Finding Text
Identification of the federal program U.S. Department of Health and Human Services
Research and Development Cluster
All Assistance Listing Numbers with amounts provided to subrecipients:
93.242 – Mental Health Research Grants
93.279 – Drug Abuse and Addiction Research Programs
93.351 – Research Infrastructure Programs
93.838 – Lung Diseases Research
93.855 – Allergy and Infectious Diseases Research
93.866 – Aging Research
Federal Award Numbers Award Period
R01MH116844-05 2/1/2022-1/31/2024
1R01MH130193-01 4/5/2022-2/28/2023
5R01MH130193-02 3/1/2023-2/29/2024
5R01DA052845-03 7/1/2022-6/30/2023
5R01DA052845-04 7/1/2023-6/30/2024
5P51OD011133-24 5/1/2022-4/30/2023
5P51OD011133-25 5/1/2023-4/30/2024
7R01HL145411-05 1/1/2023-12/31/2024
2R01AI048071-21 12/1/2022-11/30/2023
5R01AI133749-05 7/1/2021-6/30/2023
5R01AI138587-05 5/1/2022-4/30/2024
5R01AI136831-04 8/1/2022-7/31/2024
5R21AI150445-02 2/1/2021-1/31/2024
7R01AI134245-05 9/1/2021-4/30/2022
5R01AI134245-06 2/1/2022-4/30/2023
5R01AI134245-07 5/1/2023-4/30/2025
1P30AI168439-01 3/10/2022-2/28/2023
5P30AI168439-02 3/1/2023-2/29/2024
1R61AI169026-01 5/10/2022-4/30/2023
5R61AI169026-02 5/1/2023-4/30/2024
1R56AI174877-01 4/1/2023-3/31/2025
1R01AI176309-01 4/1/2023-3/31/2024
5U34AG068482-03 6/1/2022-5/31/2024
5R01AG065546-03 6/1/2022-5/31/2023
5R01AG065546-04 6/1/2023-5/31/2024
1R56AG073316-01 9/1/2021-8/31/2023
Criteria or specific requirement (including statutory, regulatory, or other citation) 2 CFR 200.303(a) requires that a non-federal entity must “(a) 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. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).”
Criteria or specific requirement (including statutory, regulatory, or other citation) (continued) 2 CFR 200.305(b)(1) requires “The non-Federal entity must be paid in advance, provided it maintains or demonstrates the willingness to maintain both written procedures that minimize the time elapsing between the transfer of funds and disbursement by the non-Federal entity, and financial management systems that meet the standards for fund control and accountability as established in this part. Advance payments to a non-Federal entity must be limited to the minimum amounts needed and be timed to be in accordance with the actual, immediate cash requirements of the non-Federal entity in carrying out the purpose of the approved program or project. The timing and amount of advance payments must be as close as is administratively feasible to the actual disbursements by the non-Federal entity for direct program or project costs and the proportionate share of any allowable indirect costs. The non-Federal entity must make timely payment to contractors in accordance with the contract provisions.”
2 CFR 200.305(b)(3) requires “when the reimbursement method is used, the Federal agency or pass-through entity must make payment within 30 calendar days after receipt of the billing, unless the Federal awarding agency or pass-through entity reasonably believes the request to be improper.”
Condition Texas Biomed Research Institute (Texas Biomed) did not provide evidence of effectively designed internal controls to ensure subrecipients are paid by Texas Biomed within 30 days of requests for reimbursement received by Texas Biomed. In 5 instances, Texas Biomed paid subrecipients after 30 days of receipt of the request for reimbursement from the subrecipient, resulting in noncompliance with 2 CFR 200.305(b)(3).
Section III – Federal Award Findings and Questioned Costs (continued)
Finding 2023-001 – Cash Management – Pass-Through Entities (continued)
Cause Texas Biomed’s internal controls around payments to subrecipients were not precisely designed to ensure the issuance of payments to subrecipients occurs within 30 days of requests for reimbursement by the subrecipient.
Effect or potential effect Texas Biomed did not comply with the cash management requirements of the Uniform Guidance to pay subrecipients within 30 days of their requests for reimbursement.
Questioned costs None.
Context For 5 of 30 subrecipient payments, Texas Biomed made payments to subrecipients at dates ranging from 40 to 132 days (40, 41, 71, 110 and 132 days) after receipt of the requests for reimbursement. These payments were not made in accordance with the 30-day requirement (2R01AI048071-21, P51OD011133-24, 5U34AG068482-03, 1P30AI168439-01 and 1R61AI169026-01). Texas Biomed’s subrecipient expenditures totaled $2.8 million during the period, which represented 6.3% of Texas Biomed’s total research and development expenditures of $44.6 million.
Identification as a repeat finding, if applicable This is a repeat finding – Finding 2022-001.
Recommendation We recommend Texas Biomed design and implement internal controls with the required precision to ensure subrecipients are paid within 30 days of the receipt of requests for reimbursement from the subrecipient and approved by the principal investigator prior to paying the subrecipient.
Views of responsible officials Management agrees with the finding and will implement corrective action to implement controls to ensure payments to subrecipients are made timely.