UNIVERSITY OF CINCINNATIHigher Education

Assistance Listing, Federal Agency, and Program Name - 84.007, 84.033, 84.038, 84.063, 84.268; U.S. Department of Education; Student Financial Assistance Cluster Federal Award Identification Number and Year - 2024-2025 Pass-through Entity - N/A Finding Type - Significant deficiency Repeat Finding - No Criteria - For Tier 1 and Tier 2 banking arrangements, the institution must perform a due diligence review at least every two years to ascertain whether the fees imposed under the arrangement are consistent with or below prevailing market rates (34 CFR 668.164(e)(2)(ix) and (f)(4)(vii)). Condition - The University did not have controls in place to ensure that the required due diligence review was completed in the last two year period related to the current established contract. Questioned Costs - None If questioned costs are not determinable, description of why known questioned costs were undetermined or otherwise could not be reported - N/A Identification of How Questioned Costs Were Computed - N/A - there are no questioned costs related to the applicable compliance requirement. Context - The University did not perform a due diligence review in the last two year period related to the existing contract. There was only one contract in place during the year ended June 30, 2025. Cause and Effect - A control was lacking to ensure the required due diligence review was performed. Recommendation - We recommend a control be implemented to ensure a due diligence review is performed at least every two years. Views of Responsible Officials and Corrective Action Plan - In order to ensure that the terms of the consumer accounts offered through UC’s Tier 1 banking agreement are not inconsistent with the best financial interest of students who choose to open an account, UC Campus Services will, at a minimum, every 2 years, beginning October 2025: a. Conduct a due diligence review to ascertain whether the fees imposed under the current agreement are consistent with or below prevailing market rates. a. This will be accomplished by downloading and comparing “consumer schedule of fees” documents from UC’s current provider as well as several local competitors (e.g. US Bank, Fifth Third Bank, Chase Bank, Superior Credit Union). b. Ensure that termination provisions are maintained in the active agreement. These provisions are listed in the current agreement under Exhibit G. 4. (g). (1). In addition, the university will organize a Title IV compliance working group to meet monthly to review any communications or new requirements published by the U.S. Department of ED, State of Ohio, or other regulatory agencies. This core working group will be comprised of members of the Student Financial Aid Office, the Office of the Bursar, and the Office of the Controller, the three offices primarily responsible for awarding, disbursing, and drawing down funds related to the Title IV programs. This group will be responsible for communicating any changes to institutional responsibilities to other university partners who may need to review or revise policies and procedures based on the regulatory changes.

Assistance Listing Number, Federal Agency, and Program Name - Research and Development Cluster: - 93.242 and 93.853, U.S. Department of Health and Human Services - 47.041 and 47.049, National Science Foundation - 84.326, U.S. Department of Education Federal Award Identification Number and Year - Research and Development Cluster: - 93.242 - 5 F31 MH125541-03 - 93.853 - 5 U01 NS120910 02; 1 R61 NS128232-01 - 47.041 - CMMI 2151465; CBET-2125056 EAGER - 47.049 - CHE 1900097; CHE-1955161 - 84.326 - H326T230006-1- FY24-28 Pass through Entity - N/A Finding Type - Significant deficiency Repeat Finding - No Criteria - As outlined in 2 CFR 200.344, a recipient must liquidate all financial obligations incurred under the federal award not 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 and must have controls in place as part of that liquidation process in order to ensure that all costs charged to the grant were incurred during the period of performance. Condition - The University did not complete full grant closeout procedures in a timely manner for 10 out of 25 grants that were tested with a period of performance that ended in the year ended June 30, 2024. For 2 of those 10, there was not an independent review of the closeout checklist performed. Questioned Costs - N/A Identification of How Questioned Costs Were Computed - The issue identified was related to timeliness of grant closeout procedures. Context - In all samples tested, grant closeout procedures were completed; however, they were outside of an effective time window in order to meet the CFR requirements. The late reviews occurred between 134 days and 262 days after the period of performance ended. Two of the grant closeout checklists were not reviewed by an independent person once they were prepared. Cause and Effect - The University does have a formal grant closeout process in place, which includes a level of review of the grant checklist complete; however, the procedures were not followed or were misunderstood by certain staff, leading to procedures being completed late and a lack of review. Recommendation - The University should implement additional training over the procedures in place and consider whether any additional controls should be designed to mitigate the risk of procedures and reviews not being done in a timely manner. Views of Responsible Officials and Corrective Action Plan - SRS Accounting works closely with the departments on grant closeouts. Although a checklist was not signed by a supervisor, many of these awards had departmental agreement of final expenses. In two cases, the award was fully spent. System restrictions prevent spending 90 days after the grant end date. Due to department and system controls, no unallowable costs were reported on any award. SRS accounting will provide further award closeout training to its team members. Additionally, SRS Accounting added a supervisory team member, which will help mitigate this situation going forward.

