Finding 2023-003 – Allowable Costs/Cost Principles Identification of the federal program: Health Resources and Services Administration HIV Emergency Relief Project Grants Assistance Listing No. 93.914 Pass Through Numbers Pass Through Entity Grant Period PH-002898 County of Los Angeles (1/1/2011 – 2/28/2023) PH-002375 County of Los Angeles (12/1/2012 – 6/30/2025) PH-003746 County of Los Angeles (12/1/2012 – 6/30/2025) PH-003802 County of Los Angeles (1/1/2013 – 6/30/2025) H-208518 County of Los Angeles (4/1/2006 – 7/31/2025) PH-004205 County of Los Angeles (6/1/2020 – 2/28/2023) 8198 PREV King County Public Health (3/1/2022 – 2/28/2023) 10126 PREV King County Public Health (3/1/2022 – 2/28/2024) St. Mary Medical Center – Long Beach Bailey-Boushay House Criteria or specific requirement (including statutory, regulatory, or other citation): 2 CFR 200.303(a) requires that a 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 and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” 2 CFR 200.430 (i) states “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflected 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; (iv) encompass both federal assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) comply with the established accounting policies and practices of the non-Federal entity.” Condition: At St. Mary Medical Center – Long Beach, internal controls with regard to approving timecards were not performed for 3 of 40 employee timecards selected for testing. At Bailey-Boushay House, internal controls with regard to approving timecards were not performed for 6 out of 40 employee timecards selected for testing. Cause: St. Mary Medical Center – Long Beach and Bailey-Boushay House management did not consistently perform the necessary internal control procedures addressing the requirements of 2 CFR 200.303(a) and 2 CFR 200.430. Effect or potential effect: Unallowable and/or inaccurate payroll expenditures could be charged to the federal program. Questioned costs: None. Context: For 3 of 40 payroll expenditures selected for testing, St. Mary Medical Center – Long Beach did not properly approve the employee timecard for time charged to the grant in accordance with the practices of St. Mary Medical Center – Long Beach. For 6 out of 40 payroll expenditures selected for testing, Bailey-Boushay House did not properly approve the employee timecard for time charged to the grant in accordance with the practices of Bailey-Boushay House. Total payroll expenditures for St. Mary Medical Center – Long Beach were approximately $1.3 million and represent 32% of the total HIV Emergency Relief Project Grants expenditures of approximately $4.2 million. Total payroll expenditures for Bailey-Boushay House were approximately $1.1 million and represent 25% of the total HIV Emergency Relief Project Grants expenditures of approximately $4.2 million. Identification of a repeat finding: This is not a repeat finding for St. Mary Medical Center – Long Beach. This is a repeat finding for Bailey-Boushay House – Finding 2022-007 and 2021-008. Recommendation: We recommend management execute its processes to properly approve all time charged to federal grants in accordance with 2 CFR 200.430. Additionally, we recommend management execute and retain evidence of its internal controls over the allowability of payroll expenditures. Views of responsible officials: Management agrees with the finding and will implement corrective action in April 2024.
Finding 2023-003 – Allowable Costs/Cost Principles Identification of the federal program: Health Resources and Services Administration HIV Emergency Relief Project Grants Assistance Listing No. 93.914 Pass Through Numbers Pass Through Entity Grant Period PH-002898 County of Los Angeles (1/1/2011 – 2/28/2023) PH-002375 County of Los Angeles (12/1/2012 – 6/30/2025) PH-003746 County of Los Angeles (12/1/2012 – 6/30/2025) PH-003802 County of Los Angeles (1/1/2013 – 6/30/2025) H-208518 County of Los Angeles (4/1/2006 – 7/31/2025) PH-004205 County of Los Angeles (6/1/2020 – 2/28/2023) 8198 PREV King County Public Health (3/1/2022 – 2/28/2023) 10126 PREV King County Public Health (3/1/2022 – 2/28/2024) St. Mary Medical Center – Long Beach Bailey-Boushay House Criteria or specific requirement (including statutory, regulatory, or other citation): 2 CFR 200.303(a) requires that a 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 and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” 2 CFR 200.430 (i) states “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflected 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; (iv) encompass both federal assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) comply with the established accounting policies and practices of the non-Federal entity.” Condition: At St. Mary Medical Center – Long Beach, internal controls with regard to approving timecards were not performed for 3 of 40 employee timecards selected for testing. At Bailey-Boushay House, internal controls with regard to approving timecards were not performed for 6 out of 40 employee timecards selected for testing. Cause: St. Mary Medical Center – Long Beach and Bailey-Boushay House management did not consistently perform the necessary internal control procedures addressing the requirements of 2 CFR 200.303(a) and 2 CFR 200.430. Effect or potential effect: Unallowable and/or inaccurate payroll expenditures could be charged to the federal program. Questioned costs: None. Context: For 3 of 40 payroll expenditures selected for testing, St. Mary Medical Center – Long Beach did not properly approve the employee timecard for time charged to the grant in accordance with the practices of St. Mary Medical Center – Long Beach. For 6 out of 40 payroll expenditures selected for testing, Bailey-Boushay House did not properly approve the employee timecard for time charged to the grant in accordance with the practices of Bailey-Boushay House. Total payroll expenditures for St. Mary Medical Center – Long Beach were approximately $1.3 million and represent 32% of the total HIV Emergency Relief Project Grants expenditures of approximately $4.2 million. Total payroll expenditures for Bailey-Boushay House were approximately $1.1 million and represent 25% of the total HIV Emergency Relief Project Grants expenditures of approximately $4.2 million. Identification of a repeat finding: This is not a repeat finding for St. Mary Medical Center – Long Beach. This is a repeat finding for Bailey-Boushay House – Finding 2022-007 and 2021-008. Recommendation: We recommend management execute its processes to properly approve all time charged to federal grants in accordance with 2 CFR 200.430. Additionally, we recommend management execute and retain evidence of its internal controls over the allowability of payroll expenditures. Views of responsible officials: Management agrees with the finding and will implement corrective action in April 2024.
Finding 2023-003 – Allowable Costs/Cost Principles Identification of the federal program: Health Resources and Services Administration HIV Emergency Relief Project Grants Assistance Listing No. 93.914 Pass Through Numbers Pass Through Entity Grant Period PH-002898 County of Los Angeles (1/1/2011 – 2/28/2023) PH-002375 County of Los Angeles (12/1/2012 – 6/30/2025) PH-003746 County of Los Angeles (12/1/2012 – 6/30/2025) PH-003802 County of Los Angeles (1/1/2013 – 6/30/2025) H-208518 County of Los Angeles (4/1/2006 – 7/31/2025) PH-004205 County of Los Angeles (6/1/2020 – 2/28/2023) 8198 PREV King County Public Health (3/1/2022 – 2/28/2023) 10126 PREV King County Public Health (3/1/2022 – 2/28/2024) St. Mary Medical Center – Long Beach Bailey-Boushay House Criteria or specific requirement (including statutory, regulatory, or other citation): 2 CFR 200.303(a) requires that a 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 and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” 2 CFR 200.430 (i) states “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflected 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; (iv) encompass both federal assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) comply with the established accounting policies and practices of the non-Federal entity.” Condition: At St. Mary Medical Center – Long Beach, internal controls with regard to approving timecards were not performed for 3 of 40 employee timecards selected for testing. At Bailey-Boushay House, internal controls with regard to approving timecards were not performed for 6 out of 40 employee timecards selected for testing. Cause: St. Mary Medical Center – Long Beach and Bailey-Boushay House management did not consistently perform the necessary internal control procedures addressing the requirements of 2 CFR 200.303(a) and 2 CFR 200.430. Effect or potential effect: Unallowable and/or inaccurate payroll expenditures could be charged to the federal program. Questioned costs: None. Context: For 3 of 40 payroll expenditures selected for testing, St. Mary Medical Center – Long Beach did not properly approve the employee timecard for time charged to the grant in accordance with the practices of St. Mary Medical Center – Long Beach. For 6 out of 40 payroll expenditures selected for testing, Bailey-Boushay House did not properly approve the employee timecard for time charged to the grant in accordance with the practices of Bailey-Boushay House. Total payroll expenditures for St. Mary Medical Center – Long Beach were approximately $1.3 million and represent 32% of the total HIV Emergency Relief Project Grants expenditures of approximately $4.2 million. Total payroll expenditures for Bailey-Boushay House were approximately $1.1 million and represent 25% of the total HIV Emergency Relief Project Grants expenditures of approximately $4.2 million. Identification of a repeat finding: This is not a repeat finding for St. Mary Medical Center – Long Beach. This is a repeat finding for Bailey-Boushay House – Finding 2022-007 and 2021-008. Recommendation: We recommend management execute its processes to properly approve all time charged to federal grants in accordance with 2 CFR 200.430. Additionally, we recommend management execute and retain evidence of its internal controls over the allowability of payroll expenditures. Views of responsible officials: Management agrees with the finding and will implement corrective action in April 2024.
Finding 2023-003 – Allowable Costs/Cost Principles Identification of the federal program: Health Resources and Services Administration HIV Emergency Relief Project Grants Assistance Listing No. 93.914 Pass Through Numbers Pass Through Entity Grant Period PH-002898 County of Los Angeles (1/1/2011 – 2/28/2023) PH-002375 County of Los Angeles (12/1/2012 – 6/30/2025) PH-003746 County of Los Angeles (12/1/2012 – 6/30/2025) PH-003802 County of Los Angeles (1/1/2013 – 6/30/2025) H-208518 County of Los Angeles (4/1/2006 – 7/31/2025) PH-004205 County of Los Angeles (6/1/2020 – 2/28/2023) 8198 PREV King County Public Health (3/1/2022 – 2/28/2023) 10126 PREV King County Public Health (3/1/2022 – 2/28/2024) St. Mary Medical Center – Long Beach Bailey-Boushay House Criteria or specific requirement (including statutory, regulatory, or other citation): 2 CFR 200.303(a) requires that a 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 and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” 2 CFR 200.430 (i) states “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflected 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; (iv) encompass both federal assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) comply with the established accounting policies and practices of the non-Federal entity.” Condition: At St. Mary Medical Center – Long Beach, internal controls with regard to approving timecards were not performed for 3 of 40 employee timecards selected for testing. At Bailey-Boushay House, internal controls with regard to approving timecards were not performed for 6 out of 40 employee timecards selected for testing. Cause: St. Mary Medical Center – Long Beach and Bailey-Boushay House management did not consistently perform the necessary internal control procedures addressing the requirements of 2 CFR 200.303(a) and 2 CFR 200.430. Effect or potential effect: Unallowable and/or inaccurate payroll expenditures could be charged to the federal program. Questioned costs: None. Context: For 3 of 40 payroll expenditures selected for testing, St. Mary Medical Center – Long Beach did not properly approve the employee timecard for time charged to the grant in accordance with the practices of St. Mary Medical Center – Long Beach. For 6 out of 40 payroll expenditures selected for testing, Bailey-Boushay House did not properly approve the employee timecard for time charged to the grant in accordance with the practices of Bailey-Boushay House. Total payroll expenditures for St. Mary Medical Center – Long Beach were approximately $1.3 million and represent 32% of the total HIV Emergency Relief Project Grants expenditures of approximately $4.2 million. Total payroll expenditures for Bailey-Boushay House were approximately $1.1 million and represent 25% of the total HIV Emergency Relief Project Grants expenditures of approximately $4.2 million. Identification of a repeat finding: This is not a repeat finding for St. Mary Medical Center – Long Beach. This is a repeat finding for Bailey-Boushay House – Finding 2022-007 and 2021-008. Recommendation: We recommend management execute its processes to properly approve all time charged to federal grants in accordance with 2 CFR 200.430. Additionally, we recommend management execute and retain evidence of its internal controls over the allowability of payroll expenditures. Views of responsible officials: Management agrees with the finding and will implement corrective action in April 2024.
