Finding 1181758 (2025-003)

FINDING 2025-003 Federal Program Information: Research and Development Cluster (ALN: 93.U10) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation) B. Allowable Cost/Cost Principles - Federal grant requirements, § 200.430, provide that salaries and wages charged to federal awards must be based on records that accurately reflect the work performed; be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable and properly allocated; be incorporated into the official records of the institution; reasonably reflect the total activity for which the employee is compensated; and 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. Condition: During our testing of expenditures, we noted the following exceptions: • For 1 of 40 selected Research and Development Cluster expenditures, a level of effort certification to support the payroll costs charged to the federal program was not performed timely. Cause: Insufficient administrative oversight and internal controls with respect to allowable cost/cost principles compliance requirements. Effect or Potential Effect: The School is not properly following it policies and procedures to ensure that compliance is maintained with respect to supporting payroll costs charged to the federal programs which could result in unallowable costs charged to the federal agency. Questioned Costs: None. Context: We tested a sample of 40 expenditures across the major programs and noted 1 exception as noted in the condition. Identification as a Repeat Finding: This is a repeat finding from prior year. This was reported as finding 2024-003 in the 2024 report. Recommendation: We recommend that the School adhere to its procedures and internal controls over the applicable compliance requirements of allowable costs/cost principles requirements to ensure that the School is appropriately monitoring level of effort reporting in a timely manner. Views of Responsible Officials and Planned Corrective Actions: We concur. Due to a change that occurred after the reporting period appropriately reallocating one employee’s effort to the federal funding source, the certification was not displayed on the effort report. The employee has certified that this effort was charged appropriately to this award. We are reviewing our policies and procedures to ensure redistribution of labor is performed within a timely manner. We have moved to an annual effort reporting process aligned to the federal regulations and are implementing the Cayuse Effort Reporting module that will more effectively track and report effort. The system will be implemented during our next effort reporting cycle.