Finding 1163365 (2024-001)

Material Weakness Repeat Finding
Requirement
M
Questioned Costs
$1
Year
2024
Accepted
2025-12-03
Audit: 372878
Organization: Biostl (MO)
Auditor: RUBINBROWN LLP

AI Summary

  • Core Issue: A subrecipient requested reimbursement exceeding actual expenses due to formula errors in tracking documents.
  • Impacted Requirements: Compliance with 2 CFR Part 332 was not met, as effective monitoring controls were lacking.
  • Recommended Follow-Up: Management should ensure all expense tracking documents are accurate and undergo proper review before submission.

Finding Text

Finding 2024-001 Significant Deficiency: Subrecipient Monitoring - Compliance and Control Finding ALN 11.307 – Economic Development Cluster Federal Agency: U.S. Department of Commerce Pass-Through Entity: N/A Criteria Or Specific Requirement: 2 CFR Part 332 requires direct recipients of grants to monitor subrecipients as necessary to ensure that the subaward is used forauthorized purposes. Condition: Audit procedures revealed that a subrecipient submitted an expense reimbursement request for an amount greater than the grant expenses that had beenincurred to date. Cause: Files used to track the subrecipient’s expenses contained formula errors that led to misallocations of funds to charge to the grant. Additionally, controls over subrecipient monitoring were not designed effectively to identify this error. Effect: Instances of noncompliance were not detected by management in a timely manner. Context: Of the 15 subrecipient reimbursement requests we tested, one of them contained an error whereby the reimbursement requested exceeded the actual expenses incurred. The subrecipient has acknowledged the error and will deduct this overcharge from its next reimbursement request in 2025. Questioned Costs: Known questioned costs associated with this error are $6,590. If this error is extrapolated over the entire population of 2024 subrecipient reimbursements, this results in projected likely questioned costs of $31,790. Identification As A Repeat Finding: Not applicable. Recommendation: We recommend that management review all documents used to track subrecipient expense to ensure they are accurate and free of error, and have undergoine with proper review and approval prior to submission. Views Of Responsible Officials: In 2025, BioSTL Grant Management and Finance leadership implemented a comprehensive post-award grant process, including extensive policies and procedures for subrecipient management and monitoring. Additionally, early in 2025, internal policies concerning subrecipient invoicing procedures were enhanced to require additional documentation and review for all subrecipient submissions of grant funds. These improvements have proven effective in identifying and rectifying errors prior to submission. Refer to the accompanying corrective action plan for more detail on the processes implemented.

Corrective Action Plan

The audit identified that a subrecipient submitted an expense reimbursement request exceeding the incurred grant expenses through the submission date. This issue resulted from a misinterpretation by the subrecipient team regarding the correct procedures for completing the expense recording worksheet. Priorto FY 2025, existing controls over subrecipient monitoring were not effectively designed to detect this error. In 2025, BioSTL Grant Management and Finance leadership implemented a comprehensive post-award grant process, including extensive policies and procedures for subrecipient management and monitoring. Additionally, early in 2025, internal policies concerning subrecipient invoicing procedures were enhanced to require additional documentation and review for all subrecipient submissions of grant funds. These improvements have proven effective in identifying and rectifying errors prior to submission. To support these initiatives, BioSTL has conducted training sessions, reviewed implementation procedures, and held regular meetings to ensure that all BioSTL personnel and subrecipient staff fully understand the requirements and have ample opportunities for communication regarding grant draws. Furthermore, to align BioSTL Policies and Procedures, a comprehensive handbook has been developed for all virtual and on-site monitoring activities. These revised procedures mandate at least one virtual monitoring session every six months and at least one on-site monitoring session per participant throughout the grant period, with additional monitoring based on risk assessment outcomes. This schedule more closely aligns with CFR requirements and ensures oversight activities are conducted thoroughly and without lapses. On-site monitoring will be completed for all subrecipients before the end of the fiscal year, which closes on December 31, 2025.

Categories

Questioned Costs Subrecipient Monitoring

Other Findings in this Audit

  • 1163364 2024-001
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
11.307 ECONOMIC ADJUSTMENT ASSISTANCE $988,462
21.027 CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS $261,209
11.020 CLUSTER GRANTS $164,775
17.285 REGISTERED APPRENTICESHIP $98,349
47.084 NSF TECHNOLOGY, INNOVATION, AND PARTNERSHIPS $89,161
11.024 BUILD TO SCALE $79,518