National Institute for Pharmaceutical Technology and Education, Inc.Non-Profit

Assistance Listing Number 93.103 Food and Drug Administration Research Grant Numbers 1U01FD00758-01 and 5U01FD04275-08 REV 4 US Department of Health and Human Services Finding 2024-003 Compliance Requirement: Filing of Single Audit Report Type of Finding: Material Weakness Criteria: Pursuant to 2 CFR section 200.512(a), the audit, data collection form, and reporting package must be submitted within 30 calendar days after receipt of the auditor’s report(s) or nine months after the end of the audit period (whichever is earlier). Condition: The Organization did not submit the Single Audit Reporting Package for the year ended June 30, 2024, within nine months after the end of the audit period (March 31, 2025). Cause: The Organization had transition in key financial personnel in January 2025. Audit fieldwork had to be delayed while the new part-time outsourced personnel worked to ensure that the records were complete and reconciled. After the auditor performed planning and made selections, additional changes were made to the financial records without being communicated to the auditor, causing further delays. Additional review of these changes resulted in more discussion and further changes, which were completed in December 2025. It then took the auditor additional time to get the testing back onto their schedule and complete the testing. Effect or potential effect: Failure to submit the required Single Audit Reporting Package timely automatically results in the Organization not qualifying for low-risk auditee status for the subsequent year’s Single Audit. Delinquent submission may also result in the inability to receive federal funding. Questioned Costs: None Repeat finding: No Recommendation: We recommend that the Organization update their policies and procedures to avoid delays in completion of the audit and to ensure timely submission of the Reporting Package. Views of responsible officials: Management agrees with the recommendation and will work to ensure future audits are completed timely.

CFDA#93.103 Grant Number U01FD004275-04 Grant Number U01FD004275-05 Grant Number 2U01FD004275-06 Grant Number 5U01FD004275-07 Grant Number 3U01FD004275-07SI US Department of Health and Human Services Food and Drug Administration Research Finding 2019-001 Reporting Noncompliance and Material Weakness Questioned Costs: None Criteria: There is a quarterly federal financial report (SF-425) required to be submitted within 30 days of the end of the quarter, and the annual federal financial report is required to be submitted for each budget period no later than 90 days after the end of the calendar quarter in which the budget period ended. Condition and Context: Two of the four quarterly federal financial reports submitted during the fiscal year ended June 30, 2019 were submitted late. The annual report was not submitted within 90 days of year end. Cause: The quarterly reports were not submitted on time once due to a lapse in procedure (the report was one day late) and another due to previous audit finding conflicts about whether the reports should be completed using accrual or cash accounting. There was additional time required to reconcile the quarterly federal financial report for cash basis. The annual report was late due to additional time needed to consult with agency on how to accurately complete the report. Effect: Information was reported late to US Department of Health and Human Services. Repeat Finding: Yes, 2018-001. Recommendation: The Organization should implement procedures to ensure reports are completed on time.Corrective Action Plan (CAP): Explanation of Disagreement with Audit Finding: Audit finding 2017-001 indicated that the quarterly reports should be completed on an accrual basis (per the accounting used by the organization). Based on the 2018 audit (and additional confirmation in PMS), resulting in audit finding 2018-001, the quarterly FFR?s should be completed on a cash basis. These discrepancies required additional time to bring the quarterly reports accurate to date using the cash basis. Prior to receiving Single Audit Resolution A-05-20-51150 from the agency, the Organization did not receive any indication that the annual reports were incomplete. Due to extra time needed to discuss with the agency, the reports were not completed by the due date to ensure they were done correctly. Actions Planned in Response to the Finding: The Office Manager will continue to complete the quarterly reports based on the revised procedures implemented for fiscal year ending 6/30/2020. In addition, the Office Manager will implement additional steps to ensure reports are filed on time. Since receiving Single Audit Resolution A-05-20-51150 from the agency, the Organization strengthened its policies and procedures and worked with the agency to complete all outstanding annual reports. Official Responsible for Ensuring the CAP: Vadim Gurvich, Executive Director Planned Completion Date for the CAP: June 30, 2020

CFDA#93.103 Grant Number U01FD004275-04 Grant Number U01FD004275-05 Grant Number 2U01FD004275-06 Grant Number 5U01FD004275-07 Grant Number 3U01FD004275-07SI US Department of Health and Human Services Food and Drug Administration Research Finding 2019-002 Cash Management Noncompliance and Significant Deficiency Questioned Costs: None Criteria: The Uniform Guidance states that procedures must be followed to minimize the time elapsing between the transfer of funds from the U.S. Treasury and disbursement and establish similar procedures for subrecipients. Interest earned on federal fund balances in excess of $250 is required to be remitted to the Department of Health and Human Services. Condition and Context: During our audit, we noted that the Organization was still in the process of spending down funds that have been received during the previous fiscal years dating back through fiscal year 2014. Cause: Due to the timeframe of the subaward projects and due to the timing of the reimbursement request received by the Organization from the subgrantees, funds obligated for various projects were not spent down as quickly as anticipated. Effect: As a result, the Organization has significant cash on hand that relates to unearned advances paid to them by the Agency from prior fiscal years. Repeat Finding: Yes, 2018-003. Recommendation: The Organization should develop and implement procedures to minimize the time elapsing between the transfer of funds from the U.S. Treasury and disbursement. These procedures should correspond better with the timing of the submission of reimbursement requests from subgrantees. Interest earned on federal fund balances should be remitted to the Department of Health and Human Services timely. Corrective Action Plan (CAP): Explanation of Disagreement with Audit Finding: We are in agreement with the finding. Actions Planned in Response to the Finding: The Organization strengthened internal policies and procedures and implemented them immediately following findings from the FY 2018 audit and included specific instructions to ensure funds transferred from the agency are spent according to Uniform Guidance timelines. The Organization returned excess cash to the agency in December 2019. Official Responsible for Ensuring the CAP: Vadim Gurvich, Executive Director Completion Date for the CAP: December 2019

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