Item 2023‐001 Allowable Costs/Activities Allowed Medical Assistance Program – Assistance Listing # 93.778 U.S. Department of Health and Human Services Passed through the State of Georgia Board of Health Care Workforce Pass-through Grant No. Family Medicine (7/1/2022 – 6/30/2023) COVID-19 Provider Relief Fund – Assistance Listing # 93.498 U.S. Department of Health and Human Services Federal Assistance Identification Number – PRF20200001 Federal Award Year - 2020 Condition/Perspective – Adequate human resource controls were not in place to document that two payroll expenditures was for allowable costs and activities prior to payment, resulting in the following: • COVID-19 Provider Relief Fund – Assistance Listing # 93.498 - One out of 40 employee payroll disbursements were paid without the proper approval of the supporting time sheet. Our sample was a statistically valid sample. • Medical Assistance Program – Assistance Listing # 93.778 - One out of 20 employee payroll disbursements were paid without the proper approval of the supporting time sheet and supporting pay rate. Our sample was a statistically valid sample. Criteria – Grantees should have controls in place to ensure that grant monies are for allowable costs and allowable activities. 2 CFR 200.303 requires the non‐Federal entity to “(a) establish and maintain effective internal controls over the Federal award that provides reasonable assurance that the non‐Federal entity is managing the Federal statutes, regulations, and the terms and conditions of the Federal award.” Grantees must follow the requirements of 2 CFR 200.430(i)(1-8) Standards for Documentation of Personnel Expenses. Cause – Lack of sufficient human resource controls to ensure there is evidence of review and approval of supporting time sheet and pay rate documentation prior to payment. Questioned Costs – Not applicable. Identification of Repeat Findings – Not a repeat finding Effect – Lack of proper review and approval could result in disallowed costs. Recommendation – We recommend the implementation of procedures necessary to ensure there is evidence of review and approval of supporting pay rate documentation and supporting time sheets of payroll disbursements prior to payment. Management’s Response – See “Corrective Action Plan”
Item 2023‐001 Allowable Costs/Activities Allowed Medical Assistance Program – Assistance Listing # 93.778 U.S. Department of Health and Human Services Passed through the State of Georgia Board of Health Care Workforce Pass-through Grant No. Family Medicine (7/1/2022 – 6/30/2023) COVID-19 Provider Relief Fund – Assistance Listing # 93.498 U.S. Department of Health and Human Services Federal Assistance Identification Number – PRF20200001 Federal Award Year - 2020 Condition/Perspective – Adequate human resource controls were not in place to document that two payroll expenditures was for allowable costs and activities prior to payment, resulting in the following: • COVID-19 Provider Relief Fund – Assistance Listing # 93.498 - One out of 40 employee payroll disbursements were paid without the proper approval of the supporting time sheet. Our sample was a statistically valid sample. • Medical Assistance Program – Assistance Listing # 93.778 - One out of 20 employee payroll disbursements were paid without the proper approval of the supporting time sheet and supporting pay rate. Our sample was a statistically valid sample. Criteria – Grantees should have controls in place to ensure that grant monies are for allowable costs and allowable activities. 2 CFR 200.303 requires the non‐Federal entity to “(a) establish and maintain effective internal controls over the Federal award that provides reasonable assurance that the non‐Federal entity is managing the Federal statutes, regulations, and the terms and conditions of the Federal award.” Grantees must follow the requirements of 2 CFR 200.430(i)(1-8) Standards for Documentation of Personnel Expenses. Cause – Lack of sufficient human resource controls to ensure there is evidence of review and approval of supporting time sheet and pay rate documentation prior to payment. Questioned Costs – Not applicable. Identification of Repeat Findings – Not a repeat finding Effect – Lack of proper review and approval could result in disallowed costs. Recommendation – We recommend the implementation of procedures necessary to ensure there is evidence of review and approval of supporting pay rate documentation and supporting time sheets of payroll disbursements prior to payment. Management’s Response – See “Corrective Action Plan”
Item 2023‐001 Allowable Costs/Activities Allowed Medical Assistance Program – Assistance Listing # 93.778 U.S. Department of Health and Human Services Passed through the State of Georgia Board of Health Care Workforce Pass-through Grant No. Family Medicine (7/1/2022 – 6/30/2023) COVID-19 Provider Relief Fund – Assistance Listing # 93.498 U.S. Department of Health and Human Services Federal Assistance Identification Number – PRF20200001 Federal Award Year - 2020 Condition/Perspective – Adequate human resource controls were not in place to document that two payroll expenditures was for allowable costs and activities prior to payment, resulting in the following: • COVID-19 Provider Relief Fund – Assistance Listing # 93.498 - One out of 40 employee payroll disbursements were paid without the proper approval of the supporting time sheet. Our sample was a statistically valid sample. • Medical Assistance Program – Assistance Listing # 93.778 - One out of 20 employee payroll disbursements were paid without the proper approval of the supporting time sheet and supporting pay rate. Our sample was a statistically valid sample. Criteria – Grantees should have controls in place to ensure that grant monies are for allowable costs and allowable activities. 2 CFR 200.303 requires the non‐Federal entity to “(a) establish and maintain effective internal controls over the Federal award that provides reasonable assurance that the non‐Federal entity is managing the Federal statutes, regulations, and the terms and conditions of the Federal award.” Grantees must follow the requirements of 2 CFR 200.430(i)(1-8) Standards for Documentation of Personnel Expenses. Cause – Lack of sufficient human resource controls to ensure there is evidence of review and approval of supporting time sheet and pay rate documentation prior to payment. Questioned Costs – Not applicable. Identification of Repeat Findings – Not a repeat finding Effect – Lack of proper review and approval could result in disallowed costs. Recommendation – We recommend the implementation of procedures necessary to ensure there is evidence of review and approval of supporting pay rate documentation and supporting time sheets of payroll disbursements prior to payment. Management’s Response – See “Corrective Action Plan”
Item 2023‐001 Allowable Costs/Activities Allowed Medical Assistance Program – Assistance Listing # 93.778 U.S. Department of Health and Human Services Passed through the State of Georgia Board of Health Care Workforce Pass-through Grant No. Family Medicine (7/1/2022 – 6/30/2023) COVID-19 Provider Relief Fund – Assistance Listing # 93.498 U.S. Department of Health and Human Services Federal Assistance Identification Number – PRF20200001 Federal Award Year - 2020 Condition/Perspective – Adequate human resource controls were not in place to document that two payroll expenditures was for allowable costs and activities prior to payment, resulting in the following: • COVID-19 Provider Relief Fund – Assistance Listing # 93.498 - One out of 40 employee payroll disbursements were paid without the proper approval of the supporting time sheet. Our sample was a statistically valid sample. • Medical Assistance Program – Assistance Listing # 93.778 - One out of 20 employee payroll disbursements were paid without the proper approval of the supporting time sheet and supporting pay rate. Our sample was a statistically valid sample. Criteria – Grantees should have controls in place to ensure that grant monies are for allowable costs and allowable activities. 2 CFR 200.303 requires the non‐Federal entity to “(a) establish and maintain effective internal controls over the Federal award that provides reasonable assurance that the non‐Federal entity is managing the Federal statutes, regulations, and the terms and conditions of the Federal award.” Grantees must follow the requirements of 2 CFR 200.430(i)(1-8) Standards for Documentation of Personnel Expenses. Cause – Lack of sufficient human resource controls to ensure there is evidence of review and approval of supporting time sheet and pay rate documentation prior to payment. Questioned Costs – Not applicable. Identification of Repeat Findings – Not a repeat finding Effect – Lack of proper review and approval could result in disallowed costs. Recommendation – We recommend the implementation of procedures necessary to ensure there is evidence of review and approval of supporting pay rate documentation and supporting time sheets of payroll disbursements prior to payment. Management’s Response – See “Corrective Action Plan”
Item 2023‐001 Allowable Costs/Activities Allowed Medical Assistance Program – Assistance Listing # 93.778 U.S. Department of Health and Human Services Passed through the State of Georgia Board of Health Care Workforce Pass-through Grant No. Family Medicine (7/1/2022 – 6/30/2023) COVID-19 Provider Relief Fund – Assistance Listing # 93.498 U.S. Department of Health and Human Services Federal Assistance Identification Number – PRF20200001 Federal Award Year - 2020 Condition/Perspective – Adequate human resource controls were not in place to document that two payroll expenditures was for allowable costs and activities prior to payment, resulting in the following: • COVID-19 Provider Relief Fund – Assistance Listing # 93.498 - One out of 40 employee payroll disbursements were paid without the proper approval of the supporting time sheet. Our sample was a statistically valid sample. • Medical Assistance Program – Assistance Listing # 93.778 - One out of 20 employee payroll disbursements were paid without the proper approval of the supporting time sheet and supporting pay rate. Our sample was a statistically valid sample. Criteria – Grantees should have controls in place to ensure that grant monies are for allowable costs and allowable activities. 2 CFR 200.303 requires the non‐Federal entity to “(a) establish and maintain effective internal controls over the Federal award that provides reasonable assurance that the non‐Federal entity is managing the Federal statutes, regulations, and the terms and conditions of the Federal award.” Grantees must follow the requirements of 2 CFR 200.430(i)(1-8) Standards for Documentation of Personnel Expenses. Cause – Lack of sufficient human resource controls to ensure there is evidence of review and approval of supporting time sheet and pay rate documentation prior to payment. Questioned Costs – Not applicable. Identification of Repeat Findings – Not a repeat finding Effect – Lack of proper review and approval could result in disallowed costs. Recommendation – We recommend the implementation of procedures necessary to ensure there is evidence of review and approval of supporting pay rate documentation and supporting time sheets of payroll disbursements prior to payment. Management’s Response – See “Corrective Action Plan”
2023-004 Lack of Documentation to Support Distribution of Wages (Significant Deficiency) Federal Agency: Department of Education Pass-through Agency: New Hampshire Department of Education Cluster/Program: Education Stabilization Fund Assistance Listing Numbers: 84.425U Passed-through Identification: #20221080 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Type of Finding: Internal Control over Compliance – Significant Deficiency Criteria or Specific Requirement: Federal regulations 2 CFR 200.303 states, the District, as a recipient of Federal funds, must establish and maintain effective internal controls 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. In addition, under 2 CFR 200.430, it states that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must (1) be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, (2) be incorporated into the official records of the non-Federal entity, (3) reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities, and (4) 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 or a federal award and non-Federal award. Condition: During our review of payroll charged to the grant, we noted one employee did not sign their semi-annual certification covering July 1st to December 31st. In speaking with the District, it was explained that the employee left the grant funded position in November 2022 before the 6 month period was completed. While the semi-annual certification was completed after the fact and signed by a supervisory official, the employee continued to be employed by the district as a substitute which allowed ample time for the employee to sign their semi-annual certification. Cause: Administrative oversight. Effect: The District did not have adequate documentation to support the time spent on activities by the employee. Questioned Costs: $5,990.73 Repeat Finding: This is not a repeat finding. Recommendation: We recommend that semi-annual certifications be completed after the fact and signed by the employee and supervisory official having firsthand knowledge of the work performed by the employee. Views of Responsible Officials: Management’s views and corrective action plan is included at the end of this report.
2023-007 - Control Weakness and Noncompliance with Personnel Expenses Charged to Federal Awards Award Years: 2018, 2020, 2021, 2022 Award Numbers: 1815976, 2033380, 2117785, 2120015, 2000629518, 22-PA-11080600-187, 5U19AI142636-05, 75N93020D00008/75N93020F00004, DE-AC07-05ID14517, DE-SC0019956, EMW-2021-SS-00019-S01, NA20OAR4310253C Compliance Requirements: Allowable Costs/Cost Principles, Special Tests and Provisions Pass-Through Entities: Battelle Energy Alliance, Norwich Technologies Inc., University Corporation for Atmospheric Research Repeat Finding: Yes (Prior Year Finding No. 2022-006) See Schedule of Findings and Questioned Costs for chart/table Condition: For the third consecutive year, the University of Louisiana at Lafayette (UL Lafayette) did not have adequate controls in place to ensure personnel expenses charged to federal R&D awards accurately reflected work performed. From a population of 28,301 payroll and non-payroll expenses charged to R&D grants for the fiscal year ended June 30, 2023, a non-statistical sample of 25 transactions were tested for compliance with allowable costs and cost principles requirements. For five (20%) of the transactions, UL Lafayette was unable to provide documentation to show that personnel related expenses totaling $612 were supported by time and effort certifications to ensure the accuracy of budget estimates charged to federal awards as required by federal regulations. We reviewed 15 grant awards corresponding to the expense transactions selected and evaluated documentation to support the level of effort for each award and the 20 key personnel assigned to the selected awards. For 13 (65%) of the key personnel, UL Lafayette was unable to provide documentation that the key personnel complied with the effort required by the grant award. Criteria: 2 CFR 200.430(i) specifies the documentation standards for personnel expenses. In order to be allowable, charges to federal awards for personnel expenses must be based on records that accurately reflect the work performed and must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Budget estimates alone do not qualify as support for charges to federal awards, but can be used for interim accounting purposes provided that internal controls include an after-the fact review to confirm the accuracy of final amounts charged to federal awards. Prior approval requirements related to key personnel effort are contained in 2 CFR 200.308(c) and within grant terms and conditions. A reduction of 25% or greater in time devoted to the project from key personnel requires prior approval as does disengagement of key personnel from the project for three or more months. Cause: UL Lafayette noted in their prior-year corrective action plan and in a draft effort reporting policy that certifications for employees charging time to federal awards would be required quarterly. For the fiscal year ended June 30, 2023, certifications were only requested in July 2023, after the fiscal year-end, and were required to be returned within 30 days. Annual certifications are not sufficient to timely detect changes in key personnel effort and ensure prior approvals are obtained when applicable. Effect: Inadequate controls related to federal documentation standards for personnel expenses could result in noncompliance with federal allowable costs and cost principles, as well as noncompliance with special tests and provisions related to key personnel effort. Recommendation: Management should strengthen internal controls to ensure that personnel expenses charged to the federal awards are supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Additionally, management should revise the Time and Effort Certification policy or implement alternative controls designed to ensure compliance with special tests and provisions requirements. Management should monitor changes in effort for key personnel and ensure that prior written approval is obtained from the federal grantor for changes that exceed the thresholds set in federal regulations. Management’s Response and Corrective Action Plan: Management concurred with the finding and outlined a plan of corrective action (B-59).
2023-007 - Control Weakness and Noncompliance with Personnel Expenses Charged to Federal Awards Award Years: 2018, 2020, 2021, 2022 Award Numbers: 1815976, 2033380, 2117785, 2120015, 2000629518, 22-PA-11080600-187, 5U19AI142636-05, 75N93020D00008/75N93020F00004, DE-AC07-05ID14517, DE-SC0019956, EMW-2021-SS-00019-S01, NA20OAR4310253C Compliance Requirements: Allowable Costs/Cost Principles, Special Tests and Provisions Pass-Through Entities: Battelle Energy Alliance, Norwich Technologies Inc., University Corporation for Atmospheric Research Repeat Finding: Yes (Prior Year Finding No. 2022-006) See Schedule of Findings and Questioned Costs for chart/table Condition: For the third consecutive year, the University of Louisiana at Lafayette (UL Lafayette) did not have adequate controls in place to ensure personnel expenses charged to federal R&D awards accurately reflected work performed. From a population of 28,301 payroll and non-payroll expenses charged to R&D grants for the fiscal year ended June 30, 2023, a non-statistical sample of 25 transactions were tested for compliance with allowable costs and cost principles requirements. For five (20%) of the transactions, UL Lafayette was unable to provide documentation to show that personnel related expenses totaling $612 were supported by time and effort certifications to ensure the accuracy of budget estimates charged to federal awards as required by federal regulations. We reviewed 15 grant awards corresponding to the expense transactions selected and evaluated documentation to support the level of effort for each award and the 20 key personnel assigned to the selected awards. For 13 (65%) of the key personnel, UL Lafayette was unable to provide documentation that the key personnel complied with the effort required by the grant award. Criteria: 2 CFR 200.430(i) specifies the documentation standards for personnel expenses. In order to be allowable, charges to federal awards for personnel expenses must be based on records that accurately reflect the work performed and must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Budget estimates alone do not qualify as support for charges to federal awards, but can be used for interim accounting purposes provided that internal controls include an after-the fact review to confirm the accuracy of final amounts charged to federal awards. Prior approval requirements related to key personnel effort are contained in 2 CFR 200.308(c) and within grant terms and conditions. A reduction of 25% or greater in time devoted to the project from key personnel requires prior approval as does disengagement of key personnel from the project for three or more months. Cause: UL Lafayette noted in their prior-year corrective action plan and in a draft effort reporting policy that certifications for employees charging time to federal awards would be required quarterly. For the fiscal year ended June 30, 2023, certifications were only requested in July 2023, after the fiscal year-end, and were required to be returned within 30 days. Annual certifications are not sufficient to timely detect changes in key personnel effort and ensure prior approvals are obtained when applicable. Effect: Inadequate controls related to federal documentation standards for personnel expenses could result in noncompliance with federal allowable costs and cost principles, as well as noncompliance with special tests and provisions related to key personnel effort. Recommendation: Management should strengthen internal controls to ensure that personnel expenses charged to the federal awards are supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Additionally, management should revise the Time and Effort Certification policy or implement alternative controls designed to ensure compliance with special tests and provisions requirements. Management should monitor changes in effort for key personnel and ensure that prior written approval is obtained from the federal grantor for changes that exceed the thresholds set in federal regulations. Management’s Response and Corrective Action Plan: Management concurred with the finding and outlined a plan of corrective action (B-59).
2023-007 - Control Weakness and Noncompliance with Personnel Expenses Charged to Federal Awards Award Years: 2018, 2020, 2021, 2022 Award Numbers: 1815976, 2033380, 2117785, 2120015, 2000629518, 22-PA-11080600-187, 5U19AI142636-05, 75N93020D00008/75N93020F00004, DE-AC07-05ID14517, DE-SC0019956, EMW-2021-SS-00019-S01, NA20OAR4310253C Compliance Requirements: Allowable Costs/Cost Principles, Special Tests and Provisions Pass-Through Entities: Battelle Energy Alliance, Norwich Technologies Inc., University Corporation for Atmospheric Research Repeat Finding: Yes (Prior Year Finding No. 2022-006) See Schedule of Findings and Questioned Costs for chart/table Condition: For the third consecutive year, the University of Louisiana at Lafayette (UL Lafayette) did not have adequate controls in place to ensure personnel expenses charged to federal R&D awards accurately reflected work performed. From a population of 28,301 payroll and non-payroll expenses charged to R&D grants for the fiscal year ended June 30, 2023, a non-statistical sample of 25 transactions were tested for compliance with allowable costs and cost principles requirements. For five (20%) of the transactions, UL Lafayette was unable to provide documentation to show that personnel related expenses totaling $612 were supported by time and effort certifications to ensure the accuracy of budget estimates charged to federal awards as required by federal regulations. We reviewed 15 grant awards corresponding to the expense transactions selected and evaluated documentation to support the level of effort for each award and the 20 key personnel assigned to the selected awards. For 13 (65%) of the key personnel, UL Lafayette was unable to provide documentation that the key personnel complied with the effort required by the grant award. Criteria: 2 CFR 200.430(i) specifies the documentation standards for personnel expenses. In order to be allowable, charges to federal awards for personnel expenses must be based on records that accurately reflect the work performed and must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Budget estimates alone do not qualify as support for charges to federal awards, but can be used for interim accounting purposes provided that internal controls include an after-the fact review to confirm the accuracy of final amounts charged to federal awards. Prior approval requirements related to key personnel effort are contained in 2 CFR 200.308(c) and within grant terms and conditions. A reduction of 25% or greater in time devoted to the project from key personnel requires prior approval as does disengagement of key personnel from the project for three or more months. Cause: UL Lafayette noted in their prior-year corrective action plan and in a draft effort reporting policy that certifications for employees charging time to federal awards would be required quarterly. For the fiscal year ended June 30, 2023, certifications were only requested in July 2023, after the fiscal year-end, and were required to be returned within 30 days. Annual certifications are not sufficient to timely detect changes in key personnel effort and ensure prior approvals are obtained when applicable. Effect: Inadequate controls related to federal documentation standards for personnel expenses could result in noncompliance with federal allowable costs and cost principles, as well as noncompliance with special tests and provisions related to key personnel effort. Recommendation: Management should strengthen internal controls to ensure that personnel expenses charged to the federal awards are supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Additionally, management should revise the Time and Effort Certification policy or implement alternative controls designed to ensure compliance with special tests and provisions requirements. Management should monitor changes in effort for key personnel and ensure that prior written approval is obtained from the federal grantor for changes that exceed the thresholds set in federal regulations. Management’s Response and Corrective Action Plan: Management concurred with the finding and outlined a plan of corrective action (B-59).
