8. Criteria or specific requirement (including statutory, regulatory, or other citation: Per the US Department of Education ESSER FAQ E-3.d: E-3.d. How long may ESSER or GEER-funded activities continue after the liquidation period? Generally, it is not good stewardship of Federal funds or prudent business practice to prepay for services that will extend many years into the future. However, under limited circumstances where a grantee or subgrantee timely obligates ESSER funds, ESSER-funded activities may continue for a reasonable time beyond the liquidation period. Factors impacting how long ESSER-funded activities may extend past the liquidation period include: (1) Whether the funds were properly obligated and liquidated in a timely manner; (2) Whether the activities would be allowed to extend beyond the liquidation period under applicable State and local procurement rules; (3) Whether the extended activities constitute a reasonable and necessary use of Federal funds; and (4) Whether prudent business practices and internal controls (which generally limit prepayment) would support the continued activities for the length of time proposed. Grantees and subgrantees must obligate funds by each program’s deadline, which means that if a grantee or subgrantee enters into a contract for activities that continue past the date of obligation and the contractor does not provide the services, the grantee or subgrantee may not enter into a new contract or obligate those funds for a different allowable use. Instead, those funds that were obligated for services that were not delivered will remain unused and will be returned to the U.S. Treasury. Because these are State-administered programs, the SEA or Governor determines whether activities extending past the liquidation period are allowable under the circumstances. For example, an SEA may determine that it is reasonable and necessary under 2 CFR §§ 200.403-200.404 for an LEA to enter into a multi-year software licensing contract with a vendor during the period of availability of ARP ESSER funds and to pay for the entirety of the software license within the liquidation period. However, under the contract, the vendor would continue to provide the services (i.e., software and technical support) for some time after the funds had been liquidated. Please note that the SEA, LEA, or subgrantee would be responsible for returning to the Federal government the cost of any services that were paid with Federal funds but not received. Under no circumstances may services extend beyond the date on which funds revert to the U.S. Department of Treasury (31 USC § 1552), which occurs four years after the obligation deadline. However, nothing prevents an SEA or LEA from continuing successful activities or services with non-ESSER/GEER funding. 9. Condition: ESSER III funds were expended for a 6-year math curriculum, beginning 9/30/24 and ending 9/30/30. Additionally, ESSER III funds were expended for the 2-year prepayment of cases of paper, to be delivered periodically from November 2024 through July 2026. The services extend beyond the dates noted above and include a prepayment. 10. Questioned Costs: For the math curriculum, questioned costs have been identified of $51,233 for the service period of 9/30/28-9/30/30. It is unclear if costs of $76,849 applicable to service period 9/3/25-9/30/28 are allowable, as this would be determined by the SEA. For the prepayment of paper, questioned costs have been identified of $27,320, applicable to service period March 2025-July 2026. 11. Context: N/A 12. Effect: A portion of the Federal funds received may need to be returned to the granting agency. Because the obligation date has passed, those funds may not be re-obligated to cover otherwise eligible costs. 13. Cause: In an effort to utilize available funding, the District overlooked these requirements. 14. Recommendation: We recommend that the District gain a thorough understanding of all applicable compliance requirements prior to expending Federal funds. 15. Management's response: See corrective action plan.
National School Lunch Program - 2025- Project No. 4210 ALN 10.555 Passed through: ISBE Federal Agency: U.S. Department of Agriculture Criteria or specific requirement (including statutory, regulatory, or other citation): Grant agreements and applicable federal regulations (e.g., 2 CFR 200.403 and 2 CFR 200.404) require that all costs charged to a federal program be adequately documented, supported, and allowable. Supporting documentation such as invoices and employee timecards must be maintained to substantiate expenditures. Condition:The District was unable to provide documentation for three invoices charged to the program. The District was also unable to provide supporting documentation for one employee time card. Questioned Costs:$4,823.03 Context: During testing of expenditures under the Child Nutrition Cluster, a sample of invoices and payroll transactions was selected for review. We requested supporting documentation to verify the allowability and accuracy of the charges. The District was unable to provide documentation for three invoices and one employee timecard included in the sample. Effect:Without adequate supporting documentation, we are unable to determine whether the questioned costs are allowable, allocable, and reasonable under program requirements. As a result, these costs are considered unsupported and questioned. Cause:The District did not maintain or was unable to locate required supporting documentation for certain expenditures charged to the Child Nutrition Cluster, indicating weaknesses in record retention and documentation controls. Recommendation: We recommend that management strengthen internal controls over record retention to ensure all invoices and payroll documentation supporting program expenditures are properly maintained and readily accessible. Management should also review current documentation practices to ensure compliance with federal and grant requirements. Mangement's Response: Management agrees with this finding and response is included within the corrective action plan.
COVID-19 Elementary and Secondary School Emergency Relief Grant - 2024 Passed through: ISBE Federal Agency: U.S. Department of Education Project Number: 2024-4998-E3 ALN 84.425U Criteria or specific requirement (including statutory, regulatory, or other citation): In accordance with 2 CFR 200.403, 2 CFR 200.404, and applicable ESSER grant requirements, all costs charged to federal awards must be adequately documented, supported, allowable, allocable, and reasonable. Supporting documentation, including vendor invoices, must be maintained to substantiate expenditures. Condition: The District could not provide supporting documentation for one (1) invoice charged to the program. Questioned Cost: $2,324.25 Context: During testing of ESSER program expenditures, a sample of disbursements was selected for review. We requested supporting documentation to verify the allowability and accuracy of the charges. The District was unable to provide documentation for one invoice included in the sample. Effect: Without adequate supporting documentation, we are unable to determine whether the expenditure is allowable, allocable, and reasonable under ESSER program requirements. As a result, the cost is considered unsupported and questioned. Cause:The District did not maintain or was unable to locate the required supporting documentation for the expenditure, indicating weaknesses in documentation retention and internal controls over grant expenditures. Recommendation: We recommend that management strengthen internal controls over documentation retention to ensure all expenditures charged to ESSER are properly supported and readily available for review. Management should also conduct a review of recordkeeping procedures to ensure compliance with federal grant requirements. Management's Response: Management agrees with this finding and response is included within the corrective action plan.
Finding 2025-001: Questioned Costs – Allowable Costs/Costs Principles (material weakness) Statement of Condition: During our testing of expenditures applied to the Economic Adjustment Assistance Program, we identified that the College charged federal funds to a capital project that had previously been paid for with bond proceeds. The bond proceeds were restricted for use on the same project for which federal funds were awarded. Criteria: In accordance with 2 CFR 200.403(a), costs charged to a federal award must be necessary, reasonable, and allocable to the federal program. Additionally, 2 CFR 200.404(a) states that a cost is reasonable if the cost is generally recognized as ordinary and necessary for the recipient’s operation or the proper and efficient performance of the Federal award. Further, 2 CFR 200.405(a) notes that a cost is allocable to a Federal award or other cost objective if the cost is assignable to that Federal award or other cost objective in accordance with the relative benefits received. In addition, the cost must be incurred specifically for the Federal award. 2 CFR 200.406(a) states that applicable credits refer to transactions that offset or reduce direct costs allocable to a federal award. To the extent that such credits are received by the recipient relate to allowable costs, they must be credited to the federal award either as a cost reduction or cash refund, as appropriate. Effect of Condition: Federal funds were used to reimburse costs that had already been paid with bond proceeds, resulting in unallowable costs being charged to the federal program. Cause of Condition: The College did not have adequate controls in place to ensure that costs charged to the federal program had not already been funded by another source. Questioned Costs: The questioned costs total approximately $1,100,000, representing the federal funds used to pay for the capital project already funded by bond proceeds. Recommendation: We recommend that the College implement and enforce procedures to ensure that all costs charged to federal programs comply with the Cost Principles stated in Subpart E of 2 CFR 200.400.
FINDING 2025-004 Subject: Child Nutrition Cluster - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children, Fresh Fruit and Vegetable Program Assistance Listings Numbers: 10.553, 10.555, 10.559, 10.582 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2023-2024, FY 2024-2025 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness, Modified Opinion Condition and Context The School Corporation had not designed or implemented a system of internal controls, which would have included appropriate segregation of duties, that would have likely been effective in preventing, or detecting and correcting, noncompliance. The School Corporation transferred $313,369 from the School Lunch fund into the Operations fund. This transfer was labeled as an indirect cost transfer; however, indirect costs were not approved to be charged to the program. This transfer was also not approved by the School Board. The issue was identified and corrected by the current Treasurer prior to June 30, 2025. The lack of internal controls and noncompliance over allowable activities was an isolated instance. Criteria 2 CFR 200.302 states in part: "(a) Each state must expend and account for the Federal award in accordance with state laws and procedures for expending and accounting for the state's own funds. In addition, the state's and the other non-Federal entity's financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. . . . (b) The financial management system of each non-Federal entity must provide for the following . . . (1) Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Federal program and Federal award identification must include, as applicable, the Assistance Listings title and number, Federal award identification number and year, name of the Federal agency, and name of the pass-through entity, if any. (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . . (3) Records that identify adequately the source and application of funds for federallyfunded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. INDIANA STATE BOARD OF ACCOUNTS 23 PLYMOUTH COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (4) Effective control over, and accountability for, all funds, property, and other assets. . . ." 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.400 states in part: "The application of these cost principles is based on the fundamental premises that: (a) The non-Federal entity is responsible for the efficient and effective administration of the Federal award through the application of sound management practices. (b) The non-Federal entity assumes responsibility for administering Federal funds in a manner consistent with underlying agreements, program objectives, and the terms and conditions of the Federal award. (c) The non-Federal entity, in recognition of its own unique combination of staff, facilities, and experience, has the primary responsibility for employing whatever form of sound organization and management techniques may be necessary in order to assure proper and efficient administration of the Federal award. . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: . . . (g) Be adequately documented. . . ." 2 CFR 200.404 states in part: "A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. The question of reasonableness is particularly important when the non- Federal entity is predominantly federally-funded. In determining reasonableness of a given cost, consideration must be given to: . . . (e) Whether the non-Federal entity significantly deviates from its established practices and policies regarding the incurrence of costs, which may unjustifiably increase the Federal award's cost." INDIANA STATE BOARD OF ACCOUNTS 24 PLYMOUTH COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.508 states in part: "The auditee must: . . . (d) Provide the auditor with access to personnel, accounts, books, records, supporting documentation, and any other information as needed for the auditor to perform the audit required by this part." Federal Register, Vol. 87, No. 18 states in part: "Treasury has divided the Restriction on Use section into . . . (B) other restrictions on use, which include (1) debt service and replenishing reserves, (2) settlements and judgements, and (3) general restrictions. These restrictions apply to all eligible use categories. . . ." Cause The School Corporation had not developed a system of internal controls that would have ensured that all activities and costs were in compliance with the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Effect Without the proper design or implementation of the components of a system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system was not capable of effectively preventing, or detecting and correcting, noncompliance as identified in the Condition and Context. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure all activities are allowable. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2025-006 Subject: Title I Grants to Local Educational Agencies - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Program: Title I Grants to Local Educational Agencies Assistance Listings Number: 84.010 Federal Award Numbers and Years (or Other Identifying Numbers): S010A220014, S010A230014 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness, Modified Opinion Condition and Context The School Corporation did not have effective internal controls in place to ensure all costs paid from Title I funds and submitted for reimbursement were for allowable activities or allowable costs. As a result, the following compliance issues were noted: On May 26, 2023, a check for $886 was issued for which supporting documentation could not be provided. As a result, it could not be determined if the expense was for an allowable activity or an allowable cost. On August 16, 2024, seven stipends were paid to non-Title I administrative staff from Title I grant funds. Two employees received $5,000 each and five employees received $3,000 each. On December 20, 2024, three stipends for $918 each were paid from Title I grant funds to employees who had previously received a stipend payment on August 16, 2024. These stipends were determined to not be an allowable activity or an allowable cost. The current Treasurer identified the stipend errors. The School Corporation requested and received reimbursement from the seven employees who received these stipends. INDIANA STATE BOARD OF ACCOUNTS 27 PLYMOUTH COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Criteria 2 CFR 200.302 states in part: "(a) Each state must expend and account for the Federal award in accordance with state laws and procedures for expending and accounting for the state's own funds. In addition, the state's and the other non-Federal entity's financial management systems, including records documenting compliance with Federal statutes, regulations, and the terms and conditions of the Federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the Federal statutes, regulations, and the terms and conditions of the Federal award. . . . (b) The financial management system of each non-Federal entity must provide for the following . . . (1) Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Federal program and Federal award identification must include, as applicable, the Assistance Listings title and number, Federal award identification number and year, name of the Federal agency, and name of the pass-through entity, if any. (2) Accurate, current, and complete disclosure of the financial results of each Federal award or program in accordance with the reporting requirements set forth in §§ 200.328 and 200.329. . . . (3) Records that identify adequately the source and application of funds for federallyfunded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. (4) Effective control over, and accountability for, all funds, property, and other assets. . . ." 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.400 states in part: "The application of these cost principles is based on the fundamental premises that: (a) The non-Federal entity is responsible for the efficient and effective administration of the Federal award through the application of sound management practices. INDIANA STATE BOARD OF ACCOUNTS 28 PLYMOUTH COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (b) The non-Federal entity assumes responsibility for administering Federal funds in a manner consistent with underlying agreements, program objectives, and the terms and conditions of the Federal award. (c) The non-Federal entity, in recognition of its own unique combination of staff, facilities, and experience, has the primary responsibility for employing whatever form of sound organization and management techniques may be necessary in order to assure proper and efficient administration of the Federal award. . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (g) Be adequately documented. . . ." 2 CFR 200.404 states in part: "A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. The question of reasonableness is particularly important when the non- Federal entity is predominantly federally-funded. In determining reasonableness of a given cost, consideration must be given to: . . . (e) Whether the non-Federal entity significantly deviates from its established practices and policies regarding the incurrence of costs, which may unjustifiably increase the Federal award's cost." 2 CFR 200.508 states in part: "The auditee must: . . . (d) Provide the auditor access to personnel, accounts, books, records, supporting documentation, and any other information as needed for the auditor to perform the audit required by this part." Federal Register, Vol. 87, No. 18 states in part: "Treasury has divided the Restriction on Use section into . . . (B) other restrictions on use, which include (1) debt service and replenishing reserves, (2) settlements and judgements, and (3) general restrictions. These restrictions apply to all eligible use categories. . . ." Cause The School Corporation did not design and implement an effective internal control system to review all payroll expenditures from the Title I funds, ensuring they were for allowable activities. Effect The failure to design and implement an effective internal control system over payroll expenditures caused noncompliance with the compliance requirements as detailed in the Condition and Context. INDIANA STATE BOARD OF ACCOUNTS 29 PLYMOUTH COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation establish a system of internal controls to ensure that grant award fund compliance requirements are appropriately researched prior to spending. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
2025 – 020. Activities Allowed or Unallowed and Allowable Costs/Cost Principles – Payroll and Indirect Costs Federal Agency: Environmental Protection Agency Federal Program Title: Performance Partnership Grants Assistance Listing: 66.605 Federal Grant ID Number: Various Pass-Through Entity: Not Applicable Award Period: Various Type of Finding: Significant deficiency in internal control over compliance, other matters Criteria: 2 CFR §200.404 states that a cost is reasonable when the charge is consistent with the recipient’s or subrecipient’s established written personnel policies. 2 CFR § 200.430 requires that charges to federal awards for salaries and wages must be supported by accurate time and effort records that reflect the actual work performed. The records must: be supported by a system of internal controls that provides reasonable assurance payroll costs are accurate, allowable, and properly allocated; be incorporated into the recipient’s official accounting records; reasonably reflect the employee’s total compensated activity, not exceeding 100 percent of compensated time; properly allocate payroll costs when employees work on multiple cost objectives, including federal and non-federal activities; comply with the recipient’s established accounting policies and procedures. Charges should not rely solely on budget estimates unless: the estimates reasonably approximate actual work performed; significant changes in work activity are promptly identified and recorded and periodic after-the-fact reviews and adjustments are performed to ensure final charges are accurate, allowable, and properly allocated. 2 CFR § 200.303 requires that the recipient and subrecipient establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: The Department did not maintain adequate time and effort documentation to support salaries and wages charged to federal awards. Specifically, payroll charges were not consistently supported by records that accurately reflected actual work performed and/or did not properly document the allocation of time between federal and non-federal activities. Indirect costs are directly correlated to the payroll expenditures thus if the payroll expenditures are inaccurate then the indirect cost will also be inaccurate. Cause: The Department lacked sufficient internal controls and/or written procedures to ensure time and effort was allocated among payroll accurately. Effect: As a result, there is an increased risk that salaries and wages charged to federal awards were inaccurate, unallowable, or improperly allocated, which could result in questioned costs and noncompliance with federal grant requirements. Questioned Costs: $17,445 for payroll testing. The overall variance between hours worked and amounts paid represents the questioned costs for payroll. Unknown for journal entry testing. Indirect costs were allocated based on budgeted personnel amounts rather than actual time and effort recorded in the Personnel Cost Account System (PCAS) and discrepancies were identified during our testing of time and effort requirements. Context: We selected thirty-six individuals to ensure time and effort requirements were properly met. Eleven out of thirty-six employees tested were paid more from the grant funds than they actually worked during the pay period. Twenty-three out of thirty-six employees tested, were paid less from the grant funds than they worked during the pay period. We selected seven indirect cost transactions to ensure time and effort requirements were being met properly. Because the journal entries related to indirect cost were made based on the budget for the grant and not the actual time and effort contributed by the individual employees per the PCAS, we were unable to provide reasonable assurance that time and effort was calculated accurately. Prior Year Single Audit Finding Numbers: Not applicable Recommendation: We recommend the Department develop and/or strengthen written policies and procedures for time and effort reporting; Ensure time and effort recordings accurately reflect actual work performed and total compensated activity; Implement supervisory review of time and effort documentation; and perform periodic after-the-fact reviews and adjustments to payroll charges to ensure compliance with federal requirements. Views of responsible officials and planned corrective actions: See management’s response on page 194.
