2024-003 Controls over Payroll (Material Weakness in Internal Controls over Compliance and Material Noncompliance) Title: Research and Development Cluster Funding Agency, Federal Award, Agreement Number, Award Year, Assistance Listing Number: National Science Foundation, 2122108, 2024,47.049 National Science Foundation, 1953487, 2024,47.076 United States Department of Education, P031C160248, 2024, 84.031C United States Department of Health and Human Services, 1R16GM146669-01 & Q02067J, 2024, 93.859 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013, 23-DG-11030000-014 Award Year:2024 Assistance Listing Number:10.694 Title: Foster Care-Title IV-E Funding Agency: United States Department of Health and Human Services Federal Award Agreement Number:N/A Award Year:2024 Assistance Listing Number:93.658 Pass-Through Agency:CYFD Pass-Through Identification Number:23-690-500-25581 Condition: In testing 25 payroll items from each program listed above, CRI noted exceptions as described in the following table. No exceptions were noted in the items tested for the Foster Care program. (See table in report pg 120) Questioned Costs: Known and likely questioned costs of $4,547 and $506,209 are associated with the R&D Cluster related to discrepancies in time and effort documentation. No questioned costs were noted in the Southwest Forest Health and Wildfire Prevention Program or the Foster Care program. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal 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). Per 2 CFR section 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: paragraph (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles; paragraph (g) Be adequately documented. Per 2 CFR section 200.430 – Compensation – personal services, paragraph (i) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Cause: The University does not have sufficient controls in place to ensure the accuracy of the amounts paid to employees nor include appropriate approvals documented to be allowable to be charged to the federal grant. The University has deficiencies recording and processing payroll as described in finding 2024-001. Effect: The University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency.
2024-005 (2022-005) Procurement, Small Purchase (Significant Deficiency in Internal Controls over Compliance with Questioned Costs Greater than $25,000) - Repeated Title: Research and Development Cluster Funding Agency: National Science Foundation Federal Award Agreement Number: 1914463, 1953487 Award Year: 2024 Assistance Listing Number: 47.076 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013 Award Year:2024 Assistance Listing Number:10.694 Condition: During our review of procurement testing in the Research and Development Cluster, the University did not follow small purchase procedures and did not have an annual self-certification election to follow micropurchase procurement for professional services. In our procurement testing in the Southwest Forest Health and Wildfire Prevention grant, no support was provided to test the procurement methods used for small purchases. Progress on resolution of prior year finding: No progress was made. Questioned Costs: Known and likely questioned costs of $78,063 and $30,975 in the R&D Cluster and the Southwest Forest Health and Wildfire Prevention program, respectively. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2 CFR 200.320(a) sets the micro-purchase threshold at $10,000 and requires purchases over the micro-purchase threshold to use small purchase procedures, whereby price or rate quotations must be obtained and 2 CFR 200.320(a)(1)(iv) states the recipient may self-certify a threshold up to $50,000 on an annual basis and must maintain documentation to be made available to the auditors which includes a justification, clear identification of the threshold, and supporting documentation. Per Title 2 US Code of Federal Regulations Part 200.403(g), costs must be adequately documented to be allowable under Federal awards. Cause: The University was using a $50,000 threshold for professional services to utilize micropurchase method of procurement in the Research and Development Cluster. In the Southwest Forest Health and Wildfire Prevention grant, the University was not retaining the supporting documentation to ensure purchase is allowable. Effect: The University may unintentionally use a higher-cost vendor when failing to obtain price or rate quotations for items over the micro-purchase threshold. In addition, the University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency
2024-003 Controls over Payroll (Material Weakness in Internal Controls over Compliance and Material Noncompliance) Title: Research and Development Cluster Funding Agency, Federal Award, Agreement Number, Award Year, Assistance Listing Number: National Science Foundation, 2122108, 2024,47.049 National Science Foundation, 1953487, 2024,47.076 United States Department of Education, P031C160248, 2024, 84.031C United States Department of Health and Human Services, 1R16GM146669-01 & Q02067J, 2024, 93.859 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013, 23-DG-11030000-014 Award Year:2024 Assistance Listing Number:10.694 Title: Foster Care-Title IV-E Funding Agency: United States Department of Health and Human Services Federal Award Agreement Number:N/A Award Year:2024 Assistance Listing Number:93.658 Pass-Through Agency:CYFD Pass-Through Identification Number:23-690-500-25581 Condition: In testing 25 payroll items from each program listed above, CRI noted exceptions as described in the following table. No exceptions were noted in the items tested for the Foster Care program. (See table in report pg 120) Questioned Costs: Known and likely questioned costs of $4,547 and $506,209 are associated with the R&D Cluster related to discrepancies in time and effort documentation. No questioned costs were noted in the Southwest Forest Health and Wildfire Prevention Program or the Foster Care program. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal 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). Per 2 CFR section 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: paragraph (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles; paragraph (g) Be adequately documented. Per 2 CFR section 200.430 – Compensation – personal services, paragraph (i) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Cause: The University does not have sufficient controls in place to ensure the accuracy of the amounts paid to employees nor include appropriate approvals documented to be allowable to be charged to the federal grant. The University has deficiencies recording and processing payroll as described in finding 2024-001. Effect: The University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency.
2024-005 (2022-005) Procurement, Small Purchase (Significant Deficiency in Internal Controls over Compliance with Questioned Costs Greater than $25,000) - Repeated Title: Research and Development Cluster Funding Agency: National Science Foundation Federal Award Agreement Number: 1914463, 1953487 Award Year: 2024 Assistance Listing Number: 47.076 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013 Award Year:2024 Assistance Listing Number:10.694 Condition: During our review of procurement testing in the Research and Development Cluster, the University did not follow small purchase procedures and did not have an annual self-certification election to follow micropurchase procurement for professional services. In our procurement testing in the Southwest Forest Health and Wildfire Prevention grant, no support was provided to test the procurement methods used for small purchases. Progress on resolution of prior year finding: No progress was made. Questioned Costs: Known and likely questioned costs of $78,063 and $30,975 in the R&D Cluster and the Southwest Forest Health and Wildfire Prevention program, respectively. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2 CFR 200.320(a) sets the micro-purchase threshold at $10,000 and requires purchases over the micro-purchase threshold to use small purchase procedures, whereby price or rate quotations must be obtained and 2 CFR 200.320(a)(1)(iv) states the recipient may self-certify a threshold up to $50,000 on an annual basis and must maintain documentation to be made available to the auditors which includes a justification, clear identification of the threshold, and supporting documentation. Per Title 2 US Code of Federal Regulations Part 200.403(g), costs must be adequately documented to be allowable under Federal awards. Cause: The University was using a $50,000 threshold for professional services to utilize micropurchase method of procurement in the Research and Development Cluster. In the Southwest Forest Health and Wildfire Prevention grant, the University was not retaining the supporting documentation to ensure purchase is allowable. Effect: The University may unintentionally use a higher-cost vendor when failing to obtain price or rate quotations for items over the micro-purchase threshold. In addition, the University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency
2024-003 Controls over Payroll (Material Weakness in Internal Controls over Compliance and Material Noncompliance) Title: Research and Development Cluster Funding Agency, Federal Award, Agreement Number, Award Year, Assistance Listing Number: National Science Foundation, 2122108, 2024,47.049 National Science Foundation, 1953487, 2024,47.076 United States Department of Education, P031C160248, 2024, 84.031C United States Department of Health and Human Services, 1R16GM146669-01 & Q02067J, 2024, 93.859 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013, 23-DG-11030000-014 Award Year:2024 Assistance Listing Number:10.694 Title: Foster Care-Title IV-E Funding Agency: United States Department of Health and Human Services Federal Award Agreement Number:N/A Award Year:2024 Assistance Listing Number:93.658 Pass-Through Agency:CYFD Pass-Through Identification Number:23-690-500-25581 Condition: In testing 25 payroll items from each program listed above, CRI noted exceptions as described in the following table. No exceptions were noted in the items tested for the Foster Care program. (See table in report pg 120) Questioned Costs: Known and likely questioned costs of $4,547 and $506,209 are associated with the R&D Cluster related to discrepancies in time and effort documentation. No questioned costs were noted in the Southwest Forest Health and Wildfire Prevention Program or the Foster Care program. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal 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). Per 2 CFR section 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: paragraph (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles; paragraph (g) Be adequately documented. Per 2 CFR section 200.430 – Compensation – personal services, paragraph (i) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Cause: The University does not have sufficient controls in place to ensure the accuracy of the amounts paid to employees nor include appropriate approvals documented to be allowable to be charged to the federal grant. The University has deficiencies recording and processing payroll as described in finding 2024-001. Effect: The University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency.
2024-005 (2022-005) Procurement, Small Purchase (Significant Deficiency in Internal Controls over Compliance with Questioned Costs Greater than $25,000) - Repeated Title: Research and Development Cluster Funding Agency: National Science Foundation Federal Award Agreement Number: 1914463, 1953487 Award Year: 2024 Assistance Listing Number: 47.076 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013 Award Year:2024 Assistance Listing Number:10.694 Condition: During our review of procurement testing in the Research and Development Cluster, the University did not follow small purchase procedures and did not have an annual self-certification election to follow micropurchase procurement for professional services. In our procurement testing in the Southwest Forest Health and Wildfire Prevention grant, no support was provided to test the procurement methods used for small purchases. Progress on resolution of prior year finding: No progress was made. Questioned Costs: Known and likely questioned costs of $78,063 and $30,975 in the R&D Cluster and the Southwest Forest Health and Wildfire Prevention program, respectively. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2 CFR 200.320(a) sets the micro-purchase threshold at $10,000 and requires purchases over the micro-purchase threshold to use small purchase procedures, whereby price or rate quotations must be obtained and 2 CFR 200.320(a)(1)(iv) states the recipient may self-certify a threshold up to $50,000 on an annual basis and must maintain documentation to be made available to the auditors which includes a justification, clear identification of the threshold, and supporting documentation. Per Title 2 US Code of Federal Regulations Part 200.403(g), costs must be adequately documented to be allowable under Federal awards. Cause: The University was using a $50,000 threshold for professional services to utilize micropurchase method of procurement in the Research and Development Cluster. In the Southwest Forest Health and Wildfire Prevention grant, the University was not retaining the supporting documentation to ensure purchase is allowable. Effect: The University may unintentionally use a higher-cost vendor when failing to obtain price or rate quotations for items over the micro-purchase threshold. In addition, the University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency
2024-003 Controls over Payroll (Material Weakness in Internal Controls over Compliance and Material Noncompliance) Title: Research and Development Cluster Funding Agency, Federal Award, Agreement Number, Award Year, Assistance Listing Number: National Science Foundation, 2122108, 2024,47.049 National Science Foundation, 1953487, 2024,47.076 United States Department of Education, P031C160248, 2024, 84.031C United States Department of Health and Human Services, 1R16GM146669-01 & Q02067J, 2024, 93.859 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013, 23-DG-11030000-014 Award Year:2024 Assistance Listing Number:10.694 Title: Foster Care-Title IV-E Funding Agency: United States Department of Health and Human Services Federal Award Agreement Number:N/A Award Year:2024 Assistance Listing Number:93.658 Pass-Through Agency:CYFD Pass-Through Identification Number:23-690-500-25581 Condition: In testing 25 payroll items from each program listed above, CRI noted exceptions as described in the following table. No exceptions were noted in the items tested for the Foster Care program. (See table in report pg 120) Questioned Costs: Known and likely questioned costs of $4,547 and $506,209 are associated with the R&D Cluster related to discrepancies in time and effort documentation. No questioned costs were noted in the Southwest Forest Health and Wildfire Prevention Program or the Foster Care program. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal 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). Per 2 CFR section 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: paragraph (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles; paragraph (g) Be adequately documented. Per 2 CFR section 200.430 – Compensation – personal services, paragraph (i) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Cause: The University does not have sufficient controls in place to ensure the accuracy of the amounts paid to employees nor include appropriate approvals documented to be allowable to be charged to the federal grant. The University has deficiencies recording and processing payroll as described in finding 2024-001. Effect: The University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency.
