2018, 2020, 2021, 2022 Award Numbers: 1815976, 2033380, 2117785, 2120015, 2000629518, 22-PA-11080600-187, 5U19AI142636-05, 75N93020D00008/75N93020F00004, DE-AC07-05ID14517, DE-SC0019956, EMW-2021-SS-00019-S01, NA20OAR4310253C Compliance Requirements: Allowable Costs/Cost Principles, Special Tests and Provisions Pass-Through Entities: Battelle Energy Alliance, Norwich Technologies Inc., University Corporation for Atmospheric Research Repeat Finding: Yes (Prior Year Finding No. 2022-006) See Schedule of Findings and Questioned Costs for chart/table Condition: For the third consecutive year, the University of Louisiana at Lafayette (UL Lafayette) did not have adequate controls in place to ensure personnel expenses charged to federal R&D awards accurately reflected work performed. From a population of 28,301 payroll and non-payroll expenses charged to R&D grants for the fiscal year ended June 30, 2023, a non-statistical sample of 25 transactions were tested for compliance with allowable costs and cost principles requirements. For five (20%) of the transactions, UL Lafayette was unable to provide documentation to show that personnel related expenses totaling $612 were supported by time and effort certifications to ensure the accuracy of budget estimates charged to federal awards as required by federal regulations. We reviewed 15 grant awards corresponding to the expense transactions selected and evaluated documentation to support the level of effort for each award and the 20 key personnel assigned to the selected awards. For 13 (65%) of the key personnel, UL Lafayette was unable to provide documentation that the key personnel complied with the effort required by the grant award. Criteria: 2 CFR 200.430(i) specifies the documentation standards for personnel expenses. In order to be allowable, charges to federal awards for personnel expenses must be based on records that accurately reflect the work performed and must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Budget estimates alone do not qualify as support for charges to federal awards, but can be used for interim accounting purposes provided that internal controls include an after-the fact review to confirm the accuracy of final amounts charged to federal awards. Prior approval requirements related to key personnel effort are contained in 2 CFR 200.308(c) and within grant terms and conditions. A reduction of 25% or greater in time devoted to the project from key personnel requires prior approval as does disengagement of key personnel from the project for three or more months. Cause: UL Lafayette noted in their prior-year corrective action plan and in a draft effort reporting policy that certifications for employees charging time to federal awards would be required quarterly. For the fiscal year ended June 30, 2023, certifications were only requested in July 2023, after the fiscal year-end, and were required to be returned within 30 days. Annual certifications are not sufficient to timely detect changes in key personnel effort and ensure prior approvals are obtained when applicable. Effect: Inadequate controls related to federal documentation standards for personnel expenses could result in noncompliance with federal allowable costs and cost principles, as well as noncompliance with special tests and provisions related to key personnel effort. Recommendation: Management should strengthen internal controls to ensure that personnel expenses charged to the federal awards are supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Additionally, management should revise the Time and Effort Certification policy or implement alternative controls designed to ensure compliance with special tests and provisions requirements. Management should monitor changes in effort for key personnel and ensure that prior written approval is obtained from the federal grantor for changes that exceed the thresholds set in federal regulations. Management’s Response and Corrective Action Plan: Management concurred with the finding and outlined a plan of corrective action (B-59).
2023-007 - Control Weakness and Noncompliance with Personnel Expenses Charged to Federal Awards Award Years: 2018, 2020, 2021, 2022 Award Numbers: 1815976, 2033380, 2117785, 2120015, 2000629518, 22-PA-11080600-187, 5U19AI142636-05, 75N93020D00008/75N93020F00004, DE-AC07-05ID14517, DE-SC0019956, EMW-2021-SS-00019-S01, NA20OAR4310253C Compliance Requirements: Allowable Costs/Cost Principles, Special Tests and Provisions Pass-Through Entities: Battelle Energy Alliance, Norwich Technologies Inc., University Corporation for Atmospheric Research Repeat Finding: Yes (Prior Year Finding No. 2022-006) See Schedule of Findings and Questioned Costs for chart/table Condition: For the third consecutive year, the University of Louisiana at Lafayette (UL Lafayette) did not have adequate controls in place to ensure personnel expenses charged to federal R&D awards accurately reflected work performed. From a population of 28,301 payroll and non-payroll expenses charged to R&D grants for the fiscal year ended June 30, 2023, a non-statistical sample of 25 transactions were tested for compliance with allowable costs and cost principles requirements. For five (20%) of the transactions, UL Lafayette was unable to provide documentation to show that personnel related expenses totaling $612 were supported by time and effort certifications to ensure the accuracy of budget estimates charged to federal awards as required by federal regulations. We reviewed 15 grant awards corresponding to the expense transactions selected and evaluated documentation to support the level of effort for each award and the 20 key personnel assigned to the selected awards. For 13 (65%) of the key personnel, UL Lafayette was unable to provide documentation that the key personnel complied with the effort required by the grant award. Criteria: 2 CFR 200.430(i) specifies the documentation standards for personnel expenses. In order to be allowable, charges to federal awards for personnel expenses must be based on records that accurately reflect the work performed and must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Budget estimates alone do not qualify as