FINDING 2025-005 Subject: COVID-19 - Education Stabilization Fund - Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Program: COVID-19 - Education Stabilization Fund Assistance Listings Numbers: 84.425D, 84.425U Federal Award Numbers and Years (or Other Identifying Numbers): S425D210013, S425U210013 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2023-005. INDIANA STATE BOARD OF ACCOUNTS 22 MICHIGAN CITY AREA SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Condition and Context The COVID-19 - Education Stabilization Fund (ESF) grant was established by the Coronavirus Aid, Relief and Economic Security (CARES) Act to respond to the Coronavirus outbreak and assist schools in creating healthy learning environments, return students to classrooms, and address local needs. The ESF grant was further funded by the Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act and the American Rescue Plan (ARP) Act. The School Corporation did not have effective internal controls in place over the Allowable Costs/Cost Principles compliance requirement. A sample of 13 payroll claims paid from the School Corporation's ESF grant were selected for testing. Of the sample, 6 employee pay rates could not be verified to a School Board-approved, allowable hourly pay rate for a high dosage tutor position. High dosage tutors were paid anywhere from $20 to $77 an hour. The School Corporation was unable to provide documentation that the School Board approved a pay rate for the high dosage tutor positions during the audit period. The total amount paid to high dosage tutors during the audit period was $472,354, which were considered questioned costs. In addition, the School Corporation paid a consulting firm to provide general support to the finance department. The expenditures were deemed unallowable as there was no documentation available that the consultants were assisting the School Corporation in preventing, preparing for, and responding to COVID-19. The total amount expended to the consultant during the audit period was $514,156, which were considered questioned costs. The lack of internal controls and noncompliance were isolated to the costs noted above for the ESSER II and ESSER III grants. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.334 states in part: "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 the Federal awards that are renewed quarterly or annual, from the date of 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. . . ." INDIANA STATE BOARD OF ACCOUNTS 23 MICHIGAN CITY AREA SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the recipient or subrecipient. (d) Be accorded consistent treatment. For example, a cost must not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for State and local governments and Indian Tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing requirements of any other federally-financed program in either the current or a prior period. See § 200.306(b). (g) Be adequately documented. See §§ 200.300 through 200.309. (h) Administrative closeout costs may be incurred until the due date of the final report(s). If incurred, these costs must be liquidated prior to the due date of the final report(s) and charged to the final budget period of the award unless otherwise specified by the Federal agency. All other costs must be incurred during the approved budget period. At its discretion, the Federal agency is authorized to waive prior written approvals to carry forward unobligated balances to subsequent budget periods. See § 200.308(g)(3). 2 CFR 200.430(i)(1) states in part: "Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." INDIANA STATE BOARD OF ACCOUNTS 24 MICHIGAN CITY AREA SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.404 states: "A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. The question of reasonableness is particularly important when the non- Federal entity is predominantly federally-funded. In determining reasonableness of a given cost, consideration must be given to: (a) Whether the cost is of a type generally recognized as ordinary and necessary for the operation of the non-Federal entity or the proper and efficient performance of the Federal award. (b) The restraints or requirements imposed by such factors as: sound business practices; arm's-length bargaining; Federal, state, local, tribal, and other laws and regulations; and terms and conditions of the Federal award. (c) Market prices for comparable goods or services for the geographic area. (d) Whether the individuals concerned acted with prudence in the circumstances considering their responsibilities to the non-Federal entity, its employees, where applicable its students or membership, the public at large, and the Federal Government. (e) Whether the non-Federal entity significantly deviates from its established practices and policies regarding the incurrence of costs, which may unjustifiably increase the Federal award's cost." 34 CFR 76.731 states: "A State and a subgrantee shall keep records to show its compliance with program requirements." Consolidated Appropriations Act, 2021, Pub. L. No. 116-260, 134 Stat. 1924 (2020) states in part: "For an additional amount for "Education Stabilization Fund".to remain available through September 30, 2022, to prevent, prepare for, and respond to coronavirus, domestically, or internationally . . ." Cause Payroll records were incomplete as the School Corporation was unable to provide documentation that all rates of pay were approved by the School Board. The School Corporation did not include the consultants above in the budget submitted as part of the grant application, and so the School Corporation did not get the required prior approval for the purchases. Effect Without proper documentation, the allowability of the ESF grant expenditures cannot be substantiated, creating a risk that unallowable costs may be charged to the federal grant. Additionally, we could not determine how the expenditures met the purpose of the program. Questioned Costs We identified $986,510 in known questioned costs as described above in the Condition and Context. INDIANA STATE BOARD OF ACCOUNTS 25 MICHIGAN CITY AREA SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Recommendation We recommend that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure rates of pay are approved by the School Board and adequately documented and that costs are allowable. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Finding: 2024-001 ALN 10.559, USDA Summer Food Service Program (SFSP) Known/Likely Questioned Costs: $151,099.42 Criteria: Federal regulations require that costs charged to the program be necessary, reasonable, and properly documented (2 CFR 200.403–200.404). In addition, procurement must follow open and competitive bidding procedures (2 CFR 200.318), and contracts must be executed and approved before charging costs to the program. Deviation/Condition: The Organization paid $151,099.42 of SFSP program funds to UTA of Boro Park for outsourced payroll services without following federal procurement requirements and without an executed, approved contract. Cause: Inadequate internal controls over procurement and contract approval. Effect: Use of program funds for unallowable costs, resulting in questioned costs of $151,099.42. Perspective: The issue represents a material exception, as the entire amount of outsourced payroll services ($151,099.42) charged to the SFSP was deemed unallowable due to noncompliance with procurement and contract approval requirements. Reporting Period: 1/1/2024-12/31/2024 Repeat Finding: No Recommendation: The Organization should reimburse the SFSP program fund in the amount of $151,099.42 from its non-federal operating funds. In addition, the Organization should establish procedures to ensure all future service contracts are competitively procured, executed in writing, and approved by the State agency before being charged to the program. Views of Responsible Officials and Corrective Action Plan: Management agrees with the finding, has reimbursed $151,099.42 to the SFSP account, and will strengthen procurement controls through competitive bidding and contract approvals to ensure compliance.
Compliance Requirement Allowable Costs and Allowable Activities Type of Finding Material Weakness in Internal Control over Compliance, Material Noncompliance Program Port Security Grant Program ALN # 97.056 Federal Agency Department of Homeland Security – Direct Award Federal Award Year 2021 and 2023 Grant Numbers EMW-2021-PU-00030- IJ#3 EMW-2023-PU-00164- IJ#4 Questioned Costs $209,855 Criteria - Federal rules require that grant funds be spent only on allowable and necessary costs that are directly related to the purpose of the award. For the Port Security Grant Program (PSGP), this means expenditures must match the projects described in the approved Investment Justification (IJ). In addition, all costs must be incurred within the official grant period; expenses made before or after the authorized performance dates are not permitted. Uniform Guidance establishes clear requirements for allowability of costs under federal awards: • 2 CFR 200.403 – Costs must be necessary, reasonable, allocable, and consistently treated in accordance with the terms and conditions of the federal award. • 2 CFR 200.405 – Costs must be directly allocable to the federal award in proportion to the benefits received. • 2 CFR 200.403(c) and 200.404 – Costs must conform to limitations or exclusions set forth in the award documents and applicable federal regulations. • 2 CFR 200.309 – A non-federal entity may charge to the federal award only allowable costs incurred during the period of performance, unless specifically authorized otherwise.Condition - Testing of 50 invoices identified significant noncompliance. Fourteen (14) invoices represented expenditures that were not aligned with the approved Investment Justification (IJ), indicating that funds were used for purposes outside the scope of the grant award. In addition, one (1) invoice reflected costs incurred prior to the authorized period of performance, in direct violation of federal grant requirements. a) Expenditures were charged to the 2021 PSGP for the purchase of camera equipment, installation, and project management activities that lacked support within the approved Investment Justification No. 3 MSOC Security Sustainment Costs, resulting in questioned costs of $78,910. b) Expenditures were charged to the 2023 PSGP for the purchase of computer equipment, conference room enhancements, and biological and cultural survey that lacked support within the approved Investment Justification No. 3 GIS Acquisition and Implementation, resulting in questioned costs of $115,044 c) Expenditures were charged to the 2023 PSGP for the purchase of executive leadership training and datto backups that lacked support within the approved Investment Justification No. 4 Sustainment for Cybersecurity Network and IT Systems, resulting in questioned costs of $15,901Cause - The District failed to implement and enforce adequate internal controls to ensure that expenditures were reviewed and validated against both the approved Investment Justification and the grant’s period of performance prior to authorization. This lack of oversight reflects a breakdown in management’s responsibility for compliance with federal grant requirements. Effect - Because the District did not ensure expenditures were properly reviewed against the approved Investment Justifications and the authorized period of performance, a total of $209,855 in questioned costs was identified. These unallowable expenditures increase the risk that federal grantor agencies may require repayment or disallowance of costs, and indicate material noncompliance with federal grant requirements. The lack of adequate review and oversight also undermines accountability for federal funds, creating heightened risk of waste, abuse, and additional future noncompliance. Recommendation - The District must implement and enforce formal review procedures requiring all PSGP expenditures to be cross-checked against the approved Investment Justification (IJ) and verified for compliance with the grant’s period of performance prior to payment. No disbursement of federal funds should occur until documentation demonstrates that the expenditure directly aligns with the approved grant scope and timing. The District must consult with FEMA regarding the allowability of identified questioned costs.
FA 2024-001 Strengthen Controls over Transfers Compliance Requirement: Activities Allowed or Unallowed Allowable Costs/Cost Principles Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Agriculture Pass-Through Entity: Georgia Department of Education AL Numbers and Titles: 10.553 – School Breakfast Program 10.555 National School Lunch Program COVID-19 – 10.555 – National School Lunch Program Federal Award Number: 245GA324N1199 (Year: 2024) 225GA324N1099 (Year: 2024) Questioned Costs: $803,845.92 Description: The policies and procedures of the School District were insufficient to provide adequate internal controls over transfers of Child Nutrition Cluster funds. Background Information: The Child Nutrition Cluster (CNC) is comprised of various programs that are intended to assist states in administering and overseeing food service program operators that provide healthful, nutritious meals to eligible children in public and non-profit private schools, residential childcare institutions, and summer programs. This Cluster of programs also fosters healthy eating habits in children by providing fresh fruits and fresh vegetables to children attending elementary and secondary schools and encourages the domestic consumption of nutritious agricultural commodities. CNC funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Agriculture. GaDOE is responsible for distributing funds to local educational agencies (LEAs) and overseeing the various CNC programs. CNC funds totaling $1,235,161.85 were expended and reported on the Pike County Board of Education’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2024. Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Provisions included in the Uniform Guidance, Section 200.403 – Factors Affecting Allowability of Costs state that “costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items, (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity… (g) Be adequately documented…” In addition, provisions included in the Uniform Guidance, Section 200.404 – Reasonable Costs state that “a cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. The question of reasonableness is particularly important when the non-Federal entity is predominantly federally-funded. In determining reasonableness of a given cost, consideration must be given to: (a) Whether the cost is of a type generally recognized as ordinary and necessary for the operation of the non-Federal entity or the proper and efficient performance of the Federal award. (b) The restraints or requirements imposed by such factors as: sound business practices; arm’s-length bargaining; Federal, state, local, tribal, and other laws and regulations; and terms and conditions of the Federal award… (d) Whether the individuals concerned acted with prudence in the circumstances considering their responsibilities to the non-Federal entity, its employees, where applicable its students or membership, the public at large, and the Federal Government. (e) Whether the non-Federal entity significantly deviates from its established practices and policies regarding the incurrence of costs, which may unjustifiably increase the Federal award’s cost.” Furthermore, provisions included in the Uniform Guidance, Section 200.1 state “Improper payment means: (1) Any payment that should not have been made or that was made in an incorrect amount under statutory, contractual, administrative, or other legally applicable requirements. (v) The term ‘‘payment’’ in this definition means any disbursement or transfer of Federal funds (including a commitment for future payment, such as cash, securities, loans, loan guarantees, and insurance subsidies) to any non-Federal person, non-Federal entity, or Federal employee, that is made by a Federal agency, a Federal contractor, a Federal grantee, or a governmental or other organization administering a Federal program or activity.” Lastly, provisions included in Title 34 CFR Section 210.14(a) state that “school food authorities shall maintain a nonprofit school food service. Revenues received by the nonprofit school food service are to be used only for the operation or improvement of such food service, except that, such revenues shall not be used to purchase land or buildings, unless otherwise approved… FNS, or to construct buildings.” Condition: Auditors performed a review of expenditure activity associated with CNC to determine if appropriate internal controls were implemented and applicable compliance requirements were met. This testing revealed that funds were transferred from the School Nutrition Fund to the General Fund. Monies included in the General Fund can be used for activities beyond the operation or improvement of the food service program. Therefore, transfers totaling $803,845.92 were not considered to be reasonable and necessary for the performance of the CNC programs and deemed unallowable. Questioned Costs: Known questioned costs of $803,845.92 were identified for the transfer of funds that was not incurred for a necessary and reasonable purpose and is considered to be an improper payment. These known questioned costs related to expenditures that were not tested as part of a sample, and therefore, should not be projected to a population to determine likely questioned costs. Cause: At the end of fiscal year 2019 the School District’s School Nutrition Fund was in a budget deficit. When budget deficits occur at a local school system a board approved corrective action plan, or “Deficit Elimination Plan,” is required to be submitted to GaDOE per the Official Code of Georgia (O.C.G.A) 20-2-67 and Chapter 25 of the Financial Management for Georgia Local Units of Administration (FMGLUA). As a part of their Deficit Elimination Plan, the School District transferred funds from the General Fund to the School Nutrition Fund to cover the budget deficit. The School District, then, transferred the funds back to the General Fund from the School Nutrition Fund in fiscal year 2024. School District personnel misunderstood GaDOE guidance regarding the initial transfer and were unaware that the monies could not be returned to the General Fund in a subsequent fiscal year. Effect: The School District is not in compliance with the Uniform Guidance or GaDOE guidance related to the CNC programs. Failure to ensure that appropriate policies and procedures are followed when expending federal funds may expose the School District to unnecessary financial strains and shortages as GaDOE may require the School District to return funds associated with unallowable transfer. Recommendation: The School District should review current internal control procedures related to School Nutrition Fund transfers. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that all expenditures, including transfers, are used for allowable purposes. In addition, the School District should implement a monitoring process to ensure that all expenditure activity is compliant with the School District’s policies and procedures. Views of Responsible Officials: We concur with this finding.