2024-005 (2022-005) Procurement, Small Purchase (Significant Deficiency in Internal Controls over Compliance with Questioned Costs Greater than $25,000) - Repeated Title: Research and Development Cluster Funding Agency: National Science Foundation Federal Award Agreement Number: 1914463, 1953487 Award Year: 2024 Assistance Listing Number: 47.076 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013 Award Year:2024 Assistance Listing Number:10.694 Condition: During our review of procurement testing in the Research and Development Cluster, the University did not follow small purchase procedures and did not have an annual self-certification election to follow micropurchase procurement for professional services. In our procurement testing in the Southwest Forest Health and Wildfire Prevention grant, no support was provided to test the procurement methods used for small purchases. Progress on resolution of prior year finding: No progress was made. Questioned Costs: Known and likely questioned costs of $78,063 and $30,975 in the R&D Cluster and the Southwest Forest Health and Wildfire Prevention program, respectively. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2 CFR 200.320(a) sets the micro-purchase threshold at $10,000 and requires purchases over the micro-purchase threshold to use small purchase procedures, whereby price or rate quotations must be obtained and 2 CFR 200.320(a)(1)(iv) states the recipient may self-certify a threshold up to $50,000 on an annual basis and must maintain documentation to be made available to the auditors which includes a justification, clear identification of the threshold, and supporting documentation. Per Title 2 US Code of Federal Regulations Part 200.403(g), costs must be adequately documented to be allowable under Federal awards. Cause: The University was using a $50,000 threshold for professional services to utilize micropurchase method of procurement in the Research and Development Cluster. In the Southwest Forest Health and Wildfire Prevention grant, the University was not retaining the supporting documentation to ensure purchase is allowable. Effect: The University may unintentionally use a higher-cost vendor when failing to obtain price or rate quotations for items over the micro-purchase threshold. In addition, the University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency
2024-003 Controls over Payroll (Material Weakness in Internal Controls over Compliance and Material Noncompliance) Title: Research and Development Cluster Funding Agency, Federal Award, Agreement Number, Award Year, Assistance Listing Number: National Science Foundation, 2122108, 2024,47.049 National Science Foundation, 1953487, 2024,47.076 United States Department of Education, P031C160248, 2024, 84.031C United States Department of Health and Human Services, 1R16GM146669-01 & Q02067J, 2024, 93.859 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013, 23-DG-11030000-014 Award Year:2024 Assistance Listing Number:10.694 Title: Foster Care-Title IV-E Funding Agency: United States Department of Health and Human Services Federal Award Agreement Number:N/A Award Year:2024 Assistance Listing Number:93.658 Pass-Through Agency:CYFD Pass-Through Identification Number:23-690-500-25581 Condition: In testing 25 payroll items from each program listed above, CRI noted exceptions as described in the following table. No exceptions were noted in the items tested for the Foster Care program. (See table in report pg 120) Questioned Costs: Known and likely questioned costs of $4,547 and $506,209 are associated with the R&D Cluster related to discrepancies in time and effort documentation. No questioned costs were noted in the Southwest Forest Health and Wildfire Prevention Program or the Foster Care program. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal 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). Per 2 CFR section 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: paragraph (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles; paragraph (g) Be adequately documented. Per 2 CFR section 200.430 – Compensation – personal services, paragraph (i) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Cause: The University does not have sufficient controls in place to ensure the accuracy of the amounts paid to employees nor include appropriate approvals documented to be allowable to be charged to the federal grant. The University has deficiencies recording and processing payroll as described in finding 2024-001. Effect: The University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency.
2024-005 (2022-005) Procurement, Small Purchase (Significant Deficiency in Internal Controls over Compliance with Questioned Costs Greater than $25,000) - Repeated Title: Research and Development Cluster Funding Agency: National Science Foundation Federal Award Agreement Number: 1914463, 1953487 Award Year: 2024 Assistance Listing Number: 47.076 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013 Award Year:2024 Assistance Listing Number:10.694 Condition: During our review of procurement testing in the Research and Development Cluster, the University did not follow small purchase procedures and did not have an annual self-certification election to follow micropurchase procurement for professional services. In our procurement testing in the Southwest Forest Health and Wildfire Prevention grant, no support was provided to test the procurement methods used for small purchases. Progress on resolution of prior year finding: No progress was made. Questioned Costs: Known and likely questioned costs of $78,063 and $30,975 in the R&D Cluster and the Southwest Forest Health and Wildfire Prevention program, respectively. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2 CFR 200.320(a) sets the micro-purchase threshold at $10,000 and requires purchases over the micro-purchase threshold to use small purchase procedures, whereby price or rate quotations must be obtained and 2 CFR 200.320(a)(1)(iv) states the recipient may self-certify a threshold up to $50,000 on an annual basis and must maintain documentation to be made available to the auditors which includes a justification, clear identification of the threshold, and supporting documentation. Per Title 2 US Code of Federal Regulations Part 200.403(g), costs must be adequately documented to be allowable under Federal awards. Cause: The University was using a $50,000 threshold for professional services to utilize micropurchase method of procurement in the Research and Development Cluster. In the Southwest Forest Health and Wildfire Prevention grant, the University was not retaining the supporting documentation to ensure purchase is allowable. Effect: The University may unintentionally use a higher-cost vendor when failing to obtain price or rate quotations for items over the micro-purchase threshold. In addition, the University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency
2024-003 Controls over Payroll (Material Weakness in Internal Controls over Compliance and Material Noncompliance) Title: Research and Development Cluster Funding Agency, Federal Award, Agreement Number, Award Year, Assistance Listing Number: National Science Foundation, 2122108, 2024,47.049 National Science Foundation, 1953487, 2024,47.076 United States Department of Education, P031C160248, 2024, 84.031C United States Department of Health and Human Services, 1R16GM146669-01 & Q02067J, 2024, 93.859 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013, 23-DG-11030000-014 Award Year:2024 Assistance Listing Number:10.694 Title: Foster Care-Title IV-E Funding Agency: United States Department of Health and Human Services Federal Award Agreement Number:N/A Award Year:2024 Assistance Listing Number:93.658 Pass-Through Agency:CYFD Pass-Through Identification Number:23-690-500-25581 Condition: In testing 25 payroll items from each program listed above, CRI noted exceptions as described in the following table. No exceptions were noted in the items tested for the Foster Care program. (See table in report pg 120) Questioned Costs: Known and likely questioned costs of $4,547 and $506,209 are associated with the R&D Cluster related to discrepancies in time and effort documentation. No questioned costs were noted in the Southwest Forest Health and Wildfire Prevention Program or the Foster Care program. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal 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). Per 2 CFR section 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: paragraph (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles; paragraph (g) Be adequately documented. Per 2 CFR section 200.430 – Compensation – personal services, paragraph (i) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Cause: The University does not have sufficient controls in place to ensure the accuracy of the amounts paid to employees nor include appropriate approvals documented to be allowable to be charged to the federal grant. The University has deficiencies recording and processing payroll as described in finding 2024-001. Effect: The University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency.
2024-005 (2022-005) Procurement, Small Purchase (Significant Deficiency in Internal Controls over Compliance with Questioned Costs Greater than $25,000) - Repeated Title: Research and Development Cluster Funding Agency: National Science Foundation Federal Award Agreement Number: 1914463, 1953487 Award Year: 2024 Assistance Listing Number: 47.076 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013 Award Year:2024 Assistance Listing Number:10.694 Condition: During our review of procurement testing in the Research and Development Cluster, the University did not follow small purchase procedures and did not have an annual self-certification election to follow micropurchase procurement for professional services. In our procurement testing in the Southwest Forest Health and Wildfire Prevention grant, no support was provided to test the procurement methods used for small purchases. Progress on resolution of prior year finding: No progress was made. Questioned Costs: Known and likely questioned costs of $78,063 and $30,975 in the R&D Cluster and the Southwest Forest Health and Wildfire Prevention program, respectively. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2 CFR 200.320(a) sets the micro-purchase threshold at $10,000 and requires purchases over the micro-purchase threshold to use small purchase procedures, whereby price or rate quotations must be obtained and 2 CFR 200.320(a)(1)(iv) states the recipient may self-certify a threshold up to $50,000 on an annual basis and must maintain documentation to be made available to the auditors which includes a justification, clear identification of the threshold, and supporting documentation. Per Title 2 US Code of Federal Regulations Part 200.403(g), costs must be adequately documented to be allowable under Federal awards. Cause: The University was using a $50,000 threshold for professional services to utilize micropurchase method of procurement in the Research and Development Cluster. In the Southwest Forest Health and Wildfire Prevention grant, the University was not retaining the supporting documentation to ensure purchase is allowable. Effect: The University may unintentionally use a higher-cost vendor when failing to obtain price or rate quotations for items over the micro-purchase threshold. In addition, the University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency
2024-003 Controls over Payroll (Material Weakness in Internal Controls over Compliance and Material Noncompliance) Title: Research and Development Cluster Funding Agency, Federal Award, Agreement Number, Award Year, Assistance Listing Number: National Science Foundation, 2122108, 2024,47.049 National Science Foundation, 1953487, 2024,47.076 United States Department of Education, P031C160248, 2024, 84.031C United States Department of Health and Human Services, 1R16GM146669-01 & Q02067J, 2024, 93.859 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013, 23-DG-11030000-014 Award Year:2024 Assistance Listing Number:10.694 Title: Foster Care-Title IV-E Funding Agency: United States Department of Health and Human Services Federal Award Agreement Number:N/A Award Year:2024 Assistance Listing Number:93.658 Pass-Through Agency:CYFD Pass-Through Identification Number:23-690-500-25581 Condition: In testing 25 payroll items from each program listed above, CRI noted exceptions as described in the following table. No exceptions were noted in the items tested for the Foster Care program. (See table in report pg 120) Questioned Costs: Known and likely questioned costs of $4,547 and $506,209 are associated with the R&D Cluster related to discrepancies in time and effort documentation. No questioned costs were noted in the Southwest Forest Health and Wildfire Prevention Program or the Foster Care program. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal 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). Per 2 CFR section 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: paragraph (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles; paragraph (g) Be adequately documented. Per 2 CFR section 200.430 – Compensation – personal services, paragraph (i) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Cause: The University does not have sufficient controls in place to ensure the accuracy of the amounts paid to employees nor include appropriate approvals documented to be allowable to be charged to the federal grant. The University has deficiencies recording and processing payroll as described in finding 2024-001. Effect: The University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency.
2024-005 (2022-005) Procurement, Small Purchase (Significant Deficiency in Internal Controls over Compliance with Questioned Costs Greater than $25,000) - Repeated Title: Research and Development Cluster Funding Agency: National Science Foundation Federal Award Agreement Number: 1914463, 1953487 Award Year: 2024 Assistance Listing Number: 47.076 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013 Award Year:2024 Assistance Listing Number:10.694 Condition: During our review of procurement testing in the Research and Development Cluster, the University did not follow small purchase procedures and did not have an annual self-certification election to follow micropurchase procurement for professional services. In our procurement testing in the Southwest Forest Health and Wildfire Prevention grant, no support was provided to test the procurement methods used for small purchases. Progress on resolution of prior year finding: No progress was made. Questioned Costs: Known and likely questioned costs of $78,063 and $30,975 in the R&D Cluster and the Southwest Forest Health and Wildfire Prevention program, respectively. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2 CFR 200.320(a) sets the micro-purchase threshold at $10,000 and requires purchases over the micro-purchase threshold to use small purchase procedures, whereby price or rate quotations must be obtained and 2 CFR 200.320(a)(1)(iv) states the recipient may self-certify a threshold up to $50,000 on an annual basis and must maintain documentation to be made available to the auditors which includes a justification, clear identification of the threshold, and supporting documentation. Per Title 2 US Code of Federal Regulations Part 200.403(g), costs must be adequately documented to be allowable under Federal awards. Cause: The University was using a $50,000 threshold for professional services to utilize micropurchase method of procurement in the Research and Development Cluster. In the Southwest Forest Health and Wildfire Prevention grant, the University was not retaining the supporting documentation to ensure purchase is allowable. Effect: The University may unintentionally use a higher-cost vendor when failing to obtain price or rate quotations for items over the micro-purchase threshold. In addition, the University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency
2024-003 Controls over Payroll (Material Weakness in Internal Controls over Compliance and Material Noncompliance) Title: Research and Development Cluster Funding Agency, Federal Award, Agreement Number, Award Year, Assistance Listing Number: National Science Foundation, 2122108, 2024,47.049 National Science Foundation, 1953487, 2024,47.076 United States Department of Education, P031C160248, 2024, 84.031C United States Department of Health and Human Services, 1R16GM146669-01 & Q02067J, 2024, 93.859 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013, 23-DG-11030000-014 Award Year:2024 Assistance Listing Number:10.694 Title: Foster Care-Title IV-E Funding Agency: United States Department of Health and Human Services Federal Award Agreement Number:N/A Award Year:2024 Assistance Listing Number:93.658 Pass-Through Agency:CYFD Pass-Through Identification Number:23-690-500-25581 Condition: In testing 25 payroll items from each program listed above, CRI noted exceptions as described in the following table. No exceptions were noted in the items tested for the Foster Care program. (See table in report pg 120) Questioned Costs: Known and likely questioned costs of $4,547 and $506,209 are associated with the R&D Cluster related to discrepancies in time and effort documentation. No questioned costs were noted in the Southwest Forest Health and Wildfire Prevention Program or the Foster Care program. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal 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). Per 2 CFR section 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: paragraph (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles; paragraph (g) Be adequately documented. Per 2 CFR section 200.430 – Compensation – personal services, paragraph (i) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Cause: The University does not have sufficient controls in place to ensure the accuracy of the amounts paid to employees nor include appropriate approvals documented to be allowable to be charged to the federal grant. The University has deficiencies recording and processing payroll as described in finding 2024-001. Effect: The University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency.
