FINDING 2024-010 Subject: Special Education Cluster (IDEA) - Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States, Special Education Preschool Grants, COVID-19 - Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.027X, 84.173, 84.173X Federal Award Numbers and Years (or Other Identifying Numbers): 22611-027-PN01, 22611-027-ARP, 22619-027-ARP, 23611-027-PN01, 23619-027-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation had not established an effective internal control system related to the grant agreement and the Allowable Costs/Cost Principles compliance requirement. INDIANA STATE BOARD OF ACCOUNTS 32 HUNTINGTON COUNTY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) During our testing, there were two employees being paid a higher rate per hour for training from the Special Education grant funds. The rate was higher than the normal hourly rate. The rate for the training hours was a stipend rate set by the school for paraprofessional training. There was no authorization by the School Corporation Officials for the rate change between the regular rate and a professional development training rate. The Indiana Department of Education did not approve the separate rate. Other noncompliance involved three employees tested. The School Corporation used accounting software to process payroll. The software calculated payroll tax based on the employee year-to-date salary rather than calculating tax on gross pay per period. The lack of internal controls and noncompliance were isolated to the transactions as described above. 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). . . ." 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. . . ." 34 CFR 76.700 states: "A State and a subgrantee shall comply with § 76.500, the State plan, applicable statutes, regulations, and approved applications, and shall use Federal funds in accordance with those statutes, regulations, plan, and applications." Cause The internal control system over the Allowable Costs/Cost Principles compliance requirement was not effective in preventing or detecting the overpayment of employees. INDIANA STATE BOARD OF ACCOUNTS 33 HUNTINGTON COUNTY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As such, the overpayment of employees was not caught by another employee at the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure payroll applicable to the grant agreement complies with the Allowable Costs/Cost Principles compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-010 Subject: Special Education Cluster (IDEA) - Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States, Special Education Preschool Grants, COVID-19 - Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.027X, 84.173, 84.173X Federal Award Numbers and Years (or Other Identifying Numbers): 22611-027-PN01, 22611-027-ARP, 22619-027-ARP, 23611-027-PN01, 23619-027-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation had not established an effective internal control system related to the grant agreement and the Allowable Costs/Cost Principles compliance requirement. INDIANA STATE BOARD OF ACCOUNTS 32 HUNTINGTON COUNTY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) During our testing, there were two employees being paid a higher rate per hour for training from the Special Education grant funds. The rate was higher than the normal hourly rate. The rate for the training hours was a stipend rate set by the school for paraprofessional training. There was no authorization by the School Corporation Officials for the rate change between the regular rate and a professional development training rate. The Indiana Department of Education did not approve the separate rate. Other noncompliance involved three employees tested. The School Corporation used accounting software to process payroll. The software calculated payroll tax based on the employee year-to-date salary rather than calculating tax on gross pay per period. The lack of internal controls and noncompliance were isolated to the transactions as described above. 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). . . ." 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. . . ." 34 CFR 76.700 states: "A State and a subgrantee shall comply with § 76.500, the State plan, applicable statutes, regulations, and approved applications, and shall use Federal funds in accordance with those statutes, regulations, plan, and applications." Cause The internal control system over the Allowable Costs/Cost Principles compliance requirement was not effective in preventing or detecting the overpayment of employees. INDIANA STATE BOARD OF ACCOUNTS 33 HUNTINGTON COUNTY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As such, the overpayment of employees was not caught by another employee at the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure payroll applicable to the grant agreement complies with the Allowable Costs/Cost Principles compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-010 Subject: Special Education Cluster (IDEA) - Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Programs: Special Education Grants to States, COVID-19 - Special Education Grants to States, Special Education Preschool Grants, COVID-19 - Special Education Preschool Grants Assistance Listings Numbers: 84.027, 84.027X, 84.173, 84.173X Federal Award Numbers and Years (or Other Identifying Numbers): 22611-027-PN01, 22611-027-ARP, 22619-027-ARP, 23611-027-PN01, 23619-027-PN01 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Condition and Context The School Corporation had not established an effective internal control system related to the grant agreement and the Allowable Costs/Cost Principles compliance requirement. INDIANA STATE BOARD OF ACCOUNTS 32 HUNTINGTON COUNTY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) During our testing, there were two employees being paid a higher rate per hour for training from the Special Education grant funds. The rate was higher than the normal hourly rate. The rate for the training hours was a stipend rate set by the school for paraprofessional training. There was no authorization by the School Corporation Officials for the rate change between the regular rate and a professional development training rate. The Indiana Department of Education did not approve the separate rate. Other noncompliance involved three employees tested. The School Corporation used accounting software to process payroll. The software calculated payroll tax based on the employee year-to-date salary rather than calculating tax on gross pay per period. The lack of internal controls and noncompliance were isolated to the transactions as described above. 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). . . ." 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. . . ." 34 CFR 76.700 states: "A State and a subgrantee shall comply with § 76.500, the State plan, applicable statutes, regulations, and approved applications, and shall use Federal funds in accordance with those statutes, regulations, plan, and applications." Cause The internal control system over the Allowable Costs/Cost Principles compliance requirement was not effective in preventing or detecting the overpayment of employees. INDIANA STATE BOARD OF ACCOUNTS 33 HUNTINGTON COUNTY COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As such, the overpayment of employees was not caught by another employee at the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure payroll applicable to the grant agreement complies with the Allowable Costs/Cost Principles compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
2024-001 - Reporting Program: Weatherization Assistance for Low-Income Persons (ALN 81.042) Award Number: C096040-23 Federal Agency: U.S. Department of Energy Pass-Through Agency: New York State Division of Housing and Community Renewal Criteria: In accordance with 2 CFR § 200.403, reimbursement requests must be based on actual, finalized, and incurred costs. Costs that are preliminary, estimated, or subject to future reallocation do not meet the federal requirements for reimbursement. Submitting reimbursement requests based on unfinalized or tentative accounting records is inconsistent with federal financial management standards and may result in unallowable costs. Condition: During the audit, we noted that reimbursement vouchers submitted to the funding agency included costs that, while present in the accounting system at the time of billing, were later reallocated to a different contract as part of the year-end review process. As a result, some of the reimbursed costs were no longer allocable to the original award under which they were requested. Cause: This occurred due to the timing of the billing process, which relied on preliminary accounting data before the final close of the books. The organization does not currently have a formal process in place to verify that all billed expenses remain allocable and properly supported after final adjustments are made. Effect: Reimbursement requests may have included costs that were ultimately charged to a different award, which could lead to compliance concerns or potential repayment obligations if not addressed. Additionally, relying on unfinalized data increases the risk of reporting inaccuracies and weakens the reliability of financial information submitted to funding agencies. Questioned Costs: None noted. Context: This issue was identified in connection with year-end adjustments affecting one specific award. Based on the nature of the issue, it appears to be isolated but highlights the need for greater alignment between billing and final accounting procedures. Repeat Finding: No Recommendation: To enhance financial oversight and support strong grant management practices, we suggest that the organization consider implementing a monthly budget-to-actual review process for all contracts within the same program. This approach would promote closer alignment between actual expenses and approved budgets, help ensure costs are properly allocable to the appropriate contracts and enable early detection and correction of any deviations or misallocations before reimbursement requests are submitted. To further support compliance and make the most effective use of available funding—while minimizing the risk of overbilling—we recommend the following actions: • Conduct monthly budget-to-actual comparisons at both the individual contract and overall program level to ensure that expenses are accurately tracked against the correct funding sources and remain within allowable limits. • Monitor cumulative billed amounts throughout the contract period to support full utilization of awarded funds while avoiding excess or premature billing. These practices can help strengthen internal controls, improve financial reporting accuracy, and support compliance with applicable federal and contract requirements. Views of Responsible Officials: See Corrective Action Plan.
Expense Documentation - Condition: During testing of federal expenditures, we noted 2 out of 40 expense transactions tested that lacked supporting documentation to validate the expense. Additionally, during testing of cash management compliance, we noted 4 out of 6 reimbursement requests tested included expenditures that lacked supporting documentation. Criteria: Per 2 CRF section 200.403(g), costs must be adequately documented. Cause of Condition: This issue was caused by inadequate policies and weakened internal controls. Effect: Failure to retain proper supporting documentation could result in noncompliance with 2 CFR 200.403(g) and/or questioned costs. Recommendation: We recommend all disbursements be supported with a receipt or invoice detailing the date, amount, and business purpose of the expenditure. This procedure will help ensure all expenditures are properly recorded and documented. Furthermore, all receipts should specify the purchase and, if for a meal purchase, the specific attendees who benefited from the expense in order to be in compliance with IRS expense guidelines. NCHE should also establish a policy regarding missing receipts. Management Response: Management accepts the finding and recommendation.
Expense Documentation - Condition: During testing of federal expenditures, we noted 2 out of 40 expense transactions tested that lacked supporting documentation to validate the expense. Additionally, during testing of cash management compliance, we noted 4 out of 6 reimbursement requests tested included expenditures that lacked supporting documentation. Criteria: Per 2 CRF section 200.403(g), costs must be adequately documented. Cause of Condition: This issue was caused by inadequate policies and weakened internal controls. Effect: Failure to retain proper supporting documentation could result in noncompliance with 2 CFR 200.403(g) and/or questioned costs. Recommendation: We recommend all disbursements be supported with a receipt or invoice detailing the date, amount, and business purpose of the expenditure. This procedure will help ensure all expenditures are properly recorded and documented. Furthermore, all receipts should specify the purchase and, if for a meal purchase, the specific attendees who benefited from the expense in order to be in compliance with IRS expense guidelines. NCHE should also establish a policy regarding missing receipts. Management Response: Management accepts the finding and recommendation.
Expense Documentation - Condition: During testing of federal expenditures, we noted 2 out of 40 expense transactions tested that lacked supporting documentation to validate the expense. Additionally, during testing of cash management compliance, we noted 4 out of 6 reimbursement requests tested included expenditures that lacked supporting documentation. Criteria: Per 2 CRF section 200.403(g), costs must be adequately documented. Cause of Condition: This issue was caused by inadequate policies and weakened internal controls. Effect: Failure to retain proper supporting documentation could result in noncompliance with 2 CFR 200.403(g) and/or questioned costs. Recommendation: We recommend all disbursements be supported with a receipt or invoice detailing the date, amount, and business purpose of the expenditure. This procedure will help ensure all expenditures are properly recorded and documented. Furthermore, all receipts should specify the purchase and, if for a meal purchase, the specific attendees who benefited from the expense in order to be in compliance with IRS expense guidelines. NCHE should also establish a policy regarding missing receipts. Management Response: Management accepts the finding and recommendation.
Expense Documentation - Condition: During testing of federal expenditures, we noted 2 out of 40 expense transactions tested that lacked supporting documentation to validate the expense. Additionally, during testing of cash management compliance, we noted 4 out of 6 reimbursement requests tested included expenditures that lacked supporting documentation. Criteria: Per 2 CRF section 200.403(g), costs must be adequately documented. Cause of Condition: This issue was caused by inadequate policies and weakened internal controls. Effect: Failure to retain proper supporting documentation could result in noncompliance with 2 CFR 200.403(g) and/or questioned costs. Recommendation: We recommend all disbursements be supported with a receipt or invoice detailing the date, amount, and business purpose of the expenditure. This procedure will help ensure all expenditures are properly recorded and documented. Furthermore, all receipts should specify the purchase and, if for a meal purchase, the specific attendees who benefited from the expense in order to be in compliance with IRS expense guidelines. NCHE should also establish a policy regarding missing receipts. Management Response: Management accepts the finding and recommendation.
Compliance Requirement - Costs Allowed or Allowable Finding Type - Material Weakness Federal Agency - U.S. Department of Health and Human Services Federal Program Title - Administration for Children & Families - Head Start Assistance Listing Number - 93.600 Criteria: The Organization receives federal assistance from the Department of Health and Human Services. The Organization requests draw down of grant funds based on actual expenditures incurred. The Organization is required to maintain adequate internal controls over financial reporting in order to ensure expenditures are properly supported, reported under the correct funding source, and within the correct grant period. 2 CFR 200.403 details the factors affecting the allowability of cost. Specifically, 2 CRF 200.403(e) provides that costs must be determined in accordance with generally accepted accounting principles (GAAP). GAAP provides that costs are not incurred until the services are performed or the product is received. Condition: During audit procedures, we noted total reimbursements received exceeded expenditures. The Organization has charged costs to the program and received reimbursement; however, the products cost charged to the program had not been received prior to June 30, 2024. We consider this to be a material weakness. Questioned Costs: $562,831 Cause: In an effort to obligate funds before the end of the grant period, certain expenditure amounts and adjustments to various accounts for products to be purchased were recorded as expenditures within the Organization’s books and records before the products were received and a liability was incurred. Therefore, the reports used in supporting draw down of funds were not accurately stated. Effect: Inaccurate financial reporting of expenditures resulted in the Organization’s reimbursement requests exceeding total program expenditures. Recommendations: We recommend that all expenditures and adjustments are accounted for in the books and records of the Organization when a liability has been incurred, and that revenue and expenditure reports be review for accuracy prior to submitting draw down requests. A reconciliation should be prepared of the expenditures recorded on the books and records to the amount submitted for reimbursement on a regular basis. All excess, unexpended funds from the current year as well as from prior year’s should be returned to remain in compliance. View of Responsible Officials: There is no disagreement with the audit finding. The Head Start Program obligated funds for supplies in June but did not receive the merchandise until August. Payables were entered in the accounting software from purchase orders then the checks were voided after the draw down occurred which caused the reports to be inaccurately stated.
Grant Title: Title I Grants to Local Educational Agencies (Title I) Federal Award Number and Year: 2024 Assistance Listing #: 84.010A Federal Agency: US Department of Education Pass-through Entity number: 43 Pass-through Agency: WV Department of Education Grant Title: Special Education Cluster: Special Education - Grants to States, Special Education -Preschool Grants, COVID-19 Special Educatin Preschool Grants Federal Award Number and Year: 2024 Assistance Listing #: 84.027A, 84.173, 84.173A and 84.173X Federal Agency: US Department of Education Pass-through Entity number: 43 Pass-through Agency: WV Department of Education Grant Title: Child Nutrition Cluster: School Breakfast Program and National School Lunch Program Federal Award Number and Year: 2024 Assistance Listing #: 10.553 and 10.555 Federal Agency: US Department of Agriculture Pass-through Entity number: 88 Pass-through Agency: WV Department of Education Grant Title: COVID-19 American Rescue Plan Elementary and Secondary School Emergency Relief Fund - Education Stabilization Fund (ESSER) Federal Award Number and Year: 2024 Assistance Listing #: 84.425U, 84.425W Federal Agency: US Department of Education Pass-through Entity number: 52 Pass-through Agency: WV Department of Education CONDITION: Several expenditures were not properly approved by the Federal Program Directors. In addition, signed purchase orders or other supporting documentation were not available for all expenditures. Management did not ensure that expenditures were allowable for the Title I, Special Education Cluster, Child Nutrition Cluster, and ESSER programs. CONTEXT: Specifically, we identified the following: Sixty non-payroll expenditure transactions were sampled for Title I Grants to Local Education Agencies, of which Two expenditures, or 3% of the sample size, totaling $4,518, did not have Program Director approval prior to payment. Seven expenditures, or 12% of the sample size, totaling $162,988, to one vendor in which the contract was not available for review for contracted services. Three expenditures, or 5% of the sample size, totaling $5,040, which were not supported with adequate documentation. Two expenditures, or 3% of the sample size, totaling $4,525, in which the purchase order was dated after the invoice. Ten non-payroll expenditure transactions were sampled for the COVID-19 American Rescue Plan Elementary and Secondary School Emergency Relief (ESSER) Fund - Education Stabilization Fund, of which Five expenditures, or 50% of the sample size, totaling $913,518, did not have Program Director approval prior to payment. Two expenditures, or 20% of the sample size, totaling $28,036, in which the purchase order was dated after the invoice. In addition, we tested 5 employee personnel files with 50 related payroll expenditures for the above federal programs and noted the following items: Three employees did not have a WV IT-104 withholding form. One employee did not have a valid employment contract in their file. Five employees did not have a years of experience ledger in the file in order to recalculate pay. One employee did not have an IRS W-4 withholding form. Sixty non-payroll expenditure transactions were sampled for the Child Nutrition Cluster, of which Two expenditures, or 3% of the sample size, totaling $388,297, did not have Program Director approval prior to payment. Six expenditures, or 10% of the sample size, totaling $57,115, in which the expenditures did not reconcile with the supporting documentation. Forty-one non-payroll expenditure transactions were sampled for the Special Education Cluster, of which Five expenditures, or 12% of the sample size totaling $4,392 in which expenditures were made without a contract or the amounts paid were not provided for in the contract. Six expenditures, or 15% of the sample size, totaling $10,850, in which the purchase order was dated after the invoice. Forty-one expenditures, or 100% could not be traced to a project application. In addition, we tested 7 employee personnel files with 19 related payroll expenditures for the above federal programs and noted the following items: Three employees were paid a total of $219,529 from the Special Education Cluster that should not have been paid with federal funds. Five employees did not have a valid employment contract in their file.Six employees were paid supplements and did not have support in their file. Two employees did not have a valid extra-duty employment contract in their file. Three employees did not have an IRS W-4 withholding form. Four employees did not have a WV IT-104 withholding form. Seven employees did not have a years of experience ledger in the file in order to recalculate pay. CRITERIA: Proper internal controls include maintaining an adequate filing system in order to safeguard records and documents and procedures that ensure all purchases are approved by reconciling a purchase order to the invoice from the vendor prior to payment. Additionally, Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.334 states, in part, that: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient." Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.403 states, in part, that: "Except where otherwise authorized by statue, costs must meet the following general criteria in order to be allowable under Federal Awards: ...(c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period... (g) Be adequately documented." QUESTIONED COSTS: Unknown. CAUSE: Procedures were not in place to ensure that invoices and supporting documentation were maintained for all expenditures and that each expenditure was properly approved. Management of the Board does not have controls in place to comply with the Title 2 U.S. Code of Federal Regulations (CFR) Part 200 and Title 34 U.S. Code of Federal Regulations (CFR) Part 75. EFFECT: Certain funds were not expended in accordance with requirements of their respective programs, and auditors were unable to determine the allowability of expenditures due to inadequate documentation. This issue contributed to the disclaimer of opinion on compliance for the Title I, Special Education Cluster, Child Nutrition Cluster, and ESSER Programs. REPEAT FINDING: Yes PRIOR YEAR FINDING NUMBER: 2023-022 RECOMMENDATION: Board officials should establish and follow procedures to require: All purchase orders be issued prior to the purchase and receipt of the invoice, Contracts for contracted services be available for review, and All personnel files be complete and have adequate support for payroll expenditures.The officials of the Upshur County Board of Education should review the existing procedures and controls over federal award expenditures to determine that these controls are implemented, and working effectively to ensure that expenditures are properly authorized prior to payment. Board officials should ensure that all expenditures are properly authorized by the respective program directors. The Board officials should consider additional training, internal reviews, cross-training of employees, and other measures as deemed appropriate to ensure existing controls are implemented.