FA 2024-001 Strengthen Controls over Transfers Compliance Requirement: Activities Allowed or Unallowed Allowable Costs/Cost Principles Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Agriculture Pass-Through Entity: Georgia Department of Education AL Numbers and Titles: 10.553 – School Breakfast Program 10.555 National School Lunch Program COVID-19 – 10.555 – National School Lunch Program Federal Award Number: 245GA324N1199 (Year: 2024) 225GA324N1099 (Year: 2024) Questioned Costs: $803,845.92 Description: The policies and procedures of the School District were insufficient to provide adequate internal controls over transfers of Child Nutrition Cluster funds. Background Information: The Child Nutrition Cluster (CNC) is comprised of various programs that are intended to assist states in administering and overseeing food service program operators that provide healthful, nutritious meals to eligible children in public and non-profit private schools, residential childcare institutions, and summer programs. This Cluster of programs also fosters healthy eating habits in children by providing fresh fruits and fresh vegetables to children attending elementary and secondary schools and encourages the domestic consumption of nutritious agricultural commodities. CNC funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Agriculture. GaDOE is responsible for distributing funds to local educational agencies (LEAs) and overseeing the various CNC programs. CNC funds totaling $1,235,161.85 were expended and reported on the Pike County Board of Education’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2024. Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Provisions included in the Uniform Guidance, Section 200.403 – Factors Affecting Allowability of Costs state that “costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items, (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity… (g) Be adequately documented…” In addition, provisions included in the Uniform Guidance, Section 200.404 – Reasonable Costs state that “a cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. The question of reasonableness is particularly important when the non-Federal entity is predominantly federally-funded. In determining reasonableness of a given cost, consideration must be given to: (a) Whether the cost is of a type generally recognized as ordinary and necessary for the operation of the non-Federal entity or the proper and efficient performance of the Federal award. (b) The restraints or requirements imposed by such factors as: sound business practices; arm’s-length bargaining; Federal, state, local, tribal, and other laws and regulations; and terms and conditions of the Federal award… (d) Whether the individuals concerned acted with prudence in the circumstances considering their responsibilities to the non-Federal entity, its employees, where applicable its students or membership, the public at large, and the Federal Government. (e) Whether the non-Federal entity significantly deviates from its established practices and policies regarding the incurrence of costs, which may unjustifiably increase the Federal award’s cost.” Furthermore, provisions included in the Uniform Guidance, Section 200.1 state “Improper payment means: (1) Any payment that should not have been made or that was made in an incorrect amount under statutory, contractual, administrative, or other legally applicable requirements. (v) The term ‘‘payment’’ in this definition means any disbursement or transfer of Federal funds (including a commitment for future payment, such as cash, securities, loans, loan guarantees, and insurance subsidies) to any non-Federal person, non-Federal entity, or Federal employee, that is made by a Federal agency, a Federal contractor, a Federal grantee, or a governmental or other organization administering a Federal program or activity.” Lastly, provisions included in Title 34 CFR Section 210.14(a) state that “school food authorities shall maintain a nonprofit school food service. Revenues received by the nonprofit school food service are to be used only for the operation or improvement of such food service, except that, such revenues shall not be used to purchase land or buildings, unless otherwise approved… FNS, or to construct buildings.” Condition: Auditors performed a review of expenditure activity associated with CNC to determine if appropriate internal controls were implemented and applicable compliance requirements were met. This testing revealed that funds were transferred from the School Nutrition Fund to the General Fund. Monies included in the General Fund can be used for activities beyond the operation or improvement of the food service program. Therefore, transfers totaling $803,845.92 were not considered to be reasonable and necessary for the performance of the CNC programs and deemed unallowable. Questioned Costs: Known questioned costs of $803,845.92 were identified for the transfer of funds that was not incurred for a necessary and reasonable purpose and is considered to be an improper payment. These known questioned costs related to expenditures that were not tested as part of a sample, and therefore, should not be projected to a population to determine likely questioned costs. Cause: At the end of fiscal year 2019 the School District’s School Nutrition Fund was in a budget deficit. When budget deficits occur at a local school system a board approved corrective action plan, or “Deficit Elimination Plan,” is required to be submitted to GaDOE per the Official Code of Georgia (O.C.G.A) 20-2-67 and Chapter 25 of the Financial Management for Georgia Local Units of Administration (FMGLUA). As a part of their Deficit Elimination Plan, the School District transferred funds from the General Fund to the School Nutrition Fund to cover the budget deficit. The School District, then, transferred the funds back to the General Fund from the School Nutrition Fund in fiscal year 2024. School District personnel misunderstood GaDOE guidance regarding the initial transfer and were unaware that the monies could not be returned to the General Fund in a subsequent fiscal year. Effect: The School District is not in compliance with the Uniform Guidance or GaDOE guidance related to the CNC programs. Failure to ensure that appropriate policies and procedures are followed when expending federal funds may expose the School District to unnecessary financial strains and shortages as GaDOE may require the School District to return funds associated with unallowable transfer. Recommendation: The School District should review current internal control procedures related to School Nutrition Fund transfers. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that all expenditures, including transfers, are used for allowable purposes. In addition, the School District should implement a monitoring process to ensure that all expenditure activity is compliant with the School District’s policies and procedures. Views of Responsible Officials: We concur with this finding.
FA 2024-001 Strengthen Controls over Transfers Compliance Requirement: Activities Allowed or Unallowed Allowable Costs/Cost Principles Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Agriculture Pass-Through Entity: Georgia Department of Education AL Numbers and Titles: 10.553 – School Breakfast Program 10.555 National School Lunch Program COVID-19 – 10.555 – National School Lunch Program Federal Award Number: 245GA324N1199 (Year: 2024) 225GA324N1099 (Year: 2024) Questioned Costs: $803,845.92 Description: The policies and procedures of the School District were insufficient to provide adequate internal controls over transfers of Child Nutrition Cluster funds. Background Information: The Child Nutrition Cluster (CNC) is comprised of various programs that are intended to assist states in administering and overseeing food service program operators that provide healthful, nutritious meals to eligible children in public and non-profit private schools, residential childcare institutions, and summer programs. This Cluster of programs also fosters healthy eating habits in children by providing fresh fruits and fresh vegetables to children attending elementary and secondary schools and encourages the domestic consumption of nutritious agricultural commodities. CNC funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Agriculture. GaDOE is responsible for distributing funds to local educational agencies (LEAs) and overseeing the various CNC programs. CNC funds totaling $1,235,161.85 were expended and reported on the Pike County Board of Education’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2024. Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Provisions included in the Uniform Guidance, Section 200.403 – Factors Affecting Allowability of Costs state that “costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items, (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity… (g) Be adequately documented…” In addition, provisions included in the Uniform Guidance, Section 200.404 – Reasonable Costs state that “a cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. The question of reasonableness is particularly important when the non-Federal entity is predominantly federally-funded. In determining reasonableness of a given cost, consideration must be given to: (a) Whether the cost is of a type generally recognized as ordinary and necessary for the operation of the non-Federal entity or the proper and efficient performance of the Federal award. (b) The restraints or requirements imposed by such factors as: sound business practices; arm’s-length bargaining; Federal, state, local, tribal, and other laws and regulations; and terms and conditions of the Federal award… (d) Whether the individuals concerned acted with prudence in the circumstances considering their responsibilities to the non-Federal entity, its employees, where applicable its students or membership, the public at large, and the Federal Government. (e) Whether the non-Federal entity significantly deviates from its established practices and policies regarding the incurrence of costs, which may unjustifiably increase the Federal award’s cost.” Furthermore, provisions included in the Uniform Guidance, Section 200.1 state “Improper payment means: (1) Any payment that should not have been made or that was made in an incorrect amount under statutory, contractual, administrative, or other legally applicable requirements. (v) The term ‘‘payment’’ in this definition means any disbursement or transfer of Federal funds (including a commitment for future payment, such as cash, securities, loans, loan guarantees, and insurance subsidies) to any non-Federal person, non-Federal entity, or Federal employee, that is made by a Federal agency, a Federal contractor, a Federal grantee, or a governmental or other organization administering a Federal program or activity.” Lastly, provisions included in Title 34 CFR Section 210.14(a) state that “school food authorities shall maintain a nonprofit school food service. Revenues received by the nonprofit school food service are to be used only for the operation or improvement of such food service, except that, such revenues shall not be used to purchase land or buildings, unless otherwise approved… FNS, or to construct buildings.” Condition: Auditors performed a review of expenditure activity associated with CNC to determine if appropriate internal controls were implemented and applicable compliance requirements were met. This testing revealed that funds were transferred from the School Nutrition Fund to the General Fund. Monies included in the General Fund can be used for activities beyond the operation or improvement of the food service program. Therefore, transfers totaling $803,845.92 were not considered to be reasonable and necessary for the performance of the CNC programs and deemed unallowable. Questioned Costs: Known questioned costs of $803,845.92 were identified for the transfer of funds that was not incurred for a necessary and reasonable purpose and is considered to be an improper payment. These known questioned costs related to expenditures that were not tested as part of a sample, and therefore, should not be projected to a population to determine likely questioned costs. Cause: At the end of fiscal year 2019 the School District’s School Nutrition Fund was in a budget deficit. When budget deficits occur at a local school system a board approved corrective action plan, or “Deficit Elimination Plan,” is required to be submitted to GaDOE per the Official Code of Georgia (O.C.G.A) 20-2-67 and Chapter 25 of the Financial Management for Georgia Local Units of Administration (FMGLUA). As a part of their Deficit Elimination Plan, the School District transferred funds from the General Fund to the School Nutrition Fund to cover the budget deficit. The School District, then, transferred the funds back to the General Fund from the School Nutrition Fund in fiscal year 2024. School District personnel misunderstood GaDOE guidance regarding the initial transfer and were unaware that the monies could not be returned to the General Fund in a subsequent fiscal year. Effect: The School District is not in compliance with the Uniform Guidance or GaDOE guidance related to the CNC programs. Failure to ensure that appropriate policies and procedures are followed when expending federal funds may expose the School District to unnecessary financial strains and shortages as GaDOE may require the School District to return funds associated with unallowable transfer. Recommendation: The School District should review current internal control procedures related to School Nutrition Fund transfers. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that all expenditures, including transfers, are used for allowable purposes. In addition, the School District should implement a monitoring process to ensure that all expenditure activity is compliant with the School District’s policies and procedures. Views of Responsible Officials: We concur with this finding.
GENERAL INFORMATION: Grant Title: COVID-19 Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Year: 2024 Federal Agency: Department of Treasury CONDITION: We noted the Putnam County Commission did not have controls in place to detect and prevent paying amounts in excess of specific contracts. Specially, a contract was executed with a vendor delineating specific prices for goods in agreement with a federal contract established between the vendor and the General Services Administration (GSA). County officials do not have a process in place to identify charges in excess of the specified prices and to ensure payments of federal funds match the agreed upon terms within the signed contract. Proper documentation was not on hand to support charges being in agreement with the contracted amounts. CRITERIA Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.404 states, in part, that: "A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. The question of reasonableness is particularly important when the non-Federal entity is predominantly federally-funded. In determining reasonableness of a given cost, consideration must be given to: ...(d) Whether the individuals concerned acted with prudence in the circumstances considering their responsibilities to the non-Federal entity, its employees, where applicable its students or membership, the public at large, and the Federal Government. (e) Whether the non-Federal entity significantly deviates from its established practices and policies regarding the incurrence of costs, which may unjustifiably increase the Federal award's cost." Proper internal control dictates the adequate review and oversight of charges related to contracted amounts. Additionally, controls should be in place to review these procedures and reduce opportunities for the override of controls. QUESTIONED COSTS: Unknown CAUSE: Procedures were not in place to verify that disbursements aligned with contractually stipulated amounts. EFFECT: We were unable to determine if the payments remitted to the vendor for charges during the year matched the specific prices on the signed contract. REPEAT FINDING: Yes PRIOR YEAR FINDING NUMBER: 2023-004 RECOMMENDATION: Officials should establish and follow procedures mandating a review and recalculation of all invoice payments. This review process should ensure that prices align with amounts agreed to in the executed contract. In instances where discrepancies are identified, officials should engage with the vendor and relevant state and federal agencies associated with the contract to determine that payments are made only for costs charged in accordance with the associated contract. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS: The County Commission will work directly with the vendor to ensure future payment requests properly align with payment information listed on the federal contract.
2024-038 Noncompliance with Payroll and Travel Expense Policies and Procedures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agencies: Various Pass-Through Entities: Various AL Numbers and Titles: Various – Research and Development Cluster Federal Award Numbers: Various Questioned Costs: None Identified Description: The University did not comply with payroll and travel expense policies and procedures. Background Information: During the year ended June 30, 2024, the Georgia Institute of Technology’s (“GIT” or the “Institute”) Department of Internal Audit completed audits of compliance with payroll and travel expense policies and procedures of two Schools within the Institute and identified noncompliance with those policies and procedures. Criteria: • Uniform Guidance 2 CFR § 200.302 Financial management • Uniform Guidance 2 CFR § 200.308 – Revision of budget and program plans • Uniform Guidance 2 CFR § 200.403 – Factors affecting allowability of costs • Uniform Guidance 2 CFR § 200.404 – Reasonable costs • Uniform Guidance 2 CFR § 200.405 – Allocable costs • Uniform Guidance 2 CFR § 200.430 – Compensation – personal services • Uniform Guidance 2 CFR § 200.475 – Travel costs • Uniform Guidance 2 CFR § 200.432 – Conferences • Title 41 CFR § 301-11.12 • Title 41 CFR § 301-11.200 Subpart C – Reduced per Diem Condition: • Noncompliance with travel policies • Noncompliance with payroll expense policies and procedures Cause: • Lack of sufficient controls for proper review and approval of travel authorizations and expensed transactions associated with sponsored award expenses • Lack of sufficient controls to ensure time and effort is properly charged to sponsored awards • Lack of consistency enforcing payroll expense policies for sponsored award management Effect: Payroll and travel expenditures may not be in compliance with federal or grant award provisions. Recommendation: • Complete and approve spend authorizations before travel to validate the necessity and reasonableness of expenses. • Include detailed justifications in spend authorizations for the travel purpose and award benefit. • Require sufficient justification for payroll expenses charged to sponsored awards, particularly for significant variances in effort. • Update internal control policies to enhance oversight and verification of time and effort reporting. This should include clear guidelines on the documentation required to support the work performed and the consequences of non-compliance. Views of Responsible Officials: Management agrees with the finding. See management’s corrective action plan.