2024-005 (2022-005) Procurement, Small Purchase (Significant Deficiency in Internal Controls over Compliance with Questioned Costs Greater than $25,000) - Repeated Title: Research and Development Cluster Funding Agency: National Science Foundation Federal Award Agreement Number: 1914463, 1953487 Award Year: 2024 Assistance Listing Number: 47.076 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013 Award Year:2024 Assistance Listing Number:10.694 Condition: During our review of procurement testing in the Research and Development Cluster, the University did not follow small purchase procedures and did not have an annual self-certification election to follow micropurchase procurement for professional services. In our procurement testing in the Southwest Forest Health and Wildfire Prevention grant, no support was provided to test the procurement methods used for small purchases. Progress on resolution of prior year finding: No progress was made. Questioned Costs: Known and likely questioned costs of $78,063 and $30,975 in the R&D Cluster and the Southwest Forest Health and Wildfire Prevention program, respectively. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2 CFR 200.320(a) sets the micro-purchase threshold at $10,000 and requires purchases over the micro-purchase threshold to use small purchase procedures, whereby price or rate quotations must be obtained and 2 CFR 200.320(a)(1)(iv) states the recipient may self-certify a threshold up to $50,000 on an annual basis and must maintain documentation to be made available to the auditors which includes a justification, clear identification of the threshold, and supporting documentation. Per Title 2 US Code of Federal Regulations Part 200.403(g), costs must be adequately documented to be allowable under Federal awards. Cause: The University was using a $50,000 threshold for professional services to utilize micropurchase method of procurement in the Research and Development Cluster. In the Southwest Forest Health and Wildfire Prevention grant, the University was not retaining the supporting documentation to ensure purchase is allowable. Effect: The University may unintentionally use a higher-cost vendor when failing to obtain price or rate quotations for items over the micro-purchase threshold. In addition, the University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency
2024-003 Controls over Payroll (Material Weakness in Internal Controls over Compliance and Material Noncompliance) Title: Research and Development Cluster Funding Agency, Federal Award, Agreement Number, Award Year, Assistance Listing Number: National Science Foundation, 2122108, 2024,47.049 National Science Foundation, 1953487, 2024,47.076 United States Department of Education, P031C160248, 2024, 84.031C United States Department of Health and Human Services, 1R16GM146669-01 & Q02067J, 2024, 93.859 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013, 23-DG-11030000-014 Award Year:2024 Assistance Listing Number:10.694 Title: Foster Care-Title IV-E Funding Agency: United States Department of Health and Human Services Federal Award Agreement Number:N/A Award Year:2024 Assistance Listing Number:93.658 Pass-Through Agency:CYFD Pass-Through Identification Number:23-690-500-25581 Condition: In testing 25 payroll items from each program listed above, CRI noted exceptions as described in the following table. No exceptions were noted in the items tested for the Foster Care program. (See table in report pg 120) Questioned Costs: Known and likely questioned costs of $4,547 and $506,209 are associated with the R&D Cluster related to discrepancies in time and effort documentation. No questioned costs were noted in the Southwest Forest Health and Wildfire Prevention Program or the Foster Care program. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal 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). Per 2 CFR section 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: paragraph (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles; paragraph (g) Be adequately documented. Per 2 CFR section 200.430 – Compensation – personal services, paragraph (i) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Cause: The University does not have sufficient controls in place to ensure the accuracy of the amounts paid to employees nor include appropriate approvals documented to be allowable to be charged to the federal grant. The University has deficiencies recording and processing payroll as described in finding 2024-001. Effect: The University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency.
2024-005 (2022-005) Procurement, Small Purchase (Significant Deficiency in Internal Controls over Compliance with Questioned Costs Greater than $25,000) - Repeated Title: Research and Development Cluster Funding Agency: National Science Foundation Federal Award Agreement Number: 1914463, 1953487 Award Year: 2024 Assistance Listing Number: 47.076 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013 Award Year:2024 Assistance Listing Number:10.694 Condition: During our review of procurement testing in the Research and Development Cluster, the University did not follow small purchase procedures and did not have an annual self-certification election to follow micropurchase procurement for professional services. In our procurement testing in the Southwest Forest Health and Wildfire Prevention grant, no support was provided to test the procurement methods used for small purchases. Progress on resolution of prior year finding: No progress was made. Questioned Costs: Known and likely questioned costs of $78,063 and $30,975 in the R&D Cluster and the Southwest Forest Health and Wildfire Prevention program, respectively. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2 CFR 200.320(a) sets the micro-purchase threshold at $10,000 and requires purchases over the micro-purchase threshold to use small purchase procedures, whereby price or rate quotations must be obtained and 2 CFR 200.320(a)(1)(iv) states the recipient may self-certify a threshold up to $50,000 on an annual basis and must maintain documentation to be made available to the auditors which includes a justification, clear identification of the threshold, and supporting documentation. Per Title 2 US Code of Federal Regulations Part 200.403(g), costs must be adequately documented to be allowable under Federal awards. Cause: The University was using a $50,000 threshold for professional services to utilize micropurchase method of procurement in the Research and Development Cluster. In the Southwest Forest Health and Wildfire Prevention grant, the University was not retaining the supporting documentation to ensure purchase is allowable. Effect: The University may unintentionally use a higher-cost vendor when failing to obtain price or rate quotations for items over the micro-purchase threshold. In addition, the University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency
2024-003 Controls over Payroll (Material Weakness in Internal Controls over Compliance and Material Noncompliance) Title: Research and Development Cluster Funding Agency, Federal Award, Agreement Number, Award Year, Assistance Listing Number: National Science Foundation, 2122108, 2024,47.049 National Science Foundation, 1953487, 2024,47.076 United States Department of Education, P031C160248, 2024, 84.031C United States Department of Health and Human Services, 1R16GM146669-01 & Q02067J, 2024, 93.859 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013, 23-DG-11030000-014 Award Year:2024 Assistance Listing Number:10.694 Title: Foster Care-Title IV-E Funding Agency: United States Department of Health and Human Services Federal Award Agreement Number:N/A Award Year:2024 Assistance Listing Number:93.658 Pass-Through Agency:CYFD Pass-Through Identification Number:23-690-500-25581 Condition: In testing 25 payroll items from each program listed above, CRI noted exceptions as described in the following table. No exceptions were noted in the items tested for the Foster Care program. (See table in report pg 120) Questioned Costs: Known and likely questioned costs of $4,547 and $506,209 are associated with the R&D Cluster related to discrepancies in time and effort documentation. No questioned costs were noted in the Southwest Forest Health and Wildfire Prevention Program or the Foster Care program. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal 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). Per 2 CFR section 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: paragraph (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles; paragraph (g) Be adequately documented. Per 2 CFR section 200.430 – Compensation – personal services, paragraph (i) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Cause: The University does not have sufficient controls in place to ensure the accuracy of the amounts paid to employees nor include appropriate approvals documented to be allowable to be charged to the federal grant. The University has deficiencies recording and processing payroll as described in finding 2024-001. Effect: The University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency.
2024-005 (2022-005) Procurement, Small Purchase (Significant Deficiency in Internal Controls over Compliance with Questioned Costs Greater than $25,000) - Repeated Title: Research and Development Cluster Funding Agency: National Science Foundation Federal Award Agreement Number: 1914463, 1953487 Award Year: 2024 Assistance Listing Number: 47.076 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013 Award Year:2024 Assistance Listing Number:10.694 Condition: During our review of procurement testing in the Research and Development Cluster, the University did not follow small purchase procedures and did not have an annual self-certification election to follow micropurchase procurement for professional services. In our procurement testing in the Southwest Forest Health and Wildfire Prevention grant, no support was provided to test the procurement methods used for small purchases. Progress on resolution of prior year finding: No progress was made. Questioned Costs: Known and likely questioned costs of $78,063 and $30,975 in the R&D Cluster and the Southwest Forest Health and Wildfire Prevention program, respectively. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2 CFR 200.320(a) sets the micro-purchase threshold at $10,000 and requires purchases over the micro-purchase threshold to use small purchase procedures, whereby price or rate quotations must be obtained and 2 CFR 200.320(a)(1)(iv) states the recipient may self-certify a threshold up to $50,000 on an annual basis and must maintain documentation to be made available to the auditors which includes a justification, clear identification of the threshold, and supporting documentation. Per Title 2 US Code of Federal Regulations Part 200.403(g), costs must be adequately documented to be allowable under Federal awards. Cause: The University was using a $50,000 threshold for professional services to utilize micropurchase method of procurement in the Research and Development Cluster. In the Southwest Forest Health and Wildfire Prevention grant, the University was not retaining the supporting documentation to ensure purchase is allowable. Effect: The University may unintentionally use a higher-cost vendor when failing to obtain price or rate quotations for items over the micro-purchase threshold. In addition, the University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency
2024-003 Controls over Payroll (Material Weakness in Internal Controls over Compliance and Material Noncompliance) Title: Research and Development Cluster Funding Agency, Federal Award, Agreement Number, Award Year, Assistance Listing Number: National Science Foundation, 2122108, 2024,47.049 National Science Foundation, 1953487, 2024,47.076 United States Department of Education, P031C160248, 2024, 84.031C United States Department of Health and Human Services, 1R16GM146669-01 & Q02067J, 2024, 93.859 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013, 23-DG-11030000-014 Award Year:2024 Assistance Listing Number:10.694 Title: Foster Care-Title IV-E Funding Agency: United States Department of Health and Human Services Federal Award Agreement Number:N/A Award Year:2024 Assistance Listing Number:93.658 Pass-Through Agency:CYFD Pass-Through Identification Number:23-690-500-25581 Condition: In testing 25 payroll items from each program listed above, CRI noted exceptions as described in the following table. No exceptions were noted in the items tested for the Foster Care program. (See table in report pg 120) Questioned Costs: Known and likely questioned costs of $4,547 and $506,209 are associated with the R&D Cluster related to discrepancies in time and effort documentation. No questioned costs were noted in the Southwest Forest Health and Wildfire Prevention Program or the Foster Care program. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal 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). Per 2 CFR section 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: paragraph (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles; paragraph (g) Be adequately documented. Per 2 CFR section 200.430 – Compensation – personal services, paragraph (i) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Cause: The University does not have sufficient controls in place to ensure the accuracy of the amounts paid to employees nor include appropriate approvals documented to be allowable to be charged to the federal grant. The University has deficiencies recording and processing payroll as described in finding 2024-001. Effect: The University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency.
