Maine Mathematics and Science Alliance

Finding Number: 2023-001: Represents a material weakness in internal control over compliance with Maine Mathematics and Science Alliance’s major federal program. Repeat Finding: Yes Type of Finding: Material Weakness Description: Internal Control over Payroll Major Program: NATIONAL SCIENCE FOUNDATION Research Development Cluster (Direct) AL# 47.076 – Education and Human Resources AL# 47.070 – Computer and Information Science and Engineering Questioned Costs: None How the questioned costs were computed: N/A Compliance Requirements: Activities Allowed or Unallowed and Allowable Costs, Cost Principles NSF Award Numbers Effected: 1831427 (Grant term 10/1/18 - 6/30/23), 1933491 (Grant term 1/1/20 - 6/30/24), 2009613 (Grant term 5/15/20 - 4/30/24), 1657217 (Grant term 8/15/17 - 7/31/22), 2115229 (Grant term 9/1/21 - 8/31/25) and 2201674 (Grant term 8/1/22 - 7/31/26) Condition: The internal controls over compliance for allowable activities and allowable costs are substantially the same for AL #47.076 and #47.070. During our audit, we noted the following: Wages charged to the programs are inconsistently including or excluding taxable benefits Pay rates noted in personnel files for several employees did not agree to the rates being paid One employee's timesheet hours did not agree to the hours paid on the payroll register Several instances in which payroll expenditures were incorrectly allocated to the programs. The employee's full wage for the pay period is being allocated rather than directly charging the program for the hours indicated on the timesheet as spent in the program and only allocating the other administrative or vacation time. The allocations were not based on time and effort records. Criteria: 2 CFR 200.430(i) 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;”. Cause: During fiscal year 2023, there was turnover in the personnel handling payroll. Effect: Without ensuring the payroll allocation is supported by time and effort records, it is possible that grants could be overcharged, resulting in misstated financial statements and unallowable costs. Context: The situation noted in the audit did not result in reportable questioned costs. The sample was not intended, and was not, a statistically valid sample. Recommendation: We recommend that the database used in the allocation of payroll to the grants be compared to the time and effort records prior to posting into the general ledger and sending to Bangor Payroll for processing. We recommend that approved pay rates in personnel files be compared to what has been provided to Bangor Payroll and corrections be made as necessary, as soon as possible. This should be completed and documented by an appropriate individual. View of responsible officials: Management agrees with the finding and has committed to a corrective action plan.

The payroll allocation process was adjusted during the fiscal year following the transition that created both the fiscal year 2022 and 2023 findings. This process has also been reviewed by NSF. A system of checks and balances are also in place to make sure wages are accurate between files and the payroll system. Person(s) Responsible: Gina Grange Timing for Implementation: Complete

2022-002

Finding Number: 2023-002: Represents a material weakness in internal control over compliance with Maine Mathematics and Science Alliance’s major federal program. Repeat Finding: No Type of Finding: Material Weakness Description: Internal Control over Financial Reporting Major Program: NATIONAL SCIENCE FOUNDATION Research Development Cluster (Direct) AL# 47.076 – Education and Human Resources AL# 47.070 – Computer and Information Science and Engineering Questioned Costs: None How the questioned costs were computed: N/A Compliance Requirements: Activities Allowed or Unallowed and Allowable Costs, Cost Principles NSF Award Numbers Effected: 1831427 (Grant term 10/1/18 - 6/30/23), 1933491 (Grant term 1/1/20 - 6/30/24), 2009613 (Grant term 5/15/20 - 4/30/24), 1657217 (Grant term 8/15/17 - 7/31/22), 2115229 (Grant term 9/1/21 - 8/31/25) and 2201674 (Grant term 8/1/22 - 7/31/26) Condition: During fiscal year 2023, there was turnover in the finance department. Out of a sample of 25 nonpayroll related cash disbursement transactions there were a total of 9 where the payment was made without indication of approval for payment on the invoice or other form of supporting documentation. Criteria: Uniform Guidance 200.302(b)(4) states each non-federal entity must provide for “effective control over, and accountability for, all funds, property, and other assets.” Cause: In an organization with a small number of personnel in its business office and accounting department, there may be an inadequate segregation of duties. This results in certain internal control limitations, including, but not limited to, proper review and approval of cash disbursements prior to processing. Effect: As a result of the financial reporting matters identified in the condition paragraph, including the lack of segregation of duties, the potential for misstatements or misappropriated assets exists as does a material weakness exists in the Alliance’s internal controls over financial reporting. Context: The situation noted in the audit did not result in reportable questioned costs. The sample was not intended, and was not, a statistically valid sample. Recommendation: We recommend that the Alliance adopt a policy whereby all payments are approved by a responsible and knowledgeable individual prior to processing to ensure that costs charged to the federal program are allowable and appropriate. View of responsible officials: Management agrees with the finding and has committed to a corrective action plan.