2024-038 Noncompliance with Payroll and Travel Expense Policies and Procedures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agencies: Various Pass-Through Entities: Various AL Numbers and Titles: Various – Research and Development Cluster Federal Award Numbers: Various Questioned Costs: None Identified Description: The University did not comply with payroll and travel expense policies and procedures. Background Information: During the year ended June 30, 2024, the Georgia Institute of Technology’s (“GIT” or the “Institute”) Department of Internal Audit completed audits of compliance with payroll and travel expense policies and procedures of two Schools within the Institute and identified noncompliance with those policies and procedures. Criteria: • Uniform Guidance 2 CFR § 200.302 Financial management • Uniform Guidance 2 CFR § 200.308 – Revision of budget and program plans • Uniform Guidance 2 CFR § 200.403 – Factors affecting allowability of costs • Uniform Guidance 2 CFR § 200.404 – Reasonable costs • Uniform Guidance 2 CFR § 200.405 – Allocable costs • Uniform Guidance 2 CFR § 200.430 – Compensation – personal services • Uniform Guidance 2 CFR § 200.475 – Travel costs • Uniform Guidance 2 CFR § 200.432 – Conferences • Title 41 CFR § 301-11.12 • Title 41 CFR § 301-11.200 Subpart C – Reduced per Diem Condition: • Noncompliance with travel policies • Noncompliance with payroll expense policies and procedures Cause: • Lack of sufficient controls for proper review and approval of travel authorizations and expensed transactions associated with sponsored award expenses • Lack of sufficient controls to ensure time and effort is properly charged to sponsored awards • Lack of consistency enforcing payroll expense policies for sponsored award management Effect: Payroll and travel expenditures may not be in compliance with federal or grant award provisions. Recommendation: • Complete and approve spend authorizations before travel to validate the necessity and reasonableness of expenses. • Include detailed justifications in spend authorizations for the travel purpose and award benefit. • Require sufficient justification for payroll expenses charged to sponsored awards, particularly for significant variances in effort. • Update internal control policies to enhance oversight and verification of time and effort reporting. This should include clear guidelines on the documentation required to support the work performed and the consequences of non-compliance. Views of Responsible Officials: Management agrees with the finding. See management’s corrective action plan.
2024-038 Noncompliance with Payroll and Travel Expense Policies and Procedures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agencies: Various Pass-Through Entities: Various AL Numbers and Titles: Various – Research and Development Cluster Federal Award Numbers: Various Questioned Costs: None Identified Description: The University did not comply with payroll and travel expense policies and procedures. Background Information: During the year ended June 30, 2024, the Georgia Institute of Technology’s (“GIT” or the “Institute”) Department of Internal Audit completed audits of compliance with payroll and travel expense policies and procedures of two Schools within the Institute and identified noncompliance with those policies and procedures. Criteria: • Uniform Guidance 2 CFR § 200.302 Financial management • Uniform Guidance 2 CFR § 200.308 – Revision of budget and program plans • Uniform Guidance 2 CFR § 200.403 – Factors affecting allowability of costs • Uniform Guidance 2 CFR § 200.404 – Reasonable costs • Uniform Guidance 2 CFR § 200.405 – Allocable costs • Uniform Guidance 2 CFR § 200.430 – Compensation – personal services • Uniform Guidance 2 CFR § 200.475 – Travel costs • Uniform Guidance 2 CFR § 200.432 – Conferences • Title 41 CFR § 301-11.12 • Title 41 CFR § 301-11.200 Subpart C – Reduced per Diem Condition: • Noncompliance with travel policies • Noncompliance with payroll expense policies and procedures Cause: • Lack of sufficient controls for proper review and approval of travel authorizations and expensed transactions associated with sponsored award expenses • Lack of sufficient controls to ensure time and effort is properly charged to sponsored awards • Lack of consistency enforcing payroll expense policies for sponsored award management Effect: Payroll and travel expenditures may not be in compliance with federal or grant award provisions. Recommendation: • Complete and approve spend authorizations before travel to validate the necessity and reasonableness of expenses. • Include detailed justifications in spend authorizations for the travel purpose and award benefit. • Require sufficient justification for payroll expenses charged to sponsored awards, particularly for significant variances in effort. • Update internal control policies to enhance oversight and verification of time and effort reporting. This should include clear guidelines on the documentation required to support the work performed and the consequences of non-compliance. Views of Responsible Officials: Management agrees with the finding. See management’s corrective action plan.
2024-038 Noncompliance with Payroll and Travel Expense Policies and Procedures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agencies: Various Pass-Through Entities: Various AL Numbers and Titles: Various – Research and Development Cluster Federal Award Numbers: Various Questioned Costs: None Identified Description: The University did not comply with payroll and travel expense policies and procedures. Background Information: During the year ended June 30, 2024, the Georgia Institute of Technology’s (“GIT” or the “Institute”) Department of Internal Audit completed audits of compliance with payroll and travel expense policies and procedures of two Schools within the Institute and identified noncompliance with those policies and procedures. Criteria: • Uniform Guidance 2 CFR § 200.302 Financial management • Uniform Guidance 2 CFR § 200.308 – Revision of budget and program plans • Uniform Guidance 2 CFR § 200.403 – Factors affecting allowability of costs • Uniform Guidance 2 CFR § 200.404 – Reasonable costs • Uniform Guidance 2 CFR § 200.405 – Allocable costs • Uniform Guidance 2 CFR § 200.430 – Compensation – personal services • Uniform Guidance 2 CFR § 200.475 – Travel costs • Uniform Guidance 2 CFR § 200.432 – Conferences • Title 41 CFR § 301-11.12 • Title 41 CFR § 301-11.200 Subpart C – Reduced per Diem Condition: • Noncompliance with travel policies • Noncompliance with payroll expense policies and procedures Cause: • Lack of sufficient controls for proper review and approval of travel authorizations and expensed transactions associated with sponsored award expenses • Lack of sufficient controls to ensure time and effort is properly charged to sponsored awards • Lack of consistency enforcing payroll expense policies for sponsored award management Effect: Payroll and travel expenditures may not be in compliance with federal or grant award provisions. Recommendation: • Complete and approve spend authorizations before travel to validate the necessity and reasonableness of expenses. • Include detailed justifications in spend authorizations for the travel purpose and award benefit. • Require sufficient justification for payroll expenses charged to sponsored awards, particularly for significant variances in effort. • Update internal control policies to enhance oversight and verification of time and effort reporting. This should include clear guidelines on the documentation required to support the work performed and the consequences of non-compliance. Views of Responsible Officials: Management agrees with the finding. See management’s corrective action plan.
2024-038 Noncompliance with Payroll and Travel Expense Policies and Procedures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agencies: Various Pass-Through Entities: Various AL Numbers and Titles: Various – Research and Development Cluster Federal Award Numbers: Various Questioned Costs: None Identified Description: The University did not comply with payroll and travel expense policies and procedures. Background Information: During the year ended June 30, 2024, the Georgia Institute of Technology’s (“GIT” or the “Institute”) Department of Internal Audit completed audits of compliance with payroll and travel expense policies and procedures of two Schools within the Institute and identified noncompliance with those policies and procedures. Criteria: • Uniform Guidance 2 CFR § 200.302 Financial management • Uniform Guidance 2 CFR § 200.308 – Revision of budget and program plans • Uniform Guidance 2 CFR § 200.403 – Factors affecting allowability of costs • Uniform Guidance 2 CFR § 200.404 – Reasonable costs • Uniform Guidance 2 CFR § 200.405 – Allocable costs • Uniform Guidance 2 CFR § 200.430 – Compensation – personal services • Uniform Guidance 2 CFR § 200.475 – Travel costs • Uniform Guidance 2 CFR § 200.432 – Conferences • Title 41 CFR § 301-11.12 • Title 41 CFR § 301-11.200 Subpart C – Reduced per Diem Condition: • Noncompliance with travel policies • Noncompliance with payroll expense policies and procedures Cause: • Lack of sufficient controls for proper review and approval of travel authorizations and expensed transactions associated with sponsored award expenses • Lack of sufficient controls to ensure time and effort is properly charged to sponsored awards • Lack of consistency enforcing payroll expense policies for sponsored award management Effect: Payroll and travel expenditures may not be in compliance with federal or grant award provisions. Recommendation: • Complete and approve spend authorizations before travel to validate the necessity and reasonableness of expenses. • Include detailed justifications in spend authorizations for the travel purpose and award benefit. • Require sufficient justification for payroll expenses charged to sponsored awards, particularly for significant variances in effort. • Update internal control policies to enhance oversight and verification of time and effort reporting. This should include clear guidelines on the documentation required to support the work performed and the consequences of non-compliance. Views of Responsible Officials: Management agrees with the finding. See management’s corrective action plan.
2024-038 Noncompliance with Payroll and Travel Expense Policies and Procedures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agencies: Various Pass-Through Entities: Various AL Numbers and Titles: Various – Research and Development Cluster Federal Award Numbers: Various Questioned Costs: None Identified Description: The University did not comply with payroll and travel expense policies and procedures. Background Information: During the year ended June 30, 2024, the Georgia Institute of Technology’s (“GIT” or the “Institute”) Department of Internal Audit completed audits of compliance with payroll and travel expense policies and procedures of two Schools within the Institute and identified noncompliance with those policies and procedures. Criteria: • Uniform Guidance 2 CFR § 200.302 Financial management • Uniform Guidance 2 CFR § 200.308 – Revision of budget and program plans • Uniform Guidance 2 CFR § 200.403 – Factors affecting allowability of costs • Uniform Guidance 2 CFR § 200.404 – Reasonable costs • Uniform Guidance 2 CFR § 200.405 – Allocable costs • Uniform Guidance 2 CFR § 200.430 – Compensation – personal services • Uniform Guidance 2 CFR § 200.475 – Travel costs • Uniform Guidance 2 CFR § 200.432 – Conferences • Title 41 CFR § 301-11.12 • Title 41 CFR § 301-11.200 Subpart C – Reduced per Diem Condition: • Noncompliance with travel policies • Noncompliance with payroll expense policies and procedures Cause: • Lack of sufficient controls for proper review and approval of travel authorizations and expensed transactions associated with sponsored award expenses • Lack of sufficient controls to ensure time and effort is properly charged to sponsored awards • Lack of consistency enforcing payroll expense policies for sponsored award management Effect: Payroll and travel expenditures may not be in compliance with federal or grant award provisions. Recommendation: • Complete and approve spend authorizations before travel to validate the necessity and reasonableness of expenses. • Include detailed justifications in spend authorizations for the travel purpose and award benefit. • Require sufficient justification for payroll expenses charged to sponsored awards, particularly for significant variances in effort. • Update internal control policies to enhance oversight and verification of time and effort reporting. This should include clear guidelines on the documentation required to support the work performed and the consequences of non-compliance. Views of Responsible Officials: Management agrees with the finding. See management’s corrective action plan.
2024-038 Noncompliance with Payroll and Travel Expense Policies and Procedures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agencies: Various Pass-Through Entities: Various AL Numbers and Titles: Various – Research and Development Cluster Federal Award Numbers: Various Questioned Costs: None Identified Description: The University did not comply with payroll and travel expense policies and procedures. Background Information: During the year ended June 30, 2024, the Georgia Institute of Technology’s (“GIT” or the “Institute”) Department of Internal Audit completed audits of compliance with payroll and travel expense policies and procedures of two Schools within the Institute and identified noncompliance with those policies and procedures. Criteria: • Uniform Guidance 2 CFR § 200.302 Financial management • Uniform Guidance 2 CFR § 200.308 – Revision of budget and program plans • Uniform Guidance 2 CFR § 200.403 – Factors affecting allowability of costs • Uniform Guidance 2 CFR § 200.404 – Reasonable costs • Uniform Guidance 2 CFR § 200.405 – Allocable costs • Uniform Guidance 2 CFR § 200.430 – Compensation – personal services • Uniform Guidance 2 CFR § 200.475 – Travel costs • Uniform Guidance 2 CFR § 200.432 – Conferences • Title 41 CFR § 301-11.12 • Title 41 CFR § 301-11.200 Subpart C – Reduced per Diem Condition: • Noncompliance with travel policies • Noncompliance with payroll expense policies and procedures Cause: • Lack of sufficient controls for proper review and approval of travel authorizations and expensed transactions associated with sponsored award expenses • Lack of sufficient controls to ensure time and effort is properly charged to sponsored awards • Lack of consistency enforcing payroll expense policies for sponsored award management Effect: Payroll and travel expenditures may not be in compliance with federal or grant award provisions. Recommendation: • Complete and approve spend authorizations before travel to validate the necessity and reasonableness of expenses. • Include detailed justifications in spend authorizations for the travel purpose and award benefit. • Require sufficient justification for payroll expenses charged to sponsored awards, particularly for significant variances in effort. • Update internal control policies to enhance oversight and verification of time and effort reporting. This should include clear guidelines on the documentation required to support the work performed and the consequences of non-compliance. Views of Responsible Officials: Management agrees with the finding. See management’s corrective action plan.
2024-038 Noncompliance with Payroll and Travel Expense Policies and Procedures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agencies: Various Pass-Through Entities: Various AL Numbers and Titles: Various – Research and Development Cluster Federal Award Numbers: Various Questioned Costs: None Identified Description: The University did not comply with payroll and travel expense policies and procedures. Background Information: During the year ended June 30, 2024, the Georgia Institute of Technology’s (“GIT” or the “Institute”) Department of Internal Audit completed audits of compliance with payroll and travel expense policies and procedures of two Schools within the Institute and identified noncompliance with those policies and procedures. Criteria: • Uniform Guidance 2 CFR § 200.302 Financial management • Uniform Guidance 2 CFR § 200.308 – Revision of budget and program plans • Uniform Guidance 2 CFR § 200.403 – Factors affecting allowability of costs • Uniform Guidance 2 CFR § 200.404 – Reasonable costs • Uniform Guidance 2 CFR § 200.405 – Allocable costs • Uniform Guidance 2 CFR § 200.430 – Compensation – personal services • Uniform Guidance 2 CFR § 200.475 – Travel costs • Uniform Guidance 2 CFR § 200.432 – Conferences • Title 41 CFR § 301-11.12 • Title 41 CFR § 301-11.200 Subpart C – Reduced per Diem Condition: • Noncompliance with travel policies • Noncompliance with payroll expense policies and procedures Cause: • Lack of sufficient controls for proper review and approval of travel authorizations and expensed transactions associated with sponsored award expenses • Lack of sufficient controls to ensure time and effort is properly charged to sponsored awards • Lack of consistency enforcing payroll expense policies for sponsored award management Effect: Payroll and travel expenditures may not be in compliance with federal or grant award provisions. Recommendation: • Complete and approve spend authorizations before travel to validate the necessity and reasonableness of expenses. • Include detailed justifications in spend authorizations for the travel purpose and award benefit. • Require sufficient justification for payroll expenses charged to sponsored awards, particularly for significant variances in effort. • Update internal control policies to enhance oversight and verification of time and effort reporting. This should include clear guidelines on the documentation required to support the work performed and the consequences of non-compliance. Views of Responsible Officials: Management agrees with the finding. See management’s corrective action plan.