2024-005 (2022-005) Procurement, Small Purchase (Significant Deficiency in Internal Controls over Compliance with Questioned Costs Greater than $25,000) - Repeated Title: Research and Development Cluster Funding Agency: National Science Foundation Federal Award Agreement Number: 1914463, 1953487 Award Year: 2024 Assistance Listing Number: 47.076 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013 Award Year:2024 Assistance Listing Number:10.694 Condition: During our review of procurement testing in the Research and Development Cluster, the University did not follow small purchase procedures and did not have an annual self-certification election to follow micropurchase procurement for professional services. In our procurement testing in the Southwest Forest Health and Wildfire Prevention grant, no support was provided to test the procurement methods used for small purchases. Progress on resolution of prior year finding: No progress was made. Questioned Costs: Known and likely questioned costs of $78,063 and $30,975 in the R&D Cluster and the Southwest Forest Health and Wildfire Prevention program, respectively. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2 CFR 200.320(a) sets the micro-purchase threshold at $10,000 and requires purchases over the micro-purchase threshold to use small purchase procedures, whereby price or rate quotations must be obtained and 2 CFR 200.320(a)(1)(iv) states the recipient may self-certify a threshold up to $50,000 on an annual basis and must maintain documentation to be made available to the auditors which includes a justification, clear identification of the threshold, and supporting documentation. Per Title 2 US Code of Federal Regulations Part 200.403(g), costs must be adequately documented to be allowable under Federal awards. Cause: The University was using a $50,000 threshold for professional services to utilize micropurchase method of procurement in the Research and Development Cluster. In the Southwest Forest Health and Wildfire Prevention grant, the University was not retaining the supporting documentation to ensure purchase is allowable. Effect: The University may unintentionally use a higher-cost vendor when failing to obtain price or rate quotations for items over the micro-purchase threshold. In addition, the University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency
2024-003 Controls over Payroll (Material Weakness in Internal Controls over Compliance and Material Noncompliance) Title: Research and Development Cluster Funding Agency, Federal Award, Agreement Number, Award Year, Assistance Listing Number: National Science Foundation, 2122108, 2024,47.049 National Science Foundation, 1953487, 2024,47.076 United States Department of Education, P031C160248, 2024, 84.031C United States Department of Health and Human Services, 1R16GM146669-01 & Q02067J, 2024, 93.859 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013, 23-DG-11030000-014 Award Year:2024 Assistance Listing Number:10.694 Title: Foster Care-Title IV-E Funding Agency: United States Department of Health and Human Services Federal Award Agreement Number:N/A Award Year:2024 Assistance Listing Number:93.658 Pass-Through Agency:CYFD Pass-Through Identification Number:23-690-500-25581 Condition: In testing 25 payroll items from each program listed above, CRI noted exceptions as described in the following table. No exceptions were noted in the items tested for the Foster Care program. (See table in report pg 120) Questioned Costs: Known and likely questioned costs of $4,547 and $506,209 are associated with the R&D Cluster related to discrepancies in time and effort documentation. No questioned costs were noted in the Southwest Forest Health and Wildfire Prevention Program or the Foster Care program. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal 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). Per 2 CFR section 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: paragraph (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles; paragraph (g) Be adequately documented. Per 2 CFR section 200.430 – Compensation – personal services, paragraph (i) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Cause: The University does not have sufficient controls in place to ensure the accuracy of the amounts paid to employees nor include appropriate approvals documented to be allowable to be charged to the federal grant. The University has deficiencies recording and processing payroll as described in finding 2024-001. Effect: The University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency.
2024-005 (2022-005) Procurement, Small Purchase (Significant Deficiency in Internal Controls over Compliance with Questioned Costs Greater than $25,000) - Repeated Title: Research and Development Cluster Funding Agency: National Science Foundation Federal Award Agreement Number: 1914463, 1953487 Award Year: 2024 Assistance Listing Number: 47.076 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013 Award Year:2024 Assistance Listing Number:10.694 Condition: During our review of procurement testing in the Research and Development Cluster, the University did not follow small purchase procedures and did not have an annual self-certification election to follow micropurchase procurement for professional services. In our procurement testing in the Southwest Forest Health and Wildfire Prevention grant, no support was provided to test the procurement methods used for small purchases. Progress on resolution of prior year finding: No progress was made. Questioned Costs: Known and likely questioned costs of $78,063 and $30,975 in the R&D Cluster and the Southwest Forest Health and Wildfire Prevention program, respectively. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2 CFR 200.320(a) sets the micro-purchase threshold at $10,000 and requires purchases over the micro-purchase threshold to use small purchase procedures, whereby price or rate quotations must be obtained and 2 CFR 200.320(a)(1)(iv) states the recipient may self-certify a threshold up to $50,000 on an annual basis and must maintain documentation to be made available to the auditors which includes a justification, clear identification of the threshold, and supporting documentation. Per Title 2 US Code of Federal Regulations Part 200.403(g), costs must be adequately documented to be allowable under Federal awards. Cause: The University was using a $50,000 threshold for professional services to utilize micropurchase method of procurement in the Research and Development Cluster. In the Southwest Forest Health and Wildfire Prevention grant, the University was not retaining the supporting documentation to ensure purchase is allowable. Effect: The University may unintentionally use a higher-cost vendor when failing to obtain price or rate quotations for items over the micro-purchase threshold. In addition, the University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency
2024-003 Controls over Payroll (Material Weakness in Internal Controls over Compliance and Material Noncompliance) Title: Research and Development Cluster Funding Agency, Federal Award, Agreement Number, Award Year, Assistance Listing Number: National Science Foundation, 2122108, 2024,47.049 National Science Foundation, 1953487, 2024,47.076 United States Department of Education, P031C160248, 2024, 84.031C United States Department of Health and Human Services, 1R16GM146669-01 & Q02067J, 2024, 93.859 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013, 23-DG-11030000-014 Award Year:2024 Assistance Listing Number:10.694 Title: Foster Care-Title IV-E Funding Agency: United States Department of Health and Human Services Federal Award Agreement Number:N/A Award Year:2024 Assistance Listing Number:93.658 Pass-Through Agency:CYFD Pass-Through Identification Number:23-690-500-25581 Condition: In testing 25 payroll items from each program listed above, CRI noted exceptions as described in the following table. No exceptions were noted in the items tested for the Foster Care program. (See table in report pg 120) Questioned Costs: Known and likely questioned costs of $4,547 and $506,209 are associated with the R&D Cluster related to discrepancies in time and effort documentation. No questioned costs were noted in the Southwest Forest Health and Wildfire Prevention Program or the Foster Care program. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal 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). Per 2 CFR section 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: paragraph (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles; paragraph (g) Be adequately documented. Per 2 CFR section 200.430 – Compensation – personal services, paragraph (i) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Cause: The University does not have sufficient controls in place to ensure the accuracy of the amounts paid to employees nor include appropriate approvals documented to be allowable to be charged to the federal grant. The University has deficiencies recording and processing payroll as described in finding 2024-001. Effect: The University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency.
2024-005 (2022-005) Procurement, Small Purchase (Significant Deficiency in Internal Controls over Compliance with Questioned Costs Greater than $25,000) - Repeated Title: Research and Development Cluster Funding Agency: National Science Foundation Federal Award Agreement Number: 1914463, 1953487 Award Year: 2024 Assistance Listing Number: 47.076 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013 Award Year:2024 Assistance Listing Number:10.694 Condition: During our review of procurement testing in the Research and Development Cluster, the University did not follow small purchase procedures and did not have an annual self-certification election to follow micropurchase procurement for professional services. In our procurement testing in the Southwest Forest Health and Wildfire Prevention grant, no support was provided to test the procurement methods used for small purchases. Progress on resolution of prior year finding: No progress was made. Questioned Costs: Known and likely questioned costs of $78,063 and $30,975 in the R&D Cluster and the Southwest Forest Health and Wildfire Prevention program, respectively. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2 CFR 200.320(a) sets the micro-purchase threshold at $10,000 and requires purchases over the micro-purchase threshold to use small purchase procedures, whereby price or rate quotations must be obtained and 2 CFR 200.320(a)(1)(iv) states the recipient may self-certify a threshold up to $50,000 on an annual basis and must maintain documentation to be made available to the auditors which includes a justification, clear identification of the threshold, and supporting documentation. Per Title 2 US Code of Federal Regulations Part 200.403(g), costs must be adequately documented to be allowable under Federal awards. Cause: The University was using a $50,000 threshold for professional services to utilize micropurchase method of procurement in the Research and Development Cluster. In the Southwest Forest Health and Wildfire Prevention grant, the University was not retaining the supporting documentation to ensure purchase is allowable. Effect: The University may unintentionally use a higher-cost vendor when failing to obtain price or rate quotations for items over the micro-purchase threshold. In addition, the University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency
2024-003 Controls over Payroll (Material Weakness in Internal Controls over Compliance and Material Noncompliance) Title: Research and Development Cluster Funding Agency, Federal Award, Agreement Number, Award Year, Assistance Listing Number: National Science Foundation, 2122108, 2024,47.049 National Science Foundation, 1953487, 2024,47.076 United States Department of Education, P031C160248, 2024, 84.031C United States Department of Health and Human Services, 1R16GM146669-01 & Q02067J, 2024, 93.859 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013, 23-DG-11030000-014 Award Year:2024 Assistance Listing Number:10.694 Title: Foster Care-Title IV-E Funding Agency: United States Department of Health and Human Services Federal Award Agreement Number:N/A Award Year:2024 Assistance Listing Number:93.658 Pass-Through Agency:CYFD Pass-Through Identification Number:23-690-500-25581 Condition: In testing 25 payroll items from each program listed above, CRI noted exceptions as described in the following table. No exceptions were noted in the items tested for the Foster Care program. (See table in report pg 120) Questioned Costs: Known and likely questioned costs of $4,547 and $506,209 are associated with the R&D Cluster related to discrepancies in time and effort documentation. No questioned costs were noted in the Southwest Forest Health and Wildfire Prevention Program or the Foster Care program. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal 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). Per 2 CFR section 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: paragraph (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles; paragraph (g) Be adequately documented. Per 2 CFR section 200.430 – Compensation – personal services, paragraph (i) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Cause: The University does not have sufficient controls in place to ensure the accuracy of the amounts paid to employees nor include appropriate approvals documented to be allowable to be charged to the federal grant. The University has deficiencies recording and processing payroll as described in finding 2024-001. Effect: The University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency.
2024-005 (2022-005) Procurement, Small Purchase (Significant Deficiency in Internal Controls over Compliance with Questioned Costs Greater than $25,000) - Repeated Title: Research and Development Cluster Funding Agency: National Science Foundation Federal Award Agreement Number: 1914463, 1953487 Award Year: 2024 Assistance Listing Number: 47.076 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013 Award Year:2024 Assistance Listing Number:10.694 Condition: During our review of procurement testing in the Research and Development Cluster, the University did not follow small purchase procedures and did not have an annual self-certification election to follow micropurchase procurement for professional services. In our procurement testing in the Southwest Forest Health and Wildfire Prevention grant, no support was provided to test the procurement methods used for small purchases. Progress on resolution of prior year finding: No progress was made. Questioned Costs: Known and likely questioned costs of $78,063 and $30,975 in the R&D Cluster and the Southwest Forest Health and Wildfire Prevention program, respectively. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2 CFR 200.320(a) sets the micro-purchase threshold at $10,000 and requires purchases over the micro-purchase threshold to use small purchase procedures, whereby price or rate quotations must be obtained and 2 CFR 200.320(a)(1)(iv) states the recipient may self-certify a threshold up to $50,000 on an annual basis and must maintain documentation to be made available to the auditors which includes a justification, clear identification of the threshold, and supporting documentation. Per Title 2 US Code of Federal Regulations Part 200.403(g), costs must be adequately documented to be allowable under Federal awards. Cause: The University was using a $50,000 threshold for professional services to utilize micropurchase method of procurement in the Research and Development Cluster. In the Southwest Forest Health and Wildfire Prevention grant, the University was not retaining the supporting documentation to ensure purchase is allowable. Effect: The University may unintentionally use a higher-cost vendor when failing to obtain price or rate quotations for items over the micro-purchase threshold. In addition, the University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency
2024-003 Controls over Payroll (Material Weakness in Internal Controls over Compliance and Material Noncompliance) Title: Research and Development Cluster Funding Agency, Federal Award, Agreement Number, Award Year, Assistance Listing Number: National Science Foundation, 2122108, 2024,47.049 National Science Foundation, 1953487, 2024,47.076 United States Department of Education, P031C160248, 2024, 84.031C United States Department of Health and Human Services, 1R16GM146669-01 & Q02067J, 2024, 93.859 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013, 23-DG-11030000-014 Award Year:2024 Assistance Listing Number:10.694 Title: Foster Care-Title IV-E Funding Agency: United States Department of Health and Human Services Federal Award Agreement Number:N/A Award Year:2024 Assistance Listing Number:93.658 Pass-Through Agency:CYFD Pass-Through Identification Number:23-690-500-25581 Condition: In testing 25 payroll items from each program listed above, CRI noted exceptions as described in the following table. No exceptions were noted in the items tested for the Foster Care program. (See table in report pg 120) Questioned Costs: Known and likely questioned costs of $4,547 and $506,209 are associated with the R&D Cluster related to discrepancies in time and effort documentation. No questioned costs were noted in the Southwest Forest Health and Wildfire Prevention Program or the Foster Care program. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal 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). Per 2 CFR section 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: paragraph (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles; paragraph (g) Be adequately documented. Per 2 CFR section 200.430 – Compensation – personal services, paragraph (i) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Cause: The University does not have sufficient controls in place to ensure the accuracy of the amounts paid to employees nor include appropriate approvals documented to be allowable to be charged to the federal grant. The University has deficiencies recording and processing payroll as described in finding 2024-001. Effect: The University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency.
