Finding Text
Lack of Review over Financial Status Reports Finding Type. Significant Deficiency in Internal Control over Compliance (Cash Management and Reporting). Program. Epidemiology and Laboratory Capacity for Infectious Diseases (ELC); U.S. Department of Health and Human Services; Assistance Listing Number 93.323; Award Number E20242798-00. Criteria. Per 2 CFR §200.305(b), non-federal entities must minimize the time elapsing between the transfer of funds and disbursement, and also must maintain accurate financial records and submit required Federal Financial Status Reports ("FSR"). Entities must also ensure that drawdowns and FSRs are complete, based on actual, allowable expenditures, supported by underlying accounting records, and prepared in accordance with Federal requirements. Condition. The University did not have documented review procedures in place for federal grant drawdowns nor review over monthly Financial Status Reports. Drawdowns were processed and Financial Status Reports were submitted without a formal review or approval process to verify that amounts reported and requested were based on allowable expenditures. Cause. The University lacked formal internal controls and oversight mechanisms to ensure drawdowns and FSRs were reviewed prior to submission. The process relied on informal practices without documented policies or designated reviewers. Effect. This deficiency increases the risk of drawing and reporting federal funds in excess of actual expenditures or for unallowable costs, potentially resulting in noncompliance with federal regulations. Questioned Costs. No costs are required to be questioned as a result of this finding, inasmuch as no unallowable expenditures were noted. Recommendation. The University should implement formal review procedures for all federal grant drawdowns including monthly FSRs, including enhancing policies around reviewing drawdowns, designated reviewers, and system controls to ensure drawdowns are accurate, allowable, and properly supported. View of Responsible Officials. Management agrees with this finding and has prepared a Corrective Action Plan.