2024-038 Noncompliance with Payroll and Travel Expense Policies and Procedures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agencies: Various Pass-Through Entities: Various AL Numbers and Titles: Various – Research and Development Cluster Federal Award Numbers: Various Questioned Costs: None Identified Description: The University did not comply with payroll and travel expense policies and procedures. Background Information: During the year ended June 30, 2024, the Georgia Institute of Technology’s (“GIT” or the “Institute”) Department of Internal Audit completed audits of compliance with payroll and travel expense policies and procedures of two Schools within the Institute and identified noncompliance with those policies and procedures. Criteria: • Uniform Guidance 2 CFR § 200.302 Financial management • Uniform Guidance 2 CFR § 200.308 – Revision of budget and program plans • Uniform Guidance 2 CFR § 200.403 – Factors affecting allowability of costs • Uniform Guidance 2 CFR § 200.404 – Reasonable costs • Uniform Guidance 2 CFR § 200.405 – Allocable costs • Uniform Guidance 2 CFR § 200.430 – Compensation – personal services • Uniform Guidance 2 CFR § 200.475 – Travel costs • Uniform Guidance 2 CFR § 200.432 – Conferences • Title 41 CFR § 301-11.12 • Title 41 CFR § 301-11.200 Subpart C – Reduced per Diem Condition: • Noncompliance with travel policies • Noncompliance with payroll expense policies and procedures Cause: • Lack of sufficient controls for proper review and approval of travel authorizations and expensed transactions associated with sponsored award expenses • Lack of sufficient controls to ensure time and effort is properly charged to sponsored awards • Lack of consistency enforcing payroll expense policies for sponsored award management Effect: Payroll and travel expenditures may not be in compliance with federal or grant award provisions. Recommendation: • Complete and approve spend authorizations before travel to validate the necessity and reasonableness of expenses. • Include detailed justifications in spend authorizations for the travel purpose and award benefit. • Require sufficient justification for payroll expenses charged to sponsored awards, particularly for significant variances in effort. • Update internal control policies to enhance oversight and verification of time and effort reporting. This should include clear guidelines on the documentation required to support the work performed and the consequences of non-compliance. Views of Responsible Officials: Management agrees with the finding. See management’s corrective action plan.
2024-038 Noncompliance with Payroll and Travel Expense Policies and Procedures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agencies: Various Pass-Through Entities: Various AL Numbers and Titles: Various – Research and Development Cluster Federal Award Numbers: Various Questioned Costs: None Identified Description: The University did not comply with payroll and travel expense policies and procedures. Background Information: During the year ended June 30, 2024, the Georgia Institute of Technology’s (“GIT” or the “Institute”) Department of Internal Audit completed audits of compliance with payroll and travel expense policies and procedures of two Schools within the Institute and identified noncompliance with those policies and procedures. Criteria: • Uniform Guidance 2 CFR § 200.302 Financial management • Uniform Guidance 2 CFR § 200.308 – Revision of budget and program plans • Uniform Guidance 2 CFR § 200.403 – Factors affecting allowability of costs • Uniform Guidance 2 CFR § 200.404 – Reasonable costs • Uniform Guidance 2 CFR § 200.405 – Allocable costs • Uniform Guidance 2 CFR § 200.430 – Compensation – personal services • Uniform Guidance 2 CFR § 200.475 – Travel costs • Uniform Guidance 2 CFR § 200.432 – Conferences • Title 41 CFR § 301-11.12 • Title 41 CFR § 301-11.200 Subpart C – Reduced per Diem Condition: • Noncompliance with travel policies • Noncompliance with payroll expense policies and procedures Cause: • Lack of sufficient controls for proper review and approval of travel authorizations and expensed transactions associated with sponsored award expenses • Lack of sufficient controls to ensure time and effort is properly charged to sponsored awards • Lack of consistency enforcing payroll expense policies for sponsored award management Effect: Payroll and travel expenditures may not be in compliance with federal or grant award provisions. Recommendation: • Complete and approve spend authorizations before travel to validate the necessity and reasonableness of expenses. • Include detailed justifications in spend authorizations for the travel purpose and award benefit. • Require sufficient justification for payroll expenses charged to sponsored awards, particularly for significant variances in effort. • Update internal control policies to enhance oversight and verification of time and effort reporting. This should include clear guidelines on the documentation required to support the work performed and the consequences of non-compliance. Views of Responsible Officials: Management agrees with the finding. See management’s corrective action plan.
2024-038 Noncompliance with Payroll and Travel Expense Policies and Procedures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agencies: Various Pass-Through Entities: Various AL Numbers and Titles: Various – Research and Development Cluster Federal Award Numbers: Various Questioned Costs: None Identified Description: The University did not comply with payroll and travel expense policies and procedures. Background Information: During the year ended June 30, 2024, the Georgia Institute of Technology’s (“GIT” or the “Institute”) Department of Internal Audit completed audits of compliance with payroll and travel expense policies and procedures of two Schools within the Institute and identified noncompliance with those policies and procedures. Criteria: • Uniform Guidance 2 CFR § 200.302 Financial management • Uniform Guidance 2 CFR § 200.308 – Revision of budget and program plans • Uniform Guidance 2 CFR § 200.403 – Factors affecting allowability of costs • Uniform Guidance 2 CFR § 200.404 – Reasonable costs • Uniform Guidance 2 CFR § 200.405 – Allocable costs • Uniform Guidance 2 CFR § 200.430 – Compensation – personal services • Uniform Guidance 2 CFR § 200.475 – Travel costs • Uniform Guidance 2 CFR § 200.432 – Conferences • Title 41 CFR § 301-11.12 • Title 41 CFR § 301-11.200 Subpart C – Reduced per Diem Condition: • Noncompliance with travel policies • Noncompliance with payroll expense policies and procedures Cause: • Lack of sufficient controls for proper review and approval of travel authorizations and expensed transactions associated with sponsored award expenses • Lack of sufficient controls to ensure time and effort is properly charged to sponsored awards • Lack of consistency enforcing payroll expense policies for sponsored award management Effect: Payroll and travel expenditures may not be in compliance with federal or grant award provisions. Recommendation: • Complete and approve spend authorizations before travel to validate the necessity and reasonableness of expenses. • Include detailed justifications in spend authorizations for the travel purpose and award benefit. • Require sufficient justification for payroll expenses charged to sponsored awards, particularly for significant variances in effort. • Update internal control policies to enhance oversight and verification of time and effort reporting. This should include clear guidelines on the documentation required to support the work performed and the consequences of non-compliance. Views of Responsible Officials: Management agrees with the finding. See management’s corrective action plan.
2024-038 Noncompliance with Payroll and Travel Expense Policies and Procedures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agencies: Various Pass-Through Entities: Various AL Numbers and Titles: Various – Research and Development Cluster Federal Award Numbers: Various Questioned Costs: None Identified Description: The University did not comply with payroll and travel expense policies and procedures. Background Information: During the year ended June 30, 2024, the Georgia Institute of Technology’s (“GIT” or the “Institute”) Department of Internal Audit completed audits of compliance with payroll and travel expense policies and procedures of two Schools within the Institute and identified noncompliance with those policies and procedures. Criteria: • Uniform Guidance 2 CFR § 200.302 Financial management • Uniform Guidance 2 CFR § 200.308 – Revision of budget and program plans • Uniform Guidance 2 CFR § 200.403 – Factors affecting allowability of costs • Uniform Guidance 2 CFR § 200.404 – Reasonable costs • Uniform Guidance 2 CFR § 200.405 – Allocable costs • Uniform Guidance 2 CFR § 200.430 – Compensation – personal services • Uniform Guidance 2 CFR § 200.475 – Travel costs • Uniform Guidance 2 CFR § 200.432 – Conferences • Title 41 CFR § 301-11.12 • Title 41 CFR § 301-11.200 Subpart C – Reduced per Diem Condition: • Noncompliance with travel policies • Noncompliance with payroll expense policies and procedures Cause: • Lack of sufficient controls for proper review and approval of travel authorizations and expensed transactions associated with sponsored award expenses • Lack of sufficient controls to ensure time and effort is properly charged to sponsored awards • Lack of consistency enforcing payroll expense policies for sponsored award management Effect: Payroll and travel expenditures may not be in compliance with federal or grant award provisions. Recommendation: • Complete and approve spend authorizations before travel to validate the necessity and reasonableness of expenses. • Include detailed justifications in spend authorizations for the travel purpose and award benefit. • Require sufficient justification for payroll expenses charged to sponsored awards, particularly for significant variances in effort. • Update internal control policies to enhance oversight and verification of time and effort reporting. This should include clear guidelines on the documentation required to support the work performed and the consequences of non-compliance. Views of Responsible Officials: Management agrees with the finding. See management’s corrective action plan.
2024-038 Noncompliance with Payroll and Travel Expense Policies and Procedures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agencies: Various Pass-Through Entities: Various AL Numbers and Titles: Various – Research and Development Cluster Federal Award Numbers: Various Questioned Costs: None Identified Description: The University did not comply with payroll and travel expense policies and procedures. Background Information: During the year ended June 30, 2024, the Georgia Institute of Technology’s (“GIT” or the “Institute”) Department of Internal Audit completed audits of compliance with payroll and travel expense policies and procedures of two Schools within the Institute and identified noncompliance with those policies and procedures. Criteria: • Uniform Guidance 2 CFR § 200.302 Financial management • Uniform Guidance 2 CFR § 200.308 – Revision of budget and program plans • Uniform Guidance 2 CFR § 200.403 – Factors affecting allowability of costs • Uniform Guidance 2 CFR § 200.404 – Reasonable costs • Uniform Guidance 2 CFR § 200.405 – Allocable costs • Uniform Guidance 2 CFR § 200.430 – Compensation – personal services • Uniform Guidance 2 CFR § 200.475 – Travel costs • Uniform Guidance 2 CFR § 200.432 – Conferences • Title 41 CFR § 301-11.12 • Title 41 CFR § 301-11.200 Subpart C – Reduced per Diem Condition: • Noncompliance with travel policies • Noncompliance with payroll expense policies and procedures Cause: • Lack of sufficient controls for proper review and approval of travel authorizations and expensed transactions associated with sponsored award expenses • Lack of sufficient controls to ensure time and effort is properly charged to sponsored awards • Lack of consistency enforcing payroll expense policies for sponsored award management Effect: Payroll and travel expenditures may not be in compliance with federal or grant award provisions. Recommendation: • Complete and approve spend authorizations before travel to validate the necessity and reasonableness of expenses. • Include detailed justifications in spend authorizations for the travel purpose and award benefit. • Require sufficient justification for payroll expenses charged to sponsored awards, particularly for significant variances in effort. • Update internal control policies to enhance oversight and verification of time and effort reporting. This should include clear guidelines on the documentation required to support the work performed and the consequences of non-compliance. Views of Responsible Officials: Management agrees with the finding. See management’s corrective action plan.
2024-038 Noncompliance with Payroll and Travel Expense Policies and Procedures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agencies: Various Pass-Through Entities: Various AL Numbers and Titles: Various – Research and Development Cluster Federal Award Numbers: Various Questioned Costs: None Identified Description: The University did not comply with payroll and travel expense policies and procedures. Background Information: During the year ended June 30, 2024, the Georgia Institute of Technology’s (“GIT” or the “Institute”) Department of Internal Audit completed audits of compliance with payroll and travel expense policies and procedures of two Schools within the Institute and identified noncompliance with those policies and procedures. Criteria: • Uniform Guidance 2 CFR § 200.302 Financial management • Uniform Guidance 2 CFR § 200.308 – Revision of budget and program plans • Uniform Guidance 2 CFR § 200.403 – Factors affecting allowability of costs • Uniform Guidance 2 CFR § 200.404 – Reasonable costs • Uniform Guidance 2 CFR § 200.405 – Allocable costs • Uniform Guidance 2 CFR § 200.430 – Compensation – personal services • Uniform Guidance 2 CFR § 200.475 – Travel costs • Uniform Guidance 2 CFR § 200.432 – Conferences • Title 41 CFR § 301-11.12 • Title 41 CFR § 301-11.200 Subpart C – Reduced per Diem Condition: • Noncompliance with travel policies • Noncompliance with payroll expense policies and procedures Cause: • Lack of sufficient controls for proper review and approval of travel authorizations and expensed transactions associated with sponsored award expenses • Lack of sufficient controls to ensure time and effort is properly charged to sponsored awards • Lack of consistency enforcing payroll expense policies for sponsored award management Effect: Payroll and travel expenditures may not be in compliance with federal or grant award provisions. Recommendation: • Complete and approve spend authorizations before travel to validate the necessity and reasonableness of expenses. • Include detailed justifications in spend authorizations for the travel purpose and award benefit. • Require sufficient justification for payroll expenses charged to sponsored awards, particularly for significant variances in effort. • Update internal control policies to enhance oversight and verification of time and effort reporting. This should include clear guidelines on the documentation required to support the work performed and the consequences of non-compliance. Views of Responsible Officials: Management agrees with the finding. See management’s corrective action plan.
2024-038 Noncompliance with Payroll and Travel Expense Policies and Procedures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agencies: Various Pass-Through Entities: Various AL Numbers and Titles: Various – Research and Development Cluster Federal Award Numbers: Various Questioned Costs: None Identified Description: The University did not comply with payroll and travel expense policies and procedures. Background Information: During the year ended June 30, 2024, the Georgia Institute of Technology’s (“GIT” or the “Institute”) Department of Internal Audit completed audits of compliance with payroll and travel expense policies and procedures of two Schools within the Institute and identified noncompliance with those policies and procedures. Criteria: • Uniform Guidance 2 CFR § 200.302 Financial management • Uniform Guidance 2 CFR § 200.308 – Revision of budget and program plans • Uniform Guidance 2 CFR § 200.403 – Factors affecting allowability of costs • Uniform Guidance 2 CFR § 200.404 – Reasonable costs • Uniform Guidance 2 CFR § 200.405 – Allocable costs • Uniform Guidance 2 CFR § 200.430 – Compensation – personal services • Uniform Guidance 2 CFR § 200.475 – Travel costs • Uniform Guidance 2 CFR § 200.432 – Conferences • Title 41 CFR § 301-11.12 • Title 41 CFR § 301-11.200 Subpart C – Reduced per Diem Condition: • Noncompliance with travel policies • Noncompliance with payroll expense policies and procedures Cause: • Lack of sufficient controls for proper review and approval of travel authorizations and expensed transactions associated with sponsored award expenses • Lack of sufficient controls to ensure time and effort is properly charged to sponsored awards • Lack of consistency enforcing payroll expense policies for sponsored award management Effect: Payroll and travel expenditures may not be in compliance with federal or grant award provisions. Recommendation: • Complete and approve spend authorizations before travel to validate the necessity and reasonableness of expenses. • Include detailed justifications in spend authorizations for the travel purpose and award benefit. • Require sufficient justification for payroll expenses charged to sponsored awards, particularly for significant variances in effort. • Update internal control policies to enhance oversight and verification of time and effort reporting. This should include clear guidelines on the documentation required to support the work performed and the consequences of non-compliance. Views of Responsible Officials: Management agrees with the finding. See management’s corrective action plan.