Grant Title: Title I Grants to Local Educational Agencies (Title I) Federal Award Number and Year: 2024 Assistance Listing #: 84.010A Federal Agency: US Department of Education Pass-through Entity number: 43 Pass-through Agency: WV Department of Education Grant Title: Special Education Cluster: Special Education - Grants to States, Special Education -Preschool Grants, COVID-19 Special Educatin Preschool Grants Federal Award Number and Year: 2024 Assistance Listing #: 84.027A, 84.173, 84.173A and 84.173X Federal Agency: US Department of Education Pass-through Entity number: 43 Pass-through Agency: WV Department of Education Grant Title: Child Nutrition Cluster: School Breakfast Program and National School Lunch Program Federal Award Number and Year: 2024 Assistance Listing #: 10.553 and 10.555 Federal Agency: US Department of Agriculture Pass-through Entity number: 88 Pass-through Agency: WV Department of Education Grant Title: COVID-19 American Rescue Plan Elementary and Secondary School Emergency Relief Fund - Education Stabilization Fund (ESSER) Federal Award Number and Year: 2024 Assistance Listing #: 84.425U, 84.425W Federal Agency: US Department of Education Pass-through Entity number: 52 Pass-through Agency: WV Department of Education CONDITION: Several expenditures were not properly approved by the Federal Program Directors. In addition, signed purchase orders or other supporting documentation were not available for all expenditures. Management did not ensure that expenditures were allowable for the Title I, Special Education Cluster, Child Nutrition Cluster, and ESSER programs. CONTEXT: Specifically, we identified the following: Sixty non-payroll expenditure transactions were sampled for Title I Grants to Local Education Agencies, of which Two expenditures, or 3% of the sample size, totaling $4,518, did not have Program Director approval prior to payment. Seven expenditures, or 12% of the sample size, totaling $162,988, to one vendor in which the contract was not available for review for contracted services. Three expenditures, or 5% of the sample size, totaling $5,040, which were not supported with adequate documentation. Two expenditures, or 3% of the sample size, totaling $4,525, in which the purchase order was dated after the invoice. Ten non-payroll expenditure transactions were sampled for the COVID-19 American Rescue Plan Elementary and Secondary School Emergency Relief (ESSER) Fund - Education Stabilization Fund, of which Five expenditures, or 50% of the sample size, totaling $913,518, did not have Program Director approval prior to payment. Two expenditures, or 20% of the sample size, totaling $28,036, in which the purchase order was dated after the invoice. In addition, we tested 5 employee personnel files with 50 related payroll expenditures for the above federal programs and noted the following items: Three employees did not have a WV IT-104 withholding form. One employee did not have a valid employment contract in their file. Five employees did not have a years of experience ledger in the file in order to recalculate pay. One employee did not have an IRS W-4 withholding form. Sixty non-payroll expenditure transactions were sampled for the Child Nutrition Cluster, of which Two expenditures, or 3% of the sample size, totaling $388,297, did not have Program Director approval prior to payment. Six expenditures, or 10% of the sample size, totaling $57,115, in which the expenditures did not reconcile with the supporting documentation. Forty-one non-payroll expenditure transactions were sampled for the Special Education Cluster, of which Five expenditures, or 12% of the sample size totaling $4,392 in which expenditures were made without a contract or the amounts paid were not provided for in the contract. Six expenditures, or 15% of the sample size, totaling $10,850, in which the purchase order was dated after the invoice. Forty-one expenditures, or 100% could not be traced to a project application. In addition, we tested 7 employee personnel files with 19 related payroll expenditures for the above federal programs and noted the following items: Three employees were paid a total of $219,529 from the Special Education Cluster that should not have been paid with federal funds. Five employees did not have a valid employment contract in their file.Six employees were paid supplements and did not have support in their file. Two employees did not have a valid extra-duty employment contract in their file. Three employees did not have an IRS W-4 withholding form. Four employees did not have a WV IT-104 withholding form. Seven employees did not have a years of experience ledger in the file in order to recalculate pay. CRITERIA: Proper internal controls include maintaining an adequate filing system in order to safeguard records and documents and procedures that ensure all purchases are approved by reconciling a purchase order to the invoice from the vendor prior to payment. Additionally, Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.334 states, in part, that: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient." Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.403 states, in part, that: "Except where otherwise authorized by statue, costs must meet the following general criteria in order to be allowable under Federal Awards: ...(c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period... (g) Be adequately documented." QUESTIONED COSTS: Unknown. CAUSE: Procedures were not in place to ensure that invoices and supporting documentation were maintained for all expenditures and that each expenditure was properly approved. Management of the Board does not have controls in place to comply with the Title 2 U.S. Code of Federal Regulations (CFR) Part 200 and Title 34 U.S. Code of Federal Regulations (CFR) Part 75. EFFECT: Certain funds were not expended in accordance with requirements of their respective programs, and auditors were unable to determine the allowability of expenditures due to inadequate documentation. This issue contributed to the disclaimer of opinion on compliance for the Title I, Special Education Cluster, Child Nutrition Cluster, and ESSER Programs. REPEAT FINDING: Yes PRIOR YEAR FINDING NUMBER: 2023-022 RECOMMENDATION: Board officials should establish and follow procedures to require: All purchase orders be issued prior to the purchase and receipt of the invoice, Contracts for contracted services be available for review, and All personnel files be complete and have adequate support for payroll expenditures.The officials of the Upshur County Board of Education should review the existing procedures and controls over federal award expenditures to determine that these controls are implemented, and working effectively to ensure that expenditures are properly authorized prior to payment. Board officials should ensure that all expenditures are properly authorized by the respective program directors. The Board officials should consider additional training, internal reviews, cross-training of employees, and other measures as deemed appropriate to ensure existing controls are implemented.
Grant Title: Title I Grants to Local Educational Agencies (Title I) Federal Award Number and Year: 2024 Assistance Listing #: 84.010A Federal Agency: US Department of Education Pass-through Entity number: 43 Pass-through Agency: WV Department of Education Grant Title: Special Education Cluster: Special Education - Grants to States, Special Education -Preschool Grants, COVID-19 Special Educatin Preschool Grants Federal Award Number and Year: 2024 Assistance Listing #: 84.027A, 84.173, 84.173A and 84.173X Federal Agency: US Department of Education Pass-through Entity number: 43 Pass-through Agency: WV Department of Education Grant Title: Child Nutrition Cluster: School Breakfast Program and National School Lunch Program Federal Award Number and Year: 2024 Assistance Listing #: 10.553 and 10.555 Federal Agency: US Department of Agriculture Pass-through Entity number: 88 Pass-through Agency: WV Department of Education Grant Title: COVID-19 American Rescue Plan Elementary and Secondary School Emergency Relief Fund - Education Stabilization Fund (ESSER) Federal Award Number and Year: 2024 Assistance Listing #: 84.425U, 84.425W Federal Agency: US Department of Education Pass-through Entity number: 52 Pass-through Agency: WV Department of Education CONDITION: Several expenditures were not properly approved by the Federal Program Directors. In addition, signed purchase orders or other supporting documentation were not available for all expenditures. Management did not ensure that expenditures were allowable for the Title I, Special Education Cluster, Child Nutrition Cluster, and ESSER programs. CONTEXT: Specifically, we identified the following: Sixty non-payroll expenditure transactions were sampled for Title I Grants to Local Education Agencies, of which Two expenditures, or 3% of the sample size, totaling $4,518, did not have Program Director approval prior to payment. Seven expenditures, or 12% of the sample size, totaling $162,988, to one vendor in which the contract was not available for review for contracted services. Three expenditures, or 5% of the sample size, totaling $5,040, which were not supported with adequate documentation. Two expenditures, or 3% of the sample size, totaling $4,525, in which the purchase order was dated after the invoice. Ten non-payroll expenditure transactions were sampled for the COVID-19 American Rescue Plan Elementary and Secondary School Emergency Relief (ESSER) Fund - Education Stabilization Fund, of which Five expenditures, or 50% of the sample size, totaling $913,518, did not have Program Director approval prior to payment. Two expenditures, or 20% of the sample size, totaling $28,036, in which the purchase order was dated after the invoice. In addition, we tested 5 employee personnel files with 50 related payroll expenditures for the above federal programs and noted the following items: Three employees did not have a WV IT-104 withholding form. One employee did not have a valid employment contract in their file. Five employees did not have a years of experience ledger in the file in order to recalculate pay. One employee did not have an IRS W-4 withholding form. Sixty non-payroll expenditure transactions were sampled for the Child Nutrition Cluster, of which Two expenditures, or 3% of the sample size, totaling $388,297, did not have Program Director approval prior to payment. Six expenditures, or 10% of the sample size, totaling $57,115, in which the expenditures did not reconcile with the supporting documentation. Forty-one non-payroll expenditure transactions were sampled for the Special Education Cluster, of which Five expenditures, or 12% of the sample size totaling $4,392 in which expenditures were made without a contract or the amounts paid were not provided for in the contract. Six expenditures, or 15% of the sample size, totaling $10,850, in which the purchase order was dated after the invoice. Forty-one expenditures, or 100% could not be traced to a project application. In addition, we tested 7 employee personnel files with 19 related payroll expenditures for the above federal programs and noted the following items: Three employees were paid a total of $219,529 from the Special Education Cluster that should not have been paid with federal funds. Five employees did not have a valid employment contract in their file.Six employees were paid supplements and did not have support in their file. Two employees did not have a valid extra-duty employment contract in their file. Three employees did not have an IRS W-4 withholding form. Four employees did not have a WV IT-104 withholding form. Seven employees did not have a years of experience ledger in the file in order to recalculate pay. CRITERIA: Proper internal controls include maintaining an adequate filing system in order to safeguard records and documents and procedures that ensure all purchases are approved by reconciling a purchase order to the invoice from the vendor prior to payment. Additionally, Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.334 states, in part, that: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient." Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.403 states, in part, that: "Except where otherwise authorized by statue, costs must meet the following general criteria in order to be allowable under Federal Awards: ...(c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period... (g) Be adequately documented." QUESTIONED COSTS: Unknown. CAUSE: Procedures were not in place to ensure that invoices and supporting documentation were maintained for all expenditures and that each expenditure was properly approved. Management of the Board does not have controls in place to comply with the Title 2 U.S. Code of Federal Regulations (CFR) Part 200 and Title 34 U.S. Code of Federal Regulations (CFR) Part 75. EFFECT: Certain funds were not expended in accordance with requirements of their respective programs, and auditors were unable to determine the allowability of expenditures due to inadequate documentation. This issue contributed to the disclaimer of opinion on compliance for the Title I, Special Education Cluster, Child Nutrition Cluster, and ESSER Programs. REPEAT FINDING: Yes PRIOR YEAR FINDING NUMBER: 2023-022 RECOMMENDATION: Board officials should establish and follow procedures to require: All purchase orders be issued prior to the purchase and receipt of the invoice, Contracts for contracted services be available for review, and All personnel files be complete and have adequate support for payroll expenditures.The officials of the Upshur County Board of Education should review the existing procedures and controls over federal award expenditures to determine that these controls are implemented, and working effectively to ensure that expenditures are properly authorized prior to payment. Board officials should ensure that all expenditures are properly authorized by the respective program directors. The Board officials should consider additional training, internal reviews, cross-training of employees, and other measures as deemed appropriate to ensure existing controls are implemented.
Grant Title: Title I Grants to Local Educational Agencies (Title I) Federal Award Number and Year: 2024 Assistance Listing #: 84.010A Federal Agency: US Department of Education Pass-through Entity number: 43 Pass-through Agency: WV Department of Education Grant Title: Special Education Cluster: Special Education - Grants to States, Special Education -Preschool Grants, COVID-19 Special Educatin Preschool Grants Federal Award Number and Year: 2024 Assistance Listing #: 84.027A, 84.173, 84.173A and 84.173X Federal Agency: US Department of Education Pass-through Entity number: 43 Pass-through Agency: WV Department of Education Grant Title: Child Nutrition Cluster: School Breakfast Program and National School Lunch Program Federal Award Number and Year: 2024 Assistance Listing #: 10.553 and 10.555 Federal Agency: US Department of Agriculture Pass-through Entity number: 88 Pass-through Agency: WV Department of Education Grant Title: COVID-19 American Rescue Plan Elementary and Secondary School Emergency Relief Fund - Education Stabilization Fund (ESSER) Federal Award Number and Year: 2024 Assistance Listing #: 84.425U, 84.425W Federal Agency: US Department of Education Pass-through Entity number: 52 Pass-through Agency: WV Department of Education CONDITION: Several expenditures were not properly approved by the Federal Program Directors. In addition, signed purchase orders or other supporting documentation were not available for all expenditures. Management did not ensure that expenditures were allowable for the Title I, Special Education Cluster, Child Nutrition Cluster, and ESSER programs. CONTEXT: Specifically, we identified the following: Sixty non-payroll expenditure transactions were sampled for Title I Grants to Local Education Agencies, of which Two expenditures, or 3% of the sample size, totaling $4,518, did not have Program Director approval prior to payment. Seven expenditures, or 12% of the sample size, totaling $162,988, to one vendor in which the contract was not available for review for contracted services. Three expenditures, or 5% of the sample size, totaling $5,040, which were not supported with adequate documentation. Two expenditures, or 3% of the sample size, totaling $4,525, in which the purchase order was dated after the invoice. Ten non-payroll expenditure transactions were sampled for the COVID-19 American Rescue Plan Elementary and Secondary School Emergency Relief (ESSER) Fund - Education Stabilization Fund, of which Five expenditures, or 50% of the sample size, totaling $913,518, did not have Program Director approval prior to payment. Two expenditures, or 20% of the sample size, totaling $28,036, in which the purchase order was dated after the invoice. In addition, we tested 5 employee personnel files with 50 related payroll expenditures for the above federal programs and noted the following items: Three employees did not have a WV IT-104 withholding form. One employee did not have a valid employment contract in their file. Five employees did not have a years of experience ledger in the file in order to recalculate pay. One employee did not have an IRS W-4 withholding form. Sixty non-payroll expenditure transactions were sampled for the Child Nutrition Cluster, of which Two expenditures, or 3% of the sample size, totaling $388,297, did not have Program Director approval prior to payment. Six expenditures, or 10% of the sample size, totaling $57,115, in which the expenditures did not reconcile with the supporting documentation. Forty-one non-payroll expenditure transactions were sampled for the Special Education Cluster, of which Five expenditures, or 12% of the sample size totaling $4,392 in which expenditures were made without a contract or the amounts paid were not provided for in the contract. Six expenditures, or 15% of the sample size, totaling $10,850, in which the purchase order was dated after the invoice. Forty-one expenditures, or 100% could not be traced to a project application. In addition, we tested 7 employee personnel files with 19 related payroll expenditures for the above federal programs and noted the following items: Three employees were paid a total of $219,529 from the Special Education Cluster that should not have been paid with federal funds. Five employees did not have a valid employment contract in their file.Six employees were paid supplements and did not have support in their file. Two employees did not have a valid extra-duty employment contract in their file. Three employees did not have an IRS W-4 withholding form. Four employees did not have a WV IT-104 withholding form. Seven employees did not have a years of experience ledger in the file in order to recalculate pay. CRITERIA: Proper internal controls include maintaining an adequate filing system in order to safeguard records and documents and procedures that ensure all purchases are approved by reconciling a purchase order to the invoice from the vendor prior to payment. Additionally, Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.334 states, in part, that: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient." Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.403 states, in part, that: "Except where otherwise authorized by statue, costs must meet the following general criteria in order to be allowable under Federal Awards: ...(c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period... (g) Be adequately documented." QUESTIONED COSTS: Unknown. CAUSE: Procedures were not in place to ensure that invoices and supporting documentation were maintained for all expenditures and that each expenditure was properly approved. Management of the Board does not have controls in place to comply with the Title 2 U.S. Code of Federal Regulations (CFR) Part 200 and Title 34 U.S. Code of Federal Regulations (CFR) Part 75. EFFECT: Certain funds were not expended in accordance with requirements of their respective programs, and auditors were unable to determine the allowability of expenditures due to inadequate documentation. This issue contributed to the disclaimer of opinion on compliance for the Title I, Special Education Cluster, Child Nutrition Cluster, and ESSER Programs. REPEAT FINDING: Yes PRIOR YEAR FINDING NUMBER: 2023-022 RECOMMENDATION: Board officials should establish and follow procedures to require: All purchase orders be issued prior to the purchase and receipt of the invoice, Contracts for contracted services be available for review, and All personnel files be complete and have adequate support for payroll expenditures.The officials of the Upshur County Board of Education should review the existing procedures and controls over federal award expenditures to determine that these controls are implemented, and working effectively to ensure that expenditures are properly authorized prior to payment. Board officials should ensure that all expenditures are properly authorized by the respective program directors. The Board officials should consider additional training, internal reviews, cross-training of employees, and other measures as deemed appropriate to ensure existing controls are implemented.
