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.
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.