2024-038 Noncompliance with Payroll and Travel Expense Policies and Procedures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agencies: Various Pass-Through Entities: Various AL Numbers and Titles: Various – Research and Development Cluster Federal Award Numbers: Various Questioned Costs: None Identified Description: The University did not comply with payroll and travel expense policies and procedures. Background Information: During the year ended June 30, 2024, the Georgia Institute of Technology’s (“GIT” or the “Institute”) Department of Internal Audit completed audits of compliance with payroll and travel expense policies and procedures of two Schools within the Institute and identified noncompliance with those policies and procedures. Criteria: • Uniform Guidance 2 CFR § 200.302 Financial management • Uniform Guidance 2 CFR § 200.308 – Revision of budget and program plans • Uniform Guidance 2 CFR § 200.403 – Factors affecting allowability of costs • Uniform Guidance 2 CFR § 200.404 – Reasonable costs • Uniform Guidance 2 CFR § 200.405 – Allocable costs • Uniform Guidance 2 CFR § 200.430 – Compensation – personal services • Uniform Guidance 2 CFR § 200.475 – Travel costs • Uniform Guidance 2 CFR § 200.432 – Conferences • Title 41 CFR § 301-11.12 • Title 41 CFR § 301-11.200 Subpart C – Reduced per Diem Condition: • Noncompliance with travel policies • Noncompliance with payroll expense policies and procedures Cause: • Lack of sufficient controls for proper review and approval of travel authorizations and expensed transactions associated with sponsored award expenses • Lack of sufficient controls to ensure time and effort is properly charged to sponsored awards • Lack of consistency enforcing payroll expense policies for sponsored award management Effect: Payroll and travel expenditures may not be in compliance with federal or grant award provisions. Recommendation: • Complete and approve spend authorizations before travel to validate the necessity and reasonableness of expenses. • Include detailed justifications in spend authorizations for the travel purpose and award benefit. • Require sufficient justification for payroll expenses charged to sponsored awards, particularly for significant variances in effort. • Update internal control policies to enhance oversight and verification of time and effort reporting. This should include clear guidelines on the documentation required to support the work performed and the consequences of non-compliance. Views of Responsible Officials: Management agrees with the finding. See management’s corrective action plan.
2024-038 Noncompliance with Payroll and Travel Expense Policies and Procedures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agencies: Various Pass-Through Entities: Various AL Numbers and Titles: Various – Research and Development Cluster Federal Award Numbers: Various Questioned Costs: None Identified Description: The University did not comply with payroll and travel expense policies and procedures. Background Information: During the year ended June 30, 2024, the Georgia Institute of Technology’s (“GIT” or the “Institute”) Department of Internal Audit completed audits of compliance with payroll and travel expense policies and procedures of two Schools within the Institute and identified noncompliance with those policies and procedures. Criteria: • Uniform Guidance 2 CFR § 200.302 Financial management • Uniform Guidance 2 CFR § 200.308 – Revision of budget and program plans • Uniform Guidance 2 CFR § 200.403 – Factors affecting allowability of costs • Uniform Guidance 2 CFR § 200.404 – Reasonable costs • Uniform Guidance 2 CFR § 200.405 – Allocable costs • Uniform Guidance 2 CFR § 200.430 – Compensation – personal services • Uniform Guidance 2 CFR § 200.475 – Travel costs • Uniform Guidance 2 CFR § 200.432 – Conferences • Title 41 CFR § 301-11.12 • Title 41 CFR § 301-11.200 Subpart C – Reduced per Diem Condition: • Noncompliance with travel policies • Noncompliance with payroll expense policies and procedures Cause: • Lack of sufficient controls for proper review and approval of travel authorizations and expensed transactions associated with sponsored award expenses • Lack of sufficient controls to ensure time and effort is properly charged to sponsored awards • Lack of consistency enforcing payroll expense policies for sponsored award management Effect: Payroll and travel expenditures may not be in compliance with federal or grant award provisions. Recommendation: • Complete and approve spend authorizations before travel to validate the necessity and reasonableness of expenses. • Include detailed justifications in spend authorizations for the travel purpose and award benefit. • Require sufficient justification for payroll expenses charged to sponsored awards, particularly for significant variances in effort. • Update internal control policies to enhance oversight and verification of time and effort reporting. This should include clear guidelines on the documentation required to support the work performed and the consequences of non-compliance. Views of Responsible Officials: Management agrees with the finding. See management’s corrective action plan.
2024-038 Noncompliance with Payroll and Travel Expense Policies and Procedures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agencies: Various Pass-Through Entities: Various AL Numbers and Titles: Various – Research and Development Cluster Federal Award Numbers: Various Questioned Costs: None Identified Description: The University did not comply with payroll and travel expense policies and procedures. Background Information: During the year ended June 30, 2024, the Georgia Institute of Technology’s (“GIT” or the “Institute”) Department of Internal Audit completed audits of compliance with payroll and travel expense policies and procedures of two Schools within the Institute and identified noncompliance with those policies and procedures. Criteria: • Uniform Guidance 2 CFR § 200.302 Financial management • Uniform Guidance 2 CFR § 200.308 – Revision of budget and program plans • Uniform Guidance 2 CFR § 200.403 – Factors affecting allowability of costs • Uniform Guidance 2 CFR § 200.404 – Reasonable costs • Uniform Guidance 2 CFR § 200.405 – Allocable costs • Uniform Guidance 2 CFR § 200.430 – Compensation – personal services • Uniform Guidance 2 CFR § 200.475 – Travel costs • Uniform Guidance 2 CFR § 200.432 – Conferences • Title 41 CFR § 301-11.12 • Title 41 CFR § 301-11.200 Subpart C – Reduced per Diem Condition: • Noncompliance with travel policies • Noncompliance with payroll expense policies and procedures Cause: • Lack of sufficient controls for proper review and approval of travel authorizations and expensed transactions associated with sponsored award expenses • Lack of sufficient controls to ensure time and effort is properly charged to sponsored awards • Lack of consistency enforcing payroll expense policies for sponsored award management Effect: Payroll and travel expenditures may not be in compliance with federal or grant award provisions. Recommendation: • Complete and approve spend authorizations before travel to validate the necessity and reasonableness of expenses. • Include detailed justifications in spend authorizations for the travel purpose and award benefit. • Require sufficient justification for payroll expenses charged to sponsored awards, particularly for significant variances in effort. • Update internal control policies to enhance oversight and verification of time and effort reporting. This should include clear guidelines on the documentation required to support the work performed and the consequences of non-compliance. Views of Responsible Officials: Management agrees with the finding. See management’s corrective action plan.
2024-038 Noncompliance with Payroll and Travel Expense Policies and Procedures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agencies: Various Pass-Through Entities: Various AL Numbers and Titles: Various – Research and Development Cluster Federal Award Numbers: Various Questioned Costs: None Identified Description: The University did not comply with payroll and travel expense policies and procedures. Background Information: During the year ended June 30, 2024, the Georgia Institute of Technology’s (“GIT” or the “Institute”) Department of Internal Audit completed audits of compliance with payroll and travel expense policies and procedures of two Schools within the Institute and identified noncompliance with those policies and procedures. Criteria: • Uniform Guidance 2 CFR § 200.302 Financial management • Uniform Guidance 2 CFR § 200.308 – Revision of budget and program plans • Uniform Guidance 2 CFR § 200.403 – Factors affecting allowability of costs • Uniform Guidance 2 CFR § 200.404 – Reasonable costs • Uniform Guidance 2 CFR § 200.405 – Allocable costs • Uniform Guidance 2 CFR § 200.430 – Compensation – personal services • Uniform Guidance 2 CFR § 200.475 – Travel costs • Uniform Guidance 2 CFR § 200.432 – Conferences • Title 41 CFR § 301-11.12 • Title 41 CFR § 301-11.200 Subpart C – Reduced per Diem Condition: • Noncompliance with travel policies • Noncompliance with payroll expense policies and procedures Cause: • Lack of sufficient controls for proper review and approval of travel authorizations and expensed transactions associated with sponsored award expenses • Lack of sufficient controls to ensure time and effort is properly charged to sponsored awards • Lack of consistency enforcing payroll expense policies for sponsored award management Effect: Payroll and travel expenditures may not be in compliance with federal or grant award provisions. Recommendation: • Complete and approve spend authorizations before travel to validate the necessity and reasonableness of expenses. • Include detailed justifications in spend authorizations for the travel purpose and award benefit. • Require sufficient justification for payroll expenses charged to sponsored awards, particularly for significant variances in effort. • Update internal control policies to enhance oversight and verification of time and effort reporting. This should include clear guidelines on the documentation required to support the work performed and the consequences of non-compliance. Views of Responsible Officials: Management agrees with the finding. See management’s corrective action plan.
2024-038 Noncompliance with Payroll and Travel Expense Policies and Procedures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agencies: Various Pass-Through Entities: Various AL Numbers and Titles: Various – Research and Development Cluster Federal Award Numbers: Various Questioned Costs: None Identified Description: The University did not comply with payroll and travel expense policies and procedures. Background Information: During the year ended June 30, 2024, the Georgia Institute of Technology’s (“GIT” or the “Institute”) Department of Internal Audit completed audits of compliance with payroll and travel expense policies and procedures of two Schools within the Institute and identified noncompliance with those policies and procedures. Criteria: • Uniform Guidance 2 CFR § 200.302 Financial management • Uniform Guidance 2 CFR § 200.308 – Revision of budget and program plans • Uniform Guidance 2 CFR § 200.403 – Factors affecting allowability of costs • Uniform Guidance 2 CFR § 200.404 – Reasonable costs • Uniform Guidance 2 CFR § 200.405 – Allocable costs • Uniform Guidance 2 CFR § 200.430 – Compensation – personal services • Uniform Guidance 2 CFR § 200.475 – Travel costs • Uniform Guidance 2 CFR § 200.432 – Conferences • Title 41 CFR § 301-11.12 • Title 41 CFR § 301-11.200 Subpart C – Reduced per Diem Condition: • Noncompliance with travel policies • Noncompliance with payroll expense policies and procedures Cause: • Lack of sufficient controls for proper review and approval of travel authorizations and expensed transactions associated with sponsored award expenses • Lack of sufficient controls to ensure time and effort is properly charged to sponsored awards • Lack of consistency enforcing payroll expense policies for sponsored award management Effect: Payroll and travel expenditures may not be in compliance with federal or grant award provisions. Recommendation: • Complete and approve spend authorizations before travel to validate the necessity and reasonableness of expenses. • Include detailed justifications in spend authorizations for the travel purpose and award benefit. • Require sufficient justification for payroll expenses charged to sponsored awards, particularly for significant variances in effort. • Update internal control policies to enhance oversight and verification of time and effort reporting. This should include clear guidelines on the documentation required to support the work performed and the consequences of non-compliance. Views of Responsible Officials: Management agrees with the finding. See management’s corrective action plan.
2024-038 Noncompliance with Payroll and Travel Expense Policies and Procedures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agencies: Various Pass-Through Entities: Various AL Numbers and Titles: Various – Research and Development Cluster Federal Award Numbers: Various Questioned Costs: None Identified Description: The University did not comply with payroll and travel expense policies and procedures. Background Information: During the year ended June 30, 2024, the Georgia Institute of Technology’s (“GIT” or the “Institute”) Department of Internal Audit completed audits of compliance with payroll and travel expense policies and procedures of two Schools within the Institute and identified noncompliance with those policies and procedures. Criteria: • Uniform Guidance 2 CFR § 200.302 Financial management • Uniform Guidance 2 CFR § 200.308 – Revision of budget and program plans • Uniform Guidance 2 CFR § 200.403 – Factors affecting allowability of costs • Uniform Guidance 2 CFR § 200.404 – Reasonable costs • Uniform Guidance 2 CFR § 200.405 – Allocable costs • Uniform Guidance 2 CFR § 200.430 – Compensation – personal services • Uniform Guidance 2 CFR § 200.475 – Travel costs • Uniform Guidance 2 CFR § 200.432 – Conferences • Title 41 CFR § 301-11.12 • Title 41 CFR § 301-11.200 Subpart C – Reduced per Diem Condition: • Noncompliance with travel policies • Noncompliance with payroll expense policies and procedures Cause: • Lack of sufficient controls for proper review and approval of travel authorizations and expensed transactions associated with sponsored award expenses • Lack of sufficient controls to ensure time and effort is properly charged to sponsored awards • Lack of consistency enforcing payroll expense policies for sponsored award management Effect: Payroll and travel expenditures may not be in compliance with federal or grant award provisions. Recommendation: • Complete and approve spend authorizations before travel to validate the necessity and reasonableness of expenses. • Include detailed justifications in spend authorizations for the travel purpose and award benefit. • Require sufficient justification for payroll expenses charged to sponsored awards, particularly for significant variances in effort. • Update internal control policies to enhance oversight and verification of time and effort reporting. This should include clear guidelines on the documentation required to support the work performed and the consequences of non-compliance. Views of Responsible Officials: Management agrees with the finding. See management’s corrective action plan.
2024-038 Noncompliance with Payroll and Travel Expense Policies and Procedures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agencies: Various Pass-Through Entities: Various AL Numbers and Titles: Various – Research and Development Cluster Federal Award Numbers: Various Questioned Costs: None Identified Description: The University did not comply with payroll and travel expense policies and procedures. Background Information: During the year ended June 30, 2024, the Georgia Institute of Technology’s (“GIT” or the “Institute”) Department of Internal Audit completed audits of compliance with payroll and travel expense policies and procedures of two Schools within the Institute and identified noncompliance with those policies and procedures. Criteria: • Uniform Guidance 2 CFR § 200.302 Financial management • Uniform Guidance 2 CFR § 200.308 – Revision of budget and program plans • Uniform Guidance 2 CFR § 200.403 – Factors affecting allowability of costs • Uniform Guidance 2 CFR § 200.404 – Reasonable costs • Uniform Guidance 2 CFR § 200.405 – Allocable costs • Uniform Guidance 2 CFR § 200.430 – Compensation – personal services • Uniform Guidance 2 CFR § 200.475 – Travel costs • Uniform Guidance 2 CFR § 200.432 – Conferences • Title 41 CFR § 301-11.12 • Title 41 CFR § 301-11.200 Subpart C – Reduced per Diem Condition: • Noncompliance with travel policies • Noncompliance with payroll expense policies and procedures Cause: • Lack of sufficient controls for proper review and approval of travel authorizations and expensed transactions associated with sponsored award expenses • Lack of sufficient controls to ensure time and effort is properly charged to sponsored awards • Lack of consistency enforcing payroll expense policies for sponsored award management Effect: Payroll and travel expenditures may not be in compliance with federal or grant award provisions. Recommendation: • Complete and approve spend authorizations before travel to validate the necessity and reasonableness of expenses. • Include detailed justifications in spend authorizations for the travel purpose and award benefit. • Require sufficient justification for payroll expenses charged to sponsored awards, particularly for significant variances in effort. • Update internal control policies to enhance oversight and verification of time and effort reporting. This should include clear guidelines on the documentation required to support the work performed and the consequences of non-compliance. Views of Responsible Officials: Management agrees with the finding. See management’s corrective action plan.