support for charges to federal awards, but can be used for interim accounting purposes provided that internal controls include an after-the fact review to confirm the accuracy of final amounts charged to federal awards. Prior approval requirements related to key personnel effort are contained in 2 CFR 200.308(c) and within grant terms and conditions. A reduction of 25% or greater in time devoted to the project from key personnel requires prior approval as does disengagement of key personnel from the project for three or more months. Cause: UL Lafayette noted in their prior-year corrective action plan and in a draft effort reporting policy that certifications for employees charging time to federal awards would be required quarterly. For the fiscal year ended June 30, 2023, certifications were only requested in July 2023, after the fiscal year-end, and were required to be returned within 30 days. Annual certifications are not sufficient to timely detect changes in key personnel effort and ensure prior approvals are obtained when applicable. Effect: Inadequate controls related to federal documentation standards for personnel expenses could result in noncompliance with federal allowable costs and cost principles, as well as noncompliance with special tests and provisions related to key personnel effort. Recommendation: Management should strengthen internal controls to ensure that personnel expenses charged to the federal awards are supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Additionally, management should revise the Time and Effort Certification policy or implement alternative controls designed to ensure compliance with special tests and provisions requirements. Management should monitor changes in effort for key personnel and ensure that prior written approval is obtained from the federal grantor for changes that exceed the thresholds set in federal regulations. Management’s Response and Corrective Action Plan: Management concurred with the finding and outlined a plan of corrective action (B-59).
2023-007 - Control Weakness and Noncompliance with Personnel Expenses Charged to Federal Awards Award Years: 2018, 2020, 2021, 2022 Award Numbers: 1815976, 2033380, 2117785, 2120015, 2000629518, 22-PA-11080600-187, 5U19AI142636-05, 75N93020D00008/75N93020F00004, DE-AC07-05ID14517, DE-SC0019956, EMW-2021-SS-00019-S01, NA20OAR4310253C Compliance Requirements: Allowable Costs/Cost Principles, Special Tests and Provisions Pass-Through Entities: Battelle Energy Alliance, Norwich Technologies Inc., University Corporation for Atmospheric Research Repeat Finding: Yes (Prior Year Finding No. 2022-006) See Schedule of Findings and Questioned Costs for chart/table Condition: For the third consecutive year, the University of Louisiana at Lafayette (UL Lafayette) did not have adequate controls in place to ensure personnel expenses charged to federal R&D awards accurately reflected work performed. From a population of 28,301 payroll and non-payroll expenses charged to R&D grants for the fiscal year ended June 30, 2023, a non-statistical sample of 25 transactions were tested for compliance with allowable costs and cost principles requirements. For five (20%) of the transactions, UL Lafayette was unable to provide documentation to show that personnel related expenses totaling $612 were supported by time and effort certifications to ensure the accuracy of budget estimates charged to federal awards as required by federal regulations. We reviewed 15 grant awards corresponding to the expense transactions selected and evaluated documentation to support the level of effort for each award and the 20 key personnel assigned to the selected awards. For 13 (65%) of the key personnel, UL Lafayette was unable to provide documentation that the key personnel complied with the effort required by the grant award. Criteria: 2 CFR 200.430(i) specifies the documentation standards for personnel expenses. In order to be allowable, charges to federal awards for personnel expenses must be based on records that accurately reflect the work performed and must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Budget estimates alone do not qualify as support for charges to federal awards, but can be used for interim accounting purposes provided that internal controls include an after-the fact review to confirm the accuracy of final amounts charged to federal awards. Prior approval requirements related to key personnel effort are contained in 2 CFR 200.308(c) and within grant terms and conditions. A reduction of 25% or greater in time devoted to the project from key personnel requires prior approval as does disengagement of key personnel from the project for three or more months. Cause: UL Lafayette noted in their prior-year corrective action plan and in a draft effort reporting policy that certifications for employees charging time to federal awards would be required quarterly. For the fiscal year ended June 30, 2023, certifications were only requested in July 2023, after the fiscal year-end, and were required to be returned within 30 days. Annual certifications are not sufficient to timely detect changes in key personnel effort and ensure prior approvals are obtained when applicable. Effect: Inadequate controls related to federal documentation standards for personnel expenses could result in noncompliance with federal allowable costs and cost principles, as well as noncompliance with special tests and provisions related to key personnel effort. Recommendation: Management should strengthen internal controls to ensure that personnel expenses charged to the federal awards are supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Additionally, management should revise the Time and Effort Certification policy or implement alternative controls designed to ensure compliance with special tests and provisions requirements. Management should monitor changes in effort for key personnel and ensure that prior written approval is obtained from the federal grantor for changes that exceed the thresholds set in federal regulations. Management’s Response and Corrective Action Plan: Management concurred with the finding and outlined a plan of corrective action (B-59).