Grant Title: Title I Grants to Local Educational Agencies (Title I) Federal Award Number and Year: 2024 Assistance Listing #: 84.010A Federal Agency: US Department of Education Pass-through Entity number: 43 Pass-through Agency: WV Department of Education Grant Title: Special Education Cluster: Special Education - Grants to States, Special Education -Preschool Grants, COVID-19 Special Educatin Preschool Grants Federal Award Number and Year: 2024 Assistance Listing #: 84.027A, 84.173, 84.173A and 84.173X Federal Agency: US Department of Education Pass-through Entity number: 43 Pass-through Agency: WV Department of Education Grant Title: Child Nutrition Cluster: School Breakfast Program and National School Lunch Program Federal Award Number and Year: 2024 Assistance Listing #: 10.553 and 10.555 Federal Agency: US Department of Agriculture Pass-through Entity number: 88 Pass-through Agency: WV Department of Education Grant Title: COVID-19 American Rescue Plan Elementary and Secondary School Emergency Relief Fund - Education Stabilization Fund (ESSER) Federal Award Number and Year: 2024 Assistance Listing #: 84.425U, 84.425W Federal Agency: US Department of Education Pass-through Entity number: 52 Pass-through Agency: WV Department of Education CONDITION: Several expenditures were not properly approved by the Federal Program Directors. In addition, signed purchase orders or other supporting documentation were not available for all expenditures. Management did not ensure that expenditures were allowable for the Title I, Special Education Cluster, Child Nutrition Cluster, and ESSER programs. CONTEXT: Specifically, we identified the following: Sixty non-payroll expenditure transactions were sampled for Title I Grants to Local Education Agencies, of which Two expenditures, or 3% of the sample size, totaling $4,518, did not have Program Director approval prior to payment. Seven expenditures, or 12% of the sample size, totaling $162,988, to one vendor in which the contract was not available for review for contracted services. Three expenditures, or 5% of the sample size, totaling $5,040, which were not supported with adequate documentation. Two expenditures, or 3% of the sample size, totaling $4,525, in which the purchase order was dated after the invoice. Ten non-payroll expenditure transactions were sampled for the COVID-19 American Rescue Plan Elementary and Secondary School Emergency Relief (ESSER) Fund - Education Stabilization Fund, of which Five expenditures, or 50% of the sample size, totaling $913,518, did not have Program Director approval prior to payment. Two expenditures, or 20% of the sample size, totaling $28,036, in which the purchase order was dated after the invoice. In addition, we tested 5 employee personnel files with 50 related payroll expenditures for the above federal programs and noted the following items: Three employees did not have a WV IT-104 withholding form. One employee did not have a valid employment contract in their file. Five employees did not have a years of experience ledger in the file in order to recalculate pay. One employee did not have an IRS W-4 withholding form. Sixty non-payroll expenditure transactions were sampled for the Child Nutrition Cluster, of which Two expenditures, or 3% of the sample size, totaling $388,297, did not have Program Director approval prior to payment. Six expenditures, or 10% of the sample size, totaling $57,115, in which the expenditures did not reconcile with the supporting documentation. Forty-one non-payroll expenditure transactions were sampled for the Special Education Cluster, of which Five expenditures, or 12% of the sample size totaling $4,392 in which expenditures were made without a contract or the amounts paid were not provided for in the contract. Six expenditures, or 15% of the sample size, totaling $10,850, in which the purchase order was dated after the invoice. Forty-one expenditures, or 100% could not be traced to a project application. In addition, we tested 7 employee personnel files with 19 related payroll expenditures for the above federal programs and noted the following items: Three employees were paid a total of $219,529 from the Special Education Cluster that should not have been paid with federal funds. Five employees did not have a valid employment contract in their file.Six employees were paid supplements and did not have support in their file. Two employees did not have a valid extra-duty employment contract in their file. Three employees did not have an IRS W-4 withholding form. Four employees did not have a WV IT-104 withholding form. Seven employees did not have a years of experience ledger in the file in order to recalculate pay. CRITERIA: Proper internal controls include maintaining an adequate filing system in order to safeguard records and documents and procedures that ensure all purchases are approved by reconciling a purchase order to the invoice from the vendor prior to payment. Additionally, Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.334 states, in part, that: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient." Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.403 states, in part, that: "Except where otherwise authorized by statue, costs must meet the following general criteria in order to be allowable under Federal Awards: ...(c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period... (g) Be adequately documented." QUESTIONED COSTS: Unknown. CAUSE: Procedures were not in place to ensure that invoices and supporting documentation were maintained for all expenditures and that each expenditure was properly approved. Management of the Board does not have controls in place to comply with the Title 2 U.S. Code of Federal Regulations (CFR) Part 200 and Title 34 U.S. Code of Federal Regulations (CFR) Part 75. EFFECT: Certain funds were not expended in accordance with requirements of their respective programs, and auditors were unable to determine the allowability of expenditures due to inadequate documentation. This issue contributed to the disclaimer of opinion on compliance for the Title I, Special Education Cluster, Child Nutrition Cluster, and ESSER Programs. REPEAT FINDING: Yes PRIOR YEAR FINDING NUMBER: 2023-022 RECOMMENDATION: Board officials should establish and follow procedures to require: All purchase orders be issued prior to the purchase and receipt of the invoice, Contracts for contracted services be available for review, and All personnel files be complete and have adequate support for payroll expenditures.The officials of the Upshur County Board of Education should review the existing procedures and controls over federal award expenditures to determine that these controls are implemented, and working effectively to ensure that expenditures are properly authorized prior to payment. Board officials should ensure that all expenditures are properly authorized by the respective program directors. The Board officials should consider additional training, internal reviews, cross-training of employees, and other measures as deemed appropriate to ensure existing controls are implemented.
Grant Title: Title I Grants to Local Educational Agencies (Title I) Federal Award Number and Year: 2024 Assistance Listing #: 84.010A Federal Agency: US Department of Education Pass-through Entity number: 43 Pass-through Agency: WV Department of Education Grant Title: Special Education Cluster: Special Education - Grants to States, Special Education -Preschool Grants, COVID-19 Special Educatin Preschool Grants Federal Award Number and Year: 2024 Assistance Listing #: 84.027A, 84.173, 84.173A and 84.173X Federal Agency: US Department of Education Pass-through Entity number: 43 Pass-through Agency: WV Department of Education Grant Title: Child Nutrition Cluster: School Breakfast Program and National School Lunch Program Federal Award Number and Year: 2024 Assistance Listing #: 10.553 and 10.555 Federal Agency: US Department of Agriculture Pass-through Entity number: 88 Pass-through Agency: WV Department of Education Grant Title: COVID-19 American Rescue Plan Elementary and Secondary School Emergency Relief Fund - Education Stabilization Fund (ESSER) Federal Award Number and Year: 2024 Assistance Listing #: 84.425U, 84.425W Federal Agency: US Department of Education Pass-through Entity number: 52 Pass-through Agency: WV Department of Education CONDITION: Several expenditures were not properly approved by the Federal Program Directors. In addition, signed purchase orders or other supporting documentation were not available for all expenditures. Management did not ensure that expenditures were allowable for the Title I, Special Education Cluster, Child Nutrition Cluster, and ESSER programs. CONTEXT: Specifically, we identified the following: Sixty non-payroll expenditure transactions were sampled for Title I Grants to Local Education Agencies, of which Two expenditures, or 3% of the sample size, totaling $4,518, did not have Program Director approval prior to payment. Seven expenditures, or 12% of the sample size, totaling $162,988, to one vendor in which the contract was not available for review for contracted services. Three expenditures, or 5% of the sample size, totaling $5,040, which were not supported with adequate documentation. Two expenditures, or 3% of the sample size, totaling $4,525, in which the purchase order was dated after the invoice. Ten non-payroll expenditure transactions were sampled for the COVID-19 American Rescue Plan Elementary and Secondary School Emergency Relief (ESSER) Fund - Education Stabilization Fund, of which Five expenditures, or 50% of the sample size, totaling $913,518, did not have Program Director approval prior to payment. Two expenditures, or 20% of the sample size, totaling $28,036, in which the purchase order was dated after the invoice. In addition, we tested 5 employee personnel files with 50 related payroll expenditures for the above federal programs and noted the following items: Three employees did not have a WV IT-104 withholding form. One employee did not have a valid employment contract in their file. Five employees did not have a years of experience ledger in the file in order to recalculate pay. One employee did not have an IRS W-4 withholding form. Sixty non-payroll expenditure transactions were sampled for the Child Nutrition Cluster, of which Two expenditures, or 3% of the sample size, totaling $388,297, did not have Program Director approval prior to payment. Six expenditures, or 10% of the sample size, totaling $57,115, in which the expenditures did not reconcile with the supporting documentation. Forty-one non-payroll expenditure transactions were sampled for the Special Education Cluster, of which Five expenditures, or 12% of the sample size totaling $4,392 in which expenditures were made without a contract or the amounts paid were not provided for in the contract. Six expenditures, or 15% of the sample size, totaling $10,850, in which the purchase order was dated after the invoice. Forty-one expenditures, or 100% could not be traced to a project application. In addition, we tested 7 employee personnel files with 19 related payroll expenditures for the above federal programs and noted the following items: Three employees were paid a total of $219,529 from the Special Education Cluster that should not have been paid with federal funds. Five employees did not have a valid employment contract in their file.Six employees were paid supplements and did not have support in their file. Two employees did not have a valid extra-duty employment contract in their file. Three employees did not have an IRS W-4 withholding form. Four employees did not have a WV IT-104 withholding form. Seven employees did not have a years of experience ledger in the file in order to recalculate pay. CRITERIA: Proper internal controls include maintaining an adequate filing system in order to safeguard records and documents and procedures that ensure all purchases are approved by reconciling a purchase order to the invoice from the vendor prior to payment. Additionally, Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.334 states, in part, that: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient." Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.403 states, in part, that: "Except where otherwise authorized by statue, costs must meet the following general criteria in order to be allowable under Federal Awards: ...(c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period... (g) Be adequately documented." QUESTIONED COSTS: Unknown. CAUSE: Procedures were not in place to ensure that invoices and supporting documentation were maintained for all expenditures and that each expenditure was properly approved. Management of the Board does not have controls in place to comply with the Title 2 U.S. Code of Federal Regulations (CFR) Part 200 and Title 34 U.S. Code of Federal Regulations (CFR) Part 75. EFFECT: Certain funds were not expended in accordance with requirements of their respective programs, and auditors were unable to determine the allowability of expenditures due to inadequate documentation. This issue contributed to the disclaimer of opinion on compliance for the Title I, Special Education Cluster, Child Nutrition Cluster, and ESSER Programs. REPEAT FINDING: Yes PRIOR YEAR FINDING NUMBER: 2023-022 RECOMMENDATION: Board officials should establish and follow procedures to require: All purchase orders be issued prior to the purchase and receipt of the invoice, Contracts for contracted services be available for review, and All personnel files be complete and have adequate support for payroll expenditures.The officials of the Upshur County Board of Education should review the existing procedures and controls over federal award expenditures to determine that these controls are implemented, and working effectively to ensure that expenditures are properly authorized prior to payment. Board officials should ensure that all expenditures are properly authorized by the respective program directors. The Board officials should consider additional training, internal reviews, cross-training of employees, and other measures as deemed appropriate to ensure existing controls are implemented.
Grant Title: Title I Grants to Local Educational Agencies (Title I) Federal Award Number and Year: 2024 Assistance Listing #: 84.010A Federal Agency: US Department of Education Pass-through Entity number: 43 Pass-through Agency: WV Department of Education Grant Title: Special Education Cluster: Special Education - Grants to States, Special Education -Preschool Grants, COVID-19 Special Educatin Preschool Grants Federal Award Number and Year: 2024 Assistance Listing #: 84.027A, 84.173, 84.173A and 84.173X Federal Agency: US Department of Education Pass-through Entity number: 43 Pass-through Agency: WV Department of Education Grant Title: Child Nutrition Cluster: School Breakfast Program and National School Lunch Program Federal Award Number and Year: 2024 Assistance Listing #: 10.553 and 10.555 Federal Agency: US Department of Agriculture Pass-through Entity number: 88 Pass-through Agency: WV Department of Education Grant Title: COVID-19 American Rescue Plan Elementary and Secondary School Emergency Relief Fund - Education Stabilization Fund (ESSER) Federal Award Number and Year: 2024 Assistance Listing #: 84.425U, 84.425W Federal Agency: US Department of Education Pass-through Entity number: 52 Pass-through Agency: WV Department of Education CONDITION: Several expenditures were not properly approved by the Federal Program Directors. In addition, signed purchase orders or other supporting documentation were not available for all expenditures. Management did not ensure that expenditures were allowable for the Title I, Special Education Cluster, Child Nutrition Cluster, and ESSER programs. CONTEXT: Specifically, we identified the following: Sixty non-payroll expenditure transactions were sampled for Title I Grants to Local Education Agencies, of which Two expenditures, or 3% of the sample size, totaling $4,518, did not have Program Director approval prior to payment. Seven expenditures, or 12% of the sample size, totaling $162,988, to one vendor in which the contract was not available for review for contracted services. Three expenditures, or 5% of the sample size, totaling $5,040, which were not supported with adequate documentation. Two expenditures, or 3% of the sample size, totaling $4,525, in which the purchase order was dated after the invoice. Ten non-payroll expenditure transactions were sampled for the COVID-19 American Rescue Plan Elementary and Secondary School Emergency Relief (ESSER) Fund - Education Stabilization Fund, of which Five expenditures, or 50% of the sample size, totaling $913,518, did not have Program Director approval prior to payment. Two expenditures, or 20% of the sample size, totaling $28,036, in which the purchase order was dated after the invoice. In addition, we tested 5 employee personnel files with 50 related payroll expenditures for the above federal programs and noted the following items: Three employees did not have a WV IT-104 withholding form. One employee did not have a valid employment contract in their file. Five employees did not have a years of experience ledger in the file in order to recalculate pay. One employee did not have an IRS W-4 withholding form. Sixty non-payroll expenditure transactions were sampled for the Child Nutrition Cluster, of which Two expenditures, or 3% of the sample size, totaling $388,297, did not have Program Director approval prior to payment. Six expenditures, or 10% of the sample size, totaling $57,115, in which the expenditures did not reconcile with the supporting documentation. Forty-one non-payroll expenditure transactions were sampled for the Special Education Cluster, of which Five expenditures, or 12% of the sample size totaling $4,392 in which expenditures were made without a contract or the amounts paid were not provided for in the contract. Six expenditures, or 15% of the sample size, totaling $10,850, in which the purchase order was dated after the invoice. Forty-one expenditures, or 100% could not be traced to a project application. In addition, we tested 7 employee personnel files with 19 related payroll expenditures for the above federal programs and noted the following items: Three employees were paid a total of $219,529 from the Special Education Cluster that should not have been paid with federal funds. Five employees did not have a valid employment contract in their file.Six employees were paid supplements and did not have support in their file. Two employees did not have a valid extra-duty employment contract in their file. Three employees did not have an IRS W-4 withholding form. Four employees did not have a WV IT-104 withholding form. Seven employees did not have a years of experience ledger in the file in order to recalculate pay. CRITERIA: Proper internal controls include maintaining an adequate filing system in order to safeguard records and documents and procedures that ensure all purchases are approved by reconciling a purchase order to the invoice from the vendor prior to payment. Additionally, Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.334 states, in part, that: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient." Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.403 states, in part, that: "Except where otherwise authorized by statue, costs must meet the following general criteria in order to be allowable under Federal Awards: ...(c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period... (g) Be adequately documented." QUESTIONED COSTS: Unknown. CAUSE: Procedures were not in place to ensure that invoices and supporting documentation were maintained for all expenditures and that each expenditure was properly approved. Management of the Board does not have controls in place to comply with the Title 2 U.S. Code of Federal Regulations (CFR) Part 200 and Title 34 U.S. Code of Federal Regulations (CFR) Part 75. EFFECT: Certain funds were not expended in accordance with requirements of their respective programs, and auditors were unable to determine the allowability of expenditures due to inadequate documentation. This issue contributed to the disclaimer of opinion on compliance for the Title I, Special Education Cluster, Child Nutrition Cluster, and ESSER Programs. REPEAT FINDING: Yes PRIOR YEAR FINDING NUMBER: 2023-022 RECOMMENDATION: Board officials should establish and follow procedures to require: All purchase orders be issued prior to the purchase and receipt of the invoice, Contracts for contracted services be available for review, and All personnel files be complete and have adequate support for payroll expenditures.The officials of the Upshur County Board of Education should review the existing procedures and controls over federal award expenditures to determine that these controls are implemented, and working effectively to ensure that expenditures are properly authorized prior to payment. Board officials should ensure that all expenditures are properly authorized by the respective program directors. The Board officials should consider additional training, internal reviews, cross-training of employees, and other measures as deemed appropriate to ensure existing controls are implemented.
Grant Title: Title I Grants to Local Educational Agencies (Title I) Federal Award Number and Year: 2024 Assistance Listing #: 84.010A Federal Agency: US Department of Education Pass-through Entity number: 43 Pass-through Agency: WV Department of Education Grant Title: Special Education Cluster: Special Education - Grants to States, Special Education -Preschool Grants, COVID-19 Special Educatin Preschool Grants Federal Award Number and Year: 2024 Assistance Listing #: 84.027A, 84.173, 84.173A and 84.173X Federal Agency: US Department of Education Pass-through Entity number: 43 Pass-through Agency: WV Department of Education Grant Title: Child Nutrition Cluster: School Breakfast Program and National School Lunch Program Federal Award Number and Year: 2024 Assistance Listing #: 10.553 and 10.555 Federal Agency: US Department of Agriculture Pass-through Entity number: 88 Pass-through Agency: WV Department of Education Grant Title: COVID-19 American Rescue Plan Elementary and Secondary School Emergency Relief Fund - Education Stabilization Fund (ESSER) Federal Award Number and Year: 2024 Assistance Listing #: 84.425U, 84.425W Federal Agency: US Department of Education Pass-through Entity number: 52 Pass-through Agency: WV Department of Education CONDITION: Several expenditures were not properly approved by the Federal Program Directors. In addition, signed purchase orders or other supporting documentation were not available for all expenditures. Management did not ensure that expenditures were allowable for the Title I, Special Education Cluster, Child Nutrition Cluster, and ESSER programs. CONTEXT: Specifically, we identified the following: Sixty non-payroll expenditure transactions were sampled for Title I Grants to Local Education Agencies, of which Two expenditures, or 3% of the sample size, totaling $4,518, did not have Program Director approval prior to payment. Seven expenditures, or 12% of the sample size, totaling $162,988, to one vendor in which the contract was not available for review for contracted services. Three expenditures, or 5% of the sample size, totaling $5,040, which were not supported with adequate documentation. Two expenditures, or 3% of the sample size, totaling $4,525, in which the purchase order was dated after the invoice. Ten non-payroll expenditure transactions were sampled for the COVID-19 American Rescue Plan Elementary and Secondary School Emergency Relief (ESSER) Fund - Education Stabilization Fund, of which Five expenditures, or 50% of the sample size, totaling $913,518, did not have Program Director approval prior to payment. Two expenditures, or 20% of the sample size, totaling $28,036, in which the purchase order was dated after the invoice. In addition, we tested 5 employee personnel files with 50 related payroll expenditures for the above federal programs and noted the following items: Three employees did not have a WV IT-104 withholding form. One employee did not have a valid employment contract in their file. Five employees did not have a years of experience ledger in the file in order to recalculate pay. One employee did not have an IRS W-4 withholding form. Sixty non-payroll expenditure transactions were sampled for the Child Nutrition Cluster, of which Two expenditures, or 3% of the sample size, totaling $388,297, did not have Program Director approval prior to payment. Six expenditures, or 10% of the sample size, totaling $57,115, in which the expenditures did not reconcile with the supporting documentation. Forty-one non-payroll expenditure transactions were sampled for the Special Education Cluster, of which Five expenditures, or 12% of the sample size totaling $4,392 in which expenditures were made without a contract or the amounts paid were not provided for in the contract. Six expenditures, or 15% of the sample size, totaling $10,850, in which the purchase order was dated after the invoice. Forty-one expenditures, or 100% could not be traced to a project application. In addition, we tested 7 employee personnel files with 19 related payroll expenditures for the above federal programs and noted the following items: Three employees were paid a total of $219,529 from the Special Education Cluster that should not have been paid with federal funds. Five employees did not have a valid employment contract in their file.Six employees were paid supplements and did not have support in their file. Two employees did not have a valid extra-duty employment contract in their file. Three employees did not have an IRS W-4 withholding form. Four employees did not have a WV IT-104 withholding form. Seven employees did not have a years of experience ledger in the file in order to recalculate pay. CRITERIA: Proper internal controls include maintaining an adequate filing system in order to safeguard records and documents and procedures that ensure all purchases are approved by reconciling a purchase order to the invoice from the vendor prior to payment. Additionally, Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.334 states, in part, that: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient." Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.403 states, in part, that: "Except where otherwise authorized by statue, costs must meet the following general criteria in order to be allowable under Federal Awards: ...(c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period... (g) Be adequately documented." QUESTIONED COSTS: Unknown. CAUSE: Procedures were not in place to ensure that invoices and supporting documentation were maintained for all expenditures and that each expenditure was properly approved. Management of the Board does not have controls in place to comply with the Title 2 U.S. Code of Federal Regulations (CFR) Part 200 and Title 34 U.S. Code of Federal Regulations (CFR) Part 75. EFFECT: Certain funds were not expended in accordance with requirements of their respective programs, and auditors were unable to determine the allowability of expenditures due to inadequate documentation. This issue contributed to the disclaimer of opinion on compliance for the Title I, Special Education Cluster, Child Nutrition Cluster, and ESSER Programs. REPEAT FINDING: Yes PRIOR YEAR FINDING NUMBER: 2023-022 RECOMMENDATION: Board officials should establish and follow procedures to require: All purchase orders be issued prior to the purchase and receipt of the invoice, Contracts for contracted services be available for review, and All personnel files be complete and have adequate support for payroll expenditures.The officials of the Upshur County Board of Education should review the existing procedures and controls over federal award expenditures to determine that these controls are implemented, and working effectively to ensure that expenditures are properly authorized prior to payment. Board officials should ensure that all expenditures are properly authorized by the respective program directors. The Board officials should consider additional training, internal reviews, cross-training of employees, and other measures as deemed appropriate to ensure existing controls are implemented.