2024-038 Noncompliance with Payroll and Travel Expense Policies and Procedures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agencies: Various Pass-Through Entities: Various AL Numbers and Titles: Various – Research and Development Cluster Federal Award Numbers: Various Questioned Costs: None Identified Description: The University did not comply with payroll and travel expense policies and procedures. Background Information: During the year ended June 30, 2024, the Georgia Institute of Technology’s (“GIT” or the “Institute”) Department of Internal Audit completed audits of compliance with payroll and travel expense policies and procedures of two Schools within the Institute and identified noncompliance with those policies and procedures. Criteria: • Uniform Guidance 2 CFR § 200.302 Financial management • Uniform Guidance 2 CFR § 200.308 – Revision of budget and program plans • Uniform Guidance 2 CFR § 200.403 – Factors affecting allowability of costs • Uniform Guidance 2 CFR § 200.404 – Reasonable costs • Uniform Guidance 2 CFR § 200.405 – Allocable costs • Uniform Guidance 2 CFR § 200.430 – Compensation – personal services • Uniform Guidance 2 CFR § 200.475 – Travel costs • Uniform Guidance 2 CFR § 200.432 – Conferences • Title 41 CFR § 301-11.12 • Title 41 CFR § 301-11.200 Subpart C – Reduced per Diem Condition: • Noncompliance with travel policies • Noncompliance with payroll expense policies and procedures Cause: • Lack of sufficient controls for proper review and approval of travel authorizations and expensed transactions associated with sponsored award expenses • Lack of sufficient controls to ensure time and effort is properly charged to sponsored awards • Lack of consistency enforcing payroll expense policies for sponsored award management Effect: Payroll and travel expenditures may not be in compliance with federal or grant award provisions. Recommendation: • Complete and approve spend authorizations before travel to validate the necessity and reasonableness of expenses. • Include detailed justifications in spend authorizations for the travel purpose and award benefit. • Require sufficient justification for payroll expenses charged to sponsored awards, particularly for significant variances in effort. • Update internal control policies to enhance oversight and verification of time and effort reporting. This should include clear guidelines on the documentation required to support the work performed and the consequences of non-compliance. Views of Responsible Officials: Management agrees with the finding. See management’s corrective action plan.
2024-038 Noncompliance with Payroll and Travel Expense Policies and Procedures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agencies: Various Pass-Through Entities: Various AL Numbers and Titles: Various – Research and Development Cluster Federal Award Numbers: Various Questioned Costs: None Identified Description: The University did not comply with payroll and travel expense policies and procedures. Background Information: During the year ended June 30, 2024, the Georgia Institute of Technology’s (“GIT” or the “Institute”) Department of Internal Audit completed audits of compliance with payroll and travel expense policies and procedures of two Schools within the Institute and identified noncompliance with those policies and procedures. Criteria: • Uniform Guidance 2 CFR § 200.302 Financial management • Uniform Guidance 2 CFR § 200.308 – Revision of budget and program plans • Uniform Guidance 2 CFR § 200.403 – Factors affecting allowability of costs • Uniform Guidance 2 CFR § 200.404 – Reasonable costs • Uniform Guidance 2 CFR § 200.405 – Allocable costs • Uniform Guidance 2 CFR § 200.430 – Compensation – personal services • Uniform Guidance 2 CFR § 200.475 – Travel costs • Uniform Guidance 2 CFR § 200.432 – Conferences • Title 41 CFR § 301-11.12 • Title 41 CFR § 301-11.200 Subpart C – Reduced per Diem Condition: • Noncompliance with travel policies • Noncompliance with payroll expense policies and procedures Cause: • Lack of sufficient controls for proper review and approval of travel authorizations and expensed transactions associated with sponsored award expenses • Lack of sufficient controls to ensure time and effort is properly charged to sponsored awards • Lack of consistency enforcing payroll expense policies for sponsored award management Effect: Payroll and travel expenditures may not be in compliance with federal or grant award provisions. Recommendation: • Complete and approve spend authorizations before travel to validate the necessity and reasonableness of expenses. • Include detailed justifications in spend authorizations for the travel purpose and award benefit. • Require sufficient justification for payroll expenses charged to sponsored awards, particularly for significant variances in effort. • Update internal control policies to enhance oversight and verification of time and effort reporting. This should include clear guidelines on the documentation required to support the work performed and the consequences of non-compliance. Views of Responsible Officials: Management agrees with the finding. See management’s corrective action plan.
2024-038 Noncompliance with Payroll and Travel Expense Policies and Procedures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agencies: Various Pass-Through Entities: Various AL Numbers and Titles: Various – Research and Development Cluster Federal Award Numbers: Various Questioned Costs: None Identified Description: The University did not comply with payroll and travel expense policies and procedures. Background Information: During the year ended June 30, 2024, the Georgia Institute of Technology’s (“GIT” or the “Institute”) Department of Internal Audit completed audits of compliance with payroll and travel expense policies and procedures of two Schools within the Institute and identified noncompliance with those policies and procedures. Criteria: • Uniform Guidance 2 CFR § 200.302 Financial management • Uniform Guidance 2 CFR § 200.308 – Revision of budget and program plans • Uniform Guidance 2 CFR § 200.403 – Factors affecting allowability of costs • Uniform Guidance 2 CFR § 200.404 – Reasonable costs • Uniform Guidance 2 CFR § 200.405 – Allocable costs • Uniform Guidance 2 CFR § 200.430 – Compensation – personal services • Uniform Guidance 2 CFR § 200.475 – Travel costs • Uniform Guidance 2 CFR § 200.432 – Conferences • Title 41 CFR § 301-11.12 • Title 41 CFR § 301-11.200 Subpart C – Reduced per Diem Condition: • Noncompliance with travel policies • Noncompliance with payroll expense policies and procedures Cause: • Lack of sufficient controls for proper review and approval of travel authorizations and expensed transactions associated with sponsored award expenses • Lack of sufficient controls to ensure time and effort is properly charged to sponsored awards • Lack of consistency enforcing payroll expense policies for sponsored award management Effect: Payroll and travel expenditures may not be in compliance with federal or grant award provisions. Recommendation: • Complete and approve spend authorizations before travel to validate the necessity and reasonableness of expenses. • Include detailed justifications in spend authorizations for the travel purpose and award benefit. • Require sufficient justification for payroll expenses charged to sponsored awards, particularly for significant variances in effort. • Update internal control policies to enhance oversight and verification of time and effort reporting. This should include clear guidelines on the documentation required to support the work performed and the consequences of non-compliance. Views of Responsible Officials: Management agrees with the finding. See management’s corrective action plan.
2024-038 Noncompliance with Payroll and Travel Expense Policies and Procedures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agencies: Various Pass-Through Entities: Various AL Numbers and Titles: Various – Research and Development Cluster Federal Award Numbers: Various Questioned Costs: None Identified Description: The University did not comply with payroll and travel expense policies and procedures. Background Information: During the year ended June 30, 2024, the Georgia Institute of Technology’s (“GIT” or the “Institute”) Department of Internal Audit completed audits of compliance with payroll and travel expense policies and procedures of two Schools within the Institute and identified noncompliance with those policies and procedures. Criteria: • Uniform Guidance 2 CFR § 200.302 Financial management • Uniform Guidance 2 CFR § 200.308 – Revision of budget and program plans • Uniform Guidance 2 CFR § 200.403 – Factors affecting allowability of costs • Uniform Guidance 2 CFR § 200.404 – Reasonable costs • Uniform Guidance 2 CFR § 200.405 – Allocable costs • Uniform Guidance 2 CFR § 200.430 – Compensation – personal services • Uniform Guidance 2 CFR § 200.475 – Travel costs • Uniform Guidance 2 CFR § 200.432 – Conferences • Title 41 CFR § 301-11.12 • Title 41 CFR § 301-11.200 Subpart C – Reduced per Diem Condition: • Noncompliance with travel policies • Noncompliance with payroll expense policies and procedures Cause: • Lack of sufficient controls for proper review and approval of travel authorizations and expensed transactions associated with sponsored award expenses • Lack of sufficient controls to ensure time and effort is properly charged to sponsored awards • Lack of consistency enforcing payroll expense policies for sponsored award management Effect: Payroll and travel expenditures may not be in compliance with federal or grant award provisions. Recommendation: • Complete and approve spend authorizations before travel to validate the necessity and reasonableness of expenses. • Include detailed justifications in spend authorizations for the travel purpose and award benefit. • Require sufficient justification for payroll expenses charged to sponsored awards, particularly for significant variances in effort. • Update internal control policies to enhance oversight and verification of time and effort reporting. This should include clear guidelines on the documentation required to support the work performed and the consequences of non-compliance. Views of Responsible Officials: Management agrees with the finding. See management’s corrective action plan.
2024-038 Noncompliance with Payroll and Travel Expense Policies and Procedures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agencies: Various Pass-Through Entities: Various AL Numbers and Titles: Various – Research and Development Cluster Federal Award Numbers: Various Questioned Costs: None Identified Description: The University did not comply with payroll and travel expense policies and procedures. Background Information: During the year ended June 30, 2024, the Georgia Institute of Technology’s (“GIT” or the “Institute”) Department of Internal Audit completed audits of compliance with payroll and travel expense policies and procedures of two Schools within the Institute and identified noncompliance with those policies and procedures. Criteria: • Uniform Guidance 2 CFR § 200.302 Financial management • Uniform Guidance 2 CFR § 200.308 – Revision of budget and program plans • Uniform Guidance 2 CFR § 200.403 – Factors affecting allowability of costs • Uniform Guidance 2 CFR § 200.404 – Reasonable costs • Uniform Guidance 2 CFR § 200.405 – Allocable costs • Uniform Guidance 2 CFR § 200.430 – Compensation – personal services • Uniform Guidance 2 CFR § 200.475 – Travel costs • Uniform Guidance 2 CFR § 200.432 – Conferences • Title 41 CFR § 301-11.12 • Title 41 CFR § 301-11.200 Subpart C – Reduced per Diem Condition: • Noncompliance with travel policies • Noncompliance with payroll expense policies and procedures Cause: • Lack of sufficient controls for proper review and approval of travel authorizations and expensed transactions associated with sponsored award expenses • Lack of sufficient controls to ensure time and effort is properly charged to sponsored awards • Lack of consistency enforcing payroll expense policies for sponsored award management Effect: Payroll and travel expenditures may not be in compliance with federal or grant award provisions. Recommendation: • Complete and approve spend authorizations before travel to validate the necessity and reasonableness of expenses. • Include detailed justifications in spend authorizations for the travel purpose and award benefit. • Require sufficient justification for payroll expenses charged to sponsored awards, particularly for significant variances in effort. • Update internal control policies to enhance oversight and verification of time and effort reporting. This should include clear guidelines on the documentation required to support the work performed and the consequences of non-compliance. Views of Responsible Officials: Management agrees with the finding. See management’s corrective action plan.
2024-038 Noncompliance with Payroll and Travel Expense Policies and Procedures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agencies: Various Pass-Through Entities: Various AL Numbers and Titles: Various – Research and Development Cluster Federal Award Numbers: Various Questioned Costs: None Identified Description: The University did not comply with payroll and travel expense policies and procedures. Background Information: During the year ended June 30, 2024, the Georgia Institute of Technology’s (“GIT” or the “Institute”) Department of Internal Audit completed audits of compliance with payroll and travel expense policies and procedures of two Schools within the Institute and identified noncompliance with those policies and procedures. Criteria: • Uniform Guidance 2 CFR § 200.302 Financial management • Uniform Guidance 2 CFR § 200.308 – Revision of budget and program plans • Uniform Guidance 2 CFR § 200.403 – Factors affecting allowability of costs • Uniform Guidance 2 CFR § 200.404 – Reasonable costs • Uniform Guidance 2 CFR § 200.405 – Allocable costs • Uniform Guidance 2 CFR § 200.430 – Compensation – personal services • Uniform Guidance 2 CFR § 200.475 – Travel costs • Uniform Guidance 2 CFR § 200.432 – Conferences • Title 41 CFR § 301-11.12 • Title 41 CFR § 301-11.200 Subpart C – Reduced per Diem Condition: • Noncompliance with travel policies • Noncompliance with payroll expense policies and procedures Cause: • Lack of sufficient controls for proper review and approval of travel authorizations and expensed transactions associated with sponsored award expenses • Lack of sufficient controls to ensure time and effort is properly charged to sponsored awards • Lack of consistency enforcing payroll expense policies for sponsored award management Effect: Payroll and travel expenditures may not be in compliance with federal or grant award provisions. Recommendation: • Complete and approve spend authorizations before travel to validate the necessity and reasonableness of expenses. • Include detailed justifications in spend authorizations for the travel purpose and award benefit. • Require sufficient justification for payroll expenses charged to sponsored awards, particularly for significant variances in effort. • Update internal control policies to enhance oversight and verification of time and effort reporting. This should include clear guidelines on the documentation required to support the work performed and the consequences of non-compliance. Views of Responsible Officials: Management agrees with the finding. See management’s corrective action plan.
2024-038 Noncompliance with Payroll and Travel Expense Policies and Procedures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agencies: Various Pass-Through Entities: Various AL Numbers and Titles: Various – Research and Development Cluster Federal Award Numbers: Various Questioned Costs: None Identified Description: The University did not comply with payroll and travel expense policies and procedures. Background Information: During the year ended June 30, 2024, the Georgia Institute of Technology’s (“GIT” or the “Institute”) Department of Internal Audit completed audits of compliance with payroll and travel expense policies and procedures of two Schools within the Institute and identified noncompliance with those policies and procedures. Criteria: • Uniform Guidance 2 CFR § 200.302 Financial management • Uniform Guidance 2 CFR § 200.308 – Revision of budget and program plans • Uniform Guidance 2 CFR § 200.403 – Factors affecting allowability of costs • Uniform Guidance 2 CFR § 200.404 – Reasonable costs • Uniform Guidance 2 CFR § 200.405 – Allocable costs • Uniform Guidance 2 CFR § 200.430 – Compensation – personal services • Uniform Guidance 2 CFR § 200.475 – Travel costs • Uniform Guidance 2 CFR § 200.432 – Conferences • Title 41 CFR § 301-11.12 • Title 41 CFR § 301-11.200 Subpart C – Reduced per Diem Condition: • Noncompliance with travel policies • Noncompliance with payroll expense policies and procedures Cause: • Lack of sufficient controls for proper review and approval of travel authorizations and expensed transactions associated with sponsored award expenses • Lack of sufficient controls to ensure time and effort is properly charged to sponsored awards • Lack of consistency enforcing payroll expense policies for sponsored award management Effect: Payroll and travel expenditures may not be in compliance with federal or grant award provisions. Recommendation: • Complete and approve spend authorizations before travel to validate the necessity and reasonableness of expenses. • Include detailed justifications in spend authorizations for the travel purpose and award benefit. • Require sufficient justification for payroll expenses charged to sponsored awards, particularly for significant variances in effort. • Update internal control policies to enhance oversight and verification of time and effort reporting. This should include clear guidelines on the documentation required to support the work performed and the consequences of non-compliance. Views of Responsible Officials: Management agrees with the finding. See management’s corrective action plan.