2023-007 - Control Weakness and Noncompliance with Personnel Expenses Charged to Federal Awards Award Years: 2018, 2020, 2021, 2022 Award Numbers: 1815976, 2033380, 2117785, 2120015, 2000629518, 22-PA-11080600-187, 5U19AI142636-05, 75N93020D00008/75N93020F00004, DE-AC07-05ID14517, DE-SC0019956, EMW-2021-SS-00019-S01, NA20OAR4310253C Compliance Requirements: Allowable Costs/Cost Principles, Special Tests and Provisions Pass-Through Entities: Battelle Energy Alliance, Norwich Technologies Inc., University Corporation for Atmospheric Research Repeat Finding: Yes (Prior Year Finding No. 2022-006) See Schedule of Findings and Questioned Costs for chart/table Condition: For the third consecutive year, the University of Louisiana at Lafayette (UL Lafayette) did not have adequate controls in place to ensure personnel expenses charged to federal R&D awards accurately reflected work performed. From a population of 28,301 payroll and non-payroll expenses charged to R&D grants for the fiscal year ended June 30, 2023, a non-statistical sample of 25 transactions were tested for compliance with allowable costs and cost principles requirements. For five (20%) of the transactions, UL Lafayette was unable to provide documentation to show that personnel related expenses totaling $612 were supported by time and effort certifications to ensure the accuracy of budget estimates charged to federal awards as required by federal regulations. We reviewed 15 grant awards corresponding to the expense transactions selected and evaluated documentation to support the level of effort for each award and the 20 key personnel assigned to the selected awards. For 13 (65%) of the key personnel, UL Lafayette was unable to provide documentation that the key personnel complied with the effort required by the grant award. Criteria: 2 CFR 200.430(i) specifies the documentation standards for personnel expenses. In order to be allowable, charges to federal awards for personnel expenses must be based on records that accurately reflect the work performed and must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Budget estimates alone do not qualify as support for charges to federal awards, but can be used for interim accounting purposes provided that internal controls include an after-the fact review to confirm the accuracy of final amounts charged to federal awards. Prior approval requirements related to key personnel effort are contained in 2 CFR 200.308(c) and within grant terms and conditions. A reduction of 25% or greater in time devoted to the project from key personnel requires prior approval as does disengagement of key personnel from the project for three or more months. Cause: UL Lafayette noted in their prior-year corrective action plan and in a draft effort reporting policy that certifications for employees charging time to federal awards would be required quarterly. For the fiscal year ended June 30, 2023, certifications were only requested in July 2023, after the fiscal year-end, and were required to be returned within 30 days. Annual certifications are not sufficient to timely detect changes in key personnel effort and ensure prior approvals are obtained when applicable. Effect: Inadequate controls related to federal documentation standards for personnel expenses could result in noncompliance with federal allowable costs and cost principles, as well as noncompliance with special tests and provisions related to key personnel effort. Recommendation: Management should strengthen internal controls to ensure that personnel expenses charged to the federal awards are supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Additionally, management should revise the Time and Effort Certification policy or implement alternative controls designed to ensure compliance with special tests and provisions requirements. Management should monitor changes in effort for key personnel and ensure that prior written approval is obtained from the federal grantor for changes that exceed the thresholds set in federal regulations. Management’s Response and Corrective Action Plan: Management concurred with the finding and outlined a plan of corrective action (B-59).