Proper filing of the documentation supporting the approvals of payments will be maintained with Standard Operating Procedures outlining the processes to ensure consistency and the ability to retrieve documents even turning times of transition. Person(s) Responsible: Gina Grange Timing for Implementation: Complete

Finding Number: 2022-002 - Represents a significant deficiency in internal control over compliance with Maine Mathematics and Science Alliance?s major federal program. Repeat Finding: No Type of Finding: Significant Deficiency Description: Internal Control over Payroll Condition: The internal controls over compliance for allowable activities and allowable costs are substantially the same for AL #47.076 and #47.070. During our audit, we noted several instances in which payroll expenditures were incorrectly allocated to the programs. The allocations were not based on time and effort records. Criteria: 2 CFR 200.430(i) 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;?. Cause: During fiscal year 2022, there was turnover in the personnel handling payroll. The database that was used from July 1, 2021 through October 15, 2021 to allocate payroll expenditures to the appropriate programs was not properly calculating based on the approved time and effort records. Effect: Without ensuring the payroll allocation is supported by time and effort records, it is possible that grants could be overcharged, resulting in misstated financial statements and unallowable costs. Context: The situation noted in the audit did not result in reportable questioned costs. We noted the exception applied to payroll periods from July 1, 2021 through October 15, 2021. The sample was not intended, and was not, a statistically valid sample. Recommendation: We recommend that the database used in the allocation of payroll to the grants be compared to the time and effort records prior to posting into the general ledger and sending to Bangor Payroll for processing. This should be completed and documented by an appropriate individual. View of responsible officials: Management agrees with the finding and has committed to a corrective action plan.

Finding Number: 2022-002 ? Significant Deficiency ? Internal Control Over Payroll The Alliance hired an organization that specialized in helping non-profits with accounting services. This organization has reviewed the payroll process and made suggestions for improvements. These suggestions have been implemented and will continue to be refined to ensure that allocations are made correctly based on time and effort. Additionally, formal reviews of time and effort will be made prior to posting expenses to the ledger. Person(s) Responsible: Ruth Allen-Kermish Timing for Implementation: Complete

Allocation of Payroll Information on the Federal Program National Science Foundation Research Development Cluster CFDA #47.076 ? Education and Human Resources CFDA #47.070 ? Computer and Information Science and Engineering July 1, 2019 ? June 30, 2020 Significant Deficiency Criteria The OMB Compliance Supplement requires that Maine Mathematics and Science Alliance (MMSA) maintain time and effort distribution records that enable the allocation of payroll and related expenses across programs. Condition The internal controls over compliance for allowable activities and allowable costs are substantially the same for CFDA #47.076 and #47.070. During our audit, we noted a couple of instances in which payroll expenditures were incorrectly allocated to the program based off from the time and effort records. We also noted one instance where an incorrect pay rate was used which could affect the amount allocated to the program based off from the time and effort records. Cause There was a manual input error into the database that is used to allocate payroll expenditures to the appropriate programs based on the approved time and effort records, as well as a salary input error, which were not caught prior to posting into the general ledger. Effect Payroll expenditures could be billed to an incorrect grant, incorrectly billed to the appropriate grant, or unallowable under the grant. Context The situations noted in the audit did not result in reportable questioned costs; however, three exceptions were noted in the controls that were tested from the sample selected. The sample was not intended, and was not, a statistically valid sample. Recommendation We recommend that the database used in the allocation of payroll to the grants be compared to the time and effort records prior to posting into the general ledger and sending to Bangor Payroll for processing. This should be completed and documented by an appropriate individual. Grantee Response Management agrees with the finding and has developed a corrective action plan.

NATIONAL SCIENCE FOUNDATION 2020-001 Research Development Cluster CFDA #47.076 ? Education and Human Resources CFDA #47.070 ? Computer and Information Science and Engineering Significant Deficiency Recommendation: We recommend that the database used in the allocation of payroll to the grants be compared to the time and effort records prior to posting into the general ledger and sending to Bangor Payroll for processing. This should be completed and documented by an appropriate individual. Action Taken: In October of 2020, we incorporated changes to our policy and procedures to ensure that salary input and payroll allocation errors are corrected prior to posting to the general ledger. - Steps have been added to that prior to submitting payroll information to Bangor Payroll, the document will be verified. - Prior to allocating payroll to grants, a proof will be completed that compares the original time and effort reports to the data entered in the database. - These steps will be performed and documented by someone other the original preparer.