2023-007 - Control Weakness and Noncompliance with Personnel Expenses Charged to Federal Awards Award Years: 2018, 2020, 2021, 2022 Award Numbers: 1815976, 2033380, 2117785, 2120015, 2000629518, 22-PA-11080600-187, 5U19AI142636-05, 75N93020D00008/75N93020F00004, DE-AC07-05ID14517, DE-SC0019956, EMW-2021-SS-00019-S01, NA20OAR4310253C Compliance Requirements: Allowable Costs/Cost Principles, Special Tests and Provisions Pass-Through Entities: Battelle Energy Alliance, Norwich Technologies Inc., University Corporation for Atmospheric Research Repeat Finding: Yes (Prior Year Finding No. 2022-006) See Schedule of Findings and Questioned Costs for chart/table Condition: For the third consecutive year, the University of Louisiana at Lafayette (UL Lafayette) did not have adequate controls in place to ensure personnel expenses charged to federal R&D awards accurately reflected work performed. From a population of 28,301 payroll and non-payroll expenses charged to R&D grants for the fiscal year ended June 30, 2023, a non-statistical sample of 25 transactions were tested for compliance with allowable costs and cost principles requirements. For five (20%) of the transactions, UL Lafayette was unable to provide documentation to show that personnel related expenses totaling $612 were supported by time and effort certifications to ensure the accuracy of budget estimates charged to federal awards as required by federal regulations. We reviewed 15 grant awards corresponding to the expense transactions selected and evaluated documentation to support the level of effort for each award and the 20 key personnel assigned to the selected awards. For 13 (65%) of the key personnel, UL Lafayette was unable to provide documentation that the key personnel complied with the effort required by the grant award. Criteria: 2 CFR 200.430(i) specifies the documentation standards for personnel expenses. In order to be allowable, charges to federal awards for personnel expenses must be based on records that accurately reflect the work performed and must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Budget estimates alone do not qualify as support for charges to federal awards, but can be used for interim accounting purposes provided that internal controls include an after-the fact review to confirm the accuracy of final amounts charged to federal awards. Prior approval requirements related to key personnel effort are contained in 2 CFR 200.308(c) and within grant terms and conditions. A reduction of 25% or greater in time devoted to the project from key personnel requires prior approval as does disengagement of key personnel from the project for three or more months. Cause: UL Lafayette noted in their prior-year corrective action plan and in a draft effort reporting policy that certifications for employees charging time to federal awards would be required quarterly. For the fiscal year ended June 30, 2023, certifications were only requested in July 2023, after the fiscal year-end, and were required to be returned within 30 days. Annual certifications are not sufficient to timely detect changes in key personnel effort and ensure prior approvals are obtained when applicable. Effect: Inadequate controls related to federal documentation standards for personnel expenses could result in noncompliance with federal allowable costs and cost principles, as well as noncompliance with special tests and provisions related to key personnel effort. Recommendation: Management should strengthen internal controls to ensure that personnel expenses charged to the federal awards are supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Additionally, management should revise the Time and Effort Certification policy or implement alternative controls designed to ensure compliance with special tests and provisions requirements. Management should monitor changes in effort for key personnel and ensure that prior written approval is obtained from the federal grantor for changes that exceed the thresholds set in federal regulations. Management’s Response and Corrective Action Plan: Management concurred with the finding and outlined a plan of corrective action (B-59).
2023-007 - Control Weakness and Noncompliance with Personnel Expenses Charged to Federal Awards Award Years: 2018, 2020, 2021, 2022 Award Numbers: 1815976, 2033380, 2117785, 2120015, 2000629518, 22-PA-11080600-187, 5U19AI142636-05, 75N93020D00008/75N93020F00004, DE-AC07-05ID14517, DE-SC0019956, EMW-2021-SS-00019-S01, NA20OAR4310253C Compliance Requirements: Allowable Costs/Cost Principles, Special Tests and Provisions Pass-Through Entities: Battelle Energy Alliance, Norwich Technologies Inc., University Corporation for Atmospheric Research Repeat Finding: Yes (Prior Year Finding No. 2022-006) See Schedule of Findings and Questioned Costs for chart/table Condition: For the third consecutive year, the University of Louisiana at Lafayette (UL Lafayette) did not have adequate controls in place to ensure personnel expenses charged to federal R&D awards accurately reflected work performed. From a population of 28,301 payroll and non-payroll expenses charged to R&D grants for the fiscal year ended June 30, 2023, a non-statistical sample of 25 transactions were tested for compliance with allowable costs and cost principles requirements. For five (20%) of the transactions, UL Lafayette was unable to provide documentation to show that personnel related expenses totaling $612 were supported by time and effort certifications to ensure the accuracy of budget estimates charged to federal awards as required by federal regulations. We reviewed 15 grant awards corresponding to the expense transactions selected and evaluated documentation to support the level of effort for each award and the 20 key personnel assigned to the selected awards. For 13 (65%) of the key personnel, UL Lafayette was unable to provide documentation that the key personnel complied with the effort required by the grant award. Criteria: 2 CFR 200.430(i) specifies the documentation standards for personnel expenses. In order to be allowable, charges to federal awards for personnel expenses must be based on records that accurately reflect the work performed and must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Budget estimates alone do not qualify as support for charges to federal awards, but can be used for interim accounting purposes provided that internal controls include an after-the fact review to confirm the accuracy of final amounts charged to federal awards. Prior approval requirements related to key personnel effort are contained in 2 CFR 200.308(c) and within grant terms and conditions. A reduction of 25% or greater in time devoted to the project from key personnel requires prior approval as does disengagement of key personnel from the project for three or more months. Cause: UL Lafayette noted in their prior-year corrective action plan and in a draft effort reporting policy that certifications for employees charging time to federal awards would be required quarterly. For the fiscal year ended June 30, 2023, certifications were only requested in July 2023, after the fiscal year-end, and were required to be returned within 30 days. Annual certifications are not sufficient to timely detect changes in key personnel effort and ensure prior approvals are obtained when applicable. Effect: Inadequate controls related to federal documentation standards for personnel expenses could result in noncompliance with federal allowable costs and cost principles, as well as noncompliance with special tests and provisions related to key personnel effort. Recommendation: Management should strengthen internal controls to ensure that personnel expenses charged to the federal awards are supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Additionally, management should revise the Time and Effort Certification policy or implement alternative controls designed to ensure compliance with special tests and provisions requirements. Management should monitor changes in effort for key personnel and ensure that prior written approval is obtained from the federal grantor for changes that exceed the thresholds set in federal regulations. Management’s Response and Corrective Action Plan: Management concurred with the finding and outlined a plan of corrective action (B-59).
2023-007 - Control Weakness and Noncompliance with Personnel Expenses Charged to Federal Awards Award Years: 2018, 2020, 2021, 2022 Award Numbers: 1815976, 2033380, 2117785, 2120015, 2000629518, 22-PA-11080600-187, 5U19AI142636-05, 75N93020D00008/75N93020F00004, DE-AC07-05ID14517, DE-SC0019956, EMW-2021-SS-00019-S01, NA20OAR4310253C Compliance Requirements: Allowable Costs/Cost Principles, Special Tests and Provisions Pass-Through Entities: Battelle Energy Alliance, Norwich Technologies Inc., University Corporation for Atmospheric Research Repeat Finding: Yes (Prior Year Finding No. 2022-006) See Schedule of Findings and Questioned Costs for chart/table Condition: For the third consecutive year, the University of Louisiana at Lafayette (UL Lafayette) did not have adequate controls in place to ensure personnel expenses charged to federal R&D awards accurately reflected work performed. From a population of 28,301 payroll and non-payroll expenses charged to R&D grants for the fiscal year ended June 30, 2023, a non-statistical sample of 25 transactions were tested for compliance with allowable costs and cost principles requirements. For five (20%) of the transactions, UL Lafayette was unable to provide documentation to show that personnel related expenses totaling $612 were supported by time and effort certifications to ensure the accuracy of budget estimates charged to federal awards as required by federal regulations. We reviewed 15 grant awards corresponding to the expense transactions selected and evaluated documentation to support the level of effort for each award and the 20 key personnel assigned to the selected awards. For 13 (65%) of the key personnel, UL Lafayette was unable to provide documentation that the key personnel complied with the effort required by the grant award. Criteria: 2 CFR 200.430(i) specifies the documentation standards for personnel expenses. In order to be allowable, charges to federal awards for personnel expenses must be based on records that accurately reflect the work performed and must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Budget estimates alone do not qualify as support for charges to federal awards, but can be used for interim accounting purposes provided that internal controls include an after-the fact review to confirm the accuracy of final amounts charged to federal awards. Prior approval requirements related to key personnel effort are contained in 2 CFR 200.308(c) and within grant terms and conditions. A reduction of 25% or greater in time devoted to the project from key personnel requires prior approval as does disengagement of key personnel from the project for three or more months. Cause: UL Lafayette noted in their prior-year corrective action plan and in a draft effort reporting policy that certifications for employees charging time to federal awards would be required quarterly. For the fiscal year ended June 30, 2023, certifications were only requested in July 2023, after the fiscal year-end, and were required to be returned within 30 days. Annual certifications are not sufficient to timely detect changes in key personnel effort and ensure prior approvals are obtained when applicable. Effect: Inadequate controls related to federal documentation standards for personnel expenses could result in noncompliance with federal allowable costs and cost principles, as well as noncompliance with special tests and provisions related to key personnel effort. Recommendation: Management should strengthen internal controls to ensure that personnel expenses charged to the federal awards are supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Additionally, management should revise the Time and Effort Certification policy or implement alternative controls designed to ensure compliance with special tests and provisions requirements. Management should monitor changes in effort for key personnel and ensure that prior written approval is obtained from the federal grantor for changes that exceed the thresholds set in federal regulations. Management’s Response and Corrective Action Plan: Management concurred with the finding and outlined a plan of corrective action (B-59).
2023-006 - Noncompliance with and Weakness in Controls over Federal Research and Development Expenses Award Years: Various Award Numbers: Various Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Pass-Through Entities: Various Repeat Finding: Yes (Prior Year Finding No. 2022-005) See Schedule of Findings and Questioned Costs for chart/table Condition: For the fifth consecutive year, the Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In a non-statistical random sample of 25 out of 2,401 payroll-adjusting entries affecting R&D, we noted the following: • Six (24%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. • Nine (36%) adjustments were not completed within 90 days of when the error was discovered. • One (4%) adjustment added unallowed expenses to a federal award project and is considered questioned costs totaling $2,619. We also performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 728 (36%) out of 2,030 adjusting journal entries were made more than 90 days after the end of the biannual period from the original transactions. The adjustments were made 92 to 467 days after the end of the biannual period. In addition, in a non-statistical random sample of 57 out of 11,827 expense transactions charged to R&D during the fiscal year ending June 30, 2023, we noted two (6%) of 32 time and effort certifications for salary and related benefit expenses tested were completed 126 to 140 days after the end of the semiannual period. Criteria: 2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity’s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments. Per LSUHSC-S’s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S’s policy, time and effort certifications should be completed within approximately 90 days of the end of the biannual period. Management interprets the end of the period to be when the time and effort reports are sent to the departments once the last month of the biannual period is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the biannual reporting period, a payroll reallocation must be created within 30 days. Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the “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. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions. In addition, the National Institute of Health (NIH) is the grantor for the majority of LSUHSCS’s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made “to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable. 2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs. Cause: LSUHSC-S implemented a revised Personnel Change (PER) form at the beginning of fiscal year 2023, which was designed to include an explanation and justification for any changes in faculty compensation on projects funded by federal awards. The departmental business managers, who are responsible for initiating PER forms, are not providing a full explanation for how errors occurred and the PER forms are not being processed timely. In addition, LSUHSC-S faculty are not completing time and effort certifications timely, which contributes to untimely adjustments for compensation. Effect: Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects. In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor. Recommendation: Management should monitor, investigate, and obtain justification from department personnel for untimely time and effort certifications, untimely adjustments, and lack of supporting documentation for adjustments to enforce established policies. Management’s Response and Corrective Action Plan: Management concurred with the finding and outlined a plan of corrective action (B-43).
2023-006 - Noncompliance with and Weakness in Controls over Federal Research and Development Expenses Award Years: Various Award Numbers: Various Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Pass-Through Entities: Various Repeat Finding: Yes (Prior Year Finding No. 2022-005) See Schedule of Findings and Questioned Costs for chart/table Condition: For the fifth consecutive year, the Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In a non-statistical random sample of 25 out of 2,401 payroll-adjusting entries affecting R&D, we noted the following: • Six (24%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. • Nine (36%) adjustments were not completed within 90 days of when the error was discovered. • One (4%) adjustment added unallowed expenses to a federal award project and is considered questioned costs totaling $2,619. We also performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 728 (36%) out of 2,030 adjusting journal entries were made more than 90 days after the end of the biannual period from the original transactions. The adjustments were made 92 to 467 days after the end of the biannual period. In addition, in a non-statistical random sample of 57 out of 11,827 expense transactions charged to R&D during the fiscal year ending June 30, 2023, we noted two (6%) of 32 time and effort certifications for salary and related benefit expenses tested were completed 126 to 140 days after the end of the semiannual period. Criteria: 2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity’s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments. Per LSUHSC-S’s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S’s policy, time and effort certifications should be completed within approximately 90 days of the end of the biannual period. Management interprets the end of the period to be when the time and effort reports are sent to the departments once the last month of the biannual period is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the biannual reporting period, a payroll reallocation must be created within 30 days. Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the “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. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions. In addition, the National Institute of Health (NIH) is the grantor for the majority of LSUHSCS’s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made “to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable. 2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs. Cause: LSUHSC-S implemented a revised Personnel Change (PER) form at the beginning of fiscal year 2023, which was designed to include an explanation and justification for any changes in faculty compensation on projects funded by federal awards. The departmental business managers, who are responsible for initiating PER forms, are not providing a full explanation for how errors occurred and the PER forms are not being processed timely. In addition, LSUHSC-S faculty are not completing time and effort certifications timely, which contributes to untimely adjustments for compensation. Effect: Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects. In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor. Recommendation: Management should monitor, investigate, and obtain justification from department personnel for untimely time and effort certifications, untimely adjustments, and lack of supporting documentation for adjustments to enforce established policies. Management’s Response and Corrective Action Plan: Management concurred with the finding and outlined a plan of corrective action (B-43).