2023-007 - Control Weakness and Noncompliance with Personnel Expenses Charged to Federal Awards Award Years: 2018, 2020, 2021, 2022 Award Numbers: 1815976, 2033380, 2117785, 2120015, 2000629518, 22-PA-11080600-187, 5U19AI142636-05, 75N93020D00008/75N93020F00004, DE-AC07-05ID14517, DE-SC0019956, EMW-2021-SS-00019-S01, NA20OAR4310253C Compliance Requirements: Allowable Costs/Cost Principles, Special Tests and Provisions Pass-Through Entities: Battelle Energy Alliance, Norwich Technologies Inc., University Corporation for Atmospheric Research Repeat Finding: Yes (Prior Year Finding No. 2022-006) See Schedule of Findings and Questioned Costs for chart/table Condition: For the third consecutive year, the University of Louisiana at Lafayette (UL Lafayette) did not have adequate controls in place to ensure personnel expenses charged to federal R&D awards accurately reflected work performed. From a population of 28,301 payroll and non-payroll expenses charged to R&D grants for the fiscal year ended June 30, 2023, a non-statistical sample of 25 transactions were tested for compliance with allowable costs and cost principles requirements. For five (20%) of the transactions, UL Lafayette was unable to provide documentation to show that personnel related expenses totaling $612 were supported by time and effort certifications to ensure the accuracy of budget estimates charged to federal awards as required by federal regulations. We reviewed 15 grant awards corresponding to the expense transactions selected and evaluated documentation to support the level of effort for each award and the 20 key personnel assigned to the selected awards. For 13 (65%) of the key personnel, UL Lafayette was unable to provide documentation that the key personnel complied with the effort required by the grant award. Criteria: 2 CFR 200.430(i) specifies the documentation standards for personnel expenses. In order to be allowable, charges to federal awards for personnel expenses must be based on records that accurately reflect the work performed and must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Budget estimates alone do not qualify as support for charges to federal awards, but can be used for interim accounting purposes provided that internal controls include an after-the fact review to confirm the accuracy of final amounts charged to federal awards. Prior approval requirements related to key personnel effort are contained in 2 CFR 200.308(c) and within grant terms and conditions. A reduction of 25% or greater in time devoted to the project from key personnel requires prior approval as does disengagement of key personnel from the project for three or more months. Cause: UL Lafayette noted in their prior-year corrective action plan and in a draft effort reporting policy that certifications for employees charging time to federal awards would be required quarterly. For the fiscal year ended June 30, 2023, certifications were only requested in July 2023, after the fiscal year-end, and were required to be returned within 30 days. Annual certifications are not sufficient to timely detect changes in key personnel effort and ensure prior approvals are obtained when applicable. Effect: Inadequate controls related to federal documentation standards for personnel expenses could result in noncompliance with federal allowable costs and cost principles, as well as noncompliance with special tests and provisions related to key personnel effort. Recommendation: Management should strengthen internal controls to ensure that personnel expenses charged to the federal awards are supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Additionally, management should revise the Time and Effort Certification policy or implement alternative controls designed to ensure compliance with special tests and provisions requirements. Management should monitor changes in effort for key personnel and ensure that prior written approval is obtained from the federal grantor for changes that exceed the thresholds set in federal regulations. Management’s Response and Corrective Action Plan: Management concurred with the finding and outlined a plan of corrective action (B-59).
2023-007 - Control Weakness and Noncompliance with Personnel Expenses Charged to Federal Awards Award Years: 2018, 2020, 2021, 2022 Award Numbers: 1815976, 2033380, 2117785, 2120015, 2000629518, 22-PA-11080600-187, 5U19AI142636-05, 75N93020D00008/75N93020F00004, DE-AC07-05ID14517, DE-SC0019956, EMW-2021-SS-00019-S01, NA20OAR4310253C Compliance Requirements: Allowable Costs/Cost Principles, Special Tests and Provisions Pass-Through Entities: Battelle Energy Alliance, Norwich Technologies Inc., University Corporation for Atmospheric Research Repeat Finding: Yes (Prior Year Finding No. 2022-006) See Schedule of Findings and Questioned Costs for chart/table Condition: For the third consecutive year, the University of Louisiana at Lafayette (UL Lafayette) did not have adequate controls in place to ensure personnel expenses charged to federal R&D awards accurately reflected work performed. From a population of 28,301 payroll and non-payroll expenses charged to R&D grants for the fiscal year ended June 30, 2023, a non-statistical sample of 25 transactions were tested for compliance with allowable costs and cost principles requirements. For five (20%) of the transactions, UL Lafayette was unable to provide documentation to show that personnel related expenses totaling $612 were supported by time and effort certifications to ensure the accuracy of budget estimates charged to federal awards as required by federal regulations. We reviewed 15 grant awards corresponding to the expense transactions selected and evaluated documentation to support the level of effort for each award and the 20 key personnel assigned to the selected awards. For 13 (65%) of the key personnel, UL Lafayette was unable to provide documentation that the key personnel complied with the effort required by the grant award. Criteria: 2 CFR 200.430(i) specifies the documentation standards for personnel expenses. In order to be allowable, charges to federal awards for personnel expenses must be based on records that accurately reflect the work performed and must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Budget estimates alone do not qualify as support for charges to federal awards, but can be used for interim accounting purposes provided that internal controls include an after-the fact review to confirm the accuracy of final amounts charged to federal awards. Prior approval requirements related to key personnel effort are contained in 2 CFR 200.308(c) and within grant terms and conditions. A reduction of 25% or greater in time devoted to the project from key personnel requires prior approval as does disengagement of key personnel from the project for three or more months. Cause: UL Lafayette noted in their prior-year corrective action plan and in a draft effort reporting policy that certifications for employees charging time to federal awards would be required quarterly. For the fiscal year ended June 30, 2023, certifications were only requested in July 2023, after the fiscal year-end, and were required to be returned within 30 days. Annual certifications are not sufficient to timely detect changes in key personnel effort and ensure prior approvals are obtained when applicable. Effect: Inadequate controls related to federal documentation standards for personnel expenses could result in noncompliance with federal allowable costs and cost principles, as well as noncompliance with special tests and provisions related to key personnel effort. Recommendation: Management should strengthen internal controls to ensure that personnel expenses charged to the federal awards are supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Additionally, management should revise the Time and Effort Certification policy or implement alternative controls designed to ensure compliance with special tests and provisions requirements. Management should monitor changes in effort for key personnel and ensure that prior written approval is obtained from the federal grantor for changes that exceed the thresholds set in federal regulations. Management’s Response and Corrective Action Plan: Management concurred with the finding and outlined a plan of corrective action (B-59).
