Finding 553594 (2024-002)

Significant Deficiency
Requirement
A
Questioned Costs
$1
Year
2024
Accepted
2025-04-01
Audit: 352191
Organization: Eastern Virginia Medical School (VA)

AI Summary

  • Core Issue: Indirect costs were overstated in four out of twelve samples due to miscalculations and ineffective control over reviews.
  • Impacted Requirements: Compliance with 2 CFR regulations regarding allowable costs and consistent charging of indirect costs was not met, leading to questioned costs of approximately $4,859.92.
  • Recommended Follow-Up: Management should enhance training for compliance control roles to ensure accurate indirect cost calculations and strengthen review processes to prevent future noncompliance.

Finding Text

2024-002 – Indirect Costs (IDC) Federal Programs – Research and Development Cluster (Assistance Listing No. 98.001 and 93.855) Federal Agencies - U.S. Agency for International Development and Department of Health and Human Services Federal Award Year – July 1, 2023 to June 30, 2024 Compliance Requirement – Activities Allowed/Unallowed and Allowable Costs Criteria Requirement: Indirect (facilities and administrative(F&A)) costs are those costs that are incurred for common or joint objectives and, therefore, cannot be identified readily and specifically with a particular sponsored project, an instructional activity, or any other institutional activity (2 CFR section 200.1). Per 2 CFR 200, Appendix III, paragraph C.2, indirect costs requires that the negotiated (or submitted) rate(s) are applied to the appropriate distribution base. Also, as described in 2 CFR section 200.403, costs must be consistently charged as either indirect or direct but may not be double charged or inconsistently charged as both. Condition Found: For four out of twelve samples, the indirect cost recorded was overstated due to miscalculations of IDC due to an ineffective control over the review and recalculation of indirect costs. • For three out of the twelve samples, the miscalculations were overstated due to a calculation error in the year end closing entry. However, the last draw request submitted for FY24 was on September 18, 2024, for expenses incurred/booked through June 30, 2024; and the indirect costs claimed on this draw request were calculated accurately, and did not include the overages. Therefore, these samples were not considered to be compliance findings as EVMS did not seek reimbursement for more than was allowable within the period of performance. As a result of the deficiency, the error resulted in questioned costs of approximately $66 on the SEFA. • For one out of twelve samples, the indirect cost calculation was performed using the incorrect cost base, resulting in an overstatement of indirect costs of $4,793.92, causing a partially overdrawn amount of $2,046.42, which resulted in noncompliance and questioned costs on the SEFA. Cause and Possible Asserted Effect: The institution’s control to review the indirect cost calculations did not operate consistently to ensure indirect costs were accurately recorded. Consequently, there were questioned costs and an overdrawn amount in FY24. Identification of Questioned Costs: The questioned costs associated with this finding are $4,859.92. Sampling: The sample was not intended to be and was not a statistically valid sample. Identification of Repeat Finding: This finding is not a repeat of a finding in the immediately prior year. Recommendation: Our recommendation is for management to reinforce and train those individuals in the compliance control ownership role to ensure controls are operating as designed in order to prevent, or detect and correct noncompliance on a timely basis. Specifically, strengthening its processes and controls around accuracy of the review over indirect costs calculation requirements. This will help ensure that controls are functioning as intended, thereby preventing or promptly identifying and rectifying instances of noncompliance. Views of Responsible Officials: Management agrees with the findings and recommendations. Through the merger with Old Dominion University, additional controls have been adopted around the processes and controls around the accuracy of the review over indirect cost calculation requirements.

Categories

Questioned Costs Allowable Costs / Cost Principles Cash Management Period of Performance Reporting

Other Findings in this Audit

  • 553591 2024-002
    Significant Deficiency
  • 553592 2024-002
    Significant Deficiency
  • 553593 2024-002
    Significant Deficiency
  • 553595 2024-003
    Significant Deficiency
  • 553596 2024-003
    Significant Deficiency
  • 553597 2024-003
    Significant Deficiency
  • 1130033 2024-002
    Significant Deficiency
  • 1130034 2024-002
    Significant Deficiency
  • 1130035 2024-002
    Significant Deficiency
  • 1130036 2024-002
    Significant Deficiency
  • 1130037 2024-003
    Significant Deficiency
  • 1130038 2024-003
    Significant Deficiency
  • 1130039 2024-003
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
84.268 Federal Direct Student Loans $50.01M
93.575 Child Care and Development Block Grant $6.70M
98.001 Usaid Foreign Assistance for Programs Overseas $4.98M
93.855 Allergy and Infectious Diseases Research $1.79M
93.342 Health Professions Student Loans, Including Primary Care Loans and Loans for Disadvantaged Students $1.70M
93.914 Hiv Emergency Relief Project Grants $1.30M
12.420 Military Medical Research and Development $708,610
93.394 Cancer Detection and Diagnosis Research $698,307
93.393 Cancer Cause and Prevention Research $597,714
93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (elc) $573,778
93.918 Grants to Provide Outpatient Early Intervention Services with Respect to Hiv Disease $511,512
93.926 Healthy Start Initiative $452,882
93.917 Hiv Care Formula Grants $431,023
93.310 Trans-Nih Research Support $352,851
93.350 National Center for Advancing Translational Sciences $322,900
93.847 Diabetes, Digestive, and Kidney Diseases Extramural Research $237,397
93.838 Lung Diseases Research $215,462
93.391 Activities to Support State, Tribal, Local and Territorial (stlt) Health Department Response to Public Health Or Healthcare Crises $163,273
93.859 Biomedical Research and Research Training $144,142
20.616 National Priority Safety Programs $140,002
93.077 Family Smoking Prevention and Tobacco Control Act Regulatory Research $136,015
93.113 Environmental Health $135,524
93.994 Maternal and Child Health Services Block Grant to the States $134,366
93.279 Drug Use and Addiction Research Programs $116,803
93.837 Cardiovascular Diseases Research $96,204
21.027 Coronavirus State and Local Fiscal Recovery Funds $77,359
93.865 Child Health and Human Development Extramural Research $74,301
93.969 Pphf Geriatric Education Centers $58,542
93.558 Temporary Assistance for Needy Families $48,867
93.866 Aging Research $46,081
93.173 Research Related to Deafness and Communication Disorders $18,510
93.307 Minority Health and Health Disparities Research $16,016
93.U75 Contraceptive Clinical Trials $11,622
93.399 Cancer Control $10,703
43.003 Exploration $7,769
93.434 Every Student Succeeds Act/preschool Development Grants $4,150
93.397 Cancer Centers Support Grants $3,235
93.853 Extramural Research Programs in the Neurosciences and Neurological Disorders $2,143
93.959 Block Grants for Prevention and Treatment of Substance Abuse $2,000
93.233 National Center on Sleep Disorders Research $810