Finding Text
Federal Program: ALN 84.425 Education Stabilization Fund (ESF)
Condition: The Academy does not have formally documented written controls to ensure compliance with the U.S. Office of Management and Budget’s (OMB) Uniform Administrative Requirement, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), in regard to determining allowable costs, procurement procedures, and cash management.
Criteria: 2 CFR § 200.302(b) requires the Academy to have written procedures related to managing cash from federal award, including determining the allowability of costs in accordance with 2 CFR 200 Subpart E – Cost Principles. Additionally, 2 CFR § 318(a) and (c), requires the Academy to formally document procedures used for procurements made within federal programs, to demonstrate compliance with Uniform Guidance, which includes written standards of conduct that cover conflicts of interest and govern the performance of individuals engaged in procurement.
Cause: The Academy’s policies and procedures have not been formally drafted and updated in written form to the extent sufficient to meet the requirements above.
Effect: The failure to have written policies and procedures resulted in the Academy’s noncompliance with the requirements of the Uniform Guidance.
Context: This is a general requirement that pertains to most federal grants. This was not identified via sampling procedures.
Questioned Costs: None identified.
Recommendation: We recommend the Academy review the Electronic Code of Federal Regulations, particularly the sections referenced above, to obtain a better understanding of the related requirements under Uniform Guidance. Based on this understanding, we recommend the Academy adopt written policies and procedures pertaining to cash management, determining the allowability of costs, and procurement procedures for all federal programs.
Views of Responsible Officials and Planned Corrective Actions: Management agrees with our recommendation. See corresponding Corrective Action Plan.