2023-007 - Control Weakness and Noncompliance with Personnel Expenses Charged to Federal Awards Award Years: 2018, 2020, 2021, 2022 Award Numbers: 1815976, 2033380, 2117785, 2120015, 2000629518, 22-PA-11080600-187, 5U19AI142636-05, 75N93020D00008/75N93020F00004, DE-AC07-05ID14517, DE-SC0019956, EMW-2021-SS-00019-S01, NA20OAR4310253C Compliance Requirements: Allowable Costs/Cost Principles, Special Tests and Provisions Pass-Through Entities: Battelle Energy Alliance, Norwich Technologies Inc., University Corporation for Atmospheric Research Repeat Finding: Yes (Prior Year Finding No. 2022-006) See Schedule of Findings and Questioned Costs for chart/table Condition: For the third consecutive year, the University of Louisiana at Lafayette (UL Lafayette) did not have adequate controls in place to ensure personnel expenses charged to federal R&D awards accurately reflected work performed. From a population of 28,301 payroll and non-payroll expenses charged to R&D grants for the fiscal year ended June 30, 2023, a non-statistical sample of 25 transactions were tested for compliance with allowable costs and cost principles requirements. For five (20%) of the transactions, UL Lafayette was unable to provide documentation to show that personnel related expenses totaling $612 were supported by time and effort certifications to ensure the accuracy of budget estimates charged to federal awards as required by federal regulations. We reviewed 15 grant awards corresponding to the expense transactions selected and evaluated documentation to support the level of effort for each award and the 20 key personnel assigned to the selected awards. For 13 (65%) of the key personnel, UL Lafayette was unable to provide documentation that the key personnel complied with the effort required by the grant award. Criteria: 2 CFR 200.430(i) specifies the documentation standards for personnel expenses. In order to be allowable, charges to federal awards for personnel expenses must be based on records that accurately reflect the work performed and must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Budget estimates alone do not qualify as support for charges to federal awards, but can be used for interim accounting purposes provided that internal controls include an after-the fact review to confirm the accuracy of final amounts charged to federal awards. Prior approval requirements related to key personnel effort are contained in 2 CFR 200.308(c) and within grant terms and conditions. A reduction of 25% or greater in time devoted to the project from key personnel requires prior approval as does disengagement of key personnel from the project for three or more months. Cause: UL Lafayette noted in their prior-year corrective action plan and in a draft effort reporting policy that certifications for employees charging time to federal awards would be required quarterly. For the fiscal year ended June 30, 2023, certifications were only requested in July 2023, after the fiscal year-end, and were required to be returned within 30 days. Annual certifications are not sufficient to timely detect changes in key personnel effort and ensure prior approvals are obtained when applicable. Effect: Inadequate controls related to federal documentation standards for personnel expenses could result in noncompliance with federal allowable costs and cost principles, as well as noncompliance with special tests and provisions related to key personnel effort. Recommendation: Management should strengthen internal controls to ensure that personnel expenses charged to the federal awards are supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Additionally, management should revise the Time and Effort Certification policy or implement alternative controls designed to ensure compliance with special tests and provisions requirements. Management should monitor changes in effort for key personnel and ensure that prior written approval is obtained from the federal grantor for changes that exceed the thresholds set in federal regulations. Management’s Response and Corrective Action Plan: Management concurred with the finding and outlined a plan of corrective action (B-59).
