Finding Text
Finding #2025-002 – Reporting – Significant Deficiency and Other Noncompliance. Applicable federal program: U. S. Department of Health and Human Services, Direct Funding, Assistance Listing #: 93.837 – Cardiovascular Diseases Research, Contract Number: 5R01HL153538-04, Contract Year: 07/01/23 – 06/30/25. Criteria: Management is responsible for establishing and maintaining effective internal controls over the preparation of the Schedule of Expenditures of Federal Awards (SEFA). Condition and context: In testing 40 transactions for allowable costs, we identified an allowable program expenditure of $33,459 that was for goods and services received in fiscal year 2024. It was billed to the program in fiscal year 2025 and is reported on the 2025 SEFA. 2024 federal expenditures reported in the SEFA were understated by $33,459. Cause: THI’s controls for reconciling project expenditures to information used in preparing the SEFA were not operating effectively to ensure all allowable grant expenditures incurred during the reporting period were included in the project statements and ultimately reported in the SEFA. Effect: The 2024 SEFA was understated for the program by $33,459. Recommendation: Reemphasize the need for year-end grant reporting procedures sufficient to ensure all allowable federal expenditures incurred during the reporting period are identified and reported completely and accurately. Views of responsible officials and planned corrective actions: Management agrees with the finding. See Corrective Action Plan.