Grant Title: Title I Grants to Local Educational Agencies (Title I) Federal Award Number and Year: 2024 Assistance Listing #: 84.010A Federal Agency: US Department of Education Pass-through Entity number: 43 Pass-through Agency: WV Department of Education Grant Title: Special Education Cluster: Special Education - Grants to States, Special Education -Preschool Grants, COVID-19 Special Educatin Preschool Grants Federal Award Number and Year: 2024 Assistance Listing #: 84.027A, 84.173, 84.173A and 84.173X Federal Agency: US Department of Education Pass-through Entity number: 43 Pass-through Agency: WV Department of Education Grant Title: Child Nutrition Cluster: School Breakfast Program and National School Lunch Program Federal Award Number and Year: 2024 Assistance Listing #: 10.553 and 10.555 Federal Agency: US Department of Agriculture Pass-through Entity number: 88 Pass-through Agency: WV Department of Education Grant Title: COVID-19 American Rescue Plan Elementary and Secondary School Emergency Relief Fund - Education Stabilization Fund (ESSER) Federal Award Number and Year: 2024 Assistance Listing #: 84.425U, 84.425W Federal Agency: US Department of Education Pass-through Entity number: 52 Pass-through Agency: WV Department of Education CONDITION: Several expenditures were not properly approved by the Federal Program Directors. In addition, signed purchase orders or other supporting documentation were not available for all expenditures. Management did not ensure that expenditures were allowable for the Title I, Special Education Cluster, Child Nutrition Cluster, and ESSER programs. CONTEXT: Specifically, we identified the following: Sixty non-payroll expenditure transactions were sampled for Title I Grants to Local Education Agencies, of which Two expenditures, or 3% of the sample size, totaling $4,518, did not have Program Director approval prior to payment. Seven expenditures, or 12% of the sample size, totaling $162,988, to one vendor in which the contract was not available for review for contracted services. Three expenditures, or 5% of the sample size, totaling $5,040, which were not supported with adequate documentation. Two expenditures, or 3% of the sample size, totaling $4,525, in which the purchase order was dated after the invoice. Ten non-payroll expenditure transactions were sampled for the COVID-19 American Rescue Plan Elementary and Secondary School Emergency Relief (ESSER) Fund - Education Stabilization Fund, of which Five expenditures, or 50% of the sample size, totaling $913,518, did not have Program Director approval prior to payment. Two expenditures, or 20% of the sample size, totaling $28,036, in which the purchase order was dated after the invoice. In addition, we tested 5 employee personnel files with 50 related payroll expenditures for the above federal programs and noted the following items: Three employees did not have a WV IT-104 withholding form. One employee did not have a valid employment contract in their file. Five employees did not have a years of experience ledger in the file in order to recalculate pay. One employee did not have an IRS W-4 withholding form. Sixty non-payroll expenditure transactions were sampled for the Child Nutrition Cluster, of which Two expenditures, or 3% of the sample size, totaling $388,297, did not have Program Director approval prior to payment. Six expenditures, or 10% of the sample size, totaling $57,115, in which the expenditures did not reconcile with the supporting documentation. Forty-one non-payroll expenditure transactions were sampled for the Special Education Cluster, of which Five expenditures, or 12% of the sample size totaling $4,392 in which expenditures were made without a contract or the amounts paid were not provided for in the contract. Six expenditures, or 15% of the sample size, totaling $10,850, in which the purchase order was dated after the invoice. Forty-one expenditures, or 100% could not be traced to a project application. In addition, we tested 7 employee personnel files with 19 related payroll expenditures for the above federal programs and noted the following items: Three employees were paid a total of $219,529 from the Special Education Cluster that should not have been paid with federal funds. Five employees did not have a valid employment contract in their file.Six employees were paid supplements and did not have support in their file. Two employees did not have a valid extra-duty employment contract in their file. Three employees did not have an IRS W-4 withholding form. Four employees did not have a WV IT-104 withholding form. Seven employees did not have a years of experience ledger in the file in order to recalculate pay. CRITERIA: Proper internal controls include maintaining an adequate filing system in order to safeguard records and documents and procedures that ensure all purchases are approved by reconciling a purchase order to the invoice from the vendor prior to payment. Additionally, Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.334 states, in part, that: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient." Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.403 states, in part, that: "Except where otherwise authorized by statue, costs must meet the following general criteria in order to be allowable under Federal Awards: ...(c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period... (g) Be adequately documented." QUESTIONED COSTS: Unknown. CAUSE: Procedures were not in place to ensure that invoices and supporting documentation were maintained for all expenditures and that each expenditure was properly approved. Management of the Board does not have controls in place to comply with the Title 2 U.S. Code of Federal Regulations (CFR) Part 200 and Title 34 U.S. Code of Federal Regulations (CFR) Part 75. EFFECT: Certain funds were not expended in accordance with requirements of their respective programs, and auditors were unable to determine the allowability of expenditures due to inadequate documentation. This issue contributed to the disclaimer of opinion on compliance for the Title I, Special Education Cluster, Child Nutrition Cluster, and ESSER Programs. REPEAT FINDING: Yes PRIOR YEAR FINDING NUMBER: 2023-022 RECOMMENDATION: Board officials should establish and follow procedures to require: All purchase orders be issued prior to the purchase and receipt of the invoice, Contracts for contracted services be available for review, and All personnel files be complete and have adequate support for payroll expenditures.The officials of the Upshur County Board of Education should review the existing procedures and controls over federal award expenditures to determine that these controls are implemented, and working effectively to ensure that expenditures are properly authorized prior to payment. Board officials should ensure that all expenditures are properly authorized by the respective program directors. The Board officials should consider additional training, internal reviews, cross-training of employees, and other measures as deemed appropriate to ensure existing controls are implemented.
Grant Title: Title I Grants to Local Educational Agencies (Title I) Federal Award Number and Year: 2024 Assistance Listing #: 84.010A Federal Agency: US Department of Education Pass-through Entity number: 43 Pass-through Agency: WV Department of Education Grant Title: Special Education Cluster: Special Education - Grants to States, Special Education -Preschool Grants, COVID-19 Special Educatin Preschool Grants Federal Award Number and Year: 2024 Assistance Listing #: 84.027A, 84.173, 84.173A and 84.173X Federal Agency: US Department of Education Pass-through Entity number: 43 Pass-through Agency: WV Department of Education Grant Title: Child Nutrition Cluster: School Breakfast Program and National School Lunch Program Federal Award Number and Year: 2024 Assistance Listing #: 10.553 and 10.555 Federal Agency: US Department of Agriculture Pass-through Entity number: 88 Pass-through Agency: WV Department of Education Grant Title: COVID-19 American Rescue Plan Elementary and Secondary School Emergency Relief Fund - Education Stabilization Fund (ESSER) Federal Award Number and Year: 2024 Assistance Listing #: 84.425U, 84.425W Federal Agency: US Department of Education Pass-through Entity number: 52 Pass-through Agency: WV Department of Education CONDITION: Several expenditures were not properly approved by the Federal Program Directors. In addition, signed purchase orders or other supporting documentation were not available for all expenditures. Management did not ensure that expenditures were allowable for the Title I, Special Education Cluster, Child Nutrition Cluster, and ESSER programs. CONTEXT: Specifically, we identified the following: Sixty non-payroll expenditure transactions were sampled for Title I Grants to Local Education Agencies, of which Two expenditures, or 3% of the sample size, totaling $4,518, did not have Program Director approval prior to payment. Seven expenditures, or 12% of the sample size, totaling $162,988, to one vendor in which the contract was not available for review for contracted services. Three expenditures, or 5% of the sample size, totaling $5,040, which were not supported with adequate documentation. Two expenditures, or 3% of the sample size, totaling $4,525, in which the purchase order was dated after the invoice. Ten non-payroll expenditure transactions were sampled for the COVID-19 American Rescue Plan Elementary and Secondary School Emergency Relief (ESSER) Fund - Education Stabilization Fund, of which Five expenditures, or 50% of the sample size, totaling $913,518, did not have Program Director approval prior to payment. Two expenditures, or 20% of the sample size, totaling $28,036, in which the purchase order was dated after the invoice. In addition, we tested 5 employee personnel files with 50 related payroll expenditures for the above federal programs and noted the following items: Three employees did not have a WV IT-104 withholding form. One employee did not have a valid employment contract in their file. Five employees did not have a years of experience ledger in the file in order to recalculate pay. One employee did not have an IRS W-4 withholding form. Sixty non-payroll expenditure transactions were sampled for the Child Nutrition Cluster, of which Two expenditures, or 3% of the sample size, totaling $388,297, did not have Program Director approval prior to payment. Six expenditures, or 10% of the sample size, totaling $57,115, in which the expenditures did not reconcile with the supporting documentation. Forty-one non-payroll expenditure transactions were sampled for the Special Education Cluster, of which Five expenditures, or 12% of the sample size totaling $4,392 in which expenditures were made without a contract or the amounts paid were not provided for in the contract. Six expenditures, or 15% of the sample size, totaling $10,850, in which the purchase order was dated after the invoice. Forty-one expenditures, or 100% could not be traced to a project application. In addition, we tested 7 employee personnel files with 19 related payroll expenditures for the above federal programs and noted the following items: Three employees were paid a total of $219,529 from the Special Education Cluster that should not have been paid with federal funds. Five employees did not have a valid employment contract in their file.Six employees were paid supplements and did not have support in their file. Two employees did not have a valid extra-duty employment contract in their file. Three employees did not have an IRS W-4 withholding form. Four employees did not have a WV IT-104 withholding form. Seven employees did not have a years of experience ledger in the file in order to recalculate pay. CRITERIA: Proper internal controls include maintaining an adequate filing system in order to safeguard records and documents and procedures that ensure all purchases are approved by reconciling a purchase order to the invoice from the vendor prior to payment. Additionally, Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.334 states, in part, that: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient." Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.403 states, in part, that: "Except where otherwise authorized by statue, costs must meet the following general criteria in order to be allowable under Federal Awards: ...(c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period... (g) Be adequately documented." QUESTIONED COSTS: Unknown. CAUSE: Procedures were not in place to ensure that invoices and supporting documentation were maintained for all expenditures and that each expenditure was properly approved. Management of the Board does not have controls in place to comply with the Title 2 U.S. Code of Federal Regulations (CFR) Part 200 and Title 34 U.S. Code of Federal Regulations (CFR) Part 75. EFFECT: Certain funds were not expended in accordance with requirements of their respective programs, and auditors were unable to determine the allowability of expenditures due to inadequate documentation. This issue contributed to the disclaimer of opinion on compliance for the Title I, Special Education Cluster, Child Nutrition Cluster, and ESSER Programs. REPEAT FINDING: Yes PRIOR YEAR FINDING NUMBER: 2023-022 RECOMMENDATION: Board officials should establish and follow procedures to require: All purchase orders be issued prior to the purchase and receipt of the invoice, Contracts for contracted services be available for review, and All personnel files be complete and have adequate support for payroll expenditures.The officials of the Upshur County Board of Education should review the existing procedures and controls over federal award expenditures to determine that these controls are implemented, and working effectively to ensure that expenditures are properly authorized prior to payment. Board officials should ensure that all expenditures are properly authorized by the respective program directors. The Board officials should consider additional training, internal reviews, cross-training of employees, and other measures as deemed appropriate to ensure existing controls are implemented.
Grant Title: Title I Grants to Local Educational Agencies (Title I) Federal Award Number and Year: 2024 Assistance Listing #: 84.010A Federal Agency: US Department of Education Pass-through Entity number: 43 Pass-through Agency: WV Department of Education Grant Title: Special Education Cluster: Special Education - Grants to States, Special Education -Preschool Grants, COVID-19 Special Educatin Preschool Grants Federal Award Number and Year: 2024 Assistance Listing #: 84.027A, 84.173, 84.173A and 84.173X Federal Agency: US Department of Education Pass-through Entity number: 43 Pass-through Agency: WV Department of Education Grant Title: Child Nutrition Cluster: School Breakfast Program and National School Lunch Program Federal Award Number and Year: 2024 Assistance Listing #: 10.553 and 10.555 Federal Agency: US Department of Agriculture Pass-through Entity number: 88 Pass-through Agency: WV Department of Education Grant Title: COVID-19 American Rescue Plan Elementary and Secondary School Emergency Relief Fund - Education Stabilization Fund (ESSER) Federal Award Number and Year: 2024 Assistance Listing #: 84.425U, 84.425W Federal Agency: US Department of Education Pass-through Entity number: 52 Pass-through Agency: WV Department of Education CONDITION: Several expenditures were not properly approved by the Federal Program Directors. In addition, signed purchase orders or other supporting documentation were not available for all expenditures. Management did not ensure that expenditures were allowable for the Title I, Special Education Cluster, Child Nutrition Cluster, and ESSER programs. CONTEXT: Specifically, we identified the following: Sixty non-payroll expenditure transactions were sampled for Title I Grants to Local Education Agencies, of which Two expenditures, or 3% of the sample size, totaling $4,518, did not have Program Director approval prior to payment. Seven expenditures, or 12% of the sample size, totaling $162,988, to one vendor in which the contract was not available for review for contracted services. Three expenditures, or 5% of the sample size, totaling $5,040, which were not supported with adequate documentation. Two expenditures, or 3% of the sample size, totaling $4,525, in which the purchase order was dated after the invoice. Ten non-payroll expenditure transactions were sampled for the COVID-19 American Rescue Plan Elementary and Secondary School Emergency Relief (ESSER) Fund - Education Stabilization Fund, of which Five expenditures, or 50% of the sample size, totaling $913,518, did not have Program Director approval prior to payment. Two expenditures, or 20% of the sample size, totaling $28,036, in which the purchase order was dated after the invoice. In addition, we tested 5 employee personnel files with 50 related payroll expenditures for the above federal programs and noted the following items: Three employees did not have a WV IT-104 withholding form. One employee did not have a valid employment contract in their file. Five employees did not have a years of experience ledger in the file in order to recalculate pay. One employee did not have an IRS W-4 withholding form. Sixty non-payroll expenditure transactions were sampled for the Child Nutrition Cluster, of which Two expenditures, or 3% of the sample size, totaling $388,297, did not have Program Director approval prior to payment. Six expenditures, or 10% of the sample size, totaling $57,115, in which the expenditures did not reconcile with the supporting documentation. Forty-one non-payroll expenditure transactions were sampled for the Special Education Cluster, of which Five expenditures, or 12% of the sample size totaling $4,392 in which expenditures were made without a contract or the amounts paid were not provided for in the contract. Six expenditures, or 15% of the sample size, totaling $10,850, in which the purchase order was dated after the invoice. Forty-one expenditures, or 100% could not be traced to a project application. In addition, we tested 7 employee personnel files with 19 related payroll expenditures for the above federal programs and noted the following items: Three employees were paid a total of $219,529 from the Special Education Cluster that should not have been paid with federal funds. Five employees did not have a valid employment contract in their file.Six employees were paid supplements and did not have support in their file. Two employees did not have a valid extra-duty employment contract in their file. Three employees did not have an IRS W-4 withholding form. Four employees did not have a WV IT-104 withholding form. Seven employees did not have a years of experience ledger in the file in order to recalculate pay. CRITERIA: Proper internal controls include maintaining an adequate filing system in order to safeguard records and documents and procedures that ensure all purchases are approved by reconciling a purchase order to the invoice from the vendor prior to payment. Additionally, Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.334 states, in part, that: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient." Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.403 states, in part, that: "Except where otherwise authorized by statue, costs must meet the following general criteria in order to be allowable under Federal Awards: ...(c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period... (g) Be adequately documented." QUESTIONED COSTS: Unknown. CAUSE: Procedures were not in place to ensure that invoices and supporting documentation were maintained for all expenditures and that each expenditure was properly approved. Management of the Board does not have controls in place to comply with the Title 2 U.S. Code of Federal Regulations (CFR) Part 200 and Title 34 U.S. Code of Federal Regulations (CFR) Part 75. EFFECT: Certain funds were not expended in accordance with requirements of their respective programs, and auditors were unable to determine the allowability of expenditures due to inadequate documentation. This issue contributed to the disclaimer of opinion on compliance for the Title I, Special Education Cluster, Child Nutrition Cluster, and ESSER Programs. REPEAT FINDING: Yes PRIOR YEAR FINDING NUMBER: 2023-022 RECOMMENDATION: Board officials should establish and follow procedures to require: All purchase orders be issued prior to the purchase and receipt of the invoice, Contracts for contracted services be available for review, and All personnel files be complete and have adequate support for payroll expenditures.The officials of the Upshur County Board of Education should review the existing procedures and controls over federal award expenditures to determine that these controls are implemented, and working effectively to ensure that expenditures are properly authorized prior to payment. Board officials should ensure that all expenditures are properly authorized by the respective program directors. The Board officials should consider additional training, internal reviews, cross-training of employees, and other measures as deemed appropriate to ensure existing controls are implemented.