2023-007 - Control Weakness and Noncompliance with Personnel Expenses Charged to Federal Awards Award Years: 2018, 2020, 2021, 2022 Award Numbers: 1815976, 2033380, 2117785, 2120015, 2000629518, 22-PA-11080600-187, 5U19AI142636-05, 75N93020D00008/75N93020F00004, DE-AC07-05ID14517, DE-SC0019956, EMW-2021-SS-00019-S01, NA20OAR4310253C Compliance Requirements: Allowable Costs/Cost Principles, Special Tests and Provisions Pass-Through Entities: Battelle Energy Alliance, Norwich Technologies Inc., University Corporation for Atmospheric Research Repeat Finding: Yes (Prior Year Finding No. 2022-006) See Schedule of Findings and Questioned Costs for chart/table Condition: For the third consecutive year, the University of Louisiana at Lafayette (UL Lafayette) did not have adequate controls in place to ensure personnel expenses charged to federal R&D awards accurately reflected work performed. From a population of 28,301 payroll and non-payroll expenses charged to R&D grants for the fiscal year ended June 30, 2023, a non-statistical sample of 25 transactions were tested for compliance with allowable costs and cost principles requirements. For five (20%) of the transactions, UL Lafayette was unable to provide documentation to show that personnel related expenses totaling $612 were supported by time and effort certifications to ensure the accuracy of budget estimates charged to federal awards as required by federal regulations. We reviewed 15 grant awards corresponding to the expense transactions selected and evaluated documentation to support the level of effort for each award and the 20 key personnel assigned to the selected awards. For 13 (65%) of the key personnel, UL Lafayette was unable to provide documentation that the key personnel complied with the effort required by the grant award. Criteria: 2 CFR 200.430(i) specifies the documentation standards for personnel expenses. In order to be allowable, charges to federal awards for personnel expenses must be based on records that accurately reflect the work performed and must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Budget estimates alone do not qualify as support for charges to federal awards, but can be used for interim accounting purposes provided that internal controls include an after-the fact review to confirm the accuracy of final amounts charged to federal awards. Prior approval requirements related to key personnel effort are contained in 2 CFR 200.308(c) and within grant terms and conditions. A reduction of 25% or greater in time devoted to the project from key personnel requires prior approval as does disengagement of key personnel from the project for three or more months. Cause: UL Lafayette noted in their prior-year corrective action plan and in a draft effort reporting policy that certifications for employees charging time to federal awards would be required quarterly. For the fiscal year ended June 30, 2023, certifications were only requested in July 2023, after the fiscal year-end, and were required to be returned within 30 days. Annual certifications are not sufficient to timely detect changes in key personnel effort and ensure prior approvals are obtained when applicable. Effect: Inadequate controls related to federal documentation standards for personnel expenses could result in noncompliance with federal allowable costs and cost principles, as well as noncompliance with special tests and provisions related to key personnel effort. Recommendation: Management should strengthen internal controls to ensure that personnel expenses charged to the federal awards are supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Additionally, management should revise the Time and Effort Certification policy or implement alternative controls designed to ensure compliance with special tests and provisions requirements. Management should monitor changes in effort for key personnel and ensure that prior written approval is obtained from the federal grantor for changes that exceed the thresholds set in federal regulations. Management’s Response and Corrective Action Plan: Management concurred with the finding and outlined a plan of corrective action (B-59).
2023-029 – Noncompliance and Weakness in Controls with Special Tests and Provisions Requirements Award Years: Various Award Numbers: Various Compliance Requirement: Special Tests and Provisions Pass-Through Entities: Various Repeat Finding: Yes (Prior Year Finding No. 2022-034) See Schedule of Findings and Questioned Costs for chart/table Condition: For the fifth consecutive year, LSUHSC-S did not have adequate controls in place to ensure compliance with Special Tests and Provisions requirements. We reviewed a non-statistical sample of 12 federal R&D Cluster awards from a population of 58 awards, plus two additional awards based on materiality, for the fiscal year ending June 30, 2023. We reviewed the biannual Time and Effort Certification forms, as applicable, for each award and the 24 key personnel assigned to the selected awards. We noted two of 24 (8%) key personnel had documentation of actual effort on the Time and Effort Certification forms that did not agree to the effort reported to the federal grantor, and there was no evidence of prior approval from the federal grantor for a change in key personnel. Criteria: 2 CFR 200.308(c) states that for non-construction federal awards, recipients must request prior approvals from federal awarding agencies for one or more of the following program or budget-related reasons: (i) change in the scope or the objective of the project or program (even if there is no associated budget revision requiring prior written approval); (ii) change in a key person specified in the application or the federal award; (iii) the disengagement from the project for more than three months, or a 25% reduction in time devoted to the project, by the approved project director or principal investigator. Cause: LSUHSC-S’s controls are not effectively designed to ensure prior approval is obtained for changes in effort by key personnel as required by federal regulations, specifically relating to disengagement from a project for more than three months or a 25% reduction in effort. This is partially due to LSUHSC-S revising their Time and Effort Certification policy in September 2022, which changed the frequency of the certification from quarterly to semiannually. Effect: Failure to implement controls over key personnel requirements could result in noncompliance with Special Tests and Provisions requirements. Recommendation: Management should monitor changes in effort for key personnel and verify that prior written approval is obtained from the federal grantor for changes that exceed the thresholds set in federal regulations. Management should revise the Time and Effort Certification policy or implement alternative controls designed to ensure compliance with Special Tests and Provisions requirements. Management’s Response and Corrective Action Plan: Management concurred with the finding and outlined a plan of corrective action (B-40).
