Finding Text
Item No. 2025-001 – Internal Controls Over Disbursement Approvals Applicable to: All Federal Awards, including Higher Education Student Aid (ALN 84.031) and Research & Development (ALN 47.076, 12.630, 93.859) Criteria The University’s Federal Award Procedures require that all Requests for Purchase be reviewed and approved by multiple levels of management prior to the disbursement of federal funds. Condition During testing of disbursements charged to federal programs, fourteen instances were identified in which required approvals were either incomplete or not documented. Specifically, certain transactions contained only a single approval or lacked evidence of approval entirely. Cause These exceptions appear to result from insufficient oversight and inconsistent adherence to established approval procedures related to federal expenditures. Effect The lack of required approvals constitutes noncompliance with the University’s internal control policies and increases the risk of unauthorized or unallowable expenditures. Questioned Costs None. Recommendation Management should enhance oversight of federal award disbursements to ensure compliance with established approval protocols. This includes reinforcing procedural expectations with relevant personnel and implementing periodic monitoring to ensure controls are consistently applied.Views of Responsible Officials Management concurs with the finding. The University acknowledges the control deficiencies identified related to disbursement approval documentation for federal awards. While policies requiring multi-level approvals are formally established, management recognizes that consistent execution and documentation of these controls were not fully adhered to in all instances. Management will formally re-communicate federal disbursement approval requirements to all relevant personnel, including principal investigators, department heads, and finance staff. This will include mandatory training sessions on federal compliance and approval protocols and distribution of updated written procedures outlining required approval levels and documentation standards. To reduce reliance on manual processes, the University will configure the financial system/workflow to require multiple levels of electronic approval prior to payment processing and restrict disbursement processing until all required approvals are completed and documented within the system. Management will implement ongoing monitoring procedures to ensure compliance, including monthly reviews of a sample of federal disbursements by the Controller's Office or Grants Accounting, quarterly compliance reporting to the CFO and senior leadership, and documentation of review results and corrective follow-up actions.