Finding 2024-003: Unallowable costs – Cost transfers based on budgeted amounts Cluster Name: Research and Development Federal Awarding Agency: Department of Health and Human Services Award Name: Leveraging natural phenotypic variations of heterogenous ALS populations-in-a-dish to enable scalable drug discovery Award Number: 5R01NS131409-03 Award Years: 2022-2025 Assistance Listing Title: Extramural Research Programs in the Neurosciences and Neurological Disorders Assistance Listing Number: 93.853 Pass-through entities: Not applicable Criteria In accordance with 2 CFR Part 200, Appendix XI guidelines, cost transfers must adhere to the principles of allowability, allocability, and reasonableness. Specifically, 2 CFR §200.403 stipulates that costs must be determined in accordance with generally accepted accounting principles (GAAP), reflecting actual expenses incurred and must be supported by adequate documentation to ensure compliance with federal requirements. Condition In fiscal year 2024, a sample of 25 cost transfers totaling $1,368,397 were tested to evaluate compliance with the relevant federal requirements. Of the samples tested, 1 exception was noted totaling $42,115 where budgeted expenditures were charged to a federal grant through a cost transfer before the actual expenditures were incurred by the University. Cause The error occurred due to a lack of proper training of the grant administrator who processed the cost transfer. Instead of verifying the underlying support and understanding the actual expenses incurred, they relied on budgeted figures to complete the transactions. Effect The incorrect cost transfer led to an overstatement of expenses on the receiving grant, resulting in unallowable and unsupported costs being charged to the federal award. Questioned Costs Total questioned costs were $42,115. Recommendation We recommend that management reinforce its existing policies regarding documentation and support for allowability of cost transfers to all members of the Department. Management’s Corrective Action Plan Management’s response is reported on “Management’s Views and Corrective Action Plan” at the end of this report.
Finding 2024-004: Review over cost transfers of subrecipient expenditures Cluster Name: Research and Development Federal Awarding Agency: Various Award Name: Various Award Number: Various Award Years: Various Assistance Listing Title: Various Assistance Listing Number: Various Pass-through entities: Various Criteria In accordance with 2 CFR Part 200, Appendix XI guidelines, cost transfers must adhere to the principles of allowability, allocability, and reasonableness. Specifically, 2 CFR §200.403 stipulates that costs must conform to any limitations or exclusions set forth in the guidance or in the Federal award as to types or amount of cost items. Additionally, the University’s indirect costs are to be charged according to federally negotiated rates as specified in their federal government rate agreement. This agreement mandates that each indirect cost rate be applied to the modified total direct costs (MTDC). The agreement stipulates that only the first $25,000 of each subaward can be included in the MTDC base for calculating indirect costs. Condition In connection with procedures performed to understand the design and implementation of internal controls over compliance, it was identified that the University lacked effective internal controls over the processing of indirect costs associated with subrecipient expenditures transferred between awards. Specifically, there was no control in place to ensure that the indirect costs being charged against the subrecipient expenditures complied with the $25,000 MTDC limit. This gap in controls was identified through our testing of indirect costs, where out of a sample of 25 indirect costs, 1 selection was identified related to a subaward expense. This was subsequently determined to have been misclassified by the University as a subaward and thus did not result in any questioned costs, but through understanding this transaction, a gap in the University’s controls was identified. Cause The University’s cost transfer process lacks a review procedure to verify that indirect cost rate limits are correctly programmed into the receiving grant's parameters before processing a cost transfer. As such, the University’s grant administrators may fail to identify indirect costs charged to the grant in excess of the allowed limits for subrecipient expenditures. Additionally, the grant administrator failed to properly apply the University’s policy for classification of subawards versus direct expenditures. Effect A lack of adequate controls in the process could result in unallowable indirect costs in excess of the $25,000 subaward limit being charged to federal awards. Additionally, a lack of review of expenditures for appropriate classification could result in the schedule of expenditures of federal awards being misstated. Questioned Costs None noted. Recommendation We recommend that management implement additional controls over the subrecipient cost transfer process to ensure appropriate reviews are conducted before the approval of a cost transfer to a federal grant. This process should include verifying that the indirect cost rate limits are correctly programmed into grant parameters before approving any subrecipient cost transfers to a grant. Additionally, we recommend that management reinforce its policies related to the classification of subawards versus direct expenditures. Management’s Corrective Action Plan Management’s response is reported on “Management’s Views and Corrective Action Plan” at the end of this report.
Finding 2024-004: Review over cost transfers of subrecipient expenditures Cluster Name: Research and Development Federal Awarding Agency: Various Award Name: Various Award Number: Various Award Years: Various Assistance Listing Title: Various Assistance Listing Number: Various Pass-through entities: Various Criteria In accordance with 2 CFR Part 200, Appendix XI guidelines, cost transfers must adhere to the principles of allowability, allocability, and reasonableness. Specifically, 2 CFR §200.403 stipulates that costs must conform to any limitations or exclusions set forth in the guidance or in the Federal award as to types or amount of cost items. Additionally, the University’s indirect costs are to be charged according to federally negotiated rates as specified in their federal government rate agreement. This agreement mandates that each indirect cost rate be applied to the modified total direct costs (MTDC). The agreement stipulates that only the first $25,000 of each subaward can be included in the MTDC base for calculating indirect costs. Condition In connection with procedures performed to understand the design and implementation of internal controls over compliance, it was identified that the University lacked effective internal controls over the processing of indirect costs associated with subrecipient expenditures transferred between awards. Specifically, there was no control in place to ensure that the indirect costs being charged against the subrecipient expenditures complied with the $25,000 MTDC limit. This gap in controls was identified through our testing of indirect costs, where out of a sample of 25 indirect costs, 1 selection was identified related to a subaward expense. This was subsequently determined to have been misclassified by the University as a subaward and thus did not result in any questioned costs, but through understanding this transaction, a gap in the University’s controls was identified. Cause The University’s cost transfer process lacks a review procedure to verify that indirect cost rate limits are correctly programmed into the receiving grant's parameters before processing a cost transfer. As such, the University’s grant administrators may fail to identify indirect costs charged to the grant in excess of the allowed limits for subrecipient expenditures. Additionally, the grant administrator failed to properly apply the University’s policy for classification of subawards versus direct expenditures. Effect A lack of adequate controls in the process could result in unallowable indirect costs in excess of the $25,000 subaward limit being charged to federal awards. Additionally, a lack of review of expenditures for appropriate classification could result in the schedule of expenditures of federal awards being misstated. Questioned Costs None noted. Recommendation We recommend that management implement additional controls over the subrecipient cost transfer process to ensure appropriate reviews are conducted before the approval of a cost transfer to a federal grant. This process should include verifying that the indirect cost rate limits are correctly programmed into grant parameters before approving any subrecipient cost transfers to a grant. Additionally, we recommend that management reinforce its policies related to the classification of subawards versus direct expenditures. Management’s Corrective Action Plan Management’s response is reported on “Management’s Views and Corrective Action Plan” at the end of this report.
Finding 2024-004: Review over cost transfers of subrecipient expenditures Cluster Name: Research and Development Federal Awarding Agency: Various Award Name: Various Award Number: Various Award Years: Various Assistance Listing Title: Various Assistance Listing Number: Various Pass-through entities: Various Criteria In accordance with 2 CFR Part 200, Appendix XI guidelines, cost transfers must adhere to the principles of allowability, allocability, and reasonableness. Specifically, 2 CFR §200.403 stipulates that costs must conform to any limitations or exclusions set forth in the guidance or in the Federal award as to types or amount of cost items. Additionally, the University’s indirect costs are to be charged according to federally negotiated rates as specified in their federal government rate agreement. This agreement mandates that each indirect cost rate be applied to the modified total direct costs (MTDC). The agreement stipulates that only the first $25,000 of each subaward can be included in the MTDC base for calculating indirect costs. Condition In connection with procedures performed to understand the design and implementation of internal controls over compliance, it was identified that the University lacked effective internal controls over the processing of indirect costs associated with subrecipient expenditures transferred between awards. Specifically, there was no control in place to ensure that the indirect costs being charged against the subrecipient expenditures complied with the $25,000 MTDC limit. This gap in controls was identified through our testing of indirect costs, where out of a sample of 25 indirect costs, 1 selection was identified related to a subaward expense. This was subsequently determined to have been misclassified by the University as a subaward and thus did not result in any questioned costs, but through understanding this transaction, a gap in the University’s controls was identified. Cause The University’s cost transfer process lacks a review procedure to verify that indirect cost rate limits are correctly programmed into the receiving grant's parameters before processing a cost transfer. As such, the University’s grant administrators may fail to identify indirect costs charged to the grant in excess of the allowed limits for subrecipient expenditures. Additionally, the grant administrator failed to properly apply the University’s policy for classification of subawards versus direct expenditures. Effect A lack of adequate controls in the process could result in unallowable indirect costs in excess of the $25,000 subaward limit being charged to federal awards. Additionally, a lack of review of expenditures for appropriate classification could result in the schedule of expenditures of federal awards being misstated. Questioned Costs None noted. Recommendation We recommend that management implement additional controls over the subrecipient cost transfer process to ensure appropriate reviews are conducted before the approval of a cost transfer to a federal grant. This process should include verifying that the indirect cost rate limits are correctly programmed into grant parameters before approving any subrecipient cost transfers to a grant. Additionally, we recommend that management reinforce its policies related to the classification of subawards versus direct expenditures. Management’s Corrective Action Plan Management’s response is reported on “Management’s Views and Corrective Action Plan” at the end of this report.
Finding 2024-004: Review over cost transfers of subrecipient expenditures Cluster Name: Research and Development Federal Awarding Agency: Various Award Name: Various Award Number: Various Award Years: Various Assistance Listing Title: Various Assistance Listing Number: Various Pass-through entities: Various Criteria In accordance with 2 CFR Part 200, Appendix XI guidelines, cost transfers must adhere to the principles of allowability, allocability, and reasonableness. Specifically, 2 CFR §200.403 stipulates that costs must conform to any limitations or exclusions set forth in the guidance or in the Federal award as to types or amount of cost items. Additionally, the University’s indirect costs are to be charged according to federally negotiated rates as specified in their federal government rate agreement. This agreement mandates that each indirect cost rate be applied to the modified total direct costs (MTDC). The agreement stipulates that only the first $25,000 of each subaward can be included in the MTDC base for calculating indirect costs. Condition In connection with procedures performed to understand the design and implementation of internal controls over compliance, it was identified that the University lacked effective internal controls over the processing of indirect costs associated with subrecipient expenditures transferred between awards. Specifically, there was no control in place to ensure that the indirect costs being charged against the subrecipient expenditures complied with the $25,000 MTDC limit. This gap in controls was identified through our testing of indirect costs, where out of a sample of 25 indirect costs, 1 selection was identified related to a subaward expense. This was subsequently determined to have been misclassified by the University as a subaward and thus did not result in any questioned costs, but through understanding this transaction, a gap in the University’s controls was identified. Cause The University’s cost transfer process lacks a review procedure to verify that indirect cost rate limits are correctly programmed into the receiving grant's parameters before processing a cost transfer. As such, the University’s grant administrators may fail to identify indirect costs charged to the grant in excess of the allowed limits for subrecipient expenditures. Additionally, the grant administrator failed to properly apply the University’s policy for classification of subawards versus direct expenditures. Effect A lack of adequate controls in the process could result in unallowable indirect costs in excess of the $25,000 subaward limit being charged to federal awards. Additionally, a lack of review of expenditures for appropriate classification could result in the schedule of expenditures of federal awards being misstated. Questioned Costs None noted. Recommendation We recommend that management implement additional controls over the subrecipient cost transfer process to ensure appropriate reviews are conducted before the approval of a cost transfer to a federal grant. This process should include verifying that the indirect cost rate limits are correctly programmed into grant parameters before approving any subrecipient cost transfers to a grant. Additionally, we recommend that management reinforce its policies related to the classification of subawards versus direct expenditures. Management’s Corrective Action Plan Management’s response is reported on “Management’s Views and Corrective Action Plan” at the end of this report.
Finding 2024-004: Review over cost transfers of subrecipient expenditures Cluster Name: Research and Development Federal Awarding Agency: Various Award Name: Various Award Number: Various Award Years: Various Assistance Listing Title: Various Assistance Listing Number: Various Pass-through entities: Various Criteria In accordance with 2 CFR Part 200, Appendix XI guidelines, cost transfers must adhere to the principles of allowability, allocability, and reasonableness. Specifically, 2 CFR §200.403 stipulates that costs must conform to any limitations or exclusions set forth in the guidance or in the Federal award as to types or amount of cost items. Additionally, the University’s indirect costs are to be charged according to federally negotiated rates as specified in their federal government rate agreement. This agreement mandates that each indirect cost rate be applied to the modified total direct costs (MTDC). The agreement stipulates that only the first $25,000 of each subaward can be included in the MTDC base for calculating indirect costs. Condition In connection with procedures performed to understand the design and implementation of internal controls over compliance, it was identified that the University lacked effective internal controls over the processing of indirect costs associated with subrecipient expenditures transferred between awards. Specifically, there was no control in place to ensure that the indirect costs being charged against the subrecipient expenditures complied with the $25,000 MTDC limit. This gap in controls was identified through our testing of indirect costs, where out of a sample of 25 indirect costs, 1 selection was identified related to a subaward expense. This was subsequently determined to have been misclassified by the University as a subaward and thus did not result in any questioned costs, but through understanding this transaction, a gap in the University’s controls was identified. Cause The University’s cost transfer process lacks a review procedure to verify that indirect cost rate limits are correctly programmed into the receiving grant's parameters before processing a cost transfer. As such, the University’s grant administrators may fail to identify indirect costs charged to the grant in excess of the allowed limits for subrecipient expenditures. Additionally, the grant administrator failed to properly apply the University’s policy for classification of subawards versus direct expenditures. Effect A lack of adequate controls in the process could result in unallowable indirect costs in excess of the $25,000 subaward limit being charged to federal awards. Additionally, a lack of review of expenditures for appropriate classification could result in the schedule of expenditures of federal awards being misstated. Questioned Costs None noted. Recommendation We recommend that management implement additional controls over the subrecipient cost transfer process to ensure appropriate reviews are conducted before the approval of a cost transfer to a federal grant. This process should include verifying that the indirect cost rate limits are correctly programmed into grant parameters before approving any subrecipient cost transfers to a grant. Additionally, we recommend that management reinforce its policies related to the classification of subawards versus direct expenditures. Management’s Corrective Action Plan Management’s response is reported on “Management’s Views and Corrective Action Plan” at the end of this report.
Finding 2024-004: Review over cost transfers of subrecipient expenditures Cluster Name: Research and Development Federal Awarding Agency: Various Award Name: Various Award Number: Various Award Years: Various Assistance Listing Title: Various Assistance Listing Number: Various Pass-through entities: Various Criteria In accordance with 2 CFR Part 200, Appendix XI guidelines, cost transfers must adhere to the principles of allowability, allocability, and reasonableness. Specifically, 2 CFR §200.403 stipulates that costs must conform to any limitations or exclusions set forth in the guidance or in the Federal award as to types or amount of cost items. Additionally, the University’s indirect costs are to be charged according to federally negotiated rates as specified in their federal government rate agreement. This agreement mandates that each indirect cost rate be applied to the modified total direct costs (MTDC). The agreement stipulates that only the first $25,000 of each subaward can be included in the MTDC base for calculating indirect costs. Condition In connection with procedures performed to understand the design and implementation of internal controls over compliance, it was identified that the University lacked effective internal controls over the processing of indirect costs associated with subrecipient expenditures transferred between awards. Specifically, there was no control in place to ensure that the indirect costs being charged against the subrecipient expenditures complied with the $25,000 MTDC limit. This gap in controls was identified through our testing of indirect costs, where out of a sample of 25 indirect costs, 1 selection was identified related to a subaward expense. This was subsequently determined to have been misclassified by the University as a subaward and thus did not result in any questioned costs, but through understanding this transaction, a gap in the University’s controls was identified. Cause The University’s cost transfer process lacks a review procedure to verify that indirect cost rate limits are correctly programmed into the receiving grant's parameters before processing a cost transfer. As such, the University’s grant administrators may fail to identify indirect costs charged to the grant in excess of the allowed limits for subrecipient expenditures. Additionally, the grant administrator failed to properly apply the University’s policy for classification of subawards versus direct expenditures. Effect A lack of adequate controls in the process could result in unallowable indirect costs in excess of the $25,000 subaward limit being charged to federal awards. Additionally, a lack of review of expenditures for appropriate classification could result in the schedule of expenditures of federal awards being misstated. Questioned Costs None noted. Recommendation We recommend that management implement additional controls over the subrecipient cost transfer process to ensure appropriate reviews are conducted before the approval of a cost transfer to a federal grant. This process should include verifying that the indirect cost rate limits are correctly programmed into grant parameters before approving any subrecipient cost transfers to a grant. Additionally, we recommend that management reinforce its policies related to the classification of subawards versus direct expenditures. Management’s Corrective Action Plan Management’s response is reported on “Management’s Views and Corrective Action Plan” at the end of this report.
Finding 2024-004: Review over cost transfers of subrecipient expenditures Cluster Name: Research and Development Federal Awarding Agency: Various Award Name: Various Award Number: Various Award Years: Various Assistance Listing Title: Various Assistance Listing Number: Various Pass-through entities: Various Criteria In accordance with 2 CFR Part 200, Appendix XI guidelines, cost transfers must adhere to the principles of allowability, allocability, and reasonableness. Specifically, 2 CFR §200.403 stipulates that costs must conform to any limitations or exclusions set forth in the guidance or in the Federal award as to types or amount of cost items. Additionally, the University’s indirect costs are to be charged according to federally negotiated rates as specified in their federal government rate agreement. This agreement mandates that each indirect cost rate be applied to the modified total direct costs (MTDC). The agreement stipulates that only the first $25,000 of each subaward can be included in the MTDC base for calculating indirect costs. Condition In connection with procedures performed to understand the design and implementation of internal controls over compliance, it was identified that the University lacked effective internal controls over the processing of indirect costs associated with subrecipient expenditures transferred between awards. Specifically, there was no control in place to ensure that the indirect costs being charged against the subrecipient expenditures complied with the $25,000 MTDC limit. This gap in controls was identified through our testing of indirect costs, where out of a sample of 25 indirect costs, 1 selection was identified related to a subaward expense. This was subsequently determined to have been misclassified by the University as a subaward and thus did not result in any questioned costs, but through understanding this transaction, a gap in the University’s controls was identified. Cause The University’s cost transfer process lacks a review procedure to verify that indirect cost rate limits are correctly programmed into the receiving grant's parameters before processing a cost transfer. As such, the University’s grant administrators may fail to identify indirect costs charged to the grant in excess of the allowed limits for subrecipient expenditures. Additionally, the grant administrator failed to properly apply the University’s policy for classification of subawards versus direct expenditures. Effect A lack of adequate controls in the process could result in unallowable indirect costs in excess of the $25,000 subaward limit being charged to federal awards. Additionally, a lack of review of expenditures for appropriate classification could result in the schedule of expenditures of federal awards being misstated. Questioned Costs None noted. Recommendation We recommend that management implement additional controls over the subrecipient cost transfer process to ensure appropriate reviews are conducted before the approval of a cost transfer to a federal grant. This process should include verifying that the indirect cost rate limits are correctly programmed into grant parameters before approving any subrecipient cost transfers to a grant. Additionally, we recommend that management reinforce its policies related to the classification of subawards versus direct expenditures. Management’s Corrective Action Plan Management’s response is reported on “Management’s Views and Corrective Action Plan” at the end of this report.
