Finding Text
Finding 2025-004 – Cash Management: Documentation Retention and Review of Reimbursement Requests – Material Weakness in Internal Control Over Compliance; Agencies – Department of Education, Department of Health and Human Services, National Science; Foundation, National Aeronautics and Space Administration, Department of Agriculture; Assistance Listing Numbers (ALN) - 84.356A, 93.859, 47.083, 47.050, 93.310, 43.008, 10.699, 47.078; Program Name - Alaska Native Educational Programs, Research and Development Cluster; Award Year / Award Number – FY 2025, 2024, 2023 / Award #S356A220066; FY 2025, 2024, 2023, 2022, 2021, 2020/Awards ANTHC- 23-U-396186; 5U24GM146576-02; 2049596; 2243258; ICER 2040729, Subaward 15660316; FIAN 2220560; ICER 1928230; Subaward 1558528; ICER 2052107; 2127346; 2309480; 80NSSC20M0070; 80NSSXC20M0070; 80NSSC24M0179, 24-MIRO-0054;1333MF4P0220; 18-JV-11261944-100; 2325081; 2419971, subaward 24-S37; Criteria or Specific Requirement – 2 CFR 200.303, Internal Controls, requires that non-federal entities receiving federal awards establish and maintain internal control designed to reasonably ensure compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR 200.302 requires that non-federal entities receiving federal awards maintain record that sufficiently identify the source and application of federal funds, and all records must be supported by source documentation.; Condition –APU did not retain sufficient documentation to demonstrate that the reimbursement request was reviewed and approved before submission. The files also did not include formal reconciliations or equivalent support tying the expenditures included in the reimbursement requests to the related drawdown amounts, but rather relied on a rolling general ledger record to support amounts reimbursed. As a result, we could not verify that the related review, approval, and reconciliation controls operated as designed.; Cause – Alaska Pacific University experienced personnel shortages and management transition during the year. Formal policies and procedures were not in place to ensure reimbursement request review, approval, reconciliation, and documentation retention responsibilities were consistently performed during the transition.; Effect or Potential Effect - Without retained evidence of review and approval and reconciliations supporting reimbursement requests, management may not be able to demonstrate that controls over reimbursement requests operated as designed. This increases the risk that errors in reimbursement requests may not be identified and corrected timely.; Questioned Costs - None reported.; Context – The exceptions were identified in all 10 reimbursement requests tested. For the Research and Development Cluster, seven drawdown requests were tested out of a total of 67. For the Alaska Native Educational Program, three were tested out of a total of 9 drawdown requests.; Repeat Finding – This is not a repeat finding.; Recommendation - We recommend that management establish formal written procedures requiring reimbursement requests to be reviewed and approved before submission, with evidence of review retained. Management should also formally retain reconciliations or detailed support tying expenditures included in each drawdown request to the amount requested, and ensure these records are readily available for audit and monitoring purposes.; Views of Responsible Officials – Management concurs with the finding and is implementing formal review of cash management.