Finding Text
Internal control deficiency and noncompliance over Period of Performance.
Identification of the federal program:
Research and Development Cluster
See the Schedule of Findings and Questioned Costs for table.
Criteria or specific requirement (including statutory, regulatory or other citation):
Title 2, Subtitle A, Chapter II, Part 200, Subpart D, 200.303 – Internal controls. The 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 or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Title 2, Subtitle A, Chapter II, Part 200, Subpart D, 200.344 – Closeout. The Federal awarding agency or pass-through entity will close out the Federal award when it determines that all applicable administrative actions and all required work on the Federal award have been completed by the non-Federal entity. If the non-Federal entity fails to complete the requirements, the Federal awarding agency or pass-through entity will proceed to close out the Federal award with the information available. This section specifies the actions the non-Federal entity and Federal awarding agency or pass-through entity must take to complete this process at the end of the period of performance: (b) Unless the Federal awarding agency or pass-through entity authorizes an extension, a non-Federal entity must liquidate all financial obligations incurred under the Federal award no later than 120 calendar days after the end date of the period of performance as specified in the terms and conditions of the Federal award.
Condition:
During our testing over period of performance, we observed management did not have effective internal controls in place to ensure all financial obligations incurred were liquidated under the Federal award no later than 120 calendar days after the end date of the period of performance as specified in the terms and conditions of the Federal award.
Cause:
Management did not have effective internal controls in place over the compliance requirement as stated in the criteria or specific requirement section above.
Effect or potential effect:
Management was reimbursed from the grantor for financial obligations incurred that were not liquidated under the Federal award no later than 120 calendar days after the end date of the period of performance as specified in the terms and conditions of the Federal award.
Questioned costs:
$5,227 – Assistance Listing Number 93.394, Award Identification Number – 7 R01 CA184792
Questioned costs were computed by taking the total financial obligations incurred that were not liquidated under the Federal award no later than 120 calendar days after the end date of the period of performance as specified in the terms and conditions of the Federal award.
Context:
Testing over period of performance were performed over City of Hope and Translational Genomics Research Institute separately with respect to internal controls as they operate under different internal control environments and combined with respect to compliance.
During our testing over period of performance, we obtained a listing of federal awards with performance period ending dates during the audit period and tested transactions for federal award costs to verify that the liquidation occurred within the allowed time period. We selected a compliance sample of 26 (23 samples for City of Hope and 3 samples for Translational Genomics Research Institute). The total value of the 23 samples for City of Hope was $223,159 and the total value of the 3 samples for Translational Genomics Research Institute was $3,733. The questioned costs were found within the City of Hope samples. The total population subjected to testing for City of Hope was $4,615,052.
There was 1 ($5,227) out of 23 ($223,159) samples where management was reimbursed from the grantor for a financial obligation incurred that was not liquidated under the Federal award no later than 120 calendar days after the end date of the period of performance as specified in the terms and conditions of the Federal award.
Identification as a repeat finding, if applicable:
No.
Recommendation:
We recommend that management develop and implement effective internal controls to ensure all financial obligations incurred were liquidated under the Federal award no later than 120 calendar days after the end date of the period of performance as specified in the terms and conditions of the Federal award. In addition, management should refund the questioned costs.
Views of responsible officials:
In response to this finding City of Hope (COH) will complete the following:
1. Research Accounting will present finding and revisit guidelines on period of performance requirements with Research and Post Award Accounting personnel.
2. COH will refund the identified questioned costs.