Finding 2024-004: Review over cost transfers of subrecipient expenditures Cluster Name: Research and Development Federal Awarding Agency: Various Award Name: Various Award Number: Various Award Years: Various Assistance Listing Title: Various Assistance Listing Number: Various Pass-through entities: Various Criteria In accordance with 2 CFR Part 200, Appendix XI guidelines, cost transfers must adhere to the principles of allowability, allocability, and reasonableness. Specifically, 2 CFR §200.403 stipulates that costs must conform to any limitations or exclusions set forth in the guidance or in the Federal award as to types or amount of cost items. Additionally, the University’s indirect costs are to be charged according to federally negotiated rates as specified in their federal government rate agreement. This agreement mandates that each indirect cost rate be applied to the modified total direct costs (MTDC). The agreement stipulates that only the first $25,000 of each subaward can be included in the MTDC base for calculating indirect costs. Condition In connection with procedures performed to understand the design and implementation of internal controls over compliance, it was identified that the University lacked effective internal controls over the processing of indirect costs associated with subrecipient expenditures transferred between awards. Specifically, there was no control in place to ensure that the indirect costs being charged against the subrecipient expenditures complied with the $25,000 MTDC limit. This gap in controls was identified through our testing of indirect costs, where out of a sample of 25 indirect costs, 1 selection was identified related to a subaward expense. This was subsequently determined to have been misclassified by the University as a subaward and thus did not result in any questioned costs, but through understanding this transaction, a gap in the University’s controls was identified. Cause The University’s cost transfer process lacks a review procedure to verify that indirect cost rate limits are correctly programmed into the receiving grant's parameters before processing a cost transfer. As such, the University’s grant administrators may fail to identify indirect costs charged to the grant in excess of the allowed limits for subrecipient expenditures. Additionally, the grant administrator failed to properly apply the University’s policy for classification of subawards versus direct expenditures. Effect A lack of adequate controls in the process could result in unallowable indirect costs in excess of the $25,000 subaward limit being charged to federal awards. Additionally, a lack of review of expenditures for appropriate classification could result in the schedule of expenditures of federal awards being misstated. Questioned Costs None noted. Recommendation We recommend that management implement additional controls over the subrecipient cost transfer process to ensure appropriate reviews are conducted before the approval of a cost transfer to a federal grant. This process should include verifying that the indirect cost rate limits are correctly programmed into grant parameters before approving any subrecipient cost transfers to a grant. Additionally, we recommend that management reinforce its policies related to the classification of subawards versus direct expenditures. Management’s Corrective Action Plan Management’s response is reported on “Management’s Views and Corrective Action Plan” at the end of this report.
Finding 2024-004: Review over cost transfers of subrecipient expenditures Cluster Name: Research and Development Federal Awarding Agency: Various Award Name: Various Award Number: Various Award Years: Various Assistance Listing Title: Various Assistance Listing Number: Various Pass-through entities: Various Criteria In accordance with 2 CFR Part 200, Appendix XI guidelines, cost transfers must adhere to the principles of allowability, allocability, and reasonableness. Specifically, 2 CFR §200.403 stipulates that costs must conform to any limitations or exclusions set forth in the guidance or in the Federal award as to types or amount of cost items. Additionally, the University’s indirect costs are to be charged according to federally negotiated rates as specified in their federal government rate agreement. This agreement mandates that each indirect cost rate be applied to the modified total direct costs (MTDC). The agreement stipulates that only the first $25,000 of each subaward can be included in the MTDC base for calculating indirect costs. Condition In connection with procedures performed to understand the design and implementation of internal controls over compliance, it was identified that the University lacked effective internal controls over the processing of indirect costs associated with subrecipient expenditures transferred between awards. Specifically, there was no control in place to ensure that the indirect costs being charged against the subrecipient expenditures complied with the $25,000 MTDC limit. This gap in controls was identified through our testing of indirect costs, where out of a sample of 25 indirect costs, 1 selection was identified related to a subaward expense. This was subsequently determined to have been misclassified by the University as a subaward and thus did not result in any questioned costs, but through understanding this transaction, a gap in the University’s controls was identified. Cause The University’s cost transfer process lacks a review procedure to verify that indirect cost rate limits are correctly programmed into the receiving grant's parameters before processing a cost transfer. As such, the University’s grant administrators may fail to identify indirect costs charged to the grant in excess of the allowed limits for subrecipient expenditures. Additionally, the grant administrator failed to properly apply the University’s policy for classification of subawards versus direct expenditures. Effect A lack of adequate controls in the process could result in unallowable indirect costs in excess of the $25,000 subaward limit being charged to federal awards. Additionally, a lack of review of expenditures for appropriate classification could result in the schedule of expenditures of federal awards being misstated. Questioned Costs None noted. Recommendation We recommend that management implement additional controls over the subrecipient cost transfer process to ensure appropriate reviews are conducted before the approval of a cost transfer to a federal grant. This process should include verifying that the indirect cost rate limits are correctly programmed into grant parameters before approving any subrecipient cost transfers to a grant. Additionally, we recommend that management reinforce its policies related to the classification of subawards versus direct expenditures. Management’s Corrective Action Plan Management’s response is reported on “Management’s Views and Corrective Action Plan” at the end of this report.
Finding 2024-004: Review over cost transfers of subrecipient expenditures Cluster Name: Research and Development Federal Awarding Agency: Various Award Name: Various Award Number: Various Award Years: Various Assistance Listing Title: Various Assistance Listing Number: Various Pass-through entities: Various Criteria In accordance with 2 CFR Part 200, Appendix XI guidelines, cost transfers must adhere to the principles of allowability, allocability, and reasonableness. Specifically, 2 CFR §200.403 stipulates that costs must conform to any limitations or exclusions set forth in the guidance or in the Federal award as to types or amount of cost items. Additionally, the University’s indirect costs are to be charged according to federally negotiated rates as specified in their federal government rate agreement. This agreement mandates that each indirect cost rate be applied to the modified total direct costs (MTDC). The agreement stipulates that only the first $25,000 of each subaward can be included in the MTDC base for calculating indirect costs. Condition In connection with procedures performed to understand the design and implementation of internal controls over compliance, it was identified that the University lacked effective internal controls over the processing of indirect costs associated with subrecipient expenditures transferred between awards. Specifically, there was no control in place to ensure that the indirect costs being charged against the subrecipient expenditures complied with the $25,000 MTDC limit. This gap in controls was identified through our testing of indirect costs, where out of a sample of 25 indirect costs, 1 selection was identified related to a subaward expense. This was subsequently determined to have been misclassified by the University as a subaward and thus did not result in any questioned costs, but through understanding this transaction, a gap in the University’s controls was identified. Cause The University’s cost transfer process lacks a review procedure to verify that indirect cost rate limits are correctly programmed into the receiving grant's parameters before processing a cost transfer. As such, the University’s grant administrators may fail to identify indirect costs charged to the grant in excess of the allowed limits for subrecipient expenditures. Additionally, the grant administrator failed to properly apply the University’s policy for classification of subawards versus direct expenditures. Effect A lack of adequate controls in the process could result in unallowable indirect costs in excess of the $25,000 subaward limit being charged to federal awards. Additionally, a lack of review of expenditures for appropriate classification could result in the schedule of expenditures of federal awards being misstated. Questioned Costs None noted. Recommendation We recommend that management implement additional controls over the subrecipient cost transfer process to ensure appropriate reviews are conducted before the approval of a cost transfer to a federal grant. This process should include verifying that the indirect cost rate limits are correctly programmed into grant parameters before approving any subrecipient cost transfers to a grant. Additionally, we recommend that management reinforce its policies related to the classification of subawards versus direct expenditures. Management’s Corrective Action Plan Management’s response is reported on “Management’s Views and Corrective Action Plan” at the end of this report.
Finding 2024-004: Review over cost transfers of subrecipient expenditures Cluster Name: Research and Development Federal Awarding Agency: Various Award Name: Various Award Number: Various Award Years: Various Assistance Listing Title: Various Assistance Listing Number: Various Pass-through entities: Various Criteria In accordance with 2 CFR Part 200, Appendix XI guidelines, cost transfers must adhere to the principles of allowability, allocability, and reasonableness. Specifically, 2 CFR §200.403 stipulates that costs must conform to any limitations or exclusions set forth in the guidance or in the Federal award as to types or amount of cost items. Additionally, the University’s indirect costs are to be charged according to federally negotiated rates as specified in their federal government rate agreement. This agreement mandates that each indirect cost rate be applied to the modified total direct costs (MTDC). The agreement stipulates that only the first $25,000 of each subaward can be included in the MTDC base for calculating indirect costs. Condition In connection with procedures performed to understand the design and implementation of internal controls over compliance, it was identified that the University lacked effective internal controls over the processing of indirect costs associated with subrecipient expenditures transferred between awards. Specifically, there was no control in place to ensure that the indirect costs being charged against the subrecipient expenditures complied with the $25,000 MTDC limit. This gap in controls was identified through our testing of indirect costs, where out of a sample of 25 indirect costs, 1 selection was identified related to a subaward expense. This was subsequently determined to have been misclassified by the University as a subaward and thus did not result in any questioned costs, but through understanding this transaction, a gap in the University’s controls was identified. Cause The University’s cost transfer process lacks a review procedure to verify that indirect cost rate limits are correctly programmed into the receiving grant's parameters before processing a cost transfer. As such, the University’s grant administrators may fail to identify indirect costs charged to the grant in excess of the allowed limits for subrecipient expenditures. Additionally, the grant administrator failed to properly apply the University’s policy for classification of subawards versus direct expenditures. Effect A lack of adequate controls in the process could result in unallowable indirect costs in excess of the $25,000 subaward limit being charged to federal awards. Additionally, a lack of review of expenditures for appropriate classification could result in the schedule of expenditures of federal awards being misstated. Questioned Costs None noted. Recommendation We recommend that management implement additional controls over the subrecipient cost transfer process to ensure appropriate reviews are conducted before the approval of a cost transfer to a federal grant. This process should include verifying that the indirect cost rate limits are correctly programmed into grant parameters before approving any subrecipient cost transfers to a grant. Additionally, we recommend that management reinforce its policies related to the classification of subawards versus direct expenditures. Management’s Corrective Action Plan Management’s response is reported on “Management’s Views and Corrective Action Plan” at the end of this report.
Finding 2024-004: Review over cost transfers of subrecipient expenditures Cluster Name: Research and Development Federal Awarding Agency: Various Award Name: Various Award Number: Various Award Years: Various Assistance Listing Title: Various Assistance Listing Number: Various Pass-through entities: Various Criteria In accordance with 2 CFR Part 200, Appendix XI guidelines, cost transfers must adhere to the principles of allowability, allocability, and reasonableness. Specifically, 2 CFR §200.403 stipulates that costs must conform to any limitations or exclusions set forth in the guidance or in the Federal award as to types or amount of cost items. Additionally, the University’s indirect costs are to be charged according to federally negotiated rates as specified in their federal government rate agreement. This agreement mandates that each indirect cost rate be applied to the modified total direct costs (MTDC). The agreement stipulates that only the first $25,000 of each subaward can be included in the MTDC base for calculating indirect costs. Condition In connection with procedures performed to understand the design and implementation of internal controls over compliance, it was identified that the University lacked effective internal controls over the processing of indirect costs associated with subrecipient expenditures transferred between awards. Specifically, there was no control in place to ensure that the indirect costs being charged against the subrecipient expenditures complied with the $25,000 MTDC limit. This gap in controls was identified through our testing of indirect costs, where out of a sample of 25 indirect costs, 1 selection was identified related to a subaward expense. This was subsequently determined to have been misclassified by the University as a subaward and thus did not result in any questioned costs, but through understanding this transaction, a gap in the University’s controls was identified. Cause The University’s cost transfer process lacks a review procedure to verify that indirect cost rate limits are correctly programmed into the receiving grant's parameters before processing a cost transfer. As such, the University’s grant administrators may fail to identify indirect costs charged to the grant in excess of the allowed limits for subrecipient expenditures. Additionally, the grant administrator failed to properly apply the University’s policy for classification of subawards versus direct expenditures. Effect A lack of adequate controls in the process could result in unallowable indirect costs in excess of the $25,000 subaward limit being charged to federal awards. Additionally, a lack of review of expenditures for appropriate classification could result in the schedule of expenditures of federal awards being misstated. Questioned Costs None noted. Recommendation We recommend that management implement additional controls over the subrecipient cost transfer process to ensure appropriate reviews are conducted before the approval of a cost transfer to a federal grant. This process should include verifying that the indirect cost rate limits are correctly programmed into grant parameters before approving any subrecipient cost transfers to a grant. Additionally, we recommend that management reinforce its policies related to the classification of subawards versus direct expenditures. Management’s Corrective Action Plan Management’s response is reported on “Management’s Views and Corrective Action Plan” at the end of this report.
Finding 2024-004: Review over cost transfers of subrecipient expenditures Cluster Name: Research and Development Federal Awarding Agency: Various Award Name: Various Award Number: Various Award Years: Various Assistance Listing Title: Various Assistance Listing Number: Various Pass-through entities: Various Criteria In accordance with 2 CFR Part 200, Appendix XI guidelines, cost transfers must adhere to the principles of allowability, allocability, and reasonableness. Specifically, 2 CFR §200.403 stipulates that costs must conform to any limitations or exclusions set forth in the guidance or in the Federal award as to types or amount of cost items. Additionally, the University’s indirect costs are to be charged according to federally negotiated rates as specified in their federal government rate agreement. This agreement mandates that each indirect cost rate be applied to the modified total direct costs (MTDC). The agreement stipulates that only the first $25,000 of each subaward can be included in the MTDC base for calculating indirect costs. Condition In connection with procedures performed to understand the design and implementation of internal controls over compliance, it was identified that the University lacked effective internal controls over the processing of indirect costs associated with subrecipient expenditures transferred between awards. Specifically, there was no control in place to ensure that the indirect costs being charged against the subrecipient expenditures complied with the $25,000 MTDC limit. This gap in controls was identified through our testing of indirect costs, where out of a sample of 25 indirect costs, 1 selection was identified related to a subaward expense. This was subsequently determined to have been misclassified by the University as a subaward and thus did not result in any questioned costs, but through understanding this transaction, a gap in the University’s controls was identified. Cause The University’s cost transfer process lacks a review procedure to verify that indirect cost rate limits are correctly programmed into the receiving grant's parameters before processing a cost transfer. As such, the University’s grant administrators may fail to identify indirect costs charged to the grant in excess of the allowed limits for subrecipient expenditures. Additionally, the grant administrator failed to properly apply the University’s policy for classification of subawards versus direct expenditures. Effect A lack of adequate controls in the process could result in unallowable indirect costs in excess of the $25,000 subaward limit being charged to federal awards. Additionally, a lack of review of expenditures for appropriate classification could result in the schedule of expenditures of federal awards being misstated. Questioned Costs None noted. Recommendation We recommend that management implement additional controls over the subrecipient cost transfer process to ensure appropriate reviews are conducted before the approval of a cost transfer to a federal grant. This process should include verifying that the indirect cost rate limits are correctly programmed into grant parameters before approving any subrecipient cost transfers to a grant. Additionally, we recommend that management reinforce its policies related to the classification of subawards versus direct expenditures. Management’s Corrective Action Plan Management’s response is reported on “Management’s Views and Corrective Action Plan” at the end of this report.
Finding 2024-004: Review over cost transfers of subrecipient expenditures Cluster Name: Research and Development Federal Awarding Agency: Various Award Name: Various Award Number: Various Award Years: Various Assistance Listing Title: Various Assistance Listing Number: Various Pass-through entities: Various Criteria In accordance with 2 CFR Part 200, Appendix XI guidelines, cost transfers must adhere to the principles of allowability, allocability, and reasonableness. Specifically, 2 CFR §200.403 stipulates that costs must conform to any limitations or exclusions set forth in the guidance or in the Federal award as to types or amount of cost items. Additionally, the University’s indirect costs are to be charged according to federally negotiated rates as specified in their federal government rate agreement. This agreement mandates that each indirect cost rate be applied to the modified total direct costs (MTDC). The agreement stipulates that only the first $25,000 of each subaward can be included in the MTDC base for calculating indirect costs. Condition In connection with procedures performed to understand the design and implementation of internal controls over compliance, it was identified that the University lacked effective internal controls over the processing of indirect costs associated with subrecipient expenditures transferred between awards. Specifically, there was no control in place to ensure that the indirect costs being charged against the subrecipient expenditures complied with the $25,000 MTDC limit. This gap in controls was identified through our testing of indirect costs, where out of a sample of 25 indirect costs, 1 selection was identified related to a subaward expense. This was subsequently determined to have been misclassified by the University as a subaward and thus did not result in any questioned costs, but through understanding this transaction, a gap in the University’s controls was identified. Cause The University’s cost transfer process lacks a review procedure to verify that indirect cost rate limits are correctly programmed into the receiving grant's parameters before processing a cost transfer. As such, the University’s grant administrators may fail to identify indirect costs charged to the grant in excess of the allowed limits for subrecipient expenditures. Additionally, the grant administrator failed to properly apply the University’s policy for classification of subawards versus direct expenditures. Effect A lack of adequate controls in the process could result in unallowable indirect costs in excess of the $25,000 subaward limit being charged to federal awards. Additionally, a lack of review of expenditures for appropriate classification could result in the schedule of expenditures of federal awards being misstated. Questioned Costs None noted. Recommendation We recommend that management implement additional controls over the subrecipient cost transfer process to ensure appropriate reviews are conducted before the approval of a cost transfer to a federal grant. This process should include verifying that the indirect cost rate limits are correctly programmed into grant parameters before approving any subrecipient cost transfers to a grant. Additionally, we recommend that management reinforce its policies related to the classification of subawards versus direct expenditures. Management’s Corrective Action Plan Management’s response is reported on “Management’s Views and Corrective Action Plan” at the end of this report.