2024-005 (2022-005) Procurement, Small Purchase (Significant Deficiency in Internal Controls over Compliance with Questioned Costs Greater than $25,000) - Repeated Title: Research and Development Cluster Funding Agency: National Science Foundation Federal Award Agreement Number: 1914463, 1953487 Award Year: 2024 Assistance Listing Number: 47.076 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013 Award Year:2024 Assistance Listing Number:10.694 Condition: During our review of procurement testing in the Research and Development Cluster, the University did not follow small purchase procedures and did not have an annual self-certification election to follow micropurchase procurement for professional services. In our procurement testing in the Southwest Forest Health and Wildfire Prevention grant, no support was provided to test the procurement methods used for small purchases. Progress on resolution of prior year finding: No progress was made. Questioned Costs: Known and likely questioned costs of $78,063 and $30,975 in the R&D Cluster and the Southwest Forest Health and Wildfire Prevention program, respectively. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2 CFR 200.320(a) sets the micro-purchase threshold at $10,000 and requires purchases over the micro-purchase threshold to use small purchase procedures, whereby price or rate quotations must be obtained and 2 CFR 200.320(a)(1)(iv) states the recipient may self-certify a threshold up to $50,000 on an annual basis and must maintain documentation to be made available to the auditors which includes a justification, clear identification of the threshold, and supporting documentation. Per Title 2 US Code of Federal Regulations Part 200.403(g), costs must be adequately documented to be allowable under Federal awards. Cause: The University was using a $50,000 threshold for professional services to utilize micropurchase method of procurement in the Research and Development Cluster. In the Southwest Forest Health and Wildfire Prevention grant, the University was not retaining the supporting documentation to ensure purchase is allowable. Effect: The University may unintentionally use a higher-cost vendor when failing to obtain price or rate quotations for items over the micro-purchase threshold. In addition, the University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency
2024-003 Controls over Payroll (Material Weakness in Internal Controls over Compliance and Material Noncompliance) Title: Research and Development Cluster Funding Agency, Federal Award, Agreement Number, Award Year, Assistance Listing Number: National Science Foundation, 2122108, 2024,47.049 National Science Foundation, 1953487, 2024,47.076 United States Department of Education, P031C160248, 2024, 84.031C United States Department of Health and Human Services, 1R16GM146669-01 & Q02067J, 2024, 93.859 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013, 23-DG-11030000-014 Award Year:2024 Assistance Listing Number:10.694 Title: Foster Care-Title IV-E Funding Agency: United States Department of Health and Human Services Federal Award Agreement Number:N/A Award Year:2024 Assistance Listing Number:93.658 Pass-Through Agency:CYFD Pass-Through Identification Number:23-690-500-25581 Condition: In testing 25 payroll items from each program listed above, CRI noted exceptions as described in the following table. No exceptions were noted in the items tested for the Foster Care program. (See table in report pg 120) Questioned Costs: Known and likely questioned costs of $4,547 and $506,209 are associated with the R&D Cluster related to discrepancies in time and effort documentation. No questioned costs were noted in the Southwest Forest Health and Wildfire Prevention Program or the Foster Care program. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal 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). Per 2 CFR section 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: paragraph (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles; paragraph (g) Be adequately documented. Per 2 CFR section 200.430 – Compensation – personal services, paragraph (i) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Cause: The University does not have sufficient controls in place to ensure the accuracy of the amounts paid to employees nor include appropriate approvals documented to be allowable to be charged to the federal grant. The University has deficiencies recording and processing payroll as described in finding 2024-001. Effect: The University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency.
2024-005 (2022-005) Procurement, Small Purchase (Significant Deficiency in Internal Controls over Compliance with Questioned Costs Greater than $25,000) - Repeated Title: Research and Development Cluster Funding Agency: National Science Foundation Federal Award Agreement Number: 1914463, 1953487 Award Year: 2024 Assistance Listing Number: 47.076 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013 Award Year:2024 Assistance Listing Number:10.694 Condition: During our review of procurement testing in the Research and Development Cluster, the University did not follow small purchase procedures and did not have an annual self-certification election to follow micropurchase procurement for professional services. In our procurement testing in the Southwest Forest Health and Wildfire Prevention grant, no support was provided to test the procurement methods used for small purchases. Progress on resolution of prior year finding: No progress was made. Questioned Costs: Known and likely questioned costs of $78,063 and $30,975 in the R&D Cluster and the Southwest Forest Health and Wildfire Prevention program, respectively. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2 CFR 200.320(a) sets the micro-purchase threshold at $10,000 and requires purchases over the micro-purchase threshold to use small purchase procedures, whereby price or rate quotations must be obtained and 2 CFR 200.320(a)(1)(iv) states the recipient may self-certify a threshold up to $50,000 on an annual basis and must maintain documentation to be made available to the auditors which includes a justification, clear identification of the threshold, and supporting documentation. Per Title 2 US Code of Federal Regulations Part 200.403(g), costs must be adequately documented to be allowable under Federal awards. Cause: The University was using a $50,000 threshold for professional services to utilize micropurchase method of procurement in the Research and Development Cluster. In the Southwest Forest Health and Wildfire Prevention grant, the University was not retaining the supporting documentation to ensure purchase is allowable. Effect: The University may unintentionally use a higher-cost vendor when failing to obtain price or rate quotations for items over the micro-purchase threshold. In addition, the University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency
2024-003 Controls over Payroll (Material Weakness in Internal Controls over Compliance and Material Noncompliance) Title: Research and Development Cluster Funding Agency, Federal Award, Agreement Number, Award Year, Assistance Listing Number: National Science Foundation, 2122108, 2024,47.049 National Science Foundation, 1953487, 2024,47.076 United States Department of Education, P031C160248, 2024, 84.031C United States Department of Health and Human Services, 1R16GM146669-01 & Q02067J, 2024, 93.859 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013, 23-DG-11030000-014 Award Year:2024 Assistance Listing Number:10.694 Title: Foster Care-Title IV-E Funding Agency: United States Department of Health and Human Services Federal Award Agreement Number:N/A Award Year:2024 Assistance Listing Number:93.658 Pass-Through Agency:CYFD Pass-Through Identification Number:23-690-500-25581 Condition: In testing 25 payroll items from each program listed above, CRI noted exceptions as described in the following table. No exceptions were noted in the items tested for the Foster Care program. (See table in report pg 120) Questioned Costs: Known and likely questioned costs of $4,547 and $506,209 are associated with the R&D Cluster related to discrepancies in time and effort documentation. No questioned costs were noted in the Southwest Forest Health and Wildfire Prevention Program or the Foster Care program. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal 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). Per 2 CFR section 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: paragraph (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles; paragraph (g) Be adequately documented. Per 2 CFR section 200.430 – Compensation – personal services, paragraph (i) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Cause: The University does not have sufficient controls in place to ensure the accuracy of the amounts paid to employees nor include appropriate approvals documented to be allowable to be charged to the federal grant. The University has deficiencies recording and processing payroll as described in finding 2024-001. Effect: The University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency.
2024-005 (2022-005) Procurement, Small Purchase (Significant Deficiency in Internal Controls over Compliance with Questioned Costs Greater than $25,000) - Repeated Title: Research and Development Cluster Funding Agency: National Science Foundation Federal Award Agreement Number: 1914463, 1953487 Award Year: 2024 Assistance Listing Number: 47.076 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013 Award Year:2024 Assistance Listing Number:10.694 Condition: During our review of procurement testing in the Research and Development Cluster, the University did not follow small purchase procedures and did not have an annual self-certification election to follow micropurchase procurement for professional services. In our procurement testing in the Southwest Forest Health and Wildfire Prevention grant, no support was provided to test the procurement methods used for small purchases. Progress on resolution of prior year finding: No progress was made. Questioned Costs: Known and likely questioned costs of $78,063 and $30,975 in the R&D Cluster and the Southwest Forest Health and Wildfire Prevention program, respectively. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2 CFR 200.320(a) sets the micro-purchase threshold at $10,000 and requires purchases over the micro-purchase threshold to use small purchase procedures, whereby price or rate quotations must be obtained and 2 CFR 200.320(a)(1)(iv) states the recipient may self-certify a threshold up to $50,000 on an annual basis and must maintain documentation to be made available to the auditors which includes a justification, clear identification of the threshold, and supporting documentation. Per Title 2 US Code of Federal Regulations Part 200.403(g), costs must be adequately documented to be allowable under Federal awards. Cause: The University was using a $50,000 threshold for professional services to utilize micropurchase method of procurement in the Research and Development Cluster. In the Southwest Forest Health and Wildfire Prevention grant, the University was not retaining the supporting documentation to ensure purchase is allowable. Effect: The University may unintentionally use a higher-cost vendor when failing to obtain price or rate quotations for items over the micro-purchase threshold. In addition, the University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency
2024-003 Controls over Payroll (Material Weakness in Internal Controls over Compliance and Material Noncompliance) Title: Research and Development Cluster Funding Agency, Federal Award, Agreement Number, Award Year, Assistance Listing Number: National Science Foundation, 2122108, 2024,47.049 National Science Foundation, 1953487, 2024,47.076 United States Department of Education, P031C160248, 2024, 84.031C United States Department of Health and Human Services, 1R16GM146669-01 & Q02067J, 2024, 93.859 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013, 23-DG-11030000-014 Award Year:2024 Assistance Listing Number:10.694 Title: Foster Care-Title IV-E Funding Agency: United States Department of Health and Human Services Federal Award Agreement Number:N/A Award Year:2024 Assistance Listing Number:93.658 Pass-Through Agency:CYFD Pass-Through Identification Number:23-690-500-25581 Condition: In testing 25 payroll items from each program listed above, CRI noted exceptions as described in the following table. No exceptions were noted in the items tested for the Foster Care program. (See table in report pg 120) Questioned Costs: Known and likely questioned costs of $4,547 and $506,209 are associated with the R&D Cluster related to discrepancies in time and effort documentation. No questioned costs were noted in the Southwest Forest Health and Wildfire Prevention Program or the Foster Care program. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal 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). Per 2 CFR section 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: paragraph (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles; paragraph (g) Be adequately documented. Per 2 CFR section 200.430 – Compensation – personal services, paragraph (i) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Cause: The University does not have sufficient controls in place to ensure the accuracy of the amounts paid to employees nor include appropriate approvals documented to be allowable to be charged to the federal grant. The University has deficiencies recording and processing payroll as described in finding 2024-001. Effect: The University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency.