2023-006 - Noncompliance with and Weakness in Controls over Federal Research and Development Expenses Award Years: Various Award Numbers: Various Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Pass-Through Entities: Various Repeat Finding: Yes (Prior Year Finding No. 2022-005) See Schedule of Findings and Questioned Costs for chart/table Condition: For the fifth consecutive year, the Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In a non-statistical random sample of 25 out of 2,401 payroll-adjusting entries affecting R&D, we noted the following: • Six (24%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. • Nine (36%) adjustments were not completed within 90 days of when the error was discovered. • One (4%) adjustment added unallowed expenses to a federal award project and is considered questioned costs totaling $2,619. We also performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 728 (36%) out of 2,030 adjusting journal entries were made more than 90 days after the end of the biannual period from the original transactions. The adjustments were made 92 to 467 days after the end of the biannual period. In addition, in a non-statistical random sample of 57 out of 11,827 expense transactions charged to R&D during the fiscal year ending June 30, 2023, we noted two (6%) of 32 time and effort certifications for salary and related benefit expenses tested were completed 126 to 140 days after the end of the semiannual period. Criteria: 2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity’s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments. Per LSUHSC-S’s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S’s policy, time and effort certifications should be completed within approximately 90 days of the end of the biannual period. Management interprets the end of the period to be when the time and effort reports are sent to the departments once the last month of the biannual period is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the biannual reporting period, a payroll reallocation must be created within 30 days. Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the “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. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions. In addition, the National Institute of Health (NIH) is the grantor for the majority of LSUHSCS’s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made “to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable. 2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs. Cause: LSUHSC-S implemented a revised Personnel Change (PER) form at the beginning of fiscal year 2023, which was designed to include an explanation and justification for any changes in faculty compensation on projects funded by federal awards. The departmental business managers, who are responsible for initiating PER forms, are not providing a full explanation for how errors occurred and the PER forms are not being processed timely. In addition, LSUHSC-S faculty are not completing time and effort certifications timely, which contributes to untimely adjustments for compensation. Effect: Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects. In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor. Recommendation: Management should monitor, investigate, and obtain justification from department personnel for untimely time and effort certifications, untimely adjustments, and lack of supporting documentation for adjustments to enforce established policies. Management’s Response and Corrective Action Plan: Management concurred with the finding and outlined a plan of corrective action (B-43).
2023-007 - Control Weakness and Noncompliance with Personnel Expenses Charged to Federal Awards Award Years: 2018, 2020, 2021, 2022 Award Numbers: 1815976, 2033380, 2117785, 2120015, 2000629518, 22-PA-11080600-187, 5U19AI142636-05, 75N93020D00008/75N93020F00004, DE-AC07-05ID14517, DE-SC0019956, EMW-2021-SS-00019-S01, NA20OAR4310253C Compliance Requirements: Allowable Costs/Cost Principles, Special Tests and Provisions Pass-Through Entities: Battelle Energy Alliance, Norwich Technologies Inc., University Corporation for Atmospheric Research Repeat Finding: Yes (Prior Year Finding No. 2022-006) See Schedule of Findings and Questioned Costs for chart/table Condition: For the third consecutive year, the University of Louisiana at Lafayette (UL Lafayette) did not have adequate controls in place to ensure personnel expenses charged to federal R&D awards accurately reflected work performed. From a population of 28,301 payroll and non-payroll expenses charged to R&D grants for the fiscal year ended June 30, 2023, a non-statistical sample of 25 transactions were tested for compliance with allowable costs and cost principles requirements. For five (20%) of the transactions, UL Lafayette was unable to provide documentation to show that personnel related expenses totaling $612 were supported by time and effort certifications to ensure the accuracy of budget estimates charged to federal awards as required by federal regulations. We reviewed 15 grant awards corresponding to the expense transactions selected and evaluated documentation to support the level of effort for each award and the 20 key personnel assigned to the selected awards. For 13 (65%) of the key personnel, UL Lafayette was unable to provide documentation that the key personnel complied with the effort required by the grant award. Criteria: 2 CFR 200.430(i) specifies the documentation standards for personnel expenses. In order to be allowable, charges to federal awards for personnel expenses must be based on records that accurately reflect the work performed and must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Budget estimates alone do not qualify as support for charges to federal awards, but can be used for interim accounting purposes provided that internal controls include an after-the fact review to confirm the accuracy of final amounts charged to federal awards. Prior approval requirements related to key personnel effort are contained in 2 CFR 200.308(c) and within grant terms and conditions. A reduction of 25% or greater in time devoted to the project from key personnel requires prior approval as does disengagement of key personnel from the project for three or more months. Cause: UL Lafayette noted in their prior-year corrective action plan and in a draft effort reporting policy that certifications for employees charging time to federal awards would be required quarterly. For the fiscal year ended June 30, 2023, certifications were only requested in July 2023, after the fiscal year-end, and were required to be returned within 30 days. Annual certifications are not sufficient to timely detect changes in key personnel effort and ensure prior approvals are obtained when applicable. Effect: Inadequate controls related to federal documentation standards for personnel expenses could result in noncompliance with federal allowable costs and cost principles, as well as noncompliance with special tests and provisions related to key personnel effort. Recommendation: Management should strengthen internal controls to ensure that personnel expenses charged to the federal awards are supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Additionally, management should revise the Time and Effort Certification policy or implement alternative controls designed to ensure compliance with special tests and provisions requirements. Management should monitor changes in effort for key personnel and ensure that prior written approval is obtained from the federal grantor for changes that exceed the thresholds set in federal regulations. Management’s Response and Corrective Action Plan: Management concurred with the finding and outlined a plan of corrective action (B-59).
2023-007 - Control Weakness and Noncompliance with Personnel Expenses Charged to Federal Awards Award Years: 2018, 2020, 2021, 2022 Award Numbers: 1815976, 2033380, 2117785, 2120015, 2000629518, 22-PA-11080600-187, 5U19AI142636-05, 75N93020D00008/75N93020F00004, DE-AC07-05ID14517, DE-SC0019956, EMW-2021-SS-00019-S01, NA20OAR4310253C Compliance Requirements: Allowable Costs/Cost Principles, Special Tests and Provisions Pass-Through Entities: Battelle Energy Alliance, Norwich Technologies Inc., University Corporation for Atmospheric Research Repeat Finding: Yes (Prior Year Finding No. 2022-006) See Schedule of Findings and Questioned Costs for chart/table Condition: For the third consecutive year, the University of Louisiana at Lafayette (UL Lafayette) did not have adequate controls in place to ensure personnel expenses charged to federal R&D awards accurately reflected work performed. From a population of 28,301 payroll and non-payroll expenses charged to R&D grants for the fiscal year ended June 30, 2023, a non-statistical sample of 25 transactions were tested for compliance with allowable costs and cost principles requirements. For five (20%) of the transactions, UL Lafayette was unable to provide documentation to show that personnel related expenses totaling $612 were supported by time and effort certifications to ensure the accuracy of budget estimates charged to federal awards as required by federal regulations. We reviewed 15 grant awards corresponding to the expense transactions selected and evaluated documentation to support the level of effort for each award and the 20 key personnel assigned to the selected awards. For 13 (65%) of the key personnel, UL Lafayette was unable to provide documentation that the key personnel complied with the effort required by the grant award. Criteria: 2 CFR 200.430(i) specifies the documentation standards for personnel expenses. In order to be allowable, charges to federal awards for personnel expenses must be based on records that accurately reflect the work performed and must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Budget estimates alone do not qualify as support for charges to federal awards, but can be used for interim accounting purposes provided that internal controls include an after-the fact review to confirm the accuracy of final amounts charged to federal awards. Prior approval requirements related to key personnel effort are contained in 2 CFR 200.308(c) and within grant terms and conditions. A reduction of 25% or greater in time devoted to the project from key personnel requires prior approval as does disengagement of key personnel from the project for three or more months. Cause: UL Lafayette noted in their prior-year corrective action plan and in a draft effort reporting policy that certifications for employees charging time to federal awards would be required quarterly. For the fiscal year ended June 30, 2023, certifications were only requested in July 2023, after the fiscal year-end, and were required to be returned within 30 days. Annual certifications are not sufficient to timely detect changes in key personnel effort and ensure prior approvals are obtained when applicable. Effect: Inadequate controls related to federal documentation standards for personnel expenses could result in noncompliance with federal allowable costs and cost principles, as well as noncompliance with special tests and provisions related to key personnel effort. Recommendation: Management should strengthen internal controls to ensure that personnel expenses charged to the federal awards are supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Additionally, management should revise the Time and Effort Certification policy or implement alternative controls designed to ensure compliance with special tests and provisions requirements. Management should monitor changes in effort for key personnel and ensure that prior written approval is obtained from the federal grantor for changes that exceed the thresholds set in federal regulations. Management’s Response and Corrective Action Plan: Management concurred with the finding and outlined a plan of corrective action (B-59).
2023-007 - Control Weakness and Noncompliance with Personnel Expenses Charged to Federal Awards Award Years: 2018, 2020, 2021, 2022 Award Numbers: 1815976, 2033380, 2117785, 2120015, 2000629518, 22-PA-11080600-187, 5U19AI142636-05, 75N93020D00008/75N93020F00004, DE-AC07-05ID14517, DE-SC0019956, EMW-2021-SS-00019-S01, NA20OAR4310253C Compliance Requirements: Allowable Costs/Cost Principles, Special Tests and Provisions Pass-Through Entities: Battelle Energy Alliance, Norwich Technologies Inc., University Corporation for Atmospheric Research Repeat Finding: Yes (Prior Year Finding No. 2022-006) See Schedule of Findings and Questioned Costs for chart/table Condition: For the third consecutive year, the University of Louisiana at Lafayette (UL Lafayette) did not have adequate controls in place to ensure personnel expenses charged to federal R&D awards accurately reflected work performed. From a population of 28,301 payroll and non-payroll expenses charged to R&D grants for the fiscal year ended June 30, 2023, a non-statistical sample of 25 transactions were tested for compliance with allowable costs and cost principles requirements. For five (20%) of the transactions, UL Lafayette was unable to provide documentation to show that personnel related expenses totaling $612 were supported by time and effort certifications to ensure the accuracy of budget estimates charged to federal awards as required by federal regulations. We reviewed 15 grant awards corresponding to the expense transactions selected and evaluated documentation to support the level of effort for each award and the 20 key personnel assigned to the selected awards. For 13 (65%) of the key personnel, UL Lafayette was unable to provide documentation that the key personnel complied with the effort required by the grant award. Criteria: 2 CFR 200.430(i) specifies the documentation standards for personnel expenses. In order to be allowable, charges to federal awards for personnel expenses must be based on records that accurately reflect the work performed and must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Budget estimates alone do not qualify as support for charges to federal awards, but can be used for interim accounting purposes provided that internal controls include an after-the fact review to confirm the accuracy of final amounts charged to federal awards. Prior approval requirements related to key personnel effort are contained in 2 CFR 200.308(c) and within grant terms and conditions. A reduction of 25% or greater in time devoted to the project from key personnel requires prior approval as does disengagement of key personnel from the project for three or more months. Cause: UL Lafayette noted in their prior-year corrective action plan and in a draft effort reporting policy that certifications for employees charging time to federal awards would be required quarterly. For the fiscal year ended June 30, 2023, certifications were only requested in July 2023, after the fiscal year-end, and were required to be returned within 30 days. Annual certifications are not sufficient to timely detect changes in key personnel effort and ensure prior approvals are obtained when applicable. Effect: Inadequate controls related to federal documentation standards for personnel expenses could result in noncompliance with federal allowable costs and cost principles, as well as noncompliance with special tests and provisions related to key personnel effort. Recommendation: Management should strengthen internal controls to ensure that personnel expenses charged to the federal awards are supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Additionally, management should revise the Time and Effort Certification policy or implement alternative controls designed to ensure compliance with special tests and provisions requirements. Management should monitor changes in effort for key personnel and ensure that prior written approval is obtained from the federal grantor for changes that exceed the thresholds set in federal regulations. Management’s Response and Corrective Action Plan: Management concurred with the finding and outlined a plan of corrective action (B-59).
2023-007 - Control Weakness and Noncompliance with Personnel Expenses Charged to Federal Awards Award Years: 2018, 2020, 2021, 2022 Award Numbers: 1815976, 2033380, 2117785, 2120015, 2000629518, 22-PA-11080600-187, 5U19AI142636-05, 75N93020D00008/75N93020F00004, DE-AC07-05ID14517, DE-SC0019956, EMW-2021-SS-00019-S01, NA20OAR4310253C Compliance Requirements: Allowable Costs/Cost Principles, Special Tests and Provisions Pass-Through Entities: Battelle Energy Alliance, Norwich Technologies Inc., University Corporation for Atmospheric Research Repeat Finding: Yes (Prior Year Finding No. 2022-006) See Schedule of Findings and Questioned Costs for chart/table Condition: For the third consecutive year, the University of Louisiana at Lafayette (UL Lafayette) did not have adequate controls in place to ensure personnel expenses charged to federal R&D awards accurately reflected work performed. From a population of 28,301 payroll and non-payroll expenses charged to R&D grants for the fiscal year ended June 30, 2023, a non-statistical sample of 25 transactions were tested for compliance with allowable costs and cost principles requirements. For five (20%) of the transactions, UL Lafayette was unable to provide documentation to show that personnel related expenses totaling $612 were supported by time and effort certifications to ensure the accuracy of budget estimates charged to federal awards as required by federal regulations. We reviewed 15 grant awards corresponding to the expense transactions selected and evaluated documentation to support the level of effort for each award and the 20 key personnel assigned to the selected awards. For 13 (65%) of the key personnel, UL Lafayette was unable to provide documentation that the key personnel complied with the effort required by the grant award. Criteria: 2 CFR 200.430(i) specifies the documentation standards for personnel expenses. In order to be allowable, charges to federal awards for personnel expenses must be based on records that accurately reflect the work performed and must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Budget estimates alone do not qualify as support for charges to federal awards, but can be used for interim accounting purposes provided that internal controls include an after-the fact review to confirm the accuracy of final amounts charged to federal awards. Prior approval requirements related to key personnel effort are contained in 2 CFR 200.308(c) and within grant terms and conditions. A reduction of 25% or greater in time devoted to the project from key personnel requires prior approval as does disengagement of key personnel from the project for three or more months. Cause: UL Lafayette noted in their prior-year corrective action plan and in a draft effort reporting policy that certifications for employees charging time to federal awards would be required quarterly. For the fiscal year ended June 30, 2023, certifications were only requested in July 2023, after the fiscal year-end, and were required to be returned within 30 days. Annual certifications are not sufficient to timely detect changes in key personnel effort and ensure prior approvals are obtained when applicable. Effect: Inadequate controls related to federal documentation standards for personnel expenses could result in noncompliance with federal allowable costs and cost principles, as well as noncompliance with special tests and provisions related to key personnel effort. Recommendation: Management should strengthen internal controls to ensure that personnel expenses charged to the federal awards are supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Additionally, management should revise the Time and Effort Certification policy or implement alternative controls designed to ensure compliance with special tests and provisions requirements. Management should monitor changes in effort for key personnel and ensure that prior written approval is obtained from the federal grantor for changes that exceed the thresholds set in federal regulations. Management’s Response and Corrective Action Plan: Management concurred with the finding and outlined a plan of corrective action (B-59).