Finding 2024-004: Review over cost transfers of subrecipient expenditures Cluster Name: Research and Development Federal Awarding Agency: Various Award Name: Various Award Number: Various Award Years: Various Assistance Listing Title: Various Assistance Listing Number: Various Pass-through entities: Various Criteria In accordance with 2 CFR Part 200, Appendix XI guidelines, cost transfers must adhere to the principles of allowability, allocability, and reasonableness. Specifically, 2 CFR §200.403 stipulates that costs must conform to any limitations or exclusions set forth in the guidance or in the Federal award as to types or amount of cost items. Additionally, the University’s indirect costs are to be charged according to federally negotiated rates as specified in their federal government rate agreement. This agreement mandates that each indirect cost rate be applied to the modified total direct costs (MTDC). The agreement stipulates that only the first $25,000 of each subaward can be included in the MTDC base for calculating indirect costs. Condition In connection with procedures performed to understand the design and implementation of internal controls over compliance, it was identified that the University lacked effective internal controls over the processing of indirect costs associated with subrecipient expenditures transferred between awards. Specifically, there was no control in place to ensure that the indirect costs being charged against the subrecipient expenditures complied with the $25,000 MTDC limit. This gap in controls was identified through our testing of indirect costs, where out of a sample of 25 indirect costs, 1 selection was identified related to a subaward expense. This was subsequently determined to have been misclassified by the University as a subaward and thus did not result in any questioned costs, but through understanding this transaction, a gap in the University’s controls was identified. Cause The University’s cost transfer process lacks a review procedure to verify that indirect cost rate limits are correctly programmed into the receiving grant's parameters before processing a cost transfer. As such, the University’s grant administrators may fail to identify indirect costs charged to the grant in excess of the allowed limits for subrecipient expenditures. Additionally, the grant administrator failed to properly apply the University’s policy for classification of subawards versus direct expenditures. Effect A lack of adequate controls in the process could result in unallowable indirect costs in excess of the $25,000 subaward limit being charged to federal awards. Additionally, a lack of review of expenditures for appropriate classification could result in the schedule of expenditures of federal awards being misstated. Questioned Costs None noted. Recommendation We recommend that management implement additional controls over the subrecipient cost transfer process to ensure appropriate reviews are conducted before the approval of a cost transfer to a federal grant. This process should include verifying that the indirect cost rate limits are correctly programmed into grant parameters before approving any subrecipient cost transfers to a grant. Additionally, we recommend that management reinforce its policies related to the classification of subawards versus direct expenditures. Management’s Corrective Action Plan Management’s response is reported on “Management’s Views and Corrective Action Plan” at the end of this report.
Finding 2024-004: Review over cost transfers of subrecipient expenditures Cluster Name: Research and Development Federal Awarding Agency: Various Award Name: Various Award Number: Various Award Years: Various Assistance Listing Title: Various Assistance Listing Number: Various Pass-through entities: Various Criteria In accordance with 2 CFR Part 200, Appendix XI guidelines, cost transfers must adhere to the principles of allowability, allocability, and reasonableness. Specifically, 2 CFR §200.403 stipulates that costs must conform to any limitations or exclusions set forth in the guidance or in the Federal award as to types or amount of cost items. Additionally, the University’s indirect costs are to be charged according to federally negotiated rates as specified in their federal government rate agreement. This agreement mandates that each indirect cost rate be applied to the modified total direct costs (MTDC). The agreement stipulates that only the first $25,000 of each subaward can be included in the MTDC base for calculating indirect costs. Condition In connection with procedures performed to understand the design and implementation of internal controls over compliance, it was identified that the University lacked effective internal controls over the processing of indirect costs associated with subrecipient expenditures transferred between awards. Specifically, there was no control in place to ensure that the indirect costs being charged against the subrecipient expenditures complied with the $25,000 MTDC limit. This gap in controls was identified through our testing of indirect costs, where out of a sample of 25 indirect costs, 1 selection was identified related to a subaward expense. This was subsequently determined to have been misclassified by the University as a subaward and thus did not result in any questioned costs, but through understanding this transaction, a gap in the University’s controls was identified. Cause The University’s cost transfer process lacks a review procedure to verify that indirect cost rate limits are correctly programmed into the receiving grant's parameters before processing a cost transfer. As such, the University’s grant administrators may fail to identify indirect costs charged to the grant in excess of the allowed limits for subrecipient expenditures. Additionally, the grant administrator failed to properly apply the University’s policy for classification of subawards versus direct expenditures. Effect A lack of adequate controls in the process could result in unallowable indirect costs in excess of the $25,000 subaward limit being charged to federal awards. Additionally, a lack of review of expenditures for appropriate classification could result in the schedule of expenditures of federal awards being misstated. Questioned Costs None noted. Recommendation We recommend that management implement additional controls over the subrecipient cost transfer process to ensure appropriate reviews are conducted before the approval of a cost transfer to a federal grant. This process should include verifying that the indirect cost rate limits are correctly programmed into grant parameters before approving any subrecipient cost transfers to a grant. Additionally, we recommend that management reinforce its policies related to the classification of subawards versus direct expenditures. Management’s Corrective Action Plan Management’s response is reported on “Management’s Views and Corrective Action Plan” at the end of this report.
Finding 2024-004: Review over cost transfers of subrecipient expenditures Cluster Name: Research and Development Federal Awarding Agency: Various Award Name: Various Award Number: Various Award Years: Various Assistance Listing Title: Various Assistance Listing Number: Various Pass-through entities: Various Criteria In accordance with 2 CFR Part 200, Appendix XI guidelines, cost transfers must adhere to the principles of allowability, allocability, and reasonableness. Specifically, 2 CFR §200.403 stipulates that costs must conform to any limitations or exclusions set forth in the guidance or in the Federal award as to types or amount of cost items. Additionally, the University’s indirect costs are to be charged according to federally negotiated rates as specified in their federal government rate agreement. This agreement mandates that each indirect cost rate be applied to the modified total direct costs (MTDC). The agreement stipulates that only the first $25,000 of each subaward can be included in the MTDC base for calculating indirect costs. Condition In connection with procedures performed to understand the design and implementation of internal controls over compliance, it was identified that the University lacked effective internal controls over the processing of indirect costs associated with subrecipient expenditures transferred between awards. Specifically, there was no control in place to ensure that the indirect costs being charged against the subrecipient expenditures complied with the $25,000 MTDC limit. This gap in controls was identified through our testing of indirect costs, where out of a sample of 25 indirect costs, 1 selection was identified related to a subaward expense. This was subsequently determined to have been misclassified by the University as a subaward and thus did not result in any questioned costs, but through understanding this transaction, a gap in the University’s controls was identified. Cause The University’s cost transfer process lacks a review procedure to verify that indirect cost rate limits are correctly programmed into the receiving grant's parameters before processing a cost transfer. As such, the University’s grant administrators may fail to identify indirect costs charged to the grant in excess of the allowed limits for subrecipient expenditures. Additionally, the grant administrator failed to properly apply the University’s policy for classification of subawards versus direct expenditures. Effect A lack of adequate controls in the process could result in unallowable indirect costs in excess of the $25,000 subaward limit being charged to federal awards. Additionally, a lack of review of expenditures for appropriate classification could result in the schedule of expenditures of federal awards being misstated. Questioned Costs None noted. Recommendation We recommend that management implement additional controls over the subrecipient cost transfer process to ensure appropriate reviews are conducted before the approval of a cost transfer to a federal grant. This process should include verifying that the indirect cost rate limits are correctly programmed into grant parameters before approving any subrecipient cost transfers to a grant. Additionally, we recommend that management reinforce its policies related to the classification of subawards versus direct expenditures. Management’s Corrective Action Plan Management’s response is reported on “Management’s Views and Corrective Action Plan” at the end of this report.
Finding 2024-004: Review over cost transfers of subrecipient expenditures Cluster Name: Research and Development Federal Awarding Agency: Various Award Name: Various Award Number: Various Award Years: Various Assistance Listing Title: Various Assistance Listing Number: Various Pass-through entities: Various Criteria In accordance with 2 CFR Part 200, Appendix XI guidelines, cost transfers must adhere to the principles of allowability, allocability, and reasonableness. Specifically, 2 CFR §200.403 stipulates that costs must conform to any limitations or exclusions set forth in the guidance or in the Federal award as to types or amount of cost items. Additionally, the University’s indirect costs are to be charged according to federally negotiated rates as specified in their federal government rate agreement. This agreement mandates that each indirect cost rate be applied to the modified total direct costs (MTDC). The agreement stipulates that only the first $25,000 of each subaward can be included in the MTDC base for calculating indirect costs. Condition In connection with procedures performed to understand the design and implementation of internal controls over compliance, it was identified that the University lacked effective internal controls over the processing of indirect costs associated with subrecipient expenditures transferred between awards. Specifically, there was no control in place to ensure that the indirect costs being charged against the subrecipient expenditures complied with the $25,000 MTDC limit. This gap in controls was identified through our testing of indirect costs, where out of a sample of 25 indirect costs, 1 selection was identified related to a subaward expense. This was subsequently determined to have been misclassified by the University as a subaward and thus did not result in any questioned costs, but through understanding this transaction, a gap in the University’s controls was identified. Cause The University’s cost transfer process lacks a review procedure to verify that indirect cost rate limits are correctly programmed into the receiving grant's parameters before processing a cost transfer. As such, the University’s grant administrators may fail to identify indirect costs charged to the grant in excess of the allowed limits for subrecipient expenditures. Additionally, the grant administrator failed to properly apply the University’s policy for classification of subawards versus direct expenditures. Effect A lack of adequate controls in the process could result in unallowable indirect costs in excess of the $25,000 subaward limit being charged to federal awards. Additionally, a lack of review of expenditures for appropriate classification could result in the schedule of expenditures of federal awards being misstated. Questioned Costs None noted. Recommendation We recommend that management implement additional controls over the subrecipient cost transfer process to ensure appropriate reviews are conducted before the approval of a cost transfer to a federal grant. This process should include verifying that the indirect cost rate limits are correctly programmed into grant parameters before approving any subrecipient cost transfers to a grant. Additionally, we recommend that management reinforce its policies related to the classification of subawards versus direct expenditures. Management’s Corrective Action Plan Management’s response is reported on “Management’s Views and Corrective Action Plan” at the end of this report.
Finding 2024-004: Review over cost transfers of subrecipient expenditures Cluster Name: Research and Development Federal Awarding Agency: Various Award Name: Various Award Number: Various Award Years: Various Assistance Listing Title: Various Assistance Listing Number: Various Pass-through entities: Various Criteria In accordance with 2 CFR Part 200, Appendix XI guidelines, cost transfers must adhere to the principles of allowability, allocability, and reasonableness. Specifically, 2 CFR §200.403 stipulates that costs must conform to any limitations or exclusions set forth in the guidance or in the Federal award as to types or amount of cost items. Additionally, the University’s indirect costs are to be charged according to federally negotiated rates as specified in their federal government rate agreement. This agreement mandates that each indirect cost rate be applied to the modified total direct costs (MTDC). The agreement stipulates that only the first $25,000 of each subaward can be included in the MTDC base for calculating indirect costs. Condition In connection with procedures performed to understand the design and implementation of internal controls over compliance, it was identified that the University lacked effective internal controls over the processing of indirect costs associated with subrecipient expenditures transferred between awards. Specifically, there was no control in place to ensure that the indirect costs being charged against the subrecipient expenditures complied with the $25,000 MTDC limit. This gap in controls was identified through our testing of indirect costs, where out of a sample of 25 indirect costs, 1 selection was identified related to a subaward expense. This was subsequently determined to have been misclassified by the University as a subaward and thus did not result in any questioned costs, but through understanding this transaction, a gap in the University’s controls was identified. Cause The University’s cost transfer process lacks a review procedure to verify that indirect cost rate limits are correctly programmed into the receiving grant's parameters before processing a cost transfer. As such, the University’s grant administrators may fail to identify indirect costs charged to the grant in excess of the allowed limits for subrecipient expenditures. Additionally, the grant administrator failed to properly apply the University’s policy for classification of subawards versus direct expenditures. Effect A lack of adequate controls in the process could result in unallowable indirect costs in excess of the $25,000 subaward limit being charged to federal awards. Additionally, a lack of review of expenditures for appropriate classification could result in the schedule of expenditures of federal awards being misstated. Questioned Costs None noted. Recommendation We recommend that management implement additional controls over the subrecipient cost transfer process to ensure appropriate reviews are conducted before the approval of a cost transfer to a federal grant. This process should include verifying that the indirect cost rate limits are correctly programmed into grant parameters before approving any subrecipient cost transfers to a grant. Additionally, we recommend that management reinforce its policies related to the classification of subawards versus direct expenditures. Management’s Corrective Action Plan Management’s response is reported on “Management’s Views and Corrective Action Plan” at the end of this report.
Finding 2024-004: Review over cost transfers of subrecipient expenditures Cluster Name: Research and Development Federal Awarding Agency: Various Award Name: Various Award Number: Various Award Years: Various Assistance Listing Title: Various Assistance Listing Number: Various Pass-through entities: Various Criteria In accordance with 2 CFR Part 200, Appendix XI guidelines, cost transfers must adhere to the principles of allowability, allocability, and reasonableness. Specifically, 2 CFR §200.403 stipulates that costs must conform to any limitations or exclusions set forth in the guidance or in the Federal award as to types or amount of cost items. Additionally, the University’s indirect costs are to be charged according to federally negotiated rates as specified in their federal government rate agreement. This agreement mandates that each indirect cost rate be applied to the modified total direct costs (MTDC). The agreement stipulates that only the first $25,000 of each subaward can be included in the MTDC base for calculating indirect costs. Condition In connection with procedures performed to understand the design and implementation of internal controls over compliance, it was identified that the University lacked effective internal controls over the processing of indirect costs associated with subrecipient expenditures transferred between awards. Specifically, there was no control in place to ensure that the indirect costs being charged against the subrecipient expenditures complied with the $25,000 MTDC limit. This gap in controls was identified through our testing of indirect costs, where out of a sample of 25 indirect costs, 1 selection was identified related to a subaward expense. This was subsequently determined to have been misclassified by the University as a subaward and thus did not result in any questioned costs, but through understanding this transaction, a gap in the University’s controls was identified. Cause The University’s cost transfer process lacks a review procedure to verify that indirect cost rate limits are correctly programmed into the receiving grant's parameters before processing a cost transfer. As such, the University’s grant administrators may fail to identify indirect costs charged to the grant in excess of the allowed limits for subrecipient expenditures. Additionally, the grant administrator failed to properly apply the University’s policy for classification of subawards versus direct expenditures. Effect A lack of adequate controls in the process could result in unallowable indirect costs in excess of the $25,000 subaward limit being charged to federal awards. Additionally, a lack of review of expenditures for appropriate classification could result in the schedule of expenditures of federal awards being misstated. Questioned Costs None noted. Recommendation We recommend that management implement additional controls over the subrecipient cost transfer process to ensure appropriate reviews are conducted before the approval of a cost transfer to a federal grant. This process should include verifying that the indirect cost rate limits are correctly programmed into grant parameters before approving any subrecipient cost transfers to a grant. Additionally, we recommend that management reinforce its policies related to the classification of subawards versus direct expenditures. Management’s Corrective Action Plan Management’s response is reported on “Management’s Views and Corrective Action Plan” at the end of this report.
Finding 2024-004: Review over cost transfers of subrecipient expenditures Cluster Name: Research and Development Federal Awarding Agency: Various Award Name: Various Award Number: Various Award Years: Various Assistance Listing Title: Various Assistance Listing Number: Various Pass-through entities: Various Criteria In accordance with 2 CFR Part 200, Appendix XI guidelines, cost transfers must adhere to the principles of allowability, allocability, and reasonableness. Specifically, 2 CFR §200.403 stipulates that costs must conform to any limitations or exclusions set forth in the guidance or in the Federal award as to types or amount of cost items. Additionally, the University’s indirect costs are to be charged according to federally negotiated rates as specified in their federal government rate agreement. This agreement mandates that each indirect cost rate be applied to the modified total direct costs (MTDC). The agreement stipulates that only the first $25,000 of each subaward can be included in the MTDC base for calculating indirect costs. Condition In connection with procedures performed to understand the design and implementation of internal controls over compliance, it was identified that the University lacked effective internal controls over the processing of indirect costs associated with subrecipient expenditures transferred between awards. Specifically, there was no control in place to ensure that the indirect costs being charged against the subrecipient expenditures complied with the $25,000 MTDC limit. This gap in controls was identified through our testing of indirect costs, where out of a sample of 25 indirect costs, 1 selection was identified related to a subaward expense. This was subsequently determined to have been misclassified by the University as a subaward and thus did not result in any questioned costs, but through understanding this transaction, a gap in the University’s controls was identified. Cause The University’s cost transfer process lacks a review procedure to verify that indirect cost rate limits are correctly programmed into the receiving grant's parameters before processing a cost transfer. As such, the University’s grant administrators may fail to identify indirect costs charged to the grant in excess of the allowed limits for subrecipient expenditures. Additionally, the grant administrator failed to properly apply the University’s policy for classification of subawards versus direct expenditures. Effect A lack of adequate controls in the process could result in unallowable indirect costs in excess of the $25,000 subaward limit being charged to federal awards. Additionally, a lack of review of expenditures for appropriate classification could result in the schedule of expenditures of federal awards being misstated. Questioned Costs None noted. Recommendation We recommend that management implement additional controls over the subrecipient cost transfer process to ensure appropriate reviews are conducted before the approval of a cost transfer to a federal grant. This process should include verifying that the indirect cost rate limits are correctly programmed into grant parameters before approving any subrecipient cost transfers to a grant. Additionally, we recommend that management reinforce its policies related to the classification of subawards versus direct expenditures. Management’s Corrective Action Plan Management’s response is reported on “Management’s Views and Corrective Action Plan” at the end of this report.
Finding 2024-004: Review over cost transfers of subrecipient expenditures Cluster Name: Research and Development Federal Awarding Agency: Various Award Name: Various Award Number: Various Award Years: Various Assistance Listing Title: Various Assistance Listing Number: Various Pass-through entities: Various Criteria In accordance with 2 CFR Part 200, Appendix XI guidelines, cost transfers must adhere to the principles of allowability, allocability, and reasonableness. Specifically, 2 CFR §200.403 stipulates that costs must conform to any limitations or exclusions set forth in the guidance or in the Federal award as to types or amount of cost items. Additionally, the University’s indirect costs are to be charged according to federally negotiated rates as specified in their federal government rate agreement. This agreement mandates that each indirect cost rate be applied to the modified total direct costs (MTDC). The agreement stipulates that only the first $25,000 of each subaward can be included in the MTDC base for calculating indirect costs. Condition In connection with procedures performed to understand the design and implementation of internal controls over compliance, it was identified that the University lacked effective internal controls over the processing of indirect costs associated with subrecipient expenditures transferred between awards. Specifically, there was no control in place to ensure that the indirect costs being charged against the subrecipient expenditures complied with the $25,000 MTDC limit. This gap in controls was identified through our testing of indirect costs, where out of a sample of 25 indirect costs, 1 selection was identified related to a subaward expense. This was subsequently determined to have been misclassified by the University as a subaward and thus did not result in any questioned costs, but through understanding this transaction, a gap in the University’s controls was identified. Cause The University’s cost transfer process lacks a review procedure to verify that indirect cost rate limits are correctly programmed into the receiving grant's parameters before processing a cost transfer. As such, the University’s grant administrators may fail to identify indirect costs charged to the grant in excess of the allowed limits for subrecipient expenditures. Additionally, the grant administrator failed to properly apply the University’s policy for classification of subawards versus direct expenditures. Effect A lack of adequate controls in the process could result in unallowable indirect costs in excess of the $25,000 subaward limit being charged to federal awards. Additionally, a lack of review of expenditures for appropriate classification could result in the schedule of expenditures of federal awards being misstated. Questioned Costs None noted. Recommendation We recommend that management implement additional controls over the subrecipient cost transfer process to ensure appropriate reviews are conducted before the approval of a cost transfer to a federal grant. This process should include verifying that the indirect cost rate limits are correctly programmed into grant parameters before approving any subrecipient cost transfers to a grant. Additionally, we recommend that management reinforce its policies related to the classification of subawards versus direct expenditures. Management’s Corrective Action Plan Management’s response is reported on “Management’s Views and Corrective Action Plan” at the end of this report.