2024-038 Noncompliance with Payroll and Travel Expense Policies and Procedures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agencies: Various Pass-Through Entities: Various AL Numbers and Titles: Various – Research and Development Cluster Federal Award Numbers: Various Questioned Costs: None Identified Description: The University did not comply with payroll and travel expense policies and procedures. Background Information: During the year ended June 30, 2024, the Georgia Institute of Technology’s (“GIT” or the “Institute”) Department of Internal Audit completed audits of compliance with payroll and travel expense policies and procedures of two Schools within the Institute and identified noncompliance with those policies and procedures. Criteria: • Uniform Guidance 2 CFR § 200.302 Financial management • Uniform Guidance 2 CFR § 200.308 – Revision of budget and program plans • Uniform Guidance 2 CFR § 200.403 – Factors affecting allowability of costs • Uniform Guidance 2 CFR § 200.404 – Reasonable costs • Uniform Guidance 2 CFR § 200.405 – Allocable costs • Uniform Guidance 2 CFR § 200.430 – Compensation – personal services • Uniform Guidance 2 CFR § 200.475 – Travel costs • Uniform Guidance 2 CFR § 200.432 – Conferences • Title 41 CFR § 301-11.12 • Title 41 CFR § 301-11.200 Subpart C – Reduced per Diem Condition: • Noncompliance with travel policies • Noncompliance with payroll expense policies and procedures Cause: • Lack of sufficient controls for proper review and approval of travel authorizations and expensed transactions associated with sponsored award expenses • Lack of sufficient controls to ensure time and effort is properly charged to sponsored awards • Lack of consistency enforcing payroll expense policies for sponsored award management Effect: Payroll and travel expenditures may not be in compliance with federal or grant award provisions. Recommendation: • Complete and approve spend authorizations before travel to validate the necessity and reasonableness of expenses. • Include detailed justifications in spend authorizations for the travel purpose and award benefit. • Require sufficient justification for payroll expenses charged to sponsored awards, particularly for significant variances in effort. • Update internal control policies to enhance oversight and verification of time and effort reporting. This should include clear guidelines on the documentation required to support the work performed and the consequences of non-compliance. Views of Responsible Officials: Management agrees with the finding. See management’s corrective action plan.
2024-038 Noncompliance with Payroll and Travel Expense Policies and Procedures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agencies: Various Pass-Through Entities: Various AL Numbers and Titles: Various – Research and Development Cluster Federal Award Numbers: Various Questioned Costs: None Identified Description: The University did not comply with payroll and travel expense policies and procedures. Background Information: During the year ended June 30, 2024, the Georgia Institute of Technology’s (“GIT” or the “Institute”) Department of Internal Audit completed audits of compliance with payroll and travel expense policies and procedures of two Schools within the Institute and identified noncompliance with those policies and procedures. Criteria: • Uniform Guidance 2 CFR § 200.302 Financial management • Uniform Guidance 2 CFR § 200.308 – Revision of budget and program plans • Uniform Guidance 2 CFR § 200.403 – Factors affecting allowability of costs • Uniform Guidance 2 CFR § 200.404 – Reasonable costs • Uniform Guidance 2 CFR § 200.405 – Allocable costs • Uniform Guidance 2 CFR § 200.430 – Compensation – personal services • Uniform Guidance 2 CFR § 200.475 – Travel costs • Uniform Guidance 2 CFR § 200.432 – Conferences • Title 41 CFR § 301-11.12 • Title 41 CFR § 301-11.200 Subpart C – Reduced per Diem Condition: • Noncompliance with travel policies • Noncompliance with payroll expense policies and procedures Cause: • Lack of sufficient controls for proper review and approval of travel authorizations and expensed transactions associated with sponsored award expenses • Lack of sufficient controls to ensure time and effort is properly charged to sponsored awards • Lack of consistency enforcing payroll expense policies for sponsored award management Effect: Payroll and travel expenditures may not be in compliance with federal or grant award provisions. Recommendation: • Complete and approve spend authorizations before travel to validate the necessity and reasonableness of expenses. • Include detailed justifications in spend authorizations for the travel purpose and award benefit. • Require sufficient justification for payroll expenses charged to sponsored awards, particularly for significant variances in effort. • Update internal control policies to enhance oversight and verification of time and effort reporting. This should include clear guidelines on the documentation required to support the work performed and the consequences of non-compliance. Views of Responsible Officials: Management agrees with the finding. See management’s corrective action plan.
2024-038 Noncompliance with Payroll and Travel Expense Policies and Procedures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agencies: Various Pass-Through Entities: Various AL Numbers and Titles: Various – Research and Development Cluster Federal Award Numbers: Various Questioned Costs: None Identified Description: The University did not comply with payroll and travel expense policies and procedures. Background Information: During the year ended June 30, 2024, the Georgia Institute of Technology’s (“GIT” or the “Institute”) Department of Internal Audit completed audits of compliance with payroll and travel expense policies and procedures of two Schools within the Institute and identified noncompliance with those policies and procedures. Criteria: • Uniform Guidance 2 CFR § 200.302 Financial management • Uniform Guidance 2 CFR § 200.308 – Revision of budget and program plans • Uniform Guidance 2 CFR § 200.403 – Factors affecting allowability of costs • Uniform Guidance 2 CFR § 200.404 – Reasonable costs • Uniform Guidance 2 CFR § 200.405 – Allocable costs • Uniform Guidance 2 CFR § 200.430 – Compensation – personal services • Uniform Guidance 2 CFR § 200.475 – Travel costs • Uniform Guidance 2 CFR § 200.432 – Conferences • Title 41 CFR § 301-11.12 • Title 41 CFR § 301-11.200 Subpart C – Reduced per Diem Condition: • Noncompliance with travel policies • Noncompliance with payroll expense policies and procedures Cause: • Lack of sufficient controls for proper review and approval of travel authorizations and expensed transactions associated with sponsored award expenses • Lack of sufficient controls to ensure time and effort is properly charged to sponsored awards • Lack of consistency enforcing payroll expense policies for sponsored award management Effect: Payroll and travel expenditures may not be in compliance with federal or grant award provisions. Recommendation: • Complete and approve spend authorizations before travel to validate the necessity and reasonableness of expenses. • Include detailed justifications in spend authorizations for the travel purpose and award benefit. • Require sufficient justification for payroll expenses charged to sponsored awards, particularly for significant variances in effort. • Update internal control policies to enhance oversight and verification of time and effort reporting. This should include clear guidelines on the documentation required to support the work performed and the consequences of non-compliance. Views of Responsible Officials: Management agrees with the finding. See management’s corrective action plan.
2024-038 Noncompliance with Payroll and Travel Expense Policies and Procedures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agencies: Various Pass-Through Entities: Various AL Numbers and Titles: Various – Research and Development Cluster Federal Award Numbers: Various Questioned Costs: None Identified Description: The University did not comply with payroll and travel expense policies and procedures. Background Information: During the year ended June 30, 2024, the Georgia Institute of Technology’s (“GIT” or the “Institute”) Department of Internal Audit completed audits of compliance with payroll and travel expense policies and procedures of two Schools within the Institute and identified noncompliance with those policies and procedures. Criteria: • Uniform Guidance 2 CFR § 200.302 Financial management • Uniform Guidance 2 CFR § 200.308 – Revision of budget and program plans • Uniform Guidance 2 CFR § 200.403 – Factors affecting allowability of costs • Uniform Guidance 2 CFR § 200.404 – Reasonable costs • Uniform Guidance 2 CFR § 200.405 – Allocable costs • Uniform Guidance 2 CFR § 200.430 – Compensation – personal services • Uniform Guidance 2 CFR § 200.475 – Travel costs • Uniform Guidance 2 CFR § 200.432 – Conferences • Title 41 CFR § 301-11.12 • Title 41 CFR § 301-11.200 Subpart C – Reduced per Diem Condition: • Noncompliance with travel policies • Noncompliance with payroll expense policies and procedures Cause: • Lack of sufficient controls for proper review and approval of travel authorizations and expensed transactions associated with sponsored award expenses • Lack of sufficient controls to ensure time and effort is properly charged to sponsored awards • Lack of consistency enforcing payroll expense policies for sponsored award management Effect: Payroll and travel expenditures may not be in compliance with federal or grant award provisions. Recommendation: • Complete and approve spend authorizations before travel to validate the necessity and reasonableness of expenses. • Include detailed justifications in spend authorizations for the travel purpose and award benefit. • Require sufficient justification for payroll expenses charged to sponsored awards, particularly for significant variances in effort. • Update internal control policies to enhance oversight and verification of time and effort reporting. This should include clear guidelines on the documentation required to support the work performed and the consequences of non-compliance. Views of Responsible Officials: Management agrees with the finding. See management’s corrective action plan.
2024-038 Noncompliance with Payroll and Travel Expense Policies and Procedures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agencies: Various Pass-Through Entities: Various AL Numbers and Titles: Various – Research and Development Cluster Federal Award Numbers: Various Questioned Costs: None Identified Description: The University did not comply with payroll and travel expense policies and procedures. Background Information: During the year ended June 30, 2024, the Georgia Institute of Technology’s (“GIT” or the “Institute”) Department of Internal Audit completed audits of compliance with payroll and travel expense policies and procedures of two Schools within the Institute and identified noncompliance with those policies and procedures. Criteria: • Uniform Guidance 2 CFR § 200.302 Financial management • Uniform Guidance 2 CFR § 200.308 – Revision of budget and program plans • Uniform Guidance 2 CFR § 200.403 – Factors affecting allowability of costs • Uniform Guidance 2 CFR § 200.404 – Reasonable costs • Uniform Guidance 2 CFR § 200.405 – Allocable costs • Uniform Guidance 2 CFR § 200.430 – Compensation – personal services • Uniform Guidance 2 CFR § 200.475 – Travel costs • Uniform Guidance 2 CFR § 200.432 – Conferences • Title 41 CFR § 301-11.12 • Title 41 CFR § 301-11.200 Subpart C – Reduced per Diem Condition: • Noncompliance with travel policies • Noncompliance with payroll expense policies and procedures Cause: • Lack of sufficient controls for proper review and approval of travel authorizations and expensed transactions associated with sponsored award expenses • Lack of sufficient controls to ensure time and effort is properly charged to sponsored awards • Lack of consistency enforcing payroll expense policies for sponsored award management Effect: Payroll and travel expenditures may not be in compliance with federal or grant award provisions. Recommendation: • Complete and approve spend authorizations before travel to validate the necessity and reasonableness of expenses. • Include detailed justifications in spend authorizations for the travel purpose and award benefit. • Require sufficient justification for payroll expenses charged to sponsored awards, particularly for significant variances in effort. • Update internal control policies to enhance oversight and verification of time and effort reporting. This should include clear guidelines on the documentation required to support the work performed and the consequences of non-compliance. Views of Responsible Officials: Management agrees with the finding. See management’s corrective action plan.
2024-038 Noncompliance with Payroll and Travel Expense Policies and Procedures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agencies: Various Pass-Through Entities: Various AL Numbers and Titles: Various – Research and Development Cluster Federal Award Numbers: Various Questioned Costs: None Identified Description: The University did not comply with payroll and travel expense policies and procedures. Background Information: During the year ended June 30, 2024, the Georgia Institute of Technology’s (“GIT” or the “Institute”) Department of Internal Audit completed audits of compliance with payroll and travel expense policies and procedures of two Schools within the Institute and identified noncompliance with those policies and procedures. Criteria: • Uniform Guidance 2 CFR § 200.302 Financial management • Uniform Guidance 2 CFR § 200.308 – Revision of budget and program plans • Uniform Guidance 2 CFR § 200.403 – Factors affecting allowability of costs • Uniform Guidance 2 CFR § 200.404 – Reasonable costs • Uniform Guidance 2 CFR § 200.405 – Allocable costs • Uniform Guidance 2 CFR § 200.430 – Compensation – personal services • Uniform Guidance 2 CFR § 200.475 – Travel costs • Uniform Guidance 2 CFR § 200.432 – Conferences • Title 41 CFR § 301-11.12 • Title 41 CFR § 301-11.200 Subpart C – Reduced per Diem Condition: • Noncompliance with travel policies • Noncompliance with payroll expense policies and procedures Cause: • Lack of sufficient controls for proper review and approval of travel authorizations and expensed transactions associated with sponsored award expenses • Lack of sufficient controls to ensure time and effort is properly charged to sponsored awards • Lack of consistency enforcing payroll expense policies for sponsored award management Effect: Payroll and travel expenditures may not be in compliance with federal or grant award provisions. Recommendation: • Complete and approve spend authorizations before travel to validate the necessity and reasonableness of expenses. • Include detailed justifications in spend authorizations for the travel purpose and award benefit. • Require sufficient justification for payroll expenses charged to sponsored awards, particularly for significant variances in effort. • Update internal control policies to enhance oversight and verification of time and effort reporting. This should include clear guidelines on the documentation required to support the work performed and the consequences of non-compliance. Views of Responsible Officials: Management agrees with the finding. See management’s corrective action plan.
2024-038 Noncompliance with Payroll and Travel Expense Policies and Procedures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agencies: Various Pass-Through Entities: Various AL Numbers and Titles: Various – Research and Development Cluster Federal Award Numbers: Various Questioned Costs: None Identified Description: The University did not comply with payroll and travel expense policies and procedures. Background Information: During the year ended June 30, 2024, the Georgia Institute of Technology’s (“GIT” or the “Institute”) Department of Internal Audit completed audits of compliance with payroll and travel expense policies and procedures of two Schools within the Institute and identified noncompliance with those policies and procedures. Criteria: • Uniform Guidance 2 CFR § 200.302 Financial management • Uniform Guidance 2 CFR § 200.308 – Revision of budget and program plans • Uniform Guidance 2 CFR § 200.403 – Factors affecting allowability of costs • Uniform Guidance 2 CFR § 200.404 – Reasonable costs • Uniform Guidance 2 CFR § 200.405 – Allocable costs • Uniform Guidance 2 CFR § 200.430 – Compensation – personal services • Uniform Guidance 2 CFR § 200.475 – Travel costs • Uniform Guidance 2 CFR § 200.432 – Conferences • Title 41 CFR § 301-11.12 • Title 41 CFR § 301-11.200 Subpart C – Reduced per Diem Condition: • Noncompliance with travel policies • Noncompliance with payroll expense policies and procedures Cause: • Lack of sufficient controls for proper review and approval of travel authorizations and expensed transactions associated with sponsored award expenses • Lack of sufficient controls to ensure time and effort is properly charged to sponsored awards • Lack of consistency enforcing payroll expense policies for sponsored award management Effect: Payroll and travel expenditures may not be in compliance with federal or grant award provisions. Recommendation: • Complete and approve spend authorizations before travel to validate the necessity and reasonableness of expenses. • Include detailed justifications in spend authorizations for the travel purpose and award benefit. • Require sufficient justification for payroll expenses charged to sponsored awards, particularly for significant variances in effort. • Update internal control policies to enhance oversight and verification of time and effort reporting. This should include clear guidelines on the documentation required to support the work performed and the consequences of non-compliance. Views of Responsible Officials: Management agrees with the finding. See management’s corrective action plan.