FAC Explorer

Finding 2523 (2023-001)

Significant Deficiency
Requirement
ABHL
Questioned Costs
$1
Year
2023
Accepted
2023-11-28
Audit: 4303
Organization: Kent State University (OH)
Auditor: Rsm US LLP

AI Summary

  • Core Issue: The University incurred unallowed expenditures for a federal grant due to false reporting by an adjunct faculty member.
  • Impacted Requirements: Non-compliance with 2 CFR § 200.413 and 2 CFR § 200.516 regarding allowable costs and audit findings.
  • Recommended Follow-Up: Enhance oversight and secondary reviews of grant-related activities to ensure compliance and proper documentation.

Finding Text

Criteria or specific requirement (including statutory, regulatory, or other citation) - During the fiscal years June 30, 2018 to June 30, 2023, the University incurred unallowed expenditures for a federal grant that were not identified by the internal controls in place over the grant program. According to 2 CFR § 200.413, Direct Costs, direct costs are those costs that can be directly assigned to a direct cost activity with a high degree of accuracy. In addition, according to 2 CFR § 200.516, Audit Findings, the auditor must report known fraud affecting a federal award as well as known questioned costs that are greater than $25,000 for a federal program which is not audited as a major program, as an audit finding. Condition- From fiscal year 2018 through 2023, the University was not able to support that expenses paid from a federal grant for salary, benefits, and travel and other expense reimbursements for an adjunct faculty member were related to allowable activities to eligible clients under the terms of the grant agreement due to false reporting by the adjunct faculty member. More specifically, the adjunct faculty member misrepresented that services were or would be provided per the terms of the grant to eligible clients. In addition, the adjunct faculty member provided false reporting of the impact of services provided to the clients and utilized fraudulent documentation as evidence for their work performed. As a result, the University was reimbursed for expenses by the grant related to services that were not provided or were unallowable. Cause - Lack of oversight and insufficient review of work performed of adjunct faculty member. Effect- The University was reimbursed federal grant monies for work that was not performed under the terms and conditions of the grant award. Questioned costs - For fiscal years 2018 to 2023, questioned costs totaled $209,101. Identification as a repeat finding - Not applicable – this matter is not a repeat finding Recommendation - We recommend the University, along with the internal audit function, continue to emphasize with staff existing job responsibilities, the critical task of secondary reviews and thoroughness of those reviews. The reviews should include ensuring compliance with grant terms and conditions, as well as adequate documentation is provided and maintained to support the federal expenditure and the secondary reviews.

Corrective Action Plan

Upon learning of the possibility of frauduelent activity, the University began an internal audit review and all activity on the grant was stopped. Throughout the process, the University coordinated with the Ohio Department of Development. The internal audit procedures led to the determination that $209,101 was incorrectly reported by the program advisor and was not detected by the program director. These funds were returned to the Ohio Department of Development on October 11, 2023. The program has been termianted and program income returned. The individuals involved with this program are no longer employees of the University. The University is in the process of seeking reimbursement from the former employee. An internal controls questionnaire was prepared and reviewed for the other Small Business Development Center (SBDC) program noting no areas of concern. The FY24 internal audit plan will include additional review of the remaining SBDC program as well as review of controls within the department which previously managed the program noted in the finding. In addition, training related to roles and responsibilities for supervisors/approvers will be provided in FY24 to emphasize the guidance provided in the grants manual. Contact person responsible for the corrective action: Mark Polatajko, Senior Vice President for Finance and Administration.

Categories

Questioned Costs Internal Control / Segregation of Duties Allowable Costs / Cost Principles Cash Management HUD Housing Programs Reporting

