FAC Explorer

Finding 509571 (2022-003)

Material Weakness Repeat Finding
Requirement
B
Questioned Costs
-
Year
2022
Accepted
2024-11-20
Audit: 329168
Organization: Clarkson University (NY)
Auditor: Kpmg

AI Summary

  • Core Issue: The University lacks effective internal controls over manual payroll calculations for federal awards, leading to clerical errors.
  • Impacted Requirements: Compliance with 2 CFR 200.303(a) and 2 CFR 200.430 regarding allowable costs and accurate payroll records.
  • Recommended Follow-Up: Implement a precise internal control system to ensure accuracy in manual payroll calculations and allocations before processing.

Finding Text

Finding Number: 2022-003 Program: Research and Development Cluster Federal Agency Names: U.S. National Aeronoautics and Space Adminstration; U.S. Department of Agriculture; U.S. Department of Defense; U.S. Department of Energy; U.S. Department of Health and Human Services; U.S. Department of Transportation; U.S. Department of Commerce; U.S. Environmental Protection Agency; U.S. Department of Homeland Security; U.S. Department of Interior; and National Science Foundation Federal Award Numbers: Various – as listed on the Schedule Federal Award Years: Various Federal Assistance Listing Numbers: Various – as listed on the Schedule Compliance Requirement: Allowable costs/Cost principles Criteria In accordance with 2 CFR 200.303(a), non-federal entities must 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. Additionally, 2 CFR 200.430 states that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Conditions Found The University performs certain manual calculations (total supplemental pay authorization divided by the number of pay periods over the summer as well as percentage allocations to multiple awards) to determine the amount to pay each pay period for both faculty and graduate assistants who work on Research and Development Cluster awards. During our testing of internal controls and compliance related to allowable costs/cost principles specific to payroll, we determined that internal controls were not designed at a level of precision to prevent or detect clerical errors associated with the manual calculations and the manual processing of payroll allocations to Research and Development Cluster awards. As a result, there were 14 errors in our sample of 81 transactions related to errors in the manual calculations, however only 7 of the errors resulted in overcharges to federal awards. The following were those errors that resulted in overcharges to federal awards: Federal assistance listing Payroll Fringe Indirect number Award number amount amount amount Total 12.300 N00014-21-1-2057 $ 170 — 90 260 13.300 N00014-21-1-2057 170 — 90 260 14.300 N00014-21-1-2057 1,425 — 755 2,180 47.041 2003307 5,744 439 3,044 9,227 47.076 1936144 7 1 4 12 47.076 2050074 10 1 5 16 47.076 1852820 20 2 11 33 $ 7,546 443 3,999 11,988 Cause In discussing these conditions with the University, they stated the errors primarily stem from when there are multiple supplemental pay authorizations or superseding appointments that require a manual calculation of the pay per pay period, retroactive adjustments or changes in allocations to federal awards. There was no secondary review of such manual calculations by someone other than the preparer. The University did not have a system of internal control that was designed and operating at a level of precision to prevent or detect errors in manual calculations and other clerical errors associated with calculations and payroll allocations for Research and Development Cluster awards related to supplemental summer payroll and graduate assistant appointments. Effect Ineffective controls could result in unallowable costs being charged to the Research and Development Cluster awards. Questioned Costs $11,988 which includes payroll, fringe benefits and applicable indirect costs. Statistical Sample Our sample was not, and was not intended to be statistically valid. Repeat Finding This finding is a repeat finding – see prior year finding 2021-003. Recommendation We recommend the University design and implement a more precise system of internal control to ensure manual calculations and payroll allocations for Research and Development Cluster awards are accurate and an allowable cost prior to processing payroll and recording payroll allocations.

Categories

Allowable Costs / Cost Principles

Other Findings in this Audit

Programs in Audit

ALN Program Name Expenditures
84.268 Federal Direct Student Loans $27.58M
84.038 Federal Perkins Loan Program $3.59M
84.425 Education Stabilization Fund $3.20M
84.063 Federal Pell Grant Program $2.84M
66.469 Great Lakes Program $1.02M
84.033 Federal Work-Study Program $584,074
84.007 Federal Supplemental Educational Opportunity Grants $440,184
84.042 Trio_student Support Services $300,517
84.217 Trio_mcnair Post-Baccalaureate Achievement $276,721
12.114 Collaborative Research and Development $269,691
93.394 Cancer Detection and Diagnosis Research $235,375
84.365 English Language Acquisition State Grants $232,285
93.865 Child Health and Human Development Extramural Research $219,366
12.300 Basic and Applied Scientific Research $170,651
47.050 Geosciences $145,324
20.200 Highway Research and Development Program $135,549
81.049 Office of Science Financial Assistance Program $126,925
47.075 Social, Behavioral, and Economic Sciences $119,135
81.086 Conservation Research and Development $93,251
12.910 Research and Technology Development $88,674
47.076 Education and Human Resources $80,122
11.431 Climate and Atmospheric Research $78,920
10.310 Agriculture and Food Research Initiative (afri) $70,312
93.273 Alcohol Research Programs $67,320
12.420 Military Medical Research and Development $66,293
47.074 Biological Sciences $63,895
97.077 Homeland Security Research, Development, Testing, Evaluation, and Demonstration of Technologies Related to Nuclear Threat Detection $62,166
93.173 Research Related to Deafness and Communication Disorders $50,822
12.800 Air Force Defense Research Sciences Program $49,620
12.901 Mathematical Sciences Grants Program $47,280
11.609 Measurement and Engineering Research and Standards $43,130
43.002 Aeronautics $27,830
43.008 Education $26,182
66.511 Office of Research and Development Consolidated Research/training/fellowships $17,249
47.049 Mathematical and Physical Sciences $17,248
81.117 Energy Efficiency and Renewable Energy Information Dissemination, Outreach, Training and Technical Analysis/assistance $17,051
45.162 Promotion of the Humanities_teaching and Learning Resources and Curriculum Development $14,289
93.989 International Research and Research Training $8,935
43.012 Space Technology $8,641
47.041 Engineering $7,816
12.000 Unknown (battelle) $7,793
93.913 Grants to States for Operation of Offices of Rural Health $7,600
12.431 Basic Scientific Research $6,819
15.944 Natural Resource Stewardship $6,170
84.037 Federal Perkins Loan Cancellations $4,700
20.215 Highway Training and Education $3,798
47.070 Computer and Information Science and Engineering $3,719
93.859 Biomedical Research and Research Training $2,616
84.126 Rehabilitation Services_vocational Rehabilitation Grants to States $344