Finding 35184 (2022-001)

Significant Deficiency
Requirement
AB
Questioned Costs
-
Year
2022
Accepted
2023-03-26
Audit: 24786
Organization: Alvernia University (PA)

AI Summary

  • Core Issue: An employee changed to a non-allowable position, yet their salary was still charged to the grant.
  • Impacted Requirements: Grant funds should only cover costs for eligible staff as defined in the award criteria.
  • Recommended Follow-Up: Strengthen internal controls to ensure compliance with allowable costs for wages and benefits.

Finding Text

Federal Program Department of Education - Strengthening Institutions Program, ALN 84.031A, Award No. P031A190172, Period 10/1/19 - 9/30/24 Criteria The grant application and award outline allowable activities and costs for the grant funds. This includes defining eligible program staff and student navigators. Condition/Cause During the year ended June 30, 2022, an individual working in an allowable position under the grant changed job titles to a different position, which was not allowable under the grant. The wages and fringe benefits for this individual continued to be charged to the grant after the change in position. Internal controls in place did not detect the unallowable costs charged to the grant in the 4th quarter of the fiscal year, prior to drawing down funds. Effect Funds were drawn down to reimburse the University for salaries and benefits for an individual who was not working in an allowable position under the grant. Questioned Costs Less than $25,000 Context Sampling was not utilized in the audit testing of salaries. Unallowable activities/costs were identified for 1 of the 11 individuals tested. Repeat Finding No. Recommendation We recommend that the University revisit and strengthen internal controls over determining compliance with the allowable activities and allowable cost requirements of the grant for wages and fringe benefits. Management Response See corrective action plan included in this report package.

Corrective Action Plan

Federal Program Department of Education - Strengthening Institutions Program, ALN 84.031A, Award No. P031A190172, Period 10/1/19 - 9/30/24 Condition/Cause During the year ended June 30, 2022, an individual working in an allowable position under the grant changed job titles to a different position, which was not allowable under the grant. The wages and fringe benefits for this individual continued to be charged to the grant after the change in position. Internal controls in place did not detect the unallowable costs charged to the grant in the 4th quarter of the fiscal year, prior to drawing down funds. Recommendation We recommend that the University revisit and strengthen internal controls over determining compliance with the allowable activities and allowable cost requirements of the grant for wages and fringe benefits. Management Response We agree with the auditors' finding. The instance of non-compliance occurred during a period when the University had a vacancy in the Grant Specialist position. This role?s duty includes oversight of the internal control environment regarding the compliance of the federal program. Effective August 2022, the position has been filled and corrective actions are in process to strengthen internal controls to avoid non-compliance going forward. To mitigate deficiencies in controls regarding change management, personnel status change forms involving federally funded programs will be circulated to the Program Director, Grant Specialist, and Business Affairs office. In addition, the Program Director will reconcile funds disbursed for unallowable costs prior to the filing of the September 30, 2023 annual report.

Categories

Allowable Costs / Cost Principles

Other Findings in this Audit

  • 35185 2022-002
    Significant Deficiency
  • 611626 2022-001
    Significant Deficiency
  • 611627 2022-002
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
84.268 Federal Direct Student Loans $22.57M
84.063 Federal Pell Grant Program $3.09M
84.033 Federal Work-Study Program $367,388
84.038 Federal Perkins Loans $339,209
84.031 Higher Education_institutional Aid $337,893
84.425 Education Stabilization Fund $257,600
94.011 Foster Grandparent Program $197,395
84.007 Federal Supplemental Educational Opportunity Grants $196,608