2024-005 (2022-005) Procurement, Small Purchase (Significant Deficiency in Internal Controls over Compliance with Questioned Costs Greater than $25,000) - Repeated Title: Research and Development Cluster Funding Agency: National Science Foundation Federal Award Agreement Number: 1914463, 1953487 Award Year: 2024 Assistance Listing Number: 47.076 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013 Award Year:2024 Assistance Listing Number:10.694 Condition: During our review of procurement testing in the Research and Development Cluster, the University did not follow small purchase procedures and did not have an annual self-certification election to follow micropurchase procurement for professional services. In our procurement testing in the Southwest Forest Health and Wildfire Prevention grant, no support was provided to test the procurement methods used for small purchases. Progress on resolution of prior year finding: No progress was made. Questioned Costs: Known and likely questioned costs of $78,063 and $30,975 in the R&D Cluster and the Southwest Forest Health and Wildfire Prevention program, respectively. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2 CFR 200.320(a) sets the micro-purchase threshold at $10,000 and requires purchases over the micro-purchase threshold to use small purchase procedures, whereby price or rate quotations must be obtained and 2 CFR 200.320(a)(1)(iv) states the recipient may self-certify a threshold up to $50,000 on an annual basis and must maintain documentation to be made available to the auditors which includes a justification, clear identification of the threshold, and supporting documentation. Per Title 2 US Code of Federal Regulations Part 200.403(g), costs must be adequately documented to be allowable under Federal awards. Cause: The University was using a $50,000 threshold for professional services to utilize micropurchase method of procurement in the Research and Development Cluster. In the Southwest Forest Health and Wildfire Prevention grant, the University was not retaining the supporting documentation to ensure purchase is allowable. Effect: The University may unintentionally use a higher-cost vendor when failing to obtain price or rate quotations for items over the micro-purchase threshold. In addition, the University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency
2024-003 Controls over Payroll (Material Weakness in Internal Controls over Compliance and Material Noncompliance) Title: Research and Development Cluster Funding Agency, Federal Award, Agreement Number, Award Year, Assistance Listing Number: National Science Foundation, 2122108, 2024,47.049 National Science Foundation, 1953487, 2024,47.076 United States Department of Education, P031C160248, 2024, 84.031C United States Department of Health and Human Services, 1R16GM146669-01 & Q02067J, 2024, 93.859 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013, 23-DG-11030000-014 Award Year:2024 Assistance Listing Number:10.694 Title: Foster Care-Title IV-E Funding Agency: United States Department of Health and Human Services Federal Award Agreement Number:N/A Award Year:2024 Assistance Listing Number:93.658 Pass-Through Agency:CYFD Pass-Through Identification Number:23-690-500-25581 Condition: In testing 25 payroll items from each program listed above, CRI noted exceptions as described in the following table. No exceptions were noted in the items tested for the Foster Care program. (See table in report pg 120) Questioned Costs: Known and likely questioned costs of $4,547 and $506,209 are associated with the R&D Cluster related to discrepancies in time and effort documentation. No questioned costs were noted in the Southwest Forest Health and Wildfire Prevention Program or the Foster Care program. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal 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). Per 2 CFR section 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: paragraph (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles; paragraph (g) Be adequately documented. Per 2 CFR section 200.430 – Compensation – personal services, paragraph (i) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Cause: The University does not have sufficient controls in place to ensure the accuracy of the amounts paid to employees nor include appropriate approvals documented to be allowable to be charged to the federal grant. The University has deficiencies recording and processing payroll as described in finding 2024-001. Effect: The University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency.
2024-005 (2022-005) Procurement, Small Purchase (Significant Deficiency in Internal Controls over Compliance with Questioned Costs Greater than $25,000) - Repeated Title: Research and Development Cluster Funding Agency: National Science Foundation Federal Award Agreement Number: 1914463, 1953487 Award Year: 2024 Assistance Listing Number: 47.076 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013 Award Year:2024 Assistance Listing Number:10.694 Condition: During our review of procurement testing in the Research and Development Cluster, the University did not follow small purchase procedures and did not have an annual self-certification election to follow micropurchase procurement for professional services. In our procurement testing in the Southwest Forest Health and Wildfire Prevention grant, no support was provided to test the procurement methods used for small purchases. Progress on resolution of prior year finding: No progress was made. Questioned Costs: Known and likely questioned costs of $78,063 and $30,975 in the R&D Cluster and the Southwest Forest Health and Wildfire Prevention program, respectively. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2 CFR 200.320(a) sets the micro-purchase threshold at $10,000 and requires purchases over the micro-purchase threshold to use small purchase procedures, whereby price or rate quotations must be obtained and 2 CFR 200.320(a)(1)(iv) states the recipient may self-certify a threshold up to $50,000 on an annual basis and must maintain documentation to be made available to the auditors which includes a justification, clear identification of the threshold, and supporting documentation. Per Title 2 US Code of Federal Regulations Part 200.403(g), costs must be adequately documented to be allowable under Federal awards. Cause: The University was using a $50,000 threshold for professional services to utilize micropurchase method of procurement in the Research and Development Cluster. In the Southwest Forest Health and Wildfire Prevention grant, the University was not retaining the supporting documentation to ensure purchase is allowable. Effect: The University may unintentionally use a higher-cost vendor when failing to obtain price or rate quotations for items over the micro-purchase threshold. In addition, the University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency
2024-003 Controls over Payroll (Material Weakness in Internal Controls over Compliance and Material Noncompliance) Title: Research and Development Cluster Funding Agency, Federal Award, Agreement Number, Award Year, Assistance Listing Number: National Science Foundation, 2122108, 2024,47.049 National Science Foundation, 1953487, 2024,47.076 United States Department of Education, P031C160248, 2024, 84.031C United States Department of Health and Human Services, 1R16GM146669-01 & Q02067J, 2024, 93.859 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013, 23-DG-11030000-014 Award Year:2024 Assistance Listing Number:10.694 Title: Foster Care-Title IV-E Funding Agency: United States Department of Health and Human Services Federal Award Agreement Number:N/A Award Year:2024 Assistance Listing Number:93.658 Pass-Through Agency:CYFD Pass-Through Identification Number:23-690-500-25581 Condition: In testing 25 payroll items from each program listed above, CRI noted exceptions as described in the following table. No exceptions were noted in the items tested for the Foster Care program. (See table in report pg 120) Questioned Costs: Known and likely questioned costs of $4,547 and $506,209 are associated with the R&D Cluster related to discrepancies in time and effort documentation. No questioned costs were noted in the Southwest Forest Health and Wildfire Prevention Program or the Foster Care program. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal 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). Per 2 CFR section 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: paragraph (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles; paragraph (g) Be adequately documented. Per 2 CFR section 200.430 – Compensation – personal services, paragraph (i) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Cause: The University does not have sufficient controls in place to ensure the accuracy of the amounts paid to employees nor include appropriate approvals documented to be allowable to be charged to the federal grant. The University has deficiencies recording and processing payroll as described in finding 2024-001. Effect: The University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency.
2024-005 (2022-005) Procurement, Small Purchase (Significant Deficiency in Internal Controls over Compliance with Questioned Costs Greater than $25,000) - Repeated Title: Research and Development Cluster Funding Agency: National Science Foundation Federal Award Agreement Number: 1914463, 1953487 Award Year: 2024 Assistance Listing Number: 47.076 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013 Award Year:2024 Assistance Listing Number:10.694 Condition: During our review of procurement testing in the Research and Development Cluster, the University did not follow small purchase procedures and did not have an annual self-certification election to follow micropurchase procurement for professional services. In our procurement testing in the Southwest Forest Health and Wildfire Prevention grant, no support was provided to test the procurement methods used for small purchases. Progress on resolution of prior year finding: No progress was made. Questioned Costs: Known and likely questioned costs of $78,063 and $30,975 in the R&D Cluster and the Southwest Forest Health and Wildfire Prevention program, respectively. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2 CFR 200.320(a) sets the micro-purchase threshold at $10,000 and requires purchases over the micro-purchase threshold to use small purchase procedures, whereby price or rate quotations must be obtained and 2 CFR 200.320(a)(1)(iv) states the recipient may self-certify a threshold up to $50,000 on an annual basis and must maintain documentation to be made available to the auditors which includes a justification, clear identification of the threshold, and supporting documentation. Per Title 2 US Code of Federal Regulations Part 200.403(g), costs must be adequately documented to be allowable under Federal awards. Cause: The University was using a $50,000 threshold for professional services to utilize micropurchase method of procurement in the Research and Development Cluster. In the Southwest Forest Health and Wildfire Prevention grant, the University was not retaining the supporting documentation to ensure purchase is allowable. Effect: The University may unintentionally use a higher-cost vendor when failing to obtain price or rate quotations for items over the micro-purchase threshold. In addition, the University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency
2024-003 Controls over Payroll (Material Weakness in Internal Controls over Compliance and Material Noncompliance) Title: Research and Development Cluster Funding Agency, Federal Award, Agreement Number, Award Year, Assistance Listing Number: National Science Foundation, 2122108, 2024,47.049 National Science Foundation, 1953487, 2024,47.076 United States Department of Education, P031C160248, 2024, 84.031C United States Department of Health and Human Services, 1R16GM146669-01 & Q02067J, 2024, 93.859 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013, 23-DG-11030000-014 Award Year:2024 Assistance Listing Number:10.694 Title: Foster Care-Title IV-E Funding Agency: United States Department of Health and Human Services Federal Award Agreement Number:N/A Award Year:2024 Assistance Listing Number:93.658 Pass-Through Agency:CYFD Pass-Through Identification Number:23-690-500-25581 Condition: In testing 25 payroll items from each program listed above, CRI noted exceptions as described in the following table. No exceptions were noted in the items tested for the Foster Care program. (See table in report pg 120) Questioned Costs: Known and likely questioned costs of $4,547 and $506,209 are associated with the R&D Cluster related to discrepancies in time and effort documentation. No questioned costs were noted in the Southwest Forest Health and Wildfire Prevention Program or the Foster Care program. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal 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). Per 2 CFR section 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: paragraph (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles; paragraph (g) Be adequately documented. Per 2 CFR section 200.430 – Compensation – personal services, paragraph (i) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Cause: The University does not have sufficient controls in place to ensure the accuracy of the amounts paid to employees nor include appropriate approvals documented to be allowable to be charged to the federal grant. The University has deficiencies recording and processing payroll as described in finding 2024-001. Effect: The University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency.
2024-005 (2022-005) Procurement, Small Purchase (Significant Deficiency in Internal Controls over Compliance with Questioned Costs Greater than $25,000) - Repeated Title: Research and Development Cluster Funding Agency: National Science Foundation Federal Award Agreement Number: 1914463, 1953487 Award Year: 2024 Assistance Listing Number: 47.076 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013 Award Year:2024 Assistance Listing Number:10.694 Condition: During our review of procurement testing in the Research and Development Cluster, the University did not follow small purchase procedures and did not have an annual self-certification election to follow micropurchase procurement for professional services. In our procurement testing in the Southwest Forest Health and Wildfire Prevention grant, no support was provided to test the procurement methods used for small purchases. Progress on resolution of prior year finding: No progress was made. Questioned Costs: Known and likely questioned costs of $78,063 and $30,975 in the R&D Cluster and the Southwest Forest Health and Wildfire Prevention program, respectively. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2 CFR 200.320(a) sets the micro-purchase threshold at $10,000 and requires purchases over the micro-purchase threshold to use small purchase procedures, whereby price or rate quotations must be obtained and 2 CFR 200.320(a)(1)(iv) states the recipient may self-certify a threshold up to $50,000 on an annual basis and must maintain documentation to be made available to the auditors which includes a justification, clear identification of the threshold, and supporting documentation. Per Title 2 US Code of Federal Regulations Part 200.403(g), costs must be adequately documented to be allowable under Federal awards. Cause: The University was using a $50,000 threshold for professional services to utilize micropurchase method of procurement in the Research and Development Cluster. In the Southwest Forest Health and Wildfire Prevention grant, the University was not retaining the supporting documentation to ensure purchase is allowable. Effect: The University may unintentionally use a higher-cost vendor when failing to obtain price or rate quotations for items over the micro-purchase threshold. In addition, the University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency
2024-003 Controls over Payroll (Material Weakness in Internal Controls over Compliance and Material Noncompliance) Title: Research and Development Cluster Funding Agency, Federal Award, Agreement Number, Award Year, Assistance Listing Number: National Science Foundation, 2122108, 2024,47.049 National Science Foundation, 1953487, 2024,47.076 United States Department of Education, P031C160248, 2024, 84.031C United States Department of Health and Human Services, 1R16GM146669-01 & Q02067J, 2024, 93.859 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013, 23-DG-11030000-014 Award Year:2024 Assistance Listing Number:10.694 Title: Foster Care-Title IV-E Funding Agency: United States Department of Health and Human Services Federal Award Agreement Number:N/A Award Year:2024 Assistance Listing Number:93.658 Pass-Through Agency:CYFD Pass-Through Identification Number:23-690-500-25581 Condition: In testing 25 payroll items from each program listed above, CRI noted exceptions as described in the following table. No exceptions were noted in the items tested for the Foster Care program. (See table in report pg 120) Questioned Costs: Known and likely questioned costs of $4,547 and $506,209 are associated with the R&D Cluster related to discrepancies in time and effort documentation. No questioned costs were noted in the Southwest Forest Health and Wildfire Prevention Program or the Foster Care program. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal 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). Per 2 CFR section 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: paragraph (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles; paragraph (g) Be adequately documented. Per 2 CFR section 200.430 – Compensation – personal services, paragraph (i) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Cause: The University does not have sufficient controls in place to ensure the accuracy of the amounts paid to employees nor include appropriate approvals documented to be allowable to be charged to the federal grant. The University has deficiencies recording and processing payroll as described in finding 2024-001. Effect: The University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency.
