Finding 390344 (2023-001)

Material Weakness Repeat Finding
Requirement
AB
Questioned Costs
-
Year
2023
Accepted
2024-03-29
Audit: 301190
Organization: Hawaii Pacific University (HI)
Auditor: Kmh LLP

AI Summary

  • Core Issue: Management failed to provide adequate documentation for payroll and non-payroll expenditures related to the HEERF Program, impacting compliance with federal requirements.
  • Impacted Requirements: 2 CFR 200.303(a) mandates effective internal controls to ensure proper management and documentation of federal awards.
  • Recommended Follow-Up: For future programs, management should create documented policies and procedures to ensure compliance and maintain necessary documentation for all expenditures.

Finding Text

Criteria: 2 CFR 200.303(a) requires the non-Federal entity to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: During our testing of the HEERF Program, for payroll and non-payroll expenditures, management did not provide sufficient support to justify the allocation of these costs to the program. Consequently, we were unable to audit the allowability of these costs. Context: For payroll-related expenditures, we selected a non-statistical sample of 6 payroll items representing $26,078, all of which did not have documentation of the justification supporting the allocation. Total payroll expenditures for the program were $110,525. Management estimated the time each departments’ employees spent on allowable COVID-related activities; however, the documentation of the calculation and allocation related to the rationale, basis and final allocations were not provided. For nonpayroll expenditures, we selected a non-statistical sample of 8 items representing $181,428, of which, 5 items representing $97,367 did not have documented justification supporting their allowability. Total nonpayroll expenditures for the program were $367,323. Management did not consistently document the justification supporting the allocation of costs to the program. Cause: Management indicated that due to the urgency in ensuring funds were distributed as quickly as possible, documented policies and procedures to administer the program were not developed and therefore not all supporting justifications were documented. Effect: Expenditures could be disbursed for unallowable costs. Questioned Costs: None Identification of a repeat finding: This is a repeat finding of 2022-001. Recommendations: The HEERF Program has ended for the University. We recommend that should similar programs become available in the future, that management develop documented policies and procedures to administer the program and that management maintain documentation to demonstrate compliance with its policies and procedures. Views of responsible officials: For payroll-related expenditures, management reviewed the duties of individuals and estimated the percentage of their time allocable to the program based upon knowledge of office functions, job duties, and additional demands and tasks related to the COVID-19 pandemic. This review and discussions within the management team resulted in the amounts allocated to the HEERF program; the percentage allocations assigned were documented in the calculations used to support the payroll activity recorded during the fiscal year ended June 30, 2023. For non-payroll related expenditures, documented policies were not developed for the HEERF program expenditures and as a result supporting justifications were not consistently documented or maintained. For all expenditures associated with the HEERF program, when documentation was not obtained or maintained, management was basing decisions on all regulations available at the time and decisions made did not violate the intent of the program. The HEERF awards were fully expended as of June 30, 2022 for the Student Portion and as of September 30, 2022 for the Institutional Portion. Should similar programs become available in the future, management will develop, in advance of expending funds, documented policies and procedures to administer the program and will maintain documentation demonstrating compliance with program requirements and related institutional policy and procedure.

Corrective Action Plan

For payroll-related expenditures, management reviewed the duties of individuals and estimated the percentage of their time allocable to the program based upon knowledge of office functions, job duties, and additional demands and tasks related to the COVID-19 pandemic. This review and discussions within the management team resulted in the amounts allocated to the HEERF program; the percentage allocations assigned were documented in the calculations used to support the payroll activity recorded during the fiscal year ended June 30, 2023. For non-payroll related expenditures, documented policies were not developed for the HEERF program expenditures and as a result supporting justifications were not consistently documented or maintained. For all expenditures associated with the HEERF program, when documentation was not obtained or maintained, management was basing decisions on all regulations available at the time and decisions made did not violate the intent of the program. The HEERF awards were fully expended as of June 30th, 2022 for the Student Portion and as of September 30th, 2022 for the Institutional Portion. Should similar programs become available in the future, management will develop, in advance of expending funds, documented policies and procedures to administer the program and will maintain documentation demonstrating compliance with program requirements and related institutional policy and procedure. Person Responsible: Assistant Vice President for the Office of Sponsored Projects; Manager, Office of Sponsored Projects; Director of Financial Aid. Targeted Correction Date: n/a, program has ended. Fiscal Year in which Finding Initially Occurred: 2021 (Finding Number 2021-002).