2023-007 - Control Weakness and Noncompliance with Personnel Expenses Charged to Federal Awards Award Years: 2018, 2020, 2021, 2022 Award Numbers: 1815976, 2033380, 2117785, 2120015, 2000629518, 22-PA-11080600-187, 5U19AI142636-05, 75N93020D00008/75N93020F00004, DE-AC07-05ID14517, DE-SC0019956, EMW-2021-SS-00019-S01, NA20OAR4310253C Compliance Requirements: Allowable Costs/Cost Principles, Special Tests and Provisions Pass-Through Entities: Battelle Energy Alliance, Norwich Technologies Inc., University Corporation for Atmospheric Research Repeat Finding: Yes (Prior Year Finding No. 2022-006) See Schedule of Findings and Questioned Costs for chart/table Condition: For the third consecutive year, the University of Louisiana at Lafayette (UL Lafayette) did not have adequate controls in place to ensure personnel expenses charged to federal R&D awards accurately reflected work performed. From a population of 28,301 payroll and non-payroll expenses charged to R&D grants for the fiscal year ended June 30, 2023, a non-statistical sample of 25 transactions were tested for compliance with allowable costs and cost principles requirements. For five (20%) of the transactions, UL Lafayette was unable to provide documentation to show that personnel related expenses totaling $612 were supported by time and effort certifications to ensure the accuracy of budget estimates charged to federal awards as required by federal regulations. We reviewed 15 grant awards corresponding to the expense transactions selected and evaluated documentation to support the level of effort for each award and the 20 key personnel assigned to the selected awards. For 13 (65%) of the key personnel, UL Lafayette was unable to provide documentation that the key personnel complied with the effort required by the grant award. Criteria: 2 CFR 200.430(i) specifies the documentation standards for personnel expenses. In order to be allowable, charges to federal awards for personnel expenses must be based on records that accurately reflect the work performed and must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Budget estimates alone do not qualify as support for charges to federal awards, but can be used for interim accounting purposes provided that internal controls include an after-the fact review to confirm the accuracy of final amounts charged to federal awards. Prior approval requirements related to key personnel effort are contained in 2 CFR 200.308(c) and within grant terms and conditions. A reduction of 25% or greater in time devoted to the project from key personnel requires prior approval as does disengagement of key personnel from the project for three or more months. Cause: UL Lafayette noted in their prior-year corrective action plan and in a draft effort reporting policy that certifications for employees charging time to federal awards would be required quarterly. For the fiscal year ended June 30, 2023, certifications were only requested in July 2023, after the fiscal year-end, and were required to be returned within 30 days. Annual certifications are not sufficient to timely detect changes in key personnel effort and ensure prior approvals are obtained when applicable. Effect: Inadequate controls related to federal documentation standards for personnel expenses could result in noncompliance with federal allowable costs and cost principles, as well as noncompliance with special tests and provisions related to key personnel effort. Recommendation: Management should strengthen internal controls to ensure that personnel expenses charged to the federal awards are supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Additionally, management should revise the Time and Effort Certification policy or implement alternative controls designed to ensure compliance with special tests and provisions requirements. Management should monitor changes in effort for key personnel and ensure that prior written approval is obtained from the federal grantor for changes that exceed the thresholds set in federal regulations. Management’s Response and Corrective Action Plan: Management concurred with the finding and outlined a plan of corrective action (B-59).
2023-028 - Inadequate Controls over Payroll Award Year: 2023 Award Numbers: NU62PS924522, NU90TP922016 Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Repeat Finding: Yes (Prior Year Finding No. 2022-004) See Schedule of Findings and Questioned Costs for chart/table Condition: For the fourth consecutive year, the Louisiana Department of Health, Office of Public Health (OPH) did not ensure payroll expenditures were certified and approved for the Public Health Emergency Preparedness program and the HIV Prevention Activities Health Department Based program. Exceptions for each federal program are as follows: • For the Public Health Emergency Preparedness program, a non-statistical sample of 60 payroll transactions was tested from a population of 1,553 transactions totaling $4,760,920. One (2%) time statement was not certified by the employee, and four (7%) time statements were not approved by the employees’ supervisors. • For the HIV Prevention Activities Health Department Based program, a non-statistical sample of 120 payroll transactions was tested from a population of 1,015 transactions totaling $434,661. Two (2%) time statements were not certified by the employees, and three (3%) time statements were not approved by the employees’ supervisors. Criteria: 2 CFR 200.430(i) states that records must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Furthermore, the records must comply with the established accounting policies and practices of the non-federal entity. The Division of Administration Personnel Policy No. 99 requires employees and supervisors to certify and/or approve time statements for accuracy. Timekeepers are responsible for reviewing the LaGov ZP241 eCertification report prior to processing to identify any employees who have not certified their time statements and any supervisors who have not approved their staff’s time statements. Cause: OPH lacked sufficient controls to ensure electronic time statements were properly certified and approved in accordance with federal and state regulations. Effect: Failure to adequately approve program expenditures increases the risk that unallowable costs could be reimbursed by the federal grantor. Recommendation: OPH should ensure employees comply with existing policies and procedures, including properly certifying and approving electronic time statements. Management’s Response and Corrective Action Plan: Management concurred with the finding and provided a corrective action plan (B-36).
2023-028 - Inadequate Controls over Payroll Award Year: 2023 Award Numbers: NU62PS924522, NU90TP922016 Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Repeat Finding: Yes (Prior Year Finding No. 2022-004) See Schedule of Findings and Questioned Costs for chart/table Condition: For the fourth consecutive year, the Louisiana Department of Health, Office of Public Health (OPH) did not ensure payroll expenditures were certified and approved for the Public Health Emergency Preparedness program and the HIV Prevention Activities Health Department Based program. Exceptions for each federal program are as follows: • For the Public Health Emergency Preparedness program, a non-statistical sample of 60 payroll transactions was tested from a population of 1,553 transactions totaling $4,760,920. One (2%) time statement was not certified by the employee, and four (7%) time statements were not approved by the employees’ supervisors. • For the HIV Prevention Activities Health Department Based program, a non-statistical sample of 120 payroll transactions was tested from a population of 1,015 transactions totaling $434,661. Two (2%) time statements were not certified by the employees, and three (3%) time statements were not approved by the employees’ supervisors. Criteria: 2 CFR 200.430(i) states that records must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Furthermore, the records must comply with the established accounting policies and practices of the non-federal entity. The Division of Administration Personnel Policy No. 99 requires employees and supervisors to certify and/or approve time statements for accuracy. Timekeepers are responsible for reviewing the LaGov ZP241 eCertification report prior to processing to identify any employees who have not certified their time statements and any supervisors who have not approved their staff’s time statements. Cause: OPH lacked sufficient controls to ensure electronic time statements were properly certified and approved in accordance with federal and state regulations. Effect: Failure to adequately approve program expenditures increases the risk that unallowable costs could be reimbursed by the federal grantor. Recommendation: OPH should ensure employees comply with existing policies and procedures, including properly certifying and approving electronic time statements. Management’s Response and Corrective Action Plan: Management concurred with the finding and provided a corrective action plan (B-36).
2023-006 - Noncompliance with and Weakness in Controls over Federal Research and Development Expenses Award Years: Various Award Numbers: Various Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Pass-Through Entities: Various Repeat Finding: Yes (Prior Year Finding No. 2022-005) See Schedule of Findings and Questioned Costs for chart/table Condition: For the fifth consecutive year, the Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In a non-statistical random sample of 25 out of 2,401 payroll-adjusting entries affecting R&D, we noted the following: • Six (24%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. • Nine (36%) adjustments were not completed within 90 days of when the error was discovered. • One (4%) adjustment added unallowed expenses to a federal award project and is considered questioned costs totaling $2,619. We also performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 728 (36%) out of 2,030 adjusting journal entries were made more than 90 days after the end of the biannual period from the original transactions. The adjustments were made 92 to 467 days after the end of the biannual period. In addition, in a non-statistical random sample of 57 out of 11,827 expense transactions charged to R&D during the fiscal year ending June 30, 2023, we noted two (6%) of 32 time and effort certifications for salary and related benefit expenses tested were completed 126 to 140 days after the end of the semiannual period. Criteria: 2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity’s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments. Per LSUHSC-S’s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S’s policy, time and effort certifications should be completed within approximately 90 days of the end of the biannual period. Management interprets the end of the period to be when the time and effort reports are sent to the departments once the last month of the biannual period is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the biannual reporting period, a payroll reallocation must be created within 30 days. Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the “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. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions. In addition, the National Institute of Health (NIH) is the grantor for the majority of LSUHSCS’s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made “to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable. 2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs. Cause: LSUHSC-S implemented a revised Personnel Change (PER) form at the beginning of fiscal year 2023, which was designed to include an explanation and justification for any changes in faculty compensation on projects funded by federal awards. The departmental business managers, who are responsible for initiating PER forms, are not providing a full explanation for how errors occurred and the PER forms are not being processed timely. In addition, LSUHSC-S faculty are not completing time and effort certifications timely, which contributes to untimely adjustments for compensation. Effect: Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects. In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor. Recommendation: Management should monitor, investigate, and obtain justification from department personnel for untimely time and effort certifications, untimely adjustments, and lack of supporting documentation for adjustments to enforce established policies. Management’s Response and Corrective Action Plan: Management concurred with the finding and outlined a plan of corrective action (B-43).
2023-006 - Noncompliance with and Weakness in Controls over Federal Research and Development Expenses Award Years: Various Award Numbers: Various Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Pass-Through Entities: Various Repeat Finding: Yes (Prior Year Finding No. 2022-005) See Schedule of Findings and Questioned Costs for chart/table Condition: For the fifth consecutive year, the Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In a non-statistical random sample of 25 out of 2,401 payroll-adjusting entries affecting R&D, we noted the following: • Six (24%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. • Nine (36%) adjustments were not completed within 90 days of when the error was discovered. • One (4%) adjustment added unallowed expenses to a federal award project and is considered questioned costs totaling $2,619. We also performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 728 (36%) out of 2,030 adjusting journal entries were made more than 90 days after the end of the biannual period from the original transactions. The adjustments were made 92 to 467 days after the end of the biannual period. In addition, in a non-statistical random sample of 57 out of 11,827 expense transactions charged to R&D during the fiscal year ending June 30, 2023, we noted two (6%) of 32 time and effort certifications for salary and related benefit expenses tested were completed 126 to 140 days after the end of the semiannual period. Criteria: 2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity’s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments. Per LSUHSC-S’s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S’s policy, time and effort certifications should be completed within approximately 90 days of the end of the biannual period. Management interprets the end of the period to be when the time and effort reports are sent to the departments once the last month of the biannual period is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the biannual reporting period, a payroll reallocation must be created within 30 days. Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the “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. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions. In addition, the National Institute of Health (NIH) is the grantor for the majority of LSUHSCS’s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made “to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable. 2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs. Cause: LSUHSC-S implemented a revised Personnel Change (PER) form at the beginning of fiscal year 2023, which was designed to include an explanation and justification for any changes in faculty compensation on projects funded by federal awards. The departmental business managers, who are responsible for initiating PER forms, are not providing a full explanation for how errors occurred and the PER forms are not being processed timely. In addition, LSUHSC-S faculty are not completing time and effort certifications timely, which contributes to untimely adjustments for compensation. Effect: Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects. In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor. Recommendation: Management should monitor, investigate, and obtain justification from department personnel for untimely time and effort certifications, untimely adjustments, and lack of supporting documentation for adjustments to enforce established policies. Management’s Response and Corrective Action Plan: Management concurred with the finding and outlined a plan of corrective action (B-43).
2023-006 - Noncompliance with and Weakness in Controls over Federal Research and Development Expenses Award Years: Various Award Numbers: Various Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Pass-Through Entities: Various Repeat Finding: Yes (Prior Year Finding No. 2022-005) See Schedule of Findings and Questioned Costs for chart/table Condition: For the fifth consecutive year, the Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In a non-statistical random sample of 25 out of 2,401 payroll-adjusting entries affecting R&D, we noted the following: • Six (24%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. • Nine (36%) adjustments were not completed within 90 days of when the error was discovered. • One (4%) adjustment added unallowed expenses to a federal award project and is considered questioned costs totaling $2,619. We also performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 728 (36%) out of 2,030 adjusting journal entries were made more than 90 days after the end of the biannual period from the original transactions. The adjustments were made 92 to 467 days after the end of the biannual period. In addition, in a non-statistical random sample of 57 out of 11,827 expense transactions charged to R&D during the fiscal year ending June 30, 2023, we noted two (6%) of 32 time and effort certifications for salary and related benefit expenses tested were completed 126 to 140 days after the end of the semiannual period. Criteria: 2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity’s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments. Per LSUHSC-S’s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S’s policy, time and effort certifications should be completed within approximately 90 days of the end of the biannual period. Management interprets the end of the period to be when the time and effort reports are sent to the departments once the last month of the biannual period is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the biannual reporting period, a payroll reallocation must be created within 30 days. Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the “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. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions. In addition, the National Institute of Health (NIH) is the grantor for the majority of LSUHSCS’s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made “to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable. 2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs. Cause: LSUHSC-S implemented a revised Personnel Change (PER) form at the beginning of fiscal year 2023, which was designed to include an explanation and justification for any changes in faculty compensation on projects funded by federal awards. The departmental business managers, who are responsible for initiating PER forms, are not providing a full explanation for how errors occurred and the PER forms are not being processed timely. In addition, LSUHSC-S faculty are not completing time and effort certifications timely, which contributes to untimely adjustments for compensation. Effect: Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects. In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor. Recommendation: Management should monitor, investigate, and obtain justification from department personnel for untimely time and effort certifications, untimely adjustments, and lack of supporting documentation for adjustments to enforce established policies. Management’s Response and Corrective Action Plan: Management concurred with the finding and outlined a plan of corrective action (B-43).
2023-006 - Noncompliance with and Weakness in Controls over Federal Research and Development Expenses Award Years: Various Award Numbers: Various Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Pass-Through Entities: Various Repeat Finding: Yes (Prior Year Finding No. 2022-005) See Schedule of Findings and Questioned Costs for chart/table Condition: For the fifth consecutive year, the Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In a non-statistical random sample of 25 out of 2,401 payroll-adjusting entries affecting R&D, we noted the following: • Six (24%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. • Nine (36%) adjustments were not completed within 90 days of when the error was discovered. • One (4%) adjustment added unallowed expenses to a federal award project and is considered questioned costs totaling $2,619. We also performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 728 (36%) out of 2,030 adjusting journal entries were made more than 90 days after the end of the biannual period from the original transactions. The adjustments were made 92 to 467 days after the end of the biannual period. In addition, in a non-statistical random sample of 57 out of 11,827 expense transactions charged to R&D during the fiscal year ending June 30, 2023, we noted two (6%) of 32 time and effort certifications for salary and related benefit expenses tested were completed 126 to 140 days after the end of the semiannual period. Criteria: 2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity’s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments. Per LSUHSC-S’s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S’s policy, time and effort certifications should be completed within approximately 90 days of the end of the biannual period. Management interprets the end of the period to be when the time and effort reports are sent to the departments once the last month of the biannual period is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the biannual reporting period, a payroll reallocation must be created within 30 days. Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the “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. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions. In addition, the National Institute of Health (NIH) is the grantor for the majority of LSUHSCS’s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made “to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable. 2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs. Cause: LSUHSC-S implemented a revised Personnel Change (PER) form at the beginning of fiscal year 2023, which was designed to include an explanation and justification for any changes in faculty compensation on projects funded by federal awards. The departmental business managers, who are responsible for initiating PER forms, are not providing a full explanation for how errors occurred and the PER forms are not being processed timely. In addition, LSUHSC-S faculty are not completing time and effort certifications timely, which contributes to untimely adjustments for compensation. Effect: Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects. In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor. Recommendation: Management should monitor, investigate, and obtain justification from department personnel for untimely time and effort certifications, untimely adjustments, and lack of supporting documentation for adjustments to enforce established policies. Management’s Response and Corrective Action Plan: Management concurred with the finding and outlined a plan of corrective action (B-43).