2024-005 (2022-005) Procurement, Small Purchase (Significant Deficiency in Internal Controls over Compliance with Questioned Costs Greater than $25,000) - Repeated Title: Research and Development Cluster Funding Agency: National Science Foundation Federal Award Agreement Number: 1914463, 1953487 Award Year: 2024 Assistance Listing Number: 47.076 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013 Award Year:2024 Assistance Listing Number:10.694 Condition: During our review of procurement testing in the Research and Development Cluster, the University did not follow small purchase procedures and did not have an annual self-certification election to follow micropurchase procurement for professional services. In our procurement testing in the Southwest Forest Health and Wildfire Prevention grant, no support was provided to test the procurement methods used for small purchases. Progress on resolution of prior year finding: No progress was made. Questioned Costs: Known and likely questioned costs of $78,063 and $30,975 in the R&D Cluster and the Southwest Forest Health and Wildfire Prevention program, respectively. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2 CFR 200.320(a) sets the micro-purchase threshold at $10,000 and requires purchases over the micro-purchase threshold to use small purchase procedures, whereby price or rate quotations must be obtained and 2 CFR 200.320(a)(1)(iv) states the recipient may self-certify a threshold up to $50,000 on an annual basis and must maintain documentation to be made available to the auditors which includes a justification, clear identification of the threshold, and supporting documentation. Per Title 2 US Code of Federal Regulations Part 200.403(g), costs must be adequately documented to be allowable under Federal awards. Cause: The University was using a $50,000 threshold for professional services to utilize micropurchase method of procurement in the Research and Development Cluster. In the Southwest Forest Health and Wildfire Prevention grant, the University was not retaining the supporting documentation to ensure purchase is allowable. Effect: The University may unintentionally use a higher-cost vendor when failing to obtain price or rate quotations for items over the micro-purchase threshold. In addition, the University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency
2024-003 Controls over Payroll (Material Weakness in Internal Controls over Compliance and Material Noncompliance) Title: Research and Development Cluster Funding Agency, Federal Award, Agreement Number, Award Year, Assistance Listing Number: National Science Foundation, 2122108, 2024,47.049 National Science Foundation, 1953487, 2024,47.076 United States Department of Education, P031C160248, 2024, 84.031C United States Department of Health and Human Services, 1R16GM146669-01 & Q02067J, 2024, 93.859 Title: Southwest Forest Health and Wildfire Prevention Funding Agency: United States Department of Agriculture Federal Award Agreement Number:21-DG-11030000-020, 22-DG-11030000-013, 23-DG-11030000-014 Award Year:2024 Assistance Listing Number:10.694 Title: Foster Care-Title IV-E Funding Agency: United States Department of Health and Human Services Federal Award Agreement Number:N/A Award Year:2024 Assistance Listing Number:93.658 Pass-Through Agency:CYFD Pass-Through Identification Number:23-690-500-25581 Condition: In testing 25 payroll items from each program listed above, CRI noted exceptions as described in the following table. No exceptions were noted in the items tested for the Foster Care program. (See table in report pg 120) Questioned Costs: Known and likely questioned costs of $4,547 and $506,209 are associated with the R&D Cluster related to discrepancies in time and effort documentation. No questioned costs were noted in the Southwest Forest Health and Wildfire Prevention Program or the Foster Care program. Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal 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). Per 2 CFR section 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: paragraph (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles; paragraph (g) Be adequately documented. Per 2 CFR section 200.430 – Compensation – personal services, paragraph (i) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Cause: The University does not have sufficient controls in place to ensure the accuracy of the amounts paid to employees nor include appropriate approvals documented to be allowable to be charged to the federal grant. The University has deficiencies recording and processing payroll as described in finding 2024-001. Effect: The University may unintentionally charge expenses to the program that do not qualify and in turn lead to questioned costs and/or repayment of funds to the Grantor agency.
FINDING 2024-003 Subject: Child Nutrition Cluster - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): 2022-2023, 2023-2024 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-002. Condition and Context An effective internal control system was not designed or implemented at the School Corporation related to food service management company claims, food service payroll benefit claims, and food service payroll to ensure compliance with requirements related to the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Food Service Management Company The School Corporation had not designed nor implemented a system of internal controls to ensure that program costs were supported by proper documentation, were allowable, and were only for the operation of the food service program. INDIANA STATE BOARD OF ACCOUNTS 21 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation entered into a cost reimbursement contract, dated July 1, 2020, with a food service management company (FSMC). Four invoices for payment to the FSMC, which totaled $885,477, were selected for testing. Supporting documentation was presented for only $760,332 of the costs invoiced. Due to the lack of supporting documentation, the Indiana State Board of Accounts was unable to determine if the remaining costs paid, $125,145, were allowable expenditures. The costs that were not properly documented were considered questioned costs. Additionally, in the supporting documentation presented for audit, sales tax was erroneously paid totaling $862. These unallowable costs were considered questioned costs. Payroll In fiscal year 2023-2024, the School Corporation's CTE Coordinator was assigned a new role, Food Service Director/Inventory Coordinator, which included compensation paid out of the Child Nutrition Cluster grant funds. The new role began in May 2024. The Food Service Director did not maintain documentation of time spent on federal program and nonfederal program activities. The total paid to the Food Service Director from the School Lunch fund without proper documentation was $4,358. The costs that were not properly documented were considered questioned costs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "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). . . ." 7 CFR 210.21(f)(1) states in part: ". . . (ii) (A) The contractor must separately identify for each cost submitted for payment to the school food authority the amount of that cost that is allowable (can be paid from the nonprofit school food service account) and the amount that is unallowable (cannot be paid from the nonprofit school food service account); or (B) The contractor must exclude all unallowable costs from its billing documents and certify that only allowable costs are submitted for payment and records have been established that maintain the visibility of unallowable costs, including directly associated costs in a manner suitable for contract cost determination and verification; INDIANA STATE BOARD OF ACCOUNTS 22 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (iii) The contractor's determination of its allowable costs must be made in compliance with the applicable Departmental and Program regulations and Office of Management and Budget cost circulars; . . . (vi) The contractor must maintain documentation of costs and discounts, rebates and other applicable credits, and must furnish such documentation upon request to the school food authority, the State agency, or the Department." 7 CFR 220.7(e) states in part: ". . . the School Food Authority shall, with respect to participating schools under its jurisdiction: (1) (i) Maintain a nonprofit school food service; (ii) . . . use all revenues received by such food service only for the operation or improvement of that food service . . ." 7 CFR 210.14(a) states in part: "Nonprofit school food service. School food authorities shall maintain a nonprofit school food service. Revenues received by the nonprofit school food service are to be used only for the operation or improvement of such food service, except that, such revenues shall not be used to purchase land or buildings, unless otherwise approved by FNS, or to construct buildings. . . ." 7 CFR 225.15(a)(1) states: "Sponsors shall operate the food service in accordance with: the provisions of this part; any instructions and handbooks issued by FNS under this part; and any instructions and handbooks issued by the State agency which are not inconsistent with the provisions of this part." 2 CFR 200.403 states in part: "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. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: INDIANA STATE BOARD OF ACCOUNTS 23 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." Cause A proper system of internal controls over the invoices paid to the FSMC and payroll paid to the Food Service Director were not properly designed or implemented by management. The School Corporation did not receive complete documentation from the FSMC to support the amounts invoiced and did not ensure the Food Service Director maintained a record of actual time spent on child nutrition duties. Effect Noncompliance with the grant agreement and the compliance requirement resulted in questioned costs and could result in the repayment of federal funds. Questioned Costs Known questioned costs of $130,365 were identified as detailed in the Condition and Context. Recommendation We recommended that the School Corporation's management design and implement a system of internal controls to ensure that disbursement documentation will be obtained, retained, and made available for audit and that the disbursements comply with the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-003 Subject: Child Nutrition Cluster - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): 2022-2023, 2023-2024 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-002. Condition and Context An effective internal control system was not designed or implemented at the School Corporation related to food service management company claims, food service payroll benefit claims, and food service payroll to ensure compliance with requirements related to the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Food Service Management Company The School Corporation had not designed nor implemented a system of internal controls to ensure that program costs were supported by proper documentation, were allowable, and were only for the operation of the food service program. INDIANA STATE BOARD OF ACCOUNTS 21 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation entered into a cost reimbursement contract, dated July 1, 2020, with a food service management company (FSMC). Four invoices for payment to the FSMC, which totaled $885,477, were selected for testing. Supporting documentation was presented for only $760,332 of the costs invoiced. Due to the lack of supporting documentation, the Indiana State Board of Accounts was unable to determine if the remaining costs paid, $125,145, were allowable expenditures. The costs that were not properly documented were considered questioned costs. Additionally, in the supporting documentation presented for audit, sales tax was erroneously paid totaling $862. These unallowable costs were considered questioned costs. Payroll In fiscal year 2023-2024, the School Corporation's CTE Coordinator was assigned a new role, Food Service Director/Inventory Coordinator, which included compensation paid out of the Child Nutrition Cluster grant funds. The new role began in May 2024. The Food Service Director did not maintain documentation of time spent on federal program and nonfederal program activities. The total paid to the Food Service Director from the School Lunch fund without proper documentation was $4,358. The costs that were not properly documented were considered questioned costs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "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). . . ." 7 CFR 210.21(f)(1) states in part: ". . . (ii) (A) The contractor must separately identify for each cost submitted for payment to the school food authority the amount of that cost that is allowable (can be paid from the nonprofit school food service account) and the amount that is unallowable (cannot be paid from the nonprofit school food service account); or (B) The contractor must exclude all unallowable costs from its billing documents and certify that only allowable costs are submitted for payment and records have been established that maintain the visibility of unallowable costs, including directly associated costs in a manner suitable for contract cost determination and verification; INDIANA STATE BOARD OF ACCOUNTS 22 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (iii) The contractor's determination of its allowable costs must be made in compliance with the applicable Departmental and Program regulations and Office of Management and Budget cost circulars; . . . (vi) The contractor must maintain documentation of costs and discounts, rebates and other applicable credits, and must furnish such documentation upon request to the school food authority, the State agency, or the Department." 7 CFR 220.7(e) states in part: ". . . the School Food Authority shall, with respect to participating schools under its jurisdiction: (1) (i) Maintain a nonprofit school food service; (ii) . . . use all revenues received by such food service only for the operation or improvement of that food service . . ." 7 CFR 210.14(a) states in part: "Nonprofit school food service. School food authorities shall maintain a nonprofit school food service. Revenues received by the nonprofit school food service are to be used only for the operation or improvement of such food service, except that, such revenues shall not be used to purchase land or buildings, unless otherwise approved by FNS, or to construct buildings. . . ." 7 CFR 225.15(a)(1) states: "Sponsors shall operate the food service in accordance with: the provisions of this part; any instructions and handbooks issued by FNS under this part; and any instructions and handbooks issued by the State agency which are not inconsistent with the provisions of this part." 2 CFR 200.403 states in part: "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. