Finding Text
2024-003 Drawdowns Segregation of Duties
Compliance Requirement Cash management
Finding Type Significant Deficiency in Internal Controls
Federal Agency US Department of Education
ALN 84.031
Federal Program Higher Education Institutional Aid
ALN 84.042A
Federal Program TRIO Cluster Program
ALN 84.425F and 84.425L
Federal Program COVID-19 - Education Stabilization Fund
Criteria
2 CFR § 200.303, Internal Controls
The recipient and subrecipient must:
(a) Establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Condition
The individual reviewing and approving the reimbursements to be requested to the Federal awarding agency is the same person performing the request and drawdown.
Cause
Lack of segregation of duties between the responsibilities for reviewing and approving reimbursements and those performing the request and drawdown.
Effect
The University has not implemented internal controls to ensure Federal awards are managed in compliance with Federal statutes, regulations, and the terms and conditions of the awards. This noncompliance can lead to financial penalties, resulting in disallowed costs that are not reimbursed by federal funds. Additionally, federal awards could be suspended or terminated, impacting the University's ability to fund its programs and operations. Increased scrutiny in future audits may lead to greater administrative burdens and oversight. In severe cases, the University may face suspension or debarment from receiving future federal funding.
Recommendations
We recommend that the University ensures compliance with federal statutes, regulations, and the terms and conditions of the awards by assigning another employee within the Administration of Federal & State Funds to handle the drawdown process. The Director should review and approve this process. Additionally, it is important to document the procedures for reimbursement requests and approvals, clearly specifying the roles and responsibilities of each individual involved.
Views of responsible official
Refer to Corrective Action Plan (Unaudited)