Finding Text
Federal Program Information:
Higher Education Institutional Aid: Strengthening Historically Black Colleges and Universities Program (“Title III”) (ALN: 84.031B and 84.031E) and TRIO Cluster (“TRIO”) (ALN: 84.047A, 84.042A and 84.217A)
Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation):
A. Activities Allowed or Unallowed/N. Special Tests and Provisions – Per 2 Code of Federal Regulation (“CFR”) Part 220, the method used for apportioning salaries must recognize the principle of after-the-fact confirmation or determination so that costs distributed represent actual costs, unless a mutually satisfactory alternative agreement is reached. Direct cost activities as well as facilities and administration (“F&A”) cost activities may be confirmed by responsible persons with suitable means of verification that the work was performed. Confirmation by the employee is not a requirement for either direct or F&A cost activities if other responsible persons make appropriate confirmations.
For after-the-fact activity records: a) Activity reports will reflect the distribution of activity expended by employees covered by the system (compensation for incidental work as described in subsection a need not be included); (b) These reports will reflect an after-the-fact reporting of the percentage distribution of activity of employees. Charges may be made initially on the basis of estimates made before the services are performed, provided that such charges are promptly adjusted if significant differences are indicated by activity records. Labor costs charged to federal awards must reasonably reflect the actual labor effort contributed by the employee to meet the objectives of the award and that adequate documentation must be maintained to support labor costs charged to sponsored agreements. For professorial and professional staff, effort certifications will be prepared each academic term, but no less frequently than every six months. For other employees, unless alternate arrangements are agreed to, the reports will be prepared no less frequently than monthly and will coincide with one or more pay periods.
B. Allowable Costs and Cost Principles - In order for costs to be allowable under federal awards, they must be necessary and reasonable for the performance of the federal award and be allocable thereto under the principles in 2 CFR Part 200, Subpart E, be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-federal entity, be accorded consistent treatment, and be determined in accordance with generally accepted accounting principles.
G. Level of Effort - Level of effort includes requirements for (a) a specified level of service to be provided from period to period and (b) a specified level of expenditures from nonfederal or federal sources for specified activities to be maintained from period to period. Only allowable categories of expenditures or other effort indicators (e.g., hours, number of people served) should be included in the computation and expenditures categories should be consistent from year to year.
Condition:
For certain payroll costs charged to federal awards, effort certifications were not prepared and/or reviewed timely during the fiscal year. Additionally, for certain payroll and non-payroll expenditures selected for testing, the University was unable to provide documentation supporting the amount charged to the federal award.
Cause:
Insufficient administrative oversight and internal controls with respect to the University’s administration of federal awards in accordance with certain compliance requirements.
Effect or Potential Effect:
The University was unable to support certain amounts charged to federal awards and effort certifications supporting certain payroll costs charged to federal awards were not completed timely and/or appropriately monitored during the year.
Questioned Costs:
Below reporting threshold.
Context:
We noted the following exceptions during our testing:
• For 4 of 15 non-payroll Title III expenditures selected for testing, the University was unable to provide documentation supporting that the expenditure was appropriately approved prior to the disbursement of funds.
• For 1 of 15 non-payroll Title III expenditures selected for testing, the University was unable to provide documentation supporting the amount charged to the federal award.
• For 2 of 10 payroll Title III expenditures selected for testing, the University was unable to provide documentation supporting the amount charged to the federal award.
• For 5 of 8 Title III employees selected for testing, time and effort reports certified by the employee could not be provided and/or did not support the amount charged to the federal award.
• For 2 of 12 months selected for testing, the University did not obtain a level of effort certification for the Title III program director.
• For 1 of 10 non-payroll TRIO expenditures selected for testing, the University was unable to provide documentation supporting that the expenditure was appropriately approved prior to the disbursement of funds.
• For 1 of 15 payroll TRIO expenditures selected for testing, the University was unable to provide documentation supporting the amount charged to the federal award.
• For 10 of 10 TRIO Program employees selected for testing, time and effort reports certified by the employee could not be provided and/or did not support the amount charged to the federal award.
Identification as a Repeat Finding:
No similar findings noted in the prior year.
Recommendation:
We recommend that the University enhance its internal controls and policies and procedures over the applicable compliance requirements to ensure that the University has appropriate and formal documentation to support federal expenditures as required, as well as appropriately monitoring time of effort reporting in a timely manner.
Views of Responsible Officials:
The University experienced turnover of key positions throughout campus, particularly in the Division of Finance, Government Sponsored Programs and various federally funds programs. The changes in staffing lead to a loss of institutional knowledge, and interrupted policy and process enforcement campus wide.
The Office of Government Sponsored Programs (“GSPAR”) will enhance its internal controls, policies and procedures to ensure the appropriate documentation to support is maintained, and to ensure that level of effort is appropriately documented and reported. GSPAR will be working in conjunction with the Office of Human Resources, including Payroll, to ensure accuracy, or timely correction, of general ledger postings. In addition, the grant onboarding process will be revised to emphasize key federal regulations and emphasize the importance of compliance. Reminders will also be provided during GSPAR’s semi-annual grant compliance workshops.