Finding 553595 (2024-003)

Significant Deficiency

Requirement

Questioned Costs

Year

2024

Accepted

2025-04-01

Audit: 352191

Organization: Eastern Virginia Medical School (VA)

Auditor: Kpmg Peat Marwick LLP

AI Summary

Core Issue: Inadequate documentation for cash drawdown approvals led to weak controls over cash management.
Impacted Requirements: Compliance with 2 CFR section 200.305(b) regarding timely fund disbursement and approval processes.
Recommended Follow-up: Enhance training and documentation practices for cash drawdown approvals to ensure compliance and effective control operations.

Finding Text

2024-003 – Cash Management Approval Federal Programs – Research and Development Cluster (Assistance Listing No. 98.001) Federal Agencies - U.S. Agency for International Development Federal Award Year – July 1, 2023 to June 30, 2024 Compliance Requirement – Cash Management Criteria Requirement: Non-federal entities must minimize the time elapsing between the transfer of funds from the US Treasury or pass-through entity and disbursement by the non-federal entity for direct program or project costs and the proportionate share of allowable indirect costs, whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means (2 CFR section 200.305(b)). The reimbursement payment method is the preferred payment method if (a) the non-federal entity cannot the meet the requirements in 2 CFR section 200.305(b)(1) for advance payment, (b) the federal awarding agency sets a specific condition for use of the reimbursement or (c) if requested by the non-federal entity (2 CFR sections 200.305(b)(3) and 200.208). The reimbursement payment method also may be used on a federal award for construction or for other construction activity as specified in 2 CFR section 200.305(b)(3). Condition Found: For two out of thirty-one samples, the institution did not maintain appropriate documentation to evidence the approval of the drawdown request. This resulted in an ineffective control over the review and approval of cash drawdowns. Cause and Possible Asserted Effect: The grants department had turnover in the current year, which resulted in inconsistent documentation of approvals. Therefore, the institution’s control to review and approve cash drawdowns did not operate consistently to ensure requests for reimbursement were properly approved and evidence of the review was maintained. Identification of Questioned Costs: There are no questioned costs associated with this finding. 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 documentation requirements around the review and approval of cash drawdown requests. 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 and approval of cash drawdown requests.

Corrective Action Plan

Finding 2024-03: Cash Management Approval Views of Responsible Officials Management agrees with the findings and recommendations. Through the merger with Old Dominion University, additional controls have adopted around the processes and controls around the review and approval of cash drawdown requests. Corrective Action Plan Effective July 1, 2024, EVMS merged with ODU and the ODU Research Foundation became the fiscal and administrative agent for EVMS’s transferring sponsored programs on behalf of ODU. As per ODU’s Memorandum of Understanding (MOU) with the ODU Research Foundation, the ODU Research Foundation has policies and processes in place to manage the review and approval of cash drawdown requests. The ODU Research Foundation uses its own system of internal controls for the review and approval of cash drawdown requests with no reliance on ODU systems for those processes and are audited separately. As a corrective action moving forward, ODU management will notify the ODU Research Foundation management of the audit findings, so they are aware of the internal control deficiencies. ODU will request the Research Foundation to provide a copy of their single audit report to monitor continued compliance with Uniform Guidance. The corrective action plan will be completed by March 31, 2025 and the contact person for this finding is Victoria Dean.

Other Findings in this Audit

553591 2024-002

Significant Deficiency
553592 2024-002

Significant Deficiency
553593 2024-002

Significant Deficiency
553594 2024-002

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