2023-006 - Noncompliance with and Weakness in Controls over Federal Research and Development Expenses Award Years: Various Award Numbers: Various Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Pass-Through Entities: Various Repeat Finding: Yes (Prior Year Finding No. 2022-005) See Schedule of Findings and Questioned Costs for chart/table Condition: For the fifth consecutive year, the Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In a non-statistical random sample of 25 out of 2,401 payroll-adjusting entries affecting R&D, we noted the following: • Six (24%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. • Nine (36%) adjustments were not completed within 90 days of when the error was discovered. • One (4%) adjustment added unallowed expenses to a federal award project and is considered questioned costs totaling $2,619. We also performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 728 (36%) out of 2,030 adjusting journal entries were made more than 90 days after the end of the biannual period from the original transactions. The adjustments were made 92 to 467 days after the end of the biannual period. In addition, in a non-statistical random sample of 57 out of 11,827 expense transactions charged to R&D during the fiscal year ending June 30, 2023, we noted two (6%) of 32 time and effort certifications for salary and related benefit expenses tested were completed 126 to 140 days after the end of the semiannual period. Criteria: 2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity’s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments. Per LSUHSC-S’s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S’s policy, time and effort certifications should be completed within approximately 90 days of the end of the biannual period. Management interprets the end of the period to be when the time and effort reports are sent to the departments once the last month of the biannual period is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the biannual reporting period, a payroll reallocation must be created within 30 days. Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the “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. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions. In addition, the National Institute of Health (NIH) is the grantor for the majority of LSUHSCS’s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made “to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable. 2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs. Cause: LSUHSC-S implemented a revised Personnel Change (PER) form at the beginning of fiscal year 2023, which was designed to include an explanation and justification for any changes in faculty compensation on projects funded by federal awards. The departmental business managers, who are responsible for initiating PER forms, are not providing a full explanation for how errors occurred and the PER forms are not being processed timely. In addition, LSUHSC-S faculty are not completing time and effort certifications timely, which contributes to untimely adjustments for compensation. Effect: Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects. In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor. Recommendation: Management should monitor, investigate, and obtain justification from department personnel for untimely time and effort certifications, untimely adjustments, and lack of supporting documentation for adjustments to enforce established policies. Management’s Response and Corrective Action Plan: Management concurred with the finding and outlined a plan of corrective action (B-43).
2023-006 - Noncompliance with and Weakness in Controls over Federal Research and Development Expenses Award Years: Various Award Numbers: Various Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Pass-Through Entities: Various Repeat Finding: Yes (Prior Year Finding No. 2022-005) See Schedule of Findings and Questioned Costs for chart/table Condition: For the fifth consecutive year, the Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In a non-statistical random sample of 25 out of 2,401 payroll-adjusting entries affecting R&D, we noted the following: • Six (24%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. • Nine (36%) adjustments were not completed within 90 days of when the error was discovered. • One (4%) adjustment added unallowed expenses to a federal award project and is considered questioned costs totaling $2,619. We also performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 728 (36%) out of 2,030 adjusting journal entries were made more than 90 days after the end of the biannual period from the original transactions. The adjustments were made 92 to 467 days after the end of the biannual period. In addition, in a non-statistical random sample of 57 out of 11,827 expense transactions charged to R&D during the fiscal year ending June 30, 2023, we noted two (6%) of 32 time and effort certifications for salary and related benefit expenses tested were completed 126 to 140 days after the end of the semiannual period. Criteria: 2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity’s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments. Per LSUHSC-S’s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S’s policy, time and effort certifications should be completed within approximately 90 days of the end of the biannual period. Management interprets the end of the period to be when the time and effort reports are sent to the departments once the last month of the biannual period is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the biannual reporting period, a payroll reallocation must be created within 30 days. Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the “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. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions. In addition, the National Institute of Health (NIH) is the grantor for the majority of LSUHSCS’s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made “to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable. 2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs. Cause: LSUHSC-S implemented a revised Personnel Change (PER) form at the beginning of fiscal year 2023, which was designed to include an explanation and justification for any changes in faculty compensation on projects funded by federal awards. The departmental business managers, who are responsible for initiating PER forms, are not providing a full explanation for how errors occurred and the PER forms are not being processed timely. In addition, LSUHSC-S faculty are not completing time and effort certifications timely, which contributes to untimely adjustments for compensation. Effect: Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects. In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor. Recommendation: Management should monitor, investigate, and obtain justification from department personnel for untimely time and effort certifications, untimely adjustments, and lack of supporting documentation for adjustments to enforce established policies. Management’s Response and Corrective Action Plan: Management concurred with the finding and outlined a plan of corrective action (B-43).
2023-006 - Noncompliance with and Weakness in Controls over Federal Research and Development Expenses Award Years: Various Award Numbers: Various Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Pass-Through Entities: Various Repeat Finding: Yes (Prior Year Finding No. 2022-005) See Schedule of Findings and Questioned Costs for chart/table Condition: For the fifth consecutive year, the Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In a non-statistical random sample of 25 out of 2,401 payroll-adjusting entries affecting R&D, we noted the following: • Six (24%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. • Nine (36%) adjustments were not completed within 90 days of when the error was discovered. • One (4%) adjustment added unallowed expenses to a federal award project and is considered questioned costs totaling $2,619. We also performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 728 (36%) out of 2,030 adjusting journal entries were made more than 90 days after the end of the biannual period from the original transactions. The adjustments were made 92 to 467 days after the end of the biannual period. In addition, in a non-statistical random sample of 57 out of 11,827 expense transactions charged to R&D during the fiscal year ending June 30, 2023, we noted two (6%) of 32 time and effort certifications for salary and related benefit expenses tested were completed 126 to 140 days after the end of the semiannual period. Criteria: 2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity’s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments. Per LSUHSC-S’s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S’s policy, time and effort certifications should be completed within approximately 90 days of the end of the biannual period. Management interprets the end of the period to be when the time and effort reports are sent to the departments once the last month of the biannual period is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the biannual reporting period, a payroll reallocation must be created within 30 days. Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the “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. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions. In addition, the National Institute of Health (NIH) is the grantor for the majority of LSUHSCS’s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made “to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable. 2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs. Cause: LSUHSC-S implemented a revised Personnel Change (PER) form at the beginning of fiscal year 2023, which was designed to include an explanation and justification for any changes in faculty compensation on projects funded by federal awards. The departmental business managers, who are responsible for initiating PER forms, are not providing a full explanation for how errors occurred and the PER forms are not being processed timely. In addition, LSUHSC-S faculty are not completing time and effort certifications timely, which contributes to untimely adjustments for compensation. Effect: Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects. In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor. Recommendation: Management should monitor, investigate, and obtain justification from department personnel for untimely time and effort certifications, untimely adjustments, and lack of supporting documentation for adjustments to enforce established policies. Management’s Response and Corrective Action Plan: Management concurred with the finding and outlined a plan of corrective action (B-43).
2023-006 - Noncompliance with and Weakness in Controls over Federal Research and Development Expenses Award Years: Various Award Numbers: Various Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Pass-Through Entities: Various Repeat Finding: Yes (Prior Year Finding No. 2022-005) See Schedule of Findings and Questioned Costs for chart/table Condition: For the fifth consecutive year, the Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In a non-statistical random sample of 25 out of 2,401 payroll-adjusting entries affecting R&D, we noted the following: • Six (24%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. • Nine (36%) adjustments were not completed within 90 days of when the error was discovered. • One (4%) adjustment added unallowed expenses to a federal award project and is considered questioned costs totaling $2,619. We also performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 728 (36%) out of 2,030 adjusting journal entries were made more than 90 days after the end of the biannual period from the original transactions. The adjustments were made 92 to 467 days after the end of the biannual period. In addition, in a non-statistical random sample of 57 out of 11,827 expense transactions charged to R&D during the fiscal year ending June 30, 2023, we noted two (6%) of 32 time and effort certifications for salary and related benefit expenses tested were completed 126 to 140 days after the end of the semiannual period. Criteria: 2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity’s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments. Per LSUHSC-S’s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S’s policy, time and effort certifications should be completed within approximately 90 days of the end of the biannual period. Management interprets the end of the period to be when the time and effort reports are sent to the departments once the last month of the biannual period is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the biannual reporting period, a payroll reallocation must be created within 30 days. Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the “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. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions. In addition, the National Institute of Health (NIH) is the grantor for the majority of LSUHSCS’s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made “to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable. 2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs. Cause: LSUHSC-S implemented a revised Personnel Change (PER) form at the beginning of fiscal year 2023, which was designed to include an explanation and justification for any changes in faculty compensation on projects funded by federal awards. The departmental business managers, who are responsible for initiating PER forms, are not providing a full explanation for how errors occurred and the PER forms are not being processed timely. In addition, LSUHSC-S faculty are not completing time and effort certifications timely, which contributes to untimely adjustments for compensation. Effect: Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects. In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor. Recommendation: Management should monitor, investigate, and obtain justification from department personnel for untimely time and effort certifications, untimely adjustments, and lack of supporting documentation for adjustments to enforce established policies. Management’s Response and Corrective Action Plan: Management concurred with the finding and outlined a plan of corrective action (B-43).
2023-006 - Noncompliance with and Weakness in Controls over Federal Research and Development Expenses Award Years: Various Award Numbers: Various Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Pass-Through Entities: Various Repeat Finding: Yes (Prior Year Finding No. 2022-005) See Schedule of Findings and Questioned Costs for chart/table Condition: For the fifth consecutive year, the Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In a non-statistical random sample of 25 out of 2,401 payroll-adjusting entries affecting R&D, we noted the following: • Six (24%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. • Nine (36%) adjustments were not completed within 90 days of when the error was discovered. • One (4%) adjustment added unallowed expenses to a federal award project and is considered questioned costs totaling $2,619. We also performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 728 (36%) out of 2,030 adjusting journal entries were made more than 90 days after the end of the biannual period from the original transactions. The adjustments were made 92 to 467 days after the end of the biannual period. In addition, in a non-statistical random sample of 57 out of 11,827 expense transactions charged to R&D during the fiscal year ending June 30, 2023, we noted two (6%) of 32 time and effort certifications for salary and related benefit expenses tested were completed 126 to 140 days after the end of the semiannual period. Criteria: 2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity’s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments. Per LSUHSC-S’s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S’s policy, time and effort certifications should be completed within approximately 90 days of the end of the biannual period. Management interprets the end of the period to be when the time and effort reports are sent to the departments once the last month of the biannual period is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the biannual reporting period, a payroll reallocation must be created within 30 days. Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the “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. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions. In addition, the National Institute of Health (NIH) is the grantor for the majority of LSUHSCS’s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made “to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable. 2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs. Cause: LSUHSC-S implemented a revised Personnel Change (PER) form at the beginning of fiscal year 2023, which was designed to include an explanation and justification for any changes in faculty compensation on projects funded by federal awards. The departmental business managers, who are responsible for initiating PER forms, are not providing a full explanation for how errors occurred and the PER forms are not being processed timely. In addition, LSUHSC-S faculty are not completing time and effort certifications timely, which contributes to untimely adjustments for compensation. Effect: Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects. In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor. Recommendation: Management should monitor, investigate, and obtain justification from department personnel for untimely time and effort certifications, untimely adjustments, and lack of supporting documentation for adjustments to enforce established policies. Management’s Response and Corrective Action Plan: Management concurred with the finding and outlined a plan of corrective action (B-43).
2023-006 - Noncompliance with and Weakness in Controls over Federal Research and Development Expenses Award Years: Various Award Numbers: Various Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Pass-Through Entities: Various Repeat Finding: Yes (Prior Year Finding No. 2022-005) See Schedule of Findings and Questioned Costs for chart/table Condition: For the fifth consecutive year, the Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In a non-statistical random sample of 25 out of 2,401 payroll-adjusting entries affecting R&D, we noted the following: • Six (24%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. • Nine (36%) adjustments were not completed within 90 days of when the error was discovered. • One (4%) adjustment added unallowed expenses to a federal award project and is considered questioned costs totaling $2,619. We also performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 728 (36%) out of 2,030 adjusting journal entries were made more than 90 days after the end of the biannual period from the original transactions. The adjustments were made 92 to 467 days after the end of the biannual period. In addition, in a non-statistical random sample of 57 out of 11,827 expense transactions charged to R&D during the fiscal year ending June 30, 2023, we noted two (6%) of 32 time and effort certifications for salary and related benefit expenses tested were completed 126 to 140 days after the end of the semiannual period. Criteria: 2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity’s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments. Per LSUHSC-S’s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S’s policy, time and effort certifications should be completed within approximately 90 days of the end of the biannual period. Management interprets the end of the period to be when the time and effort reports are sent to the departments once the last month of the biannual period is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the biannual reporting period, a payroll reallocation must be created within 30 days. Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the “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. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions. In addition, the National Institute of Health (NIH) is the grantor for the majority of LSUHSCS’s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made “to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable. 2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs. Cause: LSUHSC-S implemented a revised Personnel Change (PER) form at the beginning of fiscal year 2023, which was designed to include an explanation and justification for any changes in faculty compensation on projects funded by federal awards. The departmental business managers, who are responsible for initiating PER forms, are not providing a full explanation for how errors occurred and the PER forms are not being processed timely. In addition, LSUHSC-S faculty are not completing time and effort certifications timely, which contributes to untimely adjustments for compensation. Effect: Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects. In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor. Recommendation: Management should monitor, investigate, and obtain justification from department personnel for untimely time and effort certifications, untimely adjustments, and lack of supporting documentation for adjustments to enforce established policies. Management’s Response and Corrective Action Plan: Management concurred with the finding and outlined a plan of corrective action (B-43).
2023-007 - Control Weakness and Noncompliance with Personnel Expenses Charged to Federal Awards Award Years: 2018, 2020, 2021, 2022 Award Numbers: 1815976, 2033380, 2117785, 2120015, 2000629518, 22-PA-11080600-187, 5U19AI142636-05, 75N93020D00008/75N93020F00004, DE-AC07-05ID14517, DE-SC0019956, EMW-2021-SS-00019-S01, NA20OAR4310253C Compliance Requirements: Allowable Costs/Cost Principles, Special Tests and Provisions Pass-Through Entities: Battelle Energy Alliance, Norwich Technologies Inc., University Corporation for Atmospheric Research Repeat Finding: Yes (Prior Year Finding No. 2022-006) See Schedule of Findings and Questioned Costs for chart/table Condition: For the third consecutive year, the University of Louisiana at Lafayette (UL Lafayette) did not have adequate controls in place to ensure personnel expenses charged to federal R&D awards accurately reflected work performed. From a population of 28,301 payroll and non-payroll expenses charged to R&D grants for the fiscal year ended June 30, 2023, a non-statistical sample of 25 transactions were tested for compliance with allowable costs and cost principles requirements. For five (20%) of the transactions, UL Lafayette was unable to provide documentation to show that personnel related expenses totaling $612 were supported by time and effort certifications to ensure the accuracy of budget estimates charged to federal awards as required by federal regulations. We reviewed 15 grant awards corresponding to the expense transactions selected and evaluated documentation to support the level of effort for each award and the 20 key personnel assigned to the selected awards. For 13 (65%) of the key personnel, UL Lafayette was unable to provide documentation that the key personnel complied with the effort required by the grant award. Criteria: 2 CFR 200.430(i) specifies the documentation standards for personnel expenses. In order to be allowable, charges to federal awards for personnel expenses must be based on records that accurately reflect the work performed and must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Budget estimates alone do not qualify as support for charges to federal awards, but can be used for interim accounting purposes provided that internal controls include an after-the fact review to confirm the accuracy of final amounts charged to federal awards. Prior approval requirements related to key personnel effort are contained in 2 CFR 200.308(c) and within grant terms and conditions. A reduction of 25% or greater in time devoted to the project from key personnel requires prior approval as does disengagement of key personnel from the project for three or more months. Cause: UL Lafayette noted in their prior-year corrective action plan and in a draft effort reporting policy that certifications for employees charging time to federal awards would be required quarterly. For the fiscal year ended June 30, 2023, certifications were only requested in July 2023, after the fiscal year-end, and were required to be returned within 30 days. Annual certifications are not sufficient to timely detect changes in key personnel effort and ensure prior approvals are obtained when applicable. Effect: Inadequate controls related to federal documentation standards for personnel expenses could result in noncompliance with federal allowable costs and cost principles, as well as noncompliance with special tests and provisions related to key personnel effort. Recommendation: Management should strengthen internal controls to ensure that personnel expenses charged to the federal awards are supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Additionally, management should revise the Time and Effort Certification policy or implement alternative controls designed to ensure compliance with special tests and provisions requirements. Management should monitor changes in effort for key personnel and ensure that prior written approval is obtained from the federal grantor for changes that exceed the thresholds set in federal regulations. Management’s Response and Corrective Action Plan: Management concurred with the finding and outlined a plan of corrective action (B-59).
