Finding Text
Finding 2023-004: Internal Control over Compliance with Allowable Costs/Activities Allowed (Material Weakness)
Federal Programs: All programs
Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): As noted in 2 CFR 200.303 “The non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.”
Condition: During our audit, we identified a number of instances where there was not sufficient documentation available to support that a precise review over the allowability of certain payroll and non-payroll expenditures was performed.
Cause: The Association does not consistently adhere to documented policies and procedures for maintaining internal control over compliance over major programs for federal awards. Federal grant policy and procedure manuals have not been consistently updated, communicated, and enforced for all personnel working on grant related activities.
Effect or Potential Effect: In the event formal policies for documentation of review and approval of grant expenditures is not properly maintained, the resulting costs may be disallowed which could materially impact the Association's compliance with its grant agreements.
Questioned Costs: Questioned costs totaling $29,598 are comprised of the following:
• $22,076 for incorrect benefit rates applied to certain employees (Award ID #1726113 – PhysPort’s Impact on Teaching Practice and Award ID #1907950 – Professional Development for Teaching and Learning about Energy and Equity in High School Physics)
• $2,284 in unsupported payroll rate changes for certain employees (Award ID #1726113 – PhysPort’s Impact on Teaching Practice)
• $5,238 in unsupported costs related to a modification to a vendor contract (Award ID #2212807 - Advancing Physics Education Where Diversity Resides through Professional Development: Creating the Organization for Physics at Two-Year Colleges (OPTYCs))
Consequence of the Audit Finding: Our procedures consisted of tests of internal control and compliance over an attribute sample of payroll and non-payroll expenditures subjected to the Association's purchasing, payroll, and cash disbursement controls. We consider our sample to be representative of the population. The condition appeared to be systematic in nature.
Identification as a Repeat Finding, if Applicable: N/A
Recommendation: We recommend the Association update its federal grant policy and procedure manuals, communicate and enforce such policies amongst grant personnel, and implement formal processes to monitor compliance with federal awards.
Views of Responsible Officials and Planned Corrective Actions: See corrective action plan.
Anticipated Completion Date: December 1, 2024
Responsible Official: Michael Brosnan, Chief Financial Officer