2023-029 – Noncompliance and Weakness in Controls with Special Tests and Provisions Requirements Award Years: Various Award Numbers: Various Compliance Requirement: Special Tests and Provisions Pass-Through Entities: Various Repeat Finding: Yes (Prior Year Finding No. 2022-034) See Schedule of Findings and Questioned Costs for chart/table Condition: For the fifth consecutive year, LSUHSC-S did not have adequate controls in place to ensure compliance with Special Tests and Provisions requirements. We reviewed a non-statistical sample of 12 federal R&D Cluster awards from a population of 58 awards, plus two additional awards based on materiality, for the fiscal year ending June 30, 2023. We reviewed the biannual Time and Effort Certification forms, as applicable, for each award and the 24 key personnel assigned to the selected awards. We noted two of 24 (8%) key personnel had documentation of actual effort on the Time and Effort Certification forms that did not agree to the effort reported to the federal grantor, and there was no evidence of prior approval from the federal grantor for a change in key personnel. Criteria: 2 CFR 200.308(c) states that for non-construction federal awards, recipients must request prior approvals from federal awarding agencies for one or more of the following program or budget-related reasons: (i) change in the scope or the objective of the project or program (even if there is no associated budget revision requiring prior written approval); (ii) change in a key person specified in the application or the federal award; (iii) the disengagement from the project for more than three months, or a 25% reduction in time devoted to the project, by the approved project director or principal investigator. Cause: LSUHSC-S’s controls are not effectively designed to ensure prior approval is obtained for changes in effort by key personnel as required by federal regulations, specifically relating to disengagement from a project for more than three months or a 25% reduction in effort. This is partially due to LSUHSC-S revising their Time and Effort Certification policy in September 2022, which changed the frequency of the certification from quarterly to semiannually. Effect: Failure to implement controls over key personnel requirements could result in noncompliance with Special Tests and Provisions requirements. Recommendation: Management should monitor changes in effort for key personnel and verify that prior written approval is obtained from the federal grantor for changes that exceed the thresholds set in federal regulations. Management should revise the Time and Effort Certification policy or implement alternative controls designed to ensure compliance with Special Tests and Provisions requirements. Management’s Response and Corrective Action Plan: Management concurred with the finding and outlined a plan of corrective action (B-40).
2023-007 - Control Weakness and Noncompliance with Personnel Expenses Charged to Federal Awards Award Years: 2018, 2020, 2021, 2022 Award Numbers: 1815976, 2033380, 2117785, 2120015, 2000629518, 22-PA-11080600-187, 5U19AI142636-05, 75N93020D00008/75N93020F00004, DE-AC07-05ID14517, DE-SC0019956, EMW-2021-SS-00019-S01, NA20OAR4310253C Compliance Requirements: Allowable Costs/Cost Principles, Special Tests and Provisions Pass-Through Entities: Battelle Energy Alliance, Norwich Technologies Inc., University Corporation for Atmospheric Research Repeat Finding: Yes (Prior Year Finding No. 2022-006) See Schedule of Findings and Questioned Costs for chart/table Condition: For the third consecutive year, the University of Louisiana at Lafayette (UL Lafayette) did not have adequate controls in place to ensure personnel expenses charged to federal R&D awards accurately reflected work performed. From a population of 28,301 payroll and non-payroll expenses charged to R&D grants for the fiscal year ended June 30, 2023, a non-statistical sample of 25 transactions were tested for compliance with allowable costs and cost principles requirements. For five (20%) of the transactions, UL Lafayette was unable to provide documentation to show that personnel related expenses totaling $612 were supported by time and effort certifications to ensure the accuracy of budget estimates charged to federal awards as required by federal regulations. We reviewed 15 grant awards corresponding to the expense transactions selected and evaluated documentation to support the level of effort for each award and the 20 key personnel assigned to the selected awards. For 13 (65%) of the key personnel, UL Lafayette was unable to provide documentation that the key personnel complied with the effort required by the grant award. Criteria: 2 CFR 200.430(i) specifies the documentation standards for personnel expenses. In order to be allowable, charges to federal awards for personnel expenses must be based on records that accurately reflect the work performed and must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Budget estimates alone do not qualify as support for charges to federal awards, but can be used for interim accounting purposes provided that internal controls include an after-the fact review to confirm the accuracy of final amounts charged to federal awards. Prior approval requirements related to key personnel effort are contained in 2 CFR 200.308(c) and within grant terms and conditions. A reduction of 25% or greater in time devoted to the project from key personnel requires prior approval as does disengagement of key personnel from the project for three or more months. Cause: UL Lafayette noted in their prior-year corrective action plan and in a draft effort reporting policy that certifications for employees charging time to federal awards would be required quarterly. For the fiscal year ended June 30, 2023, certifications were only requested in July 2023, after the fiscal year-end, and were required to be returned within 30 days. Annual certifications are not sufficient to timely detect changes in key personnel effort and ensure prior approvals are obtained when applicable. Effect: Inadequate controls related to federal documentation standards for personnel expenses could result in noncompliance with federal allowable costs and cost principles, as well as noncompliance with special tests and provisions related to key personnel effort. Recommendation: Management should strengthen internal controls to ensure that personnel expenses charged to the federal awards are supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Additionally, management should revise the Time and Effort Certification policy or implement alternative controls designed to ensure compliance with special tests and provisions requirements. Management should monitor changes in effort for key personnel and ensure that prior written approval is obtained from the federal grantor for changes that exceed the thresholds set in federal regulations. Management’s Response and Corrective Action Plan: Management concurred with the finding and outlined a plan of corrective action (B-59).