Finding 2024-004: Review over cost transfers of subrecipient expenditures Cluster Name: Research and Development Federal Awarding Agency: Various Award Name: Various Award Number: Various Award Years: Various Assistance Listing Title: Various Assistance Listing Number: Various Pass-through entities: Various Criteria In accordance with 2 CFR Part 200, Appendix XI guidelines, cost transfers must adhere to the principles of allowability, allocability, and reasonableness. Specifically, 2 CFR §200.403 stipulates that costs must conform to any limitations or exclusions set forth in the guidance or in the Federal award as to types or amount of cost items. Additionally, the University’s indirect costs are to be charged according to federally negotiated rates as specified in their federal government rate agreement. This agreement mandates that each indirect cost rate be applied to the modified total direct costs (MTDC). The agreement stipulates that only the first $25,000 of each subaward can be included in the MTDC base for calculating indirect costs. Condition In connection with procedures performed to understand the design and implementation of internal controls over compliance, it was identified that the University lacked effective internal controls over the processing of indirect costs associated with subrecipient expenditures transferred between awards. Specifically, there was no control in place to ensure that the indirect costs being charged against the subrecipient expenditures complied with the $25,000 MTDC limit. This gap in controls was identified through our testing of indirect costs, where out of a sample of 25 indirect costs, 1 selection was identified related to a subaward expense. This was subsequently determined to have been misclassified by the University as a subaward and thus did not result in any questioned costs, but through understanding this transaction, a gap in the University’s controls was identified. Cause The University’s cost transfer process lacks a review procedure to verify that indirect cost rate limits are correctly programmed into the receiving grant's parameters before processing a cost transfer. As such, the University’s grant administrators may fail to identify indirect costs charged to the grant in excess of the allowed limits for subrecipient expenditures. Additionally, the grant administrator failed to properly apply the University’s policy for classification of subawards versus direct expenditures. Effect A lack of adequate controls in the process could result in unallowable indirect costs in excess of the $25,000 subaward limit being charged to federal awards. Additionally, a lack of review of expenditures for appropriate classification could result in the schedule of expenditures of federal awards being misstated. Questioned Costs None noted. Recommendation We recommend that management implement additional controls over the subrecipient cost transfer process to ensure appropriate reviews are conducted before the approval of a cost transfer to a federal grant. This process should include verifying that the indirect cost rate limits are correctly programmed into grant parameters before approving any subrecipient cost transfers to a grant. Additionally, we recommend that management reinforce its policies related to the classification of subawards versus direct expenditures. Management’s Corrective Action Plan Management’s response is reported on “Management’s Views and Corrective Action Plan” at the end of this report.
Finding 2024-004: Review over cost transfers of subrecipient expenditures Cluster Name: Research and Development Federal Awarding Agency: Various Award Name: Various Award Number: Various Award Years: Various Assistance Listing Title: Various Assistance Listing Number: Various Pass-through entities: Various Criteria In accordance with 2 CFR Part 200, Appendix XI guidelines, cost transfers must adhere to the principles of allowability, allocability, and reasonableness. Specifically, 2 CFR §200.403 stipulates that costs must conform to any limitations or exclusions set forth in the guidance or in the Federal award as to types or amount of cost items. Additionally, the University’s indirect costs are to be charged according to federally negotiated rates as specified in their federal government rate agreement. This agreement mandates that each indirect cost rate be applied to the modified total direct costs (MTDC). The agreement stipulates that only the first $25,000 of each subaward can be included in the MTDC base for calculating indirect costs. Condition In connection with procedures performed to understand the design and implementation of internal controls over compliance, it was identified that the University lacked effective internal controls over the processing of indirect costs associated with subrecipient expenditures transferred between awards. Specifically, there was no control in place to ensure that the indirect costs being charged against the subrecipient expenditures complied with the $25,000 MTDC limit. This gap in controls was identified through our testing of indirect costs, where out of a sample of 25 indirect costs, 1 selection was identified related to a subaward expense. This was subsequently determined to have been misclassified by the University as a subaward and thus did not result in any questioned costs, but through understanding this transaction, a gap in the University’s controls was identified. Cause The University’s cost transfer process lacks a review procedure to verify that indirect cost rate limits are correctly programmed into the receiving grant's parameters before processing a cost transfer. As such, the University’s grant administrators may fail to identify indirect costs charged to the grant in excess of the allowed limits for subrecipient expenditures. Additionally, the grant administrator failed to properly apply the University’s policy for classification of subawards versus direct expenditures. Effect A lack of adequate controls in the process could result in unallowable indirect costs in excess of the $25,000 subaward limit being charged to federal awards. Additionally, a lack of review of expenditures for appropriate classification could result in the schedule of expenditures of federal awards being misstated. Questioned Costs None noted. Recommendation We recommend that management implement additional controls over the subrecipient cost transfer process to ensure appropriate reviews are conducted before the approval of a cost transfer to a federal grant. This process should include verifying that the indirect cost rate limits are correctly programmed into grant parameters before approving any subrecipient cost transfers to a grant. Additionally, we recommend that management reinforce its policies related to the classification of subawards versus direct expenditures. Management’s Corrective Action Plan Management’s response is reported on “Management’s Views and Corrective Action Plan” at the end of this report.
Finding 2024-004: Review over cost transfers of subrecipient expenditures Cluster Name: Research and Development Federal Awarding Agency: Various Award Name: Various Award Number: Various Award Years: Various Assistance Listing Title: Various Assistance Listing Number: Various Pass-through entities: Various Criteria In accordance with 2 CFR Part 200, Appendix XI guidelines, cost transfers must adhere to the principles of allowability, allocability, and reasonableness. Specifically, 2 CFR §200.403 stipulates that costs must conform to any limitations or exclusions set forth in the guidance or in the Federal award as to types or amount of cost items. Additionally, the University’s indirect costs are to be charged according to federally negotiated rates as specified in their federal government rate agreement. This agreement mandates that each indirect cost rate be applied to the modified total direct costs (MTDC). The agreement stipulates that only the first $25,000 of each subaward can be included in the MTDC base for calculating indirect costs. Condition In connection with procedures performed to understand the design and implementation of internal controls over compliance, it was identified that the University lacked effective internal controls over the processing of indirect costs associated with subrecipient expenditures transferred between awards. Specifically, there was no control in place to ensure that the indirect costs being charged against the subrecipient expenditures complied with the $25,000 MTDC limit. This gap in controls was identified through our testing of indirect costs, where out of a sample of 25 indirect costs, 1 selection was identified related to a subaward expense. This was subsequently determined to have been misclassified by the University as a subaward and thus did not result in any questioned costs, but through understanding this transaction, a gap in the University’s controls was identified. Cause The University’s cost transfer process lacks a review procedure to verify that indirect cost rate limits are correctly programmed into the receiving grant's parameters before processing a cost transfer. As such, the University’s grant administrators may fail to identify indirect costs charged to the grant in excess of the allowed limits for subrecipient expenditures. Additionally, the grant administrator failed to properly apply the University’s policy for classification of subawards versus direct expenditures. Effect A lack of adequate controls in the process could result in unallowable indirect costs in excess of the $25,000 subaward limit being charged to federal awards. Additionally, a lack of review of expenditures for appropriate classification could result in the schedule of expenditures of federal awards being misstated. Questioned Costs None noted. Recommendation We recommend that management implement additional controls over the subrecipient cost transfer process to ensure appropriate reviews are conducted before the approval of a cost transfer to a federal grant. This process should include verifying that the indirect cost rate limits are correctly programmed into grant parameters before approving any subrecipient cost transfers to a grant. Additionally, we recommend that management reinforce its policies related to the classification of subawards versus direct expenditures. Management’s Corrective Action Plan Management’s response is reported on “Management’s Views and Corrective Action Plan” at the end of this report.
Finding 2024-004: Review over cost transfers of subrecipient expenditures Cluster Name: Research and Development Federal Awarding Agency: Various Award Name: Various Award Number: Various Award Years: Various Assistance Listing Title: Various Assistance Listing Number: Various Pass-through entities: Various Criteria In accordance with 2 CFR Part 200, Appendix XI guidelines, cost transfers must adhere to the principles of allowability, allocability, and reasonableness. Specifically, 2 CFR §200.403 stipulates that costs must conform to any limitations or exclusions set forth in the guidance or in the Federal award as to types or amount of cost items. Additionally, the University’s indirect costs are to be charged according to federally negotiated rates as specified in their federal government rate agreement. This agreement mandates that each indirect cost rate be applied to the modified total direct costs (MTDC). The agreement stipulates that only the first $25,000 of each subaward can be included in the MTDC base for calculating indirect costs. Condition In connection with procedures performed to understand the design and implementation of internal controls over compliance, it was identified that the University lacked effective internal controls over the processing of indirect costs associated with subrecipient expenditures transferred between awards. Specifically, there was no control in place to ensure that the indirect costs being charged against the subrecipient expenditures complied with the $25,000 MTDC limit. This gap in controls was identified through our testing of indirect costs, where out of a sample of 25 indirect costs, 1 selection was identified related to a subaward expense. This was subsequently determined to have been misclassified by the University as a subaward and thus did not result in any questioned costs, but through understanding this transaction, a gap in the University’s controls was identified. Cause The University’s cost transfer process lacks a review procedure to verify that indirect cost rate limits are correctly programmed into the receiving grant's parameters before processing a cost transfer. As such, the University’s grant administrators may fail to identify indirect costs charged to the grant in excess of the allowed limits for subrecipient expenditures. Additionally, the grant administrator failed to properly apply the University’s policy for classification of subawards versus direct expenditures. Effect A lack of adequate controls in the process could result in unallowable indirect costs in excess of the $25,000 subaward limit being charged to federal awards. Additionally, a lack of review of expenditures for appropriate classification could result in the schedule of expenditures of federal awards being misstated. Questioned Costs None noted. Recommendation We recommend that management implement additional controls over the subrecipient cost transfer process to ensure appropriate reviews are conducted before the approval of a cost transfer to a federal grant. This process should include verifying that the indirect cost rate limits are correctly programmed into grant parameters before approving any subrecipient cost transfers to a grant. Additionally, we recommend that management reinforce its policies related to the classification of subawards versus direct expenditures. Management’s Corrective Action Plan Management’s response is reported on “Management’s Views and Corrective Action Plan” at the end of this report.
Finding 2024-004: Review over cost transfers of subrecipient expenditures Cluster Name: Research and Development Federal Awarding Agency: Various Award Name: Various Award Number: Various Award Years: Various Assistance Listing Title: Various Assistance Listing Number: Various Pass-through entities: Various Criteria In accordance with 2 CFR Part 200, Appendix XI guidelines, cost transfers must adhere to the principles of allowability, allocability, and reasonableness. Specifically, 2 CFR §200.403 stipulates that costs must conform to any limitations or exclusions set forth in the guidance or in the Federal award as to types or amount of cost items. Additionally, the University’s indirect costs are to be charged according to federally negotiated rates as specified in their federal government rate agreement. This agreement mandates that each indirect cost rate be applied to the modified total direct costs (MTDC). The agreement stipulates that only the first $25,000 of each subaward can be included in the MTDC base for calculating indirect costs. Condition In connection with procedures performed to understand the design and implementation of internal controls over compliance, it was identified that the University lacked effective internal controls over the processing of indirect costs associated with subrecipient expenditures transferred between awards. Specifically, there was no control in place to ensure that the indirect costs being charged against the subrecipient expenditures complied with the $25,000 MTDC limit. This gap in controls was identified through our testing of indirect costs, where out of a sample of 25 indirect costs, 1 selection was identified related to a subaward expense. This was subsequently determined to have been misclassified by the University as a subaward and thus did not result in any questioned costs, but through understanding this transaction, a gap in the University’s controls was identified. Cause The University’s cost transfer process lacks a review procedure to verify that indirect cost rate limits are correctly programmed into the receiving grant's parameters before processing a cost transfer. As such, the University’s grant administrators may fail to identify indirect costs charged to the grant in excess of the allowed limits for subrecipient expenditures. Additionally, the grant administrator failed to properly apply the University’s policy for classification of subawards versus direct expenditures. Effect A lack of adequate controls in the process could result in unallowable indirect costs in excess of the $25,000 subaward limit being charged to federal awards. Additionally, a lack of review of expenditures for appropriate classification could result in the schedule of expenditures of federal awards being misstated. Questioned Costs None noted. Recommendation We recommend that management implement additional controls over the subrecipient cost transfer process to ensure appropriate reviews are conducted before the approval of a cost transfer to a federal grant. This process should include verifying that the indirect cost rate limits are correctly programmed into grant parameters before approving any subrecipient cost transfers to a grant. Additionally, we recommend that management reinforce its policies related to the classification of subawards versus direct expenditures. Management’s Corrective Action Plan Management’s response is reported on “Management’s Views and Corrective Action Plan” at the end of this report.
Finding 2024-004: Review over cost transfers of subrecipient expenditures Cluster Name: Research and Development Federal Awarding Agency: Various Award Name: Various Award Number: Various Award Years: Various Assistance Listing Title: Various Assistance Listing Number: Various Pass-through entities: Various Criteria In accordance with 2 CFR Part 200, Appendix XI guidelines, cost transfers must adhere to the principles of allowability, allocability, and reasonableness. Specifically, 2 CFR §200.403 stipulates that costs must conform to any limitations or exclusions set forth in the guidance or in the Federal award as to types or amount of cost items. Additionally, the University’s indirect costs are to be charged according to federally negotiated rates as specified in their federal government rate agreement. This agreement mandates that each indirect cost rate be applied to the modified total direct costs (MTDC). The agreement stipulates that only the first $25,000 of each subaward can be included in the MTDC base for calculating indirect costs. Condition In connection with procedures performed to understand the design and implementation of internal controls over compliance, it was identified that the University lacked effective internal controls over the processing of indirect costs associated with subrecipient expenditures transferred between awards. Specifically, there was no control in place to ensure that the indirect costs being charged against the subrecipient expenditures complied with the $25,000 MTDC limit. This gap in controls was identified through our testing of indirect costs, where out of a sample of 25 indirect costs, 1 selection was identified related to a subaward expense. This was subsequently determined to have been misclassified by the University as a subaward and thus did not result in any questioned costs, but through understanding this transaction, a gap in the University’s controls was identified. Cause The University’s cost transfer process lacks a review procedure to verify that indirect cost rate limits are correctly programmed into the receiving grant's parameters before processing a cost transfer. As such, the University’s grant administrators may fail to identify indirect costs charged to the grant in excess of the allowed limits for subrecipient expenditures. Additionally, the grant administrator failed to properly apply the University’s policy for classification of subawards versus direct expenditures. Effect A lack of adequate controls in the process could result in unallowable indirect costs in excess of the $25,000 subaward limit being charged to federal awards. Additionally, a lack of review of expenditures for appropriate classification could result in the schedule of expenditures of federal awards being misstated. Questioned Costs None noted. Recommendation We recommend that management implement additional controls over the subrecipient cost transfer process to ensure appropriate reviews are conducted before the approval of a cost transfer to a federal grant. This process should include verifying that the indirect cost rate limits are correctly programmed into grant parameters before approving any subrecipient cost transfers to a grant. Additionally, we recommend that management reinforce its policies related to the classification of subawards versus direct expenditures. Management’s Corrective Action Plan Management’s response is reported on “Management’s Views and Corrective Action Plan” at the end of this report.
Finding 2024-004: Review over cost transfers of subrecipient expenditures Cluster Name: Research and Development Federal Awarding Agency: Various Award Name: Various Award Number: Various Award Years: Various Assistance Listing Title: Various Assistance Listing Number: Various Pass-through entities: Various Criteria In accordance with 2 CFR Part 200, Appendix XI guidelines, cost transfers must adhere to the principles of allowability, allocability, and reasonableness. Specifically, 2 CFR §200.403 stipulates that costs must conform to any limitations or exclusions set forth in the guidance or in the Federal award as to types or amount of cost items. Additionally, the University’s indirect costs are to be charged according to federally negotiated rates as specified in their federal government rate agreement. This agreement mandates that each indirect cost rate be applied to the modified total direct costs (MTDC). The agreement stipulates that only the first $25,000 of each subaward can be included in the MTDC base for calculating indirect costs. Condition In connection with procedures performed to understand the design and implementation of internal controls over compliance, it was identified that the University lacked effective internal controls over the processing of indirect costs associated with subrecipient expenditures transferred between awards. Specifically, there was no control in place to ensure that the indirect costs being charged against the subrecipient expenditures complied with the $25,000 MTDC limit. This gap in controls was identified through our testing of indirect costs, where out of a sample of 25 indirect costs, 1 selection was identified related to a subaward expense. This was subsequently determined to have been misclassified by the University as a subaward and thus did not result in any questioned costs, but through understanding this transaction, a gap in the University’s controls was identified. Cause The University’s cost transfer process lacks a review procedure to verify that indirect cost rate limits are correctly programmed into the receiving grant's parameters before processing a cost transfer. As such, the University’s grant administrators may fail to identify indirect costs charged to the grant in excess of the allowed limits for subrecipient expenditures. Additionally, the grant administrator failed to properly apply the University’s policy for classification of subawards versus direct expenditures. Effect A lack of adequate controls in the process could result in unallowable indirect costs in excess of the $25,000 subaward limit being charged to federal awards. Additionally, a lack of review of expenditures for appropriate classification could result in the schedule of expenditures of federal awards being misstated. Questioned Costs None noted. Recommendation We recommend that management implement additional controls over the subrecipient cost transfer process to ensure appropriate reviews are conducted before the approval of a cost transfer to a federal grant. This process should include verifying that the indirect cost rate limits are correctly programmed into grant parameters before approving any subrecipient cost transfers to a grant. Additionally, we recommend that management reinforce its policies related to the classification of subawards versus direct expenditures. Management’s Corrective Action Plan Management’s response is reported on “Management’s Views and Corrective Action Plan” at the end of this report.