Other Findings in this Audit

  • 2524 2023-001
    Significant Deficiency
  • 2525 2023-001
    Significant Deficiency
  • 2526 2023-001
    Significant Deficiency
  • 2527 2023-001
    Significant Deficiency
  • 2528 2023-001
    Significant Deficiency
  • 2529 2023-001
    Significant Deficiency
  • 2530 2023-001
    Significant Deficiency
  • 578965 2023-001
    Significant Deficiency
  • 578966 2023-001
    Significant Deficiency
  • 578967 2023-001
    Significant Deficiency
  • 578968 2023-001
    Significant Deficiency
  • 578969 2023-001
    Significant Deficiency
  • 578970 2023-001
    Significant Deficiency
  • 578971 2023-001
    Significant Deficiency
  • 578972 2023-001
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
84.268 Federal Direct Student Loans $157.66M
84.063 Federal Pell Grant Program $38.88M
84.038 Federal Perkins Loan Program $16.21M
93.364 Nursing Student Loans $2.48M
84.425 Higher Education Emergency Relief Fund (heerf) - Institutional Portion $2.09M
84.033 Federal Work-Study Program $1.57M
84.425 Higher Education Emergency Relief Fund (heerf) - Student Aid Portion $1.54M
84.047 Trio_upward Bound $1.32M
84.007 Federal Supplemental Educational Opportunity Grants $1.31M
84.002 Adult Education - Basic Grants to States $933,341
81.049 Office of Science Financial Assistance Program $740,751
93.243 Substance Abuse and Mental Health Services_projects of Regional and National Significance $641,821
93.247 Advanced Nursing Education Grant Program $510,808
84.042 Trio_student Support Services $468,966
93.865 Child Health and Human Development Extramural Research $467,726
93.226 Research on Healthcare Costs, Quality and Outcomes $430,252
81.U01 Department of Energy $375,983
84.066 Trio_educational Opportunity Centers $342,050
84.217 Trio_mcnair Post-Baccalaureate Achievement $311,797
93.396 Cancer Biology Research $279,157
93.732 Mental and Behavioral Health Education and Training Grants $278,506
47.075 Social, Behavioral, and Economic Sciences $278,294
93.342 Health Professions Student Loans, Including Primary Care Loans/loans for Disadvantaged Students $270,601
21.019 Coronavirus Relief Fund $250,581
12.300 Basic and Applied Scientific Research $229,344
84.324 Research in Special Education $194,224
10.855 Distance Learning and Telemedicine Loans and Grants $188,169
84.325 Special Education - Personnel Development to Improve Services and Results for Children with Disabilities $185,710
20.106 Airport Improvement Program $170,610
93.433 Acl National Institute on Disability, Independent Living, and Rehabilitation Research $165,709
93.994 Maternal and Child Health Services Block Grant to the States $161,543
84.425 Heerf - American Rescue Plan Elementary and Secondary School Relief Fund $154,418
93.394 Cancer Detection and Diagnosis Research $153,493
59.037 Small Business Development Centers $145,944
93.847 Diabetes, Digestive, and Kidney Diseases Extramural Research $138,263
93.395 Cancer Treatment Research $138,170
84.334 Gaining Early Awareness and Readiness for Undergraduate Programs $125,056
84.379 Teacher Education Assistance for College and Higher Education Grants (teach Grants) $120,647
47.049 Mathematical and Physical Sciences $112,228
93.361 Nursing Research $106,280
84.048 Career and Technical Education -- Basic Grants to States $99,580
11.431 Climate and Atmospheric Research $97,548
84.027 Special Education_grants to States $91,790
47.078 Polar Programs $89,015
93.516 Affordable Care Act (aca) Public Health Training Centers Program $81,641
16.525 Grants to Reduce Domestic Violence, Dating Violence, Sexual Assault, and Stalking on Campus $72,825
93.946 Cooperative Agreements to Support State-Based Safe Motherhood and Infant Health Initiative Programs $72,163
47.U01 National Science Foundation Contract $69,956
43.007 Space Operations $69,637
19.009 Academic Exchange Programs - Undergraduate Programs $66,173
93.421 Strengthening Public Health Systems and Services Through National Partnerships to Improve and Protect the Nation’s Health $61,476
12.U01 Department of Defense Contract $56,003
43.001 Science $55,017
47.079 Office of International Science and Engineering $46,027
93.242 Mental Health Research Grants $39,328
84.305 Education Research, Development and Dissemination $38,605
93.859 Biomedical Research and Research Training $38,436
15.808 U.s. Geological Survey_ Research and Data Collection $37,237
66.469 Great Lakes Program $37,221
47.076 Education and Human Resources $34,788
64.U01 Department of Veterans Affairs Contract $33,616
17.502 Occupational Safety and Health_susan Harwood Training Grants $33,335
14.218 Community Development Block Grants/entitlement Grants $32,000
93.279 Drug Abuse and Addiction Research Programs $30,823
45.312 National Leadership Grants $28,475
12.U04 Department of Defense Contract $26,772
11.419 Coastal Zone Management Administration Awards $26,498
93.104 Comprehensive Community Mental Health Services for Children with Serious Emotional Disturbances (sed) $25,055
19.408 Academic Exchange Programs - Teachers $23,955
84.365 English Language Acquisition State Grants $23,626
11.417 Sea Grant Support $22,254
10.932 Regional Conservation Partnership Program $19,402
12.U05 Department of Defense Contract $19,219
93.173 Research Related to Deafness and Communication Disorders $19,047
43.008 Education $18,500
47.070 Computer and Information Science and Engineering $17,631
16.738 Edward Byrne Memorial Justice Assistance Grant Program $17,300
81.U02 Department of Energy $16,424
93.307 Minority Health and Health Disparities Research $15,537
93.853 Extramural Research Programs in the Neurosciences and Neurological Disorders $15,167
93.778 Medical Assistance Program $14,640
12.U03 Department of Defense Contract $13,423
93.276 Drug-Free Communities Support Program Grants $13,276
45.313 Laura Bush 21st Century Librarian Program $11,102
19.040 Public Diplomacy Programs $10,522
12.420 Military Medical Research and Development $10,000
93.855 Allergy, Immunology and Transplantation Research $9,963
81.135 Advanced Research Projects Agency - Energy $9,299
12.U06 Department of Defense Contract $8,524
20.109 Air Transportation Centers of Excellence $7,904
19.400 Academic Exchange Programs - Graduate Students $7,427
84.000 Department of Education Contract $7,253
15.805 Assistance to State Water Resources Research Institutes $6,564
84.408 Postsecondary Education Scholarships for Veteran's Dependents $6,501
12.901 Mathematical Sciences Grants Program $6,400
93.866 Aging Research $6,269
10.680 Forest Health Protection $5,011
43.000 NASA Contract $4,466
47.050 Geosciences $4,215
45.025 Promotion of the Arts_partnership Agreements $4,000
10.310 Agriculture and Food Research Initiative (afri) $3,800
15.954 National Park Service Conservation, Protection, Outreach, and Education $3,208
45.024 Promotion of the Arts_grants to Organizations and Individuals $2,500
45.310 Grants to States $2,000
93.273 Alcohol Research Programs $1,580
47.074 Biological Sciences $1,413
84.425 Heerf - Elementary and Secondary School Emergency Relief Fund $1,078
47.041 Engineering $1,000
21.027 Coronavirus State and Local Fiscal Recovery Funds $912
93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (elc) $839
12.U02 Department of Defense Contract $508
93.113 Environmental Health $448
45.129 Promotion of the Humanities_federal/state Partnership $291
59.075 Shuttered Venue Operators Grant Program $-5,281
84.425 Heerf - Governor's Emergency Education Relief Fund $-8,360