Assistance Listing, Federal Agency, and Program Name - 84.042, U.S. Department of Education, Trio Cluster - Student Support Services Federal Award Identification Number and Year - P042A201799; 2021, 2022, 2023 Pass through Entity - N/A Finding Type - Material noncompliance with laws and regulations Repeat Finding - No Criteria - The requirements for activities allowed or unallowed are contained in program legislation, federal awarding agency regulations, and the terms and conditions of the award. Condition - Through an internal audit review, the University identified costs charged to this program that were determined to be unallowable or questionable. Questioned Costs - $69,353 Identification of How Questioned Costs Were Computed - Specific amounts identified by the University's internal audit (IA) department Context - Of the total questioned costs identified, $5,222 was partially unallowable, $35,335 was questionable, and $28,796 was deemed unallowable. The costs spanned from fiscal year ended June 30, 2022 to fiscal year ended June 30, 2024. At the time of identification, $306 of charges was immediately removed from the grant due to the nature of the costs (personal expenses). The remaining questioned costs, as well as all travel expenditures during that period, are being reviewed by IA in further detail to determine if they are unallowable. Cause and Effect - Despite having controls to review cost allowability, a program manager approved costs for the grant that did not clearly meet the program’s terms and conditions. Recommendation - The University should review its procedures regarding expense review to determine whether any changes need to be made to prevent unallowable costs being charged to the program. Views of Responsible Officials and Planned Corrective Actions The University’s internal audit department identified the noncompliance referenced in this finding. The University promptly informed the sponsor and provided refunds for the inappropriate charges. Staff involved in these improper actions were disciplined up to and including termination. Current staff have been counseled and provided additional training. The University has also instituted an additional review step for all large dollar projects and provides central support for the administration of large grants as needed.

Assistance Listing Number, Federal Agency, and Program Name - Research and Development Cluster: - 20.232, U.S. Department of Transportation, Commercial Driver's License Program Implementation Grant - 93.350, U.S. Department of Health and Human Services, National Center for Advancing Translational Sciences - 93.279, U.S. Department of Health and Human Services, Drug Abuse and Addiction Research Programs - 93.853, U.S. Department of Health and Human Services, Extramural Research Programs in the Neurosciences and Neurological Disorders - 93.866, U.S. Department of Health and Human Services, Aging Research Non-Research and Development Cluster: - 17.268, Department of Labor, H-1B Job Training Federal Award Identification Number and Year - Research and Development Cluster: - 20.323 - FM-CDL-0435-20-01-00 - 93.350 - UTR001425B - 93.279 - OSU SPC-1000006389 UM1DA; UDA013732E - 93.853 - SUBK00007313 SLEEP SMART; UNS110772A - 93.866 - RAG072592A 17.268: HG-33044-19-60-A-39, 2019 Pass-through Entity - 93.279 - The Ohio State University; 93.853 - University of Michigan Finding Type - Significant deficiency Repeat Finding - No Criteria - As outlined in 2 CFR 200.305(b)(3), when the reimbursement method is used for payment, organizations must make a payment within 30 calendar days after receipt of the billing unless the federal awarding agency or pass-through entity reasonably believes the request to be improper. Condition - Out of 28 payments to subrecipients that were tested, 12 were made after the 30-calendar-day requirement, 10 and 2 from the R&D Cluster and ALN 17.268, respectively. Questioned Costs - N/A Identification of How Questioned Costs Were Computed - The issue identified was related solely to timeliness of payments. Context - In all samples tested, payment was made to the subrecipient; however, the delayed payments ranged from 39 - 242 days between the invoice being received by the University and payment being made to the subrecipient. Cause and Effect - The University does have formal general accounts payable and cash disbursement processes in place; however, there are no specific controls in place to ensure that subrecipients are paid within the 30-day requirement. Although all of the payments were ultimately made, the lack of controls resulted in several late payments. Recommendation - The University should implement a control to ensure that payments are made within the required time frame. Views of Responsible Officials and Corrective Action Plan - Accounts payable personnel will review all vendor invoices to determine whether an invoice is related to a federal award expenditure. For federal award expenditures, accounts payable will manually change the payment terms to 30 calendar days or less to ensure compliance. Periodically, accounts payable will review open federal award payables to verify payment terms have been properly set for the 30-day compliance requirement. The Controller’s and Accounts Payable offices will also explore creating a more efficient long-term solution, whereby the 30-day terms could be automatically set during the purchase order creation process. This would eliminate any manual updates to the payment terms by accounts payable personnel. The Sponsored Research Services Accounting Office will send reminders to all college business officers and principal investigators (PIs) to highlight the need for prompt review and approval of federal award invoices. This language will be incorporated into the SRS Best Grant Practices training classes, as well as the University’s fundamentals of sponsored administration training courses.