2023-007 - Control Weakness and Noncompliance with Personnel Expenses Charged to Federal Awards Award Years: 2018, 2020, 2021, 2022 Award Numbers: 1815976, 2033380, 2117785, 2120015, 2000629518, 22-PA-11080600-187, 5U19AI142636-05, 75N93020D00008/75N93020F00004, DE-AC07-05ID14517, DE-SC0019956, EMW-2021-SS-00019-S01, NA20OAR4310253C Compliance Requirements: Allowable Costs/Cost Principles, Special Tests and Provisions Pass-Through Entities: Battelle Energy Alliance, Norwich Technologies Inc., University Corporation for Atmospheric Research Repeat Finding: Yes (Prior Year Finding No. 2022-006) See Schedule of Findings and Questioned Costs for chart/table Condition: For the third consecutive year, the University of Louisiana at Lafayette (UL Lafayette) did not have adequate controls in place to ensure personnel expenses charged to federal R&D awards accurately reflected work performed. From a population of 28,301 payroll and non-payroll expenses charged to R&D grants for the fiscal year ended June 30, 2023, a non-statistical sample of 25 transactions were tested for compliance with allowable costs and cost principles requirements. For five (20%) of the transactions, UL Lafayette was unable to provide documentation to show that personnel related expenses totaling $612 were supported by time and effort certifications to ensure the accuracy of budget estimates charged to federal awards as required by federal regulations. We reviewed 15 grant awards corresponding to the expense transactions selected and evaluated documentation to support the level of effort for each award and the 20 key personnel assigned to the selected awards. For 13 (65%) of the key personnel, UL Lafayette was unable to provide documentation that the key personnel complied with the effort required by the grant award. Criteria: 2 CFR 200.430(i) specifies the documentation standards for personnel expenses. In order to be allowable, charges to federal awards for personnel expenses must be based on records that accurately reflect the work performed and must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Budget estimates alone do not qualify as support for charges to federal awards, but can be used for interim accounting purposes provided that internal controls include an after-the fact review to confirm the accuracy of final amounts charged to federal awards. Prior approval requirements related to key personnel effort are contained in 2 CFR 200.308(c) and within grant terms and conditions. A reduction of 25% or greater in time devoted to the project from key personnel requires prior approval as does disengagement of key personnel from the project for three or more months. Cause: UL Lafayette noted in their prior-year corrective action plan and in a draft effort reporting policy that certifications for employees charging time to federal awards would be required quarterly. For the fiscal year ended June 30, 2023, certifications were only requested in July 2023, after the fiscal year-end, and were required to be returned within 30 days. Annual certifications are not sufficient to timely detect changes in key personnel effort and ensure prior approvals are obtained when applicable. Effect: Inadequate controls related to federal documentation standards for personnel expenses could result in noncompliance with federal allowable costs and cost principles, as well as noncompliance with special tests and provisions related to key personnel effort. Recommendation: Management should strengthen internal controls to ensure that personnel expenses charged to the federal awards are supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Additionally, management should revise the Time and Effort Certification policy or implement alternative controls designed to ensure compliance with special tests and provisions requirements. Management should monitor changes in effort for key personnel and ensure that prior written approval is obtained from the federal grantor for changes that exceed the thresholds set in federal regulations. Management’s Response and Corrective Action Plan: Management concurred with the finding and outlined a plan of corrective action (B-59).