Finding Text
Finding 2023-003 – Material Weakness – Compliance Requirement Related to Activities
Allowed and Allowable Costs –
National Science Foundation – Social, Behavioral, and Economic Sciences
(CFDA # 47.075)
Department of Defense – The University of Texas Health Science Center of
Houston pass through – Basic Scientific Research (CFDA # 12.431)
Criteria – All expenditures charged to federal grants should be properly reviewed and
approved, prior to submission to granting agencies, and paid with no excess or duplicate
payments.
Condition – There were multiple instances of transactions charged to grant programs either
as duplicate transactions, incorrect amounts revised after date of submission to granting
agency, or improperly excluded from submissions. Additionally, there were transactions that
did not have sufficient appropriate audit evidence including but not limited to lack of
Organizational policy, missing invoices, etc. to support such transactions as eligible
expenses. These charges were not identified and corrected by the Organization prior to fiscal
year-end.
Cause – Due to employee staffing constraints and lack of a higher level of supervisory or
review function in the finance and accounting department, the accounting records were not
completed in a timely manner.
Effect of Potential Effect – Improper expenses were charged and reimbursed under the grant
program.
Questioned Costs – Found costs include $189 and $600. The remaining balance is unknown
due to significant posting closing adjustments as well as unclear documentation of such
adjustments.
Context – We identified these issues when reconciling the expenditure detail to the Schedule
of Federal Awards. During such reconciliation, multiple adjustments to the Schedule of
Federal Awards were required. Additionally, we tested 20 payroll and 20 non-payroll cash
disbursements charged to the grants and identified expenditures not appropriately supported.
Recommendation – The Organization should correct the excess expense recorded and
ensure controls are in place to ensure incorrect reporting is not possible in the future. All
expenditures in excess of a specific dollar threshold should require receipts and specific
reason for allowable costs.
Views of Responsible Officials – See Corrective Action Plan.