Assistance Listing Number, Federal Agency, and Program Name - 17.268, Department of Labor, H-1B Job Training Grants Federal Award Identification Number and Year - HG-33044-19-60-A-39, 2019 Pass-through Entity - N/A Finding Type - Significant deficiency and material noncompliance with laws and regulations Repeat Finding - No Criteria - The requirements for activities allowed or unallowed are contained in program legislation, federal awarding agency regulations, and the terms and conditions of the award. Condition - Out of 60 allowability samples that were tested, 1 expenditure tested was determined to be incorrectly charged to this grant. Questioned Costs - $58,875 Identification of How Questioned Costs Were Computed - The amount represents the direct cost identified ($37,500) and the related indirect cost that was originally charged to the grant ($21,375), which represents the direct cost charged at the 57 percent indirect cost rate. Context - The underlying unallowable expenditure was related to a different, nonfederal grant. Cause and Effect - The review controls in place were ineffective, as the posting error was not caught by the review that occurs at the time of posting or by subsequent reviews completed by management throughout the year. This resulted in unallowable direct and indirect expenses being charged to the grant. Recommendation - The University should enhance or supplement its internal controls to ensure that charges to grants are reviewed for allowability. Views of Responsible Officials and Planned Corrective Actions - The College of Cooperative Education and Professional Studies (CCPS) has instituted several reforms to prevent future instances of this nature. The program director is now required to review and sign off on all transactions before they are charged to the project to ensure all charges are appropriate. New staff have been assigned to the project to process transactions, and the CCPS business office is now meeting monthly to review project activity, discuss any questions, and address any concerns regarding financial activities. Additionally, the University is drafting a new policy to review and, if needed, provide additional administrative support for large, complex grant projects. This policy will require that grant proposals above a certain dollar threshold be reviewed by the Office of Research prior to submission to ensure proper resources will be available to manage the project if awarded. In cases where the Office of Research determines additional resources may be needed, it will be authorized to require that additional support be included in the grant proposal or else provide additional administrative help to the unit at the time of award.

Federal Program - Federal Direct Student Loan Program, CFDA No. 84.268, 2019, Department of Education Criteria or Specific Requirement - Special Tests and Provisions ? The University is responsible for notifying students or parents of the date and amount of loan disbursements, the right to cancel all or a portion of such disbursements and the procedure and time by which the student or parent must notify the institution of his or her wish to cancel the loan (34 CFR 668.165). Condition ? Loan disbursement notifications were not sent to students during the period of March 2017 to October 2018. Questioned Costs - There were no questioned costs as a result of this finding. Context - From a sample of 25 students, 23 of the students were not properly notified of their loan disbursements. However, management indicated that no students received notification during the time period noted above. Our sampling method was not, and was not intended to be, statistically valid. Effect ? Without timely notification of loan disbursements, students do not have the opportunity to cancel debt which they do not wish to incur. Cause ? Notifications ceased being sent to students and parents after the conversion to a new student information software. While the software was programmed to send automatic notifications, an undetected error in the system prevented this from occurring. Identification as a Repeat Finding - No. Recommendation - We recommend management perform periodic tests of automated processes within the student financial aid function to ensure ongoing compliance with federal award requirements. Views of Responsible Officials and Planned Corrective Actions - The university?s Student Financial Aid Office took corrective action to fix the technical problems underlying the failure of the disbursement notification process prior to the 2019 audit. It is important to note that students receive multiple messages regarding their loans, including a disclosure from the US Department of Education several days prior to the loan disbursement. The university does not require the student to produce the disbursement notification to request a loan return, mitigating the effect noted in the finding. The university agrees with the auditors? recommendation for periodic review and compliance testing to ensure notification of loan disbursements. This review process will be detailed in the corrective action plan filed separately.