2023-006 - Noncompliance with and Weakness in Controls over Federal Research and Development Expenses Award Years: Various Award Numbers: Various Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Pass-Through Entities: Various Repeat Finding: Yes (Prior Year Finding No. 2022-005) See Schedule of Findings and Questioned Costs for chart/table Condition: For the fifth consecutive year, the Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In a non-statistical random sample of 25 out of 2,401 payroll-adjusting entries affecting R&D, we noted the following: • Six (24%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. • Nine (36%) adjustments were not completed within 90 days of when the error was discovered. • One (4%) adjustment added unallowed expenses to a federal award project and is considered questioned costs totaling $2,619. We also performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 728 (36%) out of 2,030 adjusting journal entries were made more than 90 days after the end of the biannual period from the original transactions. The adjustments were made 92 to 467 days after the end of the biannual period. In addition, in a non-statistical random sample of 57 out of 11,827 expense transactions charged to R&D during the fiscal year ending June 30, 2023, we noted two (6%) of 32 time and effort certifications for salary and related benefit expenses tested were completed 126 to 140 days after the end of the semiannual period. Criteria: 2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity’s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments. Per LSUHSC-S’s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S’s policy, time and effort certifications should be completed within approximately 90 days of the end of the biannual period. Management interprets the end of the period to be when the time and effort reports are sent to the departments once the last month of the biannual period is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the biannual reporting period, a payroll reallocation must be created within 30 days. Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the “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. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions. In addition, the National Institute of Health (NIH) is the grantor for the majority of LSUHSCS’s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made “to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable. 2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs. Cause: LSUHSC-S implemented a revised Personnel Change (PER) form at the beginning of fiscal year 2023, which was designed to include an explanation and justification for any changes in faculty compensation on projects funded by federal awards. The departmental business managers, who are responsible for initiating PER forms, are not providing a full explanation for how errors occurred and the PER forms are not being processed timely. In addition, LSUHSC-S faculty are not completing time and effort certifications timely, which contributes to untimely adjustments for compensation. Effect: Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects. In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor. Recommendation: Management should monitor, investigate, and obtain justification from department personnel for untimely time and effort certifications, untimely adjustments, and lack of supporting documentation for adjustments to enforce established policies. Management’s Response and Corrective Action Plan: Management concurred with the finding and outlined a plan of corrective action (B-43).
2023-006 - Noncompliance with and Weakness in Controls over Federal Research and Development Expenses Award Years: Various Award Numbers: Various Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Pass-Through Entities: Various Repeat Finding: Yes (Prior Year Finding No. 2022-005) See Schedule of Findings and Questioned Costs for chart/table Condition: For the fifth consecutive year, the Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In a non-statistical random sample of 25 out of 2,401 payroll-adjusting entries affecting R&D, we noted the following: • Six (24%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. • Nine (36%) adjustments were not completed within 90 days of when the error was discovered. • One (4%) adjustment added unallowed expenses to a federal award project and is considered questioned costs totaling $2,619. We also performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 728 (36%) out of 2,030 adjusting journal entries were made more than 90 days after the end of the biannual period from the original transactions. The adjustments were made 92 to 467 days after the end of the biannual period. In addition, in a non-statistical random sample of 57 out of 11,827 expense transactions charged to R&D during the fiscal year ending June 30, 2023, we noted two (6%) of 32 time and effort certifications for salary and related benefit expenses tested were completed 126 to 140 days after the end of the semiannual period. Criteria: 2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity’s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments. Per LSUHSC-S’s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S’s policy, time and effort certifications should be completed within approximately 90 days of the end of the biannual period. Management interprets the end of the period to be when the time and effort reports are sent to the departments once the last month of the biannual period is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the biannual reporting period, a payroll reallocation must be created within 30 days. Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the “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. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions. In addition, the National Institute of Health (NIH) is the grantor for the majority of LSUHSCS’s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made “to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable. 2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs. Cause: LSUHSC-S implemented a revised Personnel Change (PER) form at the beginning of fiscal year 2023, which was designed to include an explanation and justification for any changes in faculty compensation on projects funded by federal awards. The departmental business managers, who are responsible for initiating PER forms, are not providing a full explanation for how errors occurred and the PER forms are not being processed timely. In addition, LSUHSC-S faculty are not completing time and effort certifications timely, which contributes to untimely adjustments for compensation. Effect: Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects. In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor. Recommendation: Management should monitor, investigate, and obtain justification from department personnel for untimely time and effort certifications, untimely adjustments, and lack of supporting documentation for adjustments to enforce established policies. Management’s Response and Corrective Action Plan: Management concurred with the finding and outlined a plan of corrective action (B-43).
2023-006 - Noncompliance with and Weakness in Controls over Federal Research and Development Expenses Award Years: Various Award Numbers: Various Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Pass-Through Entities: Various Repeat Finding: Yes (Prior Year Finding No. 2022-005) See Schedule of Findings and Questioned Costs for chart/table Condition: For the fifth consecutive year, the Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In a non-statistical random sample of 25 out of 2,401 payroll-adjusting entries affecting R&D, we noted the following: • Six (24%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. • Nine (36%) adjustments were not completed within 90 days of when the error was discovered. • One (4%) adjustment added unallowed expenses to a federal award project and is considered questioned costs totaling $2,619. We also performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 728 (36%) out of 2,030 adjusting journal entries were made more than 90 days after the end of the biannual period from the original transactions. The adjustments were made 92 to 467 days after the end of the biannual period. In addition, in a non-statistical random sample of 57 out of 11,827 expense transactions charged to R&D during the fiscal year ending June 30, 2023, we noted two (6%) of 32 time and effort certifications for salary and related benefit expenses tested were completed 126 to 140 days after the end of the semiannual period. Criteria: 2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity’s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments. Per LSUHSC-S’s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S’s policy, time and effort certifications should be completed within approximately 90 days of the end of the biannual period. Management interprets the end of the period to be when the time and effort reports are sent to the departments once the last month of the biannual period is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the biannual reporting period, a payroll reallocation must be created within 30 days. Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the “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. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions. In addition, the National Institute of Health (NIH) is the grantor for the majority of LSUHSCS’s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made “to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable. 2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs. Cause: LSUHSC-S implemented a revised Personnel Change (PER) form at the beginning of fiscal year 2023, which was designed to include an explanation and justification for any changes in faculty compensation on projects funded by federal awards. The departmental business managers, who are responsible for initiating PER forms, are not providing a full explanation for how errors occurred and the PER forms are not being processed timely. In addition, LSUHSC-S faculty are not completing time and effort certifications timely, which contributes to untimely adjustments for compensation. Effect: Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects. In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor. Recommendation: Management should monitor, investigate, and obtain justification from department personnel for untimely time and effort certifications, untimely adjustments, and lack of supporting documentation for adjustments to enforce established policies. Management’s Response and Corrective Action Plan: Management concurred with the finding and outlined a plan of corrective action (B-43).
2023-006 - Noncompliance with and Weakness in Controls over Federal Research and Development Expenses Award Years: Various Award Numbers: Various Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Pass-Through Entities: Various Repeat Finding: Yes (Prior Year Finding No. 2022-005) See Schedule of Findings and Questioned Costs for chart/table Condition: For the fifth consecutive year, the Louisiana State University Health Sciences Center in Shreveport (LSUHSC-S) did not ensure internal control over documentation of personnel services were operating effectively, and did not ensure compliance with federal guidance regarding cost transfers applicable to the Research and Development (R&D) Cluster. In a non-statistical random sample of 25 out of 2,401 payroll-adjusting entries affecting R&D, we noted the following: • Six (24%) adjustments did not have adequate documentation for cost transfers to fully explain how the error occurred and a sufficient explanation to support the correctness of the new charge. • Nine (36%) adjustments were not completed within 90 days of when the error was discovered. • One (4%) adjustment added unallowed expenses to a federal award project and is considered questioned costs totaling $2,619. We also performed an analysis of payroll adjusting journal entries to record cost transfers to and/or from R&D awards. We noted that 728 (36%) out of 2,030 adjusting journal entries were made more than 90 days after the end of the biannual period from the original transactions. The adjustments were made 92 to 467 days after the end of the biannual period. In addition, in a non-statistical random sample of 57 out of 11,827 expense transactions charged to R&D during the fiscal year ending June 30, 2023, we noted two (6%) of 32 time and effort certifications for salary and related benefit expenses tested were completed 126 to 140 days after the end of the semiannual period. Criteria: 2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.430(i)(1)(viii), budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that significant changes in work activity are identified and entered into the records in a timely manner and the non-federal entity’s system of internal controls includes processes to review after-the-fact charges and make necessary adjustments. Per LSUHSC-S’s Time and Effort Certification Policy and Procedures, LSUHSC-S utilizes time and effort certifications to support salary charges to sponsored projects as an after-the-fact certification of effort of all individuals when all or a portion of their salaries are charged to a sponsored project. Based on LSUHSC-S’s policy, time and effort certifications should be completed within approximately 90 days of the end of the biannual period. Management interprets the end of the period to be when the time and effort reports are sent to the departments once the last month of the biannual period is closed in the accounting system. If there is a substantial (5% or more) difference between the salary charges and the effort actually expended by the individual on projects during the biannual reporting period, a payroll reallocation must be created within 30 days. Per 2 CFR 200.303, the non-federal entity must establish and maintain effective internal control over the federal award. These internal controls should be in compliance with guidance in the “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. Per the Standards for Internal Control in the Federal Government, examples of common categories of control activities include accurate and timely recording of transactions. In addition, the National Institute of Health (NIH) is the grantor for the majority of LSUHSCS’s R&D grant awards. Per the NIH Grants Policy Statement 7.5, cost transfers that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. An explanation merely stating that the transfer was made “to correct error" or "to transfer to correct project" is not sufficient. Transfers of costs from one project to another or from one competitive segment to the next solely to cover cost overruns are not allowable. 2 CFR 200 Subpart E and the terms and conditions of the award establish requirements for non-federal entities receiving federal awards that govern the allowability of costs. Cause: LSUHSC-S implemented a revised Personnel Change (PER) form at the beginning of fiscal year 2023, which was designed to include an explanation and justification for any changes in faculty compensation on projects funded by federal awards. The departmental business managers, who are responsible for initiating PER forms, are not providing a full explanation for how errors occurred and the PER forms are not being processed timely. In addition, LSUHSC-S faculty are not completing time and effort certifications timely, which contributes to untimely adjustments for compensation. Effect: Untimely certifications and the untimely discovery and correction of errors increases the risk of inaccurate reporting and may result in an inability to complete approved projects within the approved budget and/or period of performance. As a result, LSUHSC-S may have to utilize university funds to complete approved projects. In addition, inadequate controls and noncompliance with federal awards increases the likelihood of disallowed costs, which LSUHSC-S may have to repay to the federal grantor. Recommendation: Management should monitor, investigate, and obtain justification from department personnel for untimely time and effort certifications, untimely adjustments, and lack of supporting documentation for adjustments to enforce established policies. Management’s Response and Corrective Action Plan: Management concurred with the finding and outlined a plan of corrective action (B-43).
2023-007 - Control Weakness and Noncompliance with Personnel Expenses Charged to Federal Awards Award Years: 2018, 2020, 2021, 2022 Award Numbers: 1815976, 2033380, 2117785, 2120015, 2000629518, 22-PA-11080600-187, 5U19AI142636-05, 75N93020D00008/75N93020F00004, DE-AC07-05ID14517, DE-SC0019956, EMW-2021-SS-00019-S01, NA20OAR4310253C Compliance Requirements: Allowable Costs/Cost Principles, Special Tests and Provisions Pass-Through Entities: Battelle Energy Alliance, Norwich Technologies Inc., University Corporation for Atmospheric Research Repeat Finding: Yes (Prior Year Finding No. 2022-006) See Schedule of Findings and Questioned Costs for chart/table Condition: For the third consecutive year, the University of Louisiana at Lafayette (UL Lafayette) did not have adequate controls in place to ensure personnel expenses charged to federal R&D awards accurately reflected work performed. From a population of 28,301 payroll and non-payroll expenses charged to R&D grants for the fiscal year ended June 30, 2023, a non-statistical sample of 25 transactions were tested for compliance with allowable costs and cost principles requirements. For five (20%) of the transactions, UL Lafayette was unable to provide documentation to show that personnel related expenses totaling $612 were supported by time and effort certifications to ensure the accuracy of budget estimates charged to federal awards as required by federal regulations. We reviewed 15 grant awards corresponding to the expense transactions selected and evaluated documentation to support the level of effort for each award and the 20 key personnel assigned to the selected awards. For 13 (65%) of the key personnel, UL Lafayette was unable to provide documentation that the key personnel complied with the effort required by the grant award. Criteria: 2 CFR 200.430(i) specifies the documentation standards for personnel expenses. In order to be allowable, charges to federal awards for personnel expenses must be based on records that accurately reflect the work performed and must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Budget estimates alone do not qualify as support for charges to federal awards, but can be used for interim accounting purposes provided that internal controls include an after-the fact review to confirm the accuracy of final amounts charged to federal awards. Prior approval requirements related to key personnel effort are contained in 2 CFR 200.308(c) and within grant terms and conditions. A reduction of 25% or greater in time devoted to the project from key personnel requires prior approval as does disengagement of key personnel from the project for three or more months. Cause: UL Lafayette noted in their prior-year corrective action plan and in a draft effort reporting policy that certifications for employees charging time to federal awards would be required quarterly. For the fiscal year ended June 30, 2023, certifications were only requested in July 2023, after the fiscal year-end, and were required to be returned within 30 days. Annual certifications are not sufficient to timely detect changes in key personnel effort and ensure prior approvals are obtained when applicable. Effect: Inadequate controls related to federal documentation standards for personnel expenses could result in noncompliance with federal allowable costs and cost principles, as well as noncompliance with special tests and provisions related to key personnel effort. Recommendation: Management should strengthen internal controls to ensure that personnel expenses charged to the federal awards are supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Additionally, management should revise the Time and Effort Certification policy or implement alternative controls designed to ensure compliance with special tests and provisions requirements. Management should monitor changes in effort for key personnel and ensure that prior written approval is obtained from the federal grantor for changes that exceed the thresholds set in federal regulations. Management’s Response and Corrective Action Plan: Management concurred with the finding and outlined a plan of corrective action (B-59).