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: INDIANA STATE BOARD OF ACCOUNTS 23 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." Cause A proper system of internal controls over the invoices paid to the FSMC and payroll paid to the Food Service Director were not properly designed or implemented by management. The School Corporation did not receive complete documentation from the FSMC to support the amounts invoiced and did not ensure the Food Service Director maintained a record of actual time spent on child nutrition duties. Effect Noncompliance with the grant agreement and the compliance requirement resulted in questioned costs and could result in the repayment of federal funds. Questioned Costs Known questioned costs of $130,365 were identified as detailed in the Condition and Context. Recommendation We recommended that the School Corporation's management design and implement a system of internal controls to ensure that disbursement documentation will be obtained, retained, and made available for audit and that the disbursements comply with the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-003 Subject: Child Nutrition Cluster - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): 2022-2023, 2023-2024 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-002. Condition and Context An effective internal control system was not designed or implemented at the School Corporation related to food service management company claims, food service payroll benefit claims, and food service payroll to ensure compliance with requirements related to the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Food Service Management Company The School Corporation had not designed nor implemented a system of internal controls to ensure that program costs were supported by proper documentation, were allowable, and were only for the operation of the food service program. INDIANA STATE BOARD OF ACCOUNTS 21 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation entered into a cost reimbursement contract, dated July 1, 2020, with a food service management company (FSMC). Four invoices for payment to the FSMC, which totaled $885,477, were selected for testing. Supporting documentation was presented for only $760,332 of the costs invoiced. Due to the lack of supporting documentation, the Indiana State Board of Accounts was unable to determine if the remaining costs paid, $125,145, were allowable expenditures. The costs that were not properly documented were considered questioned costs. Additionally, in the supporting documentation presented for audit, sales tax was erroneously paid totaling $862. These unallowable costs were considered questioned costs. Payroll In fiscal year 2023-2024, the School Corporation's CTE Coordinator was assigned a new role, Food Service Director/Inventory Coordinator, which included compensation paid out of the Child Nutrition Cluster grant funds. The new role began in May 2024. The Food Service Director did not maintain documentation of time spent on federal program and nonfederal program activities. The total paid to the Food Service Director from the School Lunch fund without proper documentation was $4,358. The costs that were not properly documented were considered questioned costs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "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). . . ." 7 CFR 210.21(f)(1) states in part: ". . . (ii) (A) The contractor must separately identify for each cost submitted for payment to the school food authority the amount of that cost that is allowable (can be paid from the nonprofit school food service account) and the amount that is unallowable (cannot be paid from the nonprofit school food service account); or (B) The contractor must exclude all unallowable costs from its billing documents and certify that only allowable costs are submitted for payment and records have been established that maintain the visibility of unallowable costs, including directly associated costs in a manner suitable for contract cost determination and verification; INDIANA STATE BOARD OF ACCOUNTS 22 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (iii) The contractor's determination of its allowable costs must be made in compliance with the applicable Departmental and Program regulations and Office of Management and Budget cost circulars; . . . (vi) The contractor must maintain documentation of costs and discounts, rebates and other applicable credits, and must furnish such documentation upon request to the school food authority, the State agency, or the Department." 7 CFR 220.7(e) states in part: ". . . the School Food Authority shall, with respect to participating schools under its jurisdiction: (1) (i) Maintain a nonprofit school food service; (ii) . . . use all revenues received by such food service only for the operation or improvement of that food service . . ." 7 CFR 210.14(a) states in part: "Nonprofit school food service. School food authorities shall maintain a nonprofit school food service. Revenues received by the nonprofit school food service are to be used only for the operation or improvement of such food service, except that, such revenues shall not be used to purchase land or buildings, unless otherwise approved by FNS, or to construct buildings. . . ." 7 CFR 225.15(a)(1) states: "Sponsors shall operate the food service in accordance with: the provisions of this part; any instructions and handbooks issued by FNS under this part; and any instructions and handbooks issued by the State agency which are not inconsistent with the provisions of this part." 2 CFR 200.403 states in part: "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. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: INDIANA STATE BOARD OF ACCOUNTS 23 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." Cause A proper system of internal controls over the invoices paid to the FSMC and payroll paid to the Food Service Director were not properly designed or implemented by management. The School Corporation did not receive complete documentation from the FSMC to support the amounts invoiced and did not ensure the Food Service Director maintained a record of actual time spent on child nutrition duties. Effect Noncompliance with the grant agreement and the compliance requirement resulted in questioned costs and could result in the repayment of federal funds. Questioned Costs Known questioned costs of $130,365 were identified as detailed in the Condition and Context. Recommendation We recommended that the School Corporation's management design and implement a system of internal controls to ensure that disbursement documentation will be obtained, retained, and made available for audit and that the disbursements comply with the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-003 Subject: Child Nutrition Cluster - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): 2022-2023, 2023-2024 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-002. Condition and Context An effective internal control system was not designed or implemented at the School Corporation related to food service management company claims, food service payroll benefit claims, and food service payroll to ensure compliance with requirements related to the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Food Service Management Company The School Corporation had not designed nor implemented a system of internal controls to ensure that program costs were supported by proper documentation, were allowable, and were only for the operation of the food service program. INDIANA STATE BOARD OF ACCOUNTS 21 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation entered into a cost reimbursement contract, dated July 1, 2020, with a food service management company (FSMC). Four invoices for payment to the FSMC, which totaled $885,477, were selected for testing. Supporting documentation was presented for only $760,332 of the costs invoiced. Due to the lack of supporting documentation, the Indiana State Board of Accounts was unable to determine if the remaining costs paid, $125,145, were allowable expenditures. The costs that were not properly documented were considered questioned costs. Additionally, in the supporting documentation presented for audit, sales tax was erroneously paid totaling $862. These unallowable costs were considered questioned costs. Payroll In fiscal year 2023-2024, the School Corporation's CTE Coordinator was assigned a new role, Food Service Director/Inventory Coordinator, which included compensation paid out of the Child Nutrition Cluster grant funds. The new role began in May 2024. The Food Service Director did not maintain documentation of time spent on federal program and nonfederal program activities. The total paid to the Food Service Director from the School Lunch fund without proper documentation was $4,358. The costs that were not properly documented were considered questioned costs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "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). . . ." 7 CFR 210.21(f)(1) states in part: ". . . (ii) (A) The contractor must separately identify for each cost submitted for payment to the school food authority the amount of that cost that is allowable (can be paid from the nonprofit school food service account) and the amount that is unallowable (cannot be paid from the nonprofit school food service account); or (B) The contractor must exclude all unallowable costs from its billing documents and certify that only allowable costs are submitted for payment and records have been established that maintain the visibility of unallowable costs, including directly associated costs in a manner suitable for contract cost determination and verification; INDIANA STATE BOARD OF ACCOUNTS 22 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (iii) The contractor's determination of its allowable costs must be made in compliance with the applicable Departmental and Program regulations and Office of Management and Budget cost circulars; . . . (vi) The contractor must maintain documentation of costs and discounts, rebates and other applicable credits, and must furnish such documentation upon request to the school food authority, the State agency, or the Department." 7 CFR 220.7(e) states in part: ". . . the School Food Authority shall, with respect to participating schools under its jurisdiction: (1) (i) Maintain a nonprofit school food service; (ii) . . . use all revenues received by such food service only for the operation or improvement of that food service . . ." 7 CFR 210.14(a) states in part: "Nonprofit school food service. School food authorities shall maintain a nonprofit school food service. Revenues received by the nonprofit school food service are to be used only for the operation or improvement of such food service, except that, such revenues shall not be used to purchase land or buildings, unless otherwise approved by FNS, or to construct buildings. . . ." 7 CFR 225.15(a)(1) states: "Sponsors shall operate the food service in accordance with: the provisions of this part; any instructions and handbooks issued by FNS under this part; and any instructions and handbooks issued by the State agency which are not inconsistent with the provisions of this part." 2 CFR 200.403 states in part: "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. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: INDIANA STATE BOARD OF ACCOUNTS 23 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." Cause A proper system of internal controls over the invoices paid to the FSMC and payroll paid to the Food Service Director were not properly designed or implemented by management. The School Corporation did not receive complete documentation from the FSMC to support the amounts invoiced and did not ensure the Food Service Director maintained a record of actual time spent on child nutrition duties. Effect Noncompliance with the grant agreement and the compliance requirement resulted in questioned costs and could result in the repayment of federal funds. Questioned Costs Known questioned costs of $130,365 were identified as detailed in the Condition and Context. Recommendation We recommended that the School Corporation's management design and implement a system of internal controls to ensure that disbursement documentation will be obtained, retained, and made available for audit and that the disbursements comply with the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-003 Subject: Child Nutrition Cluster - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): 2022-2023, 2023-2024 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-002. Condition and Context An effective internal control system was not designed or implemented at the School Corporation related to food service management company claims, food service payroll benefit claims, and food service payroll to ensure compliance with requirements related to the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Food Service Management Company The School Corporation had not designed nor implemented a system of internal controls to ensure that program costs were supported by proper documentation, were allowable, and were only for the operation of the food service program. INDIANA STATE BOARD OF ACCOUNTS 21 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) The School Corporation entered into a cost reimbursement contract, dated July 1, 2020, with a food service management company (FSMC). Four invoices for payment to the FSMC, which totaled $885,477, were selected for testing. Supporting documentation was presented for only $760,332 of the costs invoiced. Due to the lack of supporting documentation, the Indiana State Board of Accounts was unable to determine if the remaining costs paid, $125,145, were allowable expenditures. The costs that were not properly documented were considered questioned costs. Additionally, in the supporting documentation presented for audit, sales tax was erroneously paid totaling $862. These unallowable costs were considered questioned costs. Payroll In fiscal year 2023-2024, the School Corporation's CTE Coordinator was assigned a new role, Food Service Director/Inventory Coordinator, which included compensation paid out of the Child Nutrition Cluster grant funds. The new role began in May 2024. The Food Service Director did not maintain documentation of time spent on federal program and nonfederal program activities. The total paid to the Food Service Director from the School Lunch fund without proper documentation was $4,358. The costs that were not properly documented were considered questioned costs. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "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). . . ." 7 CFR 210.21(f)(1) states in part: ". . . (ii) (A) The contractor must separately identify for each cost submitted for payment to the school food authority the amount of that cost that is allowable (can be paid from the nonprofit school food service account) and the amount that is unallowable (cannot be paid from the nonprofit school food service account); or (B) The contractor must exclude all unallowable costs from its billing documents and certify that only allowable costs are submitted for payment and records have been established that maintain the visibility of unallowable costs, including directly associated costs in a manner suitable for contract cost determination and verification; INDIANA STATE BOARD OF ACCOUNTS 22 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (iii) The contractor's determination of its allowable costs must be made in compliance with the applicable Departmental and Program regulations and Office of Management and Budget cost circulars; . . . (vi) The contractor must maintain documentation of costs and discounts, rebates and other applicable credits, and must furnish such documentation upon request to the school food authority, the State agency, or the Department." 7 CFR 220.7(e) states in part: ". . . the School Food Authority shall, with respect to participating schools under its jurisdiction: (1) (i) Maintain a nonprofit school food service; (ii) . . . use all revenues received by such food service only for the operation or improvement of that food service . . ." 7 CFR 210.14(a) states in part: "Nonprofit school food service. School food authorities shall maintain a nonprofit school food service. Revenues received by the nonprofit school food service are to be used only for the operation or improvement of such food service, except that, such revenues shall not be used to purchase land or buildings, unless otherwise approved by FNS, or to construct buildings. . . ." 7 CFR 225.15(a)(1) states: "Sponsors shall operate the food service in accordance with: the provisions of this part; any instructions and handbooks issued by FNS under this part; and any instructions and handbooks issued by the State agency which are not inconsistent with the provisions of this part." 2 CFR 200.403 states in part: "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. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: INDIANA STATE BOARD OF ACCOUNTS 23 GARY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." Cause A proper system of internal controls over the invoices paid to the FSMC and payroll paid to the Food Service Director were not properly designed or implemented by management. The School Corporation did not receive complete documentation from the FSMC to support the amounts invoiced and did not ensure the Food Service Director maintained a record of actual time spent on child nutrition duties. Effect Noncompliance with the grant agreement and the compliance requirement resulted in questioned costs and could result in the repayment of federal funds. Questioned Costs Known questioned costs of $130,365 were identified as detailed in the Condition and Context. Recommendation We recommended that the School Corporation's management design and implement a system of internal controls to ensure that disbursement documentation will be obtained, retained, and made available for audit and that the disbursements comply with the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.