Categories

Allowable Costs / Cost Principles

Other Findings in this Audit

  • 390316 2023-003
    Material Weakness
  • 390317 2023-004
    Material Weakness
  • 390318 2023-003
    Material Weakness
  • 390319 2023-004
    Material Weakness
  • 390320 2023-003
    Material Weakness
  • 390321 2023-004
    Material Weakness
  • 390322 2023-003
    Material Weakness
  • 390323 2023-004
    Material Weakness
  • 390324 2023-003
    Material Weakness
  • 390325 2023-004
    Material Weakness
  • 390326 2023-003
    Material Weakness
  • 390327 2023-004
    Material Weakness
  • 390328 2023-003
    Material Weakness
  • 390329 2023-004
    Material Weakness
  • 390330 2023-003
    Material Weakness
  • 390331 2023-004
    Material Weakness
  • 390332 2023-003
    Material Weakness
  • 390333 2023-004
    Material Weakness
  • 390334 2023-003
    Material Weakness
  • 390335 2023-004
    Material Weakness
  • 390336 2023-003
    Material Weakness
  • 390337 2023-004
    Material Weakness
  • 390338 2023-003
    Material Weakness
  • 390339 2023-004
    Material Weakness
  • 390340 2023-003
    Material Weakness
  • 390341 2023-004
    Material Weakness
  • 390342 2023-003
    Material Weakness
  • 390343 2023-004
    Material Weakness
  • 390345 2023-002
    Material Weakness Repeat
  • 390346 2023-005
    Significant Deficiency
  • 390347 2023-001
    Material Weakness Repeat
  • 390348 2023-002
    Material Weakness Repeat
  • 390349 2023-005
    Significant Deficiency
  • 390350 2023-003
    Material Weakness
  • 390351 2023-004
    Material Weakness
  • 390352 2023-003
    Material Weakness
  • 390353 2023-004
    Material Weakness
  • 390354 2023-003
    Material Weakness
  • 390355 2023-004
    Material Weakness
  • 390356 2023-003
    Material Weakness
  • 390357 2023-004
    Material Weakness
  • 390358 2023-003
    Material Weakness
  • 390359 2023-004
    Material Weakness
  • 390360 2023-003
    Material Weakness
  • 390361 2023-004
    Material Weakness
  • 390362 2023-003
    Material Weakness
  • 390363 2023-004
    Material Weakness
  • 390364 2023-003
    Material Weakness
  • 390365 2023-004
    Material Weakness
  • 390366 2023-003
    Material Weakness
  • 390367 2023-004
    Material Weakness
  • 966758 2023-003
    Material Weakness
  • 966759 2023-004
    Material Weakness
  • 966760 2023-003
    Material Weakness
  • 966761 2023-004
    Material Weakness
  • 966762 2023-003
    Material Weakness
  • 966763 2023-004
    Material Weakness
  • 966764 2023-003
    Material Weakness
  • 966765 2023-004
    Material Weakness
  • 966766 2023-003
    Material Weakness
  • 966767 2023-004
    Material Weakness
  • 966768 2023-003
    Material Weakness
  • 966769 2023-004
    Material Weakness
  • 966770 2023-003
    Material Weakness
  • 966771 2023-004
    Material Weakness
  • 966772 2023-003
    Material Weakness
  • 966773 2023-004
    Material Weakness
  • 966774 2023-003
    Material Weakness
  • 966775 2023-004
    Material Weakness
  • 966776 2023-003
    Material Weakness
  • 966777 2023-004
    Material Weakness
  • 966778 2023-003
    Material Weakness
  • 966779 2023-004
    Material Weakness
  • 966780 2023-003
    Material Weakness
  • 966781 2023-004
    Material Weakness
  • 966782 2023-003
    Material Weakness
  • 966783 2023-004
    Material Weakness
  • 966784 2023-003
    Material Weakness
  • 966785 2023-004
    Material Weakness
  • 966786 2023-001
    Material Weakness Repeat
  • 966787 2023-002
    Material Weakness Repeat
  • 966788 2023-005
    Significant Deficiency
  • 966789 2023-001
    Material Weakness Repeat
  • 966790 2023-002
    Material Weakness Repeat
  • 966791 2023-005
    Significant Deficiency
  • 966792 2023-003
    Material Weakness
  • 966793 2023-004
    Material Weakness
  • 966794 2023-003
    Material Weakness
  • 966795 2023-004
    Material Weakness
  • 966796 2023-003
    Material Weakness
  • 966797 2023-004
    Material Weakness
  • 966798 2023-003
    Material Weakness
  • 966799 2023-004
    Material Weakness
  • 966800 2023-003
    Material Weakness
  • 966801 2023-004
    Material Weakness
  • 966802 2023-003
    Material Weakness
  • 966803 2023-004
    Material Weakness
  • 966804 2023-003
    Material Weakness
  • 966805 2023-004
    Material Weakness
  • 966806 2023-003
    Material Weakness
  • 966807 2023-004
    Material Weakness
  • 966808 2023-003
    Material Weakness
  • 966809 2023-004
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
84.268 Federal Direct Student Loans $26.60M
84.063 Federal Pell Grant Program $4.12M
84.038 Federal Perkins Loan $790,904
93.364 Nursing Student Loans $485,276
11.427 Fisheries Development and Utilization Research and Development Grants and Cooperative Agreements Program $329,162
84.007 Federal Supplemental Educational Opportunity Grants $252,000
93.279 Drug Abuse and Addiction Research Programs $248,487
84.033 Federal Work-Study Program $245,780
11.609 Measurement and Engineering Research and Standards $224,526
47.050 Geosciences $156,402
93.859 Biomedical Research and Research Training $143,741
84.425 Education Stabilization Fund $97,067
20.205 Highway Planning and Construction $94,281
47.070 Computer and Information Science and Engineering $90,041
93.932 Native Hawaiian Health Care Systems $80,840
47.049 Mathematical and Physical Sciences $79,974
11.999 Marine Debris Program $79,770
10.200 Grants for Agricultural Research, Special Research Grants $58,161
84.031 Higher Education_institutional Aid $55,221
47.076 Education and Human Resources $53,901
93.847 Diabetes, Digestive, and Kidney Diseases Extramural Research $40,930
47.083 Integrative Activities $31,450
45.308 Native American/native Hawaiian Museum Services Program $21,319
93.242 Mental Health Research Grants $13,178
93.264 Nurse Faculty Loan Program (nflp) $11,895
93.853 Extramural Research Programs in the Neurosciences and Neurological Disorders $6,467
11.417 Sea Grant Support $5,807
84.379 Teacher Education Assistance for College and Higher Education Grants (teach Grants) $5,658
93.397 Cancer Centers Support Grants $4,070
93.310 Trans-Nih Research Support $2,315