2023-030 - Weakness in Controls over Payroll Award Years: 2022, 2023 Award Numbers: 2204LADI00, 2304LADI00 Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Repeat Finding: No See Schedule of Findings and Questioned Costs for chart/table Condition: DCFS did not follow established payroll policies and procedures for the certification and approval of time statements, as well as for the approval of leave requests. This is the second consecutive year a weakness in controls over payroll has been reported. In our review of 45 time statements department-wide for the period July 1, 2022, through June 30, 2023, we identified the following: • Ten (22%) time statements were approved by supervisors between 1 and 252 days after the date required by policy. • Three (7%) time statements were certified by employees between 20 and 70 days after the date required by policy. • Two (4%) time statements were not certified by employees nor approved by the supervisors prior to payroll processing. In addition, our review of payroll system reports identified 8,133 (5%) of 156,777 leave requests that were auto-approved by the system. This occurs when leave has been requested, but the employee’s supervisor did not take timely action to approve/reject the system leave request before the end of the pay period in which the leave was taken. All open leave requests in the system will be auto-approved on the last day of the applicable pay period in order for the employee to receive payment. We also performed procedures specifically on the Disability Insurance/SSI Cluster, a major federal program for fiscal year 2023. In a statistical sample of 40 payroll transactions from a population of 46,568 Disability Insurance/SSI Cluster payroll transactions totaling $19,646,061, three (8%) of the time statements tested were not approved by the employees’ supervisors. Criteria: DCFS payroll policy requires employees to certify their time statements by the Tuesday following the close of the pay period in the Cross-Application Time Statements (CATS) system, and supervisors are required to approve time statements in the CATS system by the Wednesday following the close of the pay period. Supervisors are also responsible for approving or rejecting all leave requests before the end of the applicable pay period. Also, 2 CFR 200.430(i)(1)(i) requires that charges to federal awards for salaries and wages must be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Cause: DCFS employees did not adhere to the established policies and procedures over payroll to certify and approve time statements in a timely manner or properly approve leave requests. Effect: As a result, there is an increased risk that errors and/or fraud could occur and not be detected in a timely manner and that unallowable costs could be reimbursed by the federal grantor. Recommendation: Management should ensure employees comply with existing policies and procedures, including certifying and approving time statements and leave requests in a timely manner. Management’s Response and Corrective Action Plan: Management concurred with the finding and provided a corrective action plan (B-6).
2023-007 - Control Weakness and Noncompliance with Personnel Expenses Charged to Federal Awards Award Years: 2018, 2020, 2021, 2022 Award Numbers: 1815976, 2033380, 2117785, 2120015, 2000629518, 22-PA-11080600-187, 5U19AI142636-05, 75N93020D00008/75N93020F00004, DE-AC07-05ID14517, DE-SC0019956, EMW-2021-SS-00019-S01, NA20OAR4310253C Compliance Requirements: Allowable Costs/Cost Principles, Special Tests and Provisions Pass-Through Entities: Battelle Energy Alliance, Norwich Technologies Inc., University Corporation for Atmospheric Research Repeat Finding: Yes (Prior Year Finding No. 2022-006) See Schedule of Findings and Questioned Costs for chart/table Condition: For the third consecutive year, the University of Louisiana at Lafayette (UL Lafayette) did not have adequate controls in place to ensure personnel expenses charged to federal R&D awards accurately reflected work performed. From a population of 28,301 payroll and non-payroll expenses charged to R&D grants for the fiscal year ended June 30, 2023, a non-statistical sample of 25 transactions were tested for compliance with allowable costs and cost principles requirements. For five (20%) of the transactions, UL Lafayette was unable to provide documentation to show that personnel related expenses totaling $612 were supported by time and effort certifications to ensure the accuracy of budget estimates charged to federal awards as required by federal regulations. We reviewed 15 grant awards corresponding to the expense transactions selected and evaluated documentation to support the level of effort for each award and the 20 key personnel assigned to the selected awards. For 13 (65%) of the key personnel, UL Lafayette was unable to provide documentation that the key personnel complied with the effort required by the grant award. Criteria: 2 CFR 200.430(i) specifies the documentation standards for personnel expenses. In order to be allowable, charges to federal awards for personnel expenses must be based on records that accurately reflect the work performed and must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Budget estimates alone do not qualify as support for charges to federal awards, but can be used for interim accounting purposes provided that internal controls include an after-the fact review to confirm the accuracy of final amounts charged to federal awards. Prior approval requirements related to key personnel effort are contained in 2 CFR 200.308(c) and within grant terms and conditions. A reduction of 25% or greater in time devoted to the project from key personnel requires prior approval as does disengagement of key personnel from the project for three or more months. Cause: UL Lafayette noted in their prior-year corrective action plan and in a draft effort reporting policy that certifications for employees charging time to federal awards would be required quarterly. For the fiscal year ended June 30, 2023, certifications were only requested in July 2023, after the fiscal year-end, and were required to be returned within 30 days. Annual certifications are not sufficient to timely detect changes in key personnel effort and ensure prior approvals are obtained when applicable. Effect: Inadequate controls related to federal documentation standards for personnel expenses could result in noncompliance with federal allowable costs and cost principles, as well as noncompliance with special tests and provisions related to key personnel effort. Recommendation: Management should strengthen internal controls to ensure that personnel expenses charged to the federal awards are supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Additionally, management should revise the Time and Effort Certification policy or implement alternative controls designed to ensure compliance with special tests and provisions requirements. Management should monitor changes in effort for key personnel and ensure that prior written approval is obtained from the federal grantor for changes that exceed the thresholds set in federal regulations. Management’s Response and Corrective Action Plan: Management concurred with the finding and outlined a plan of corrective action (B-59).
III. Federal Award Findings and Questioned Costs Finding 2023-001: Certification over payroll cost allocation Federal Grantor U.S. Department of Health and Human Services Pass-Through Grantor Illinois Department of Human Services Federal Assistance Listing Number ALN: 93.667 Program Title Social Services Block Grant Contract Number FSCWJ00302 Award Year 2022-2023 Criteria 2 CFR 200.430(i) Standards for Documentation of Personnel Expenses (1) Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that the non-federal entity's system of internal controls includes processes to review after-the-fact interim charges made to a federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the federal award is accurate, allowable, and properly allocated. Condition Envision Unlimited allocated staff salaries and related fringe benefits to the federal program based on budgeted estimates which were determined before the services were performed. There was no employee certification or documented review of actual time and effort incurred for the payroll costs charged to the grant at the time audit procedures were performed. Subsequently, in December 2023, employee certifications were obtained and reviewed by supervisors for all grant payroll costs charged during the award year and were provided to the auditors. Cause Program directors at Envision Unlimited assert that they are aware of time and effort allocated to this federal program and that informal reviews take place to ensure that actual time and effort incurred does not differ from that which was budgeted and allocated in advance. However, internal controls were not in place to formally certify and document reviews to provide evidence of this process. Effect No adjustments were determined to be necessary. However, insufficient internal controls over time and effort reporting, such as the lack of employee certification or documented review of actual time and effort incurred for the payroll costs charged to the grant, could result in noncompliance with federal regulations and the loss of future federal funding. Questions Costs:No questioned costs were identified. Repeat Finding No Recommendation We recommend that a system be put in place to allow employees whose salaries and related fringe benefits are allocated to federal programs to certify that their actual time and effort does not differ from that which was budgeted and allocated to the program, in advance. This self-certification should be reviewed by and approved by the employees’ direct supervisor to assert that the time and effort allocated is accurate. These certifications and their reviews should take place on, at least, a quarterly basis and be completed in a timely fashion following the end of the related quarter. Views of Responsible Officials Management is in agreement with this finding. See corrective action plan.
Finding No. 2023-001 – Activities Allowed or Unallowed; Allowable Costs/Costs Principles Agency and Award: U.S. Department of Health and Human Services ALN Numbers: 93.659, Adoption Assistance Program 93.667, Social Services Block Grant Program Agency and Award: Florida Department of Juvenile Justice CSFA Number: 80.005, Children and Families in Need of Services Program Significant Deficiency/Other Matter Compliance Criteria: The Code of Federal Regulations (CFR) Section 200.403(g) states that for costs to be allowable under federal awards, they must be adequately documented and there must be sufficient documentation. Additionally, CFR Section 200.430 states that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed and are supported by a system of internal control which provides reasonable assurance that the charges are accurate and allowable. The Florida’s Division of Accounting and Auditing Reference Guide for State Expenditures states that supporting documentation shall be maintained in support of expenditure payment requests for cost reimbursement contracts including that approved timesheets support the hours worked on the project or activity must be kept. Condition: During our testing of payroll disbursements, we noted that seven of the 120 payroll expenditures selected for testing did not have a properly approved timecard for the pay period selected. Cause: The Organization’s policies and procedures were not appropriately adhered to in these instances to obtain approval of timecards prior to payroll being processed to evidence these costs was allowable and that an appropriate level of review and approval was completed prior to charging these costs to a federal program or state financial assistance project. Effect or Potential Effect: We were unable to confirm the accuracy or completeness of the expense claim as a federal or state financial assistance expenditure. Questioned Costs: There are no questioned costs as the Organization performed a thorough review and approval of the timecards after they were identified by the auditor. Context: We tested a sample of 120 payroll expense items and found seven exceptions. Recommendation: We recommend that the Organization review its controls over payroll disbursements to ensure that all employees timecards are approved prior to payroll being processed. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding. See Corrective Action Plan.
Finding No. 2023-001 – Activities Allowed or Unallowed; Allowable Costs/Costs Principles Agency and Award: U.S. Department of Health and Human Services ALN Numbers: 93.659, Adoption Assistance Program 93.667, Social Services Block Grant Program Agency and Award: Florida Department of Juvenile Justice CSFA Number: 80.005, Children and Families in Need of Services Program Significant Deficiency/Other Matter Compliance Criteria: The Code of Federal Regulations (CFR) Section 200.403(g) states that for costs to be allowable under federal awards, they must be adequately documented and there must be sufficient documentation. Additionally, CFR Section 200.430 states that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed and are supported by a system of internal control which provides reasonable assurance that the charges are accurate and allowable. The Florida’s Division of Accounting and Auditing Reference Guide for State Expenditures states that supporting documentation shall be maintained in support of expenditure payment requests for cost reimbursement contracts including that approved timesheets support the hours worked on the project or activity must be kept. Condition: During our testing of payroll disbursements, we noted that seven of the 120 payroll expenditures selected for testing did not have a properly approved timecard for the pay period selected. Cause: The Organization’s policies and procedures were not appropriately adhered to in these instances to obtain approval of timecards prior to payroll being processed to evidence these costs was allowable and that an appropriate level of review and approval was completed prior to charging these costs to a federal program or state financial assistance project. Effect or Potential Effect: We were unable to confirm the accuracy or completeness of the expense claim as a federal or state financial assistance expenditure. Questioned Costs: There are no questioned costs as the Organization performed a thorough review and approval of the timecards after they were identified by the auditor. Context: We tested a sample of 120 payroll expense items and found seven exceptions. Recommendation: We recommend that the Organization review its controls over payroll disbursements to ensure that all employees timecards are approved prior to payroll being processed. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding. See Corrective Action Plan.
Finding No. 2023-001 – Activities Allowed or Unallowed; Allowable Costs/Costs Principles Agency and Award: U.S. Department of Health and Human Services ALN Numbers: 93.659, Adoption Assistance Program 93.667, Social Services Block Grant Program Agency and Award: Florida Department of Juvenile Justice CSFA Number: 80.005, Children and Families in Need of Services Program Significant Deficiency/Other Matter Compliance Criteria: The Code of Federal Regulations (CFR) Section 200.403(g) states that for costs to be allowable under federal awards, they must be adequately documented and there must be sufficient documentation. Additionally, CFR Section 200.430 states that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed and are supported by a system of internal control which provides reasonable assurance that the charges are accurate and allowable. The Florida’s Division of Accounting and Auditing Reference Guide for State Expenditures states that supporting documentation shall be maintained in support of expenditure payment requests for cost reimbursement contracts including that approved timesheets support the hours worked on the project or activity must be kept. Condition: During our testing of payroll disbursements, we noted that seven of the 120 payroll expenditures selected for testing did not have a properly approved timecard for the pay period selected. Cause: The Organization’s policies and procedures were not appropriately adhered to in these instances to obtain approval of timecards prior to payroll being processed to evidence these costs was allowable and that an appropriate level of review and approval was completed prior to charging these costs to a federal program or state financial assistance project. Effect or Potential Effect: We were unable to confirm the accuracy or completeness of the expense claim as a federal or state financial assistance expenditure. Questioned Costs: There are no questioned costs as the Organization performed a thorough review and approval of the timecards after they were identified by the auditor. Context: We tested a sample of 120 payroll expense items and found seven exceptions. Recommendation: We recommend that the Organization review its controls over payroll disbursements to ensure that all employees timecards are approved prior to payroll being processed. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding. See Corrective Action Plan.
Finding No. 2023-001 – Activities Allowed or Unallowed; Allowable Costs/Costs Principles Agency and Award: U.S. Department of Health and Human Services ALN Numbers: 93.659, Adoption Assistance Program 93.667, Social Services Block Grant Program Agency and Award: Florida Department of Juvenile Justice CSFA Number: 80.005, Children and Families in Need of Services Program Significant Deficiency/Other Matter Compliance Criteria: The Code of Federal Regulations (CFR) Section 200.403(g) states that for costs to be allowable under federal awards, they must be adequately documented and there must be sufficient documentation. Additionally, CFR Section 200.430 states that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed and are supported by a system of internal control which provides reasonable assurance that the charges are accurate and allowable. The Florida’s Division of Accounting and Auditing Reference Guide for State Expenditures states that supporting documentation shall be maintained in support of expenditure payment requests for cost reimbursement contracts including that approved timesheets support the hours worked on the project or activity must be kept. Condition: During our testing of payroll disbursements, we noted that seven of the 120 payroll expenditures selected for testing did not have a properly approved timecard for the pay period selected. Cause: The Organization’s policies and procedures were not appropriately adhered to in these instances to obtain approval of timecards prior to payroll being processed to evidence these costs was allowable and that an appropriate level of review and approval was completed prior to charging these costs to a federal program or state financial assistance project. Effect or Potential Effect: We were unable to confirm the accuracy or completeness of the expense claim as a federal or state financial assistance expenditure. Questioned Costs: There are no questioned costs as the Organization performed a thorough review and approval of the timecards after they were identified by the auditor. Context: We tested a sample of 120 payroll expense items and found seven exceptions. Recommendation: We recommend that the Organization review its controls over payroll disbursements to ensure that all employees timecards are approved prior to payroll being processed. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding. See Corrective Action Plan.
Finding No. 2023-001 – Activities Allowed or Unallowed; Allowable Costs/Costs Principles Agency and Award: U.S. Department of Health and Human Services ALN Numbers: 93.659, Adoption Assistance Program 93.667, Social Services Block Grant Program Agency and Award: Florida Department of Juvenile Justice CSFA Number: 80.005, Children and Families in Need of Services Program Significant Deficiency/Other Matter Compliance Criteria: The Code of Federal Regulations (CFR) Section 200.403(g) states that for costs to be allowable under federal awards, they must be adequately documented and there must be sufficient documentation. Additionally, CFR Section 200.430 states that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed and are supported by a system of internal control which provides reasonable assurance that the charges are accurate and allowable. The Florida’s Division of Accounting and Auditing Reference Guide for State Expenditures states that supporting documentation shall be maintained in support of expenditure payment requests for cost reimbursement contracts including that approved timesheets support the hours worked on the project or activity must be kept. Condition: During our testing of payroll disbursements, we noted that seven of the 120 payroll expenditures selected for testing did not have a properly approved timecard for the pay period selected. Cause: The Organization’s policies and procedures were not appropriately adhered to in these instances to obtain approval of timecards prior to payroll being processed to evidence these costs was allowable and that an appropriate level of review and approval was completed prior to charging these costs to a federal program or state financial assistance project. Effect or Potential Effect: We were unable to confirm the accuracy or completeness of the expense claim as a federal or state financial assistance expenditure. Questioned Costs: There are no questioned costs as the Organization performed a thorough review and approval of the timecards after they were identified by the auditor. Context: We tested a sample of 120 payroll expense items and found seven exceptions. Recommendation: We recommend that the Organization review its controls over payroll disbursements to ensure that all employees timecards are approved prior to payroll being processed. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding. See Corrective Action Plan.