The Experimental Station: 6100 BlackstoneNon-Profit

Finding No. 2023-001: Allowable Costs/Cost Principles Program: AL# 10.331 - Gus Schumacher Nutrition Incentive Program (GUSNIP/GUCRR) Federal Grantor: U.S. Department of Agriculture Criteria – Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: I. Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; II. Be incorporated into the official records of the non-Federal entity; III. Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; IV. Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis; V. Comply with the established accounting policies and practices of the non-Federal entity; VI. Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non- Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Citation – 2 CFR 200.430 (i) Condition – Salary expense allocated and charged to Federal awards did not agree to timesheet reports that were signed by the employee and their direct supervisor. Additionally, timesheets were not properly approved by a supervisor. Cause – Budgeted rates were used to calculate the amount charged to the grant. Employees that worked exclusively on the grant covered by the Federal award had timesheets to support the time spent on the grant. Effect – The amount of salary expense and related fringe benefits charged to the Federal award did not meet the criteria outlined above. This leads to a risk that inaccurate charges could be made to the Federal award. Questioned Costs – None – the Organization was able to provide alternative methods to demonstrate that costs charged to the grant were less than actual amount incurred.Context - For 2 out of 4 employees tested, the salary allocated did not agree to the timesheet reports. Additionally, for 1 out 4 employees tested, the timesheet did not reflect a supervisor approval/signature as required by the Organization’s handbook policy. Repeat Finding - Yes - Finding 2022-003. Please see Summary Schedule of Prior Year Audit Findings. Recommendation - We recommend that the Organization follows policies and procedures to ensure compliance with proper payroll documentation. We also recommend that timesheets be used to support all allocations as the basis for recording salary to the books and used as the source of costs that get charged to Federal awards. Views of Responsible Officials - See Corrective Action Plan.

Finding No. 2022-002: Allowable Costs/Cost Principles Program: AL# 10.331 - Gus Schumacher Nutrition Incentive Program (GUSNIP) and AL# 93.667 - Illinois Department of Human Services - Social Service Block Grant (IDHS) Federal Grantor: U.S. Department of Agriculture U.S. Department of Health and Human Services Criteria – The Organization should follow federal cost principles and monitor indirect costs for grants throughout the year to ensure that it is allocating shared costs using a consistent method across all programs in the Organization that are at or below the indirect cost rate for the year. Condition – The Organization did not monitor the indirect cost expense/rate charged to each grant for the year ending 2022. Cause – The Organization first accepted Federal grants for year 2021 and is in process of creating procedures to monitor such information. Effect – The Organization did not charge all programs its fair share of shared costs using a consistent method. Questioned Costs – None Repeat Finding – No Recommendation – We recommend that the Organization updates its policies and procedures to ensure it has internal controls in place to monitor the indirect cost charged to grants throughout the year and make sure it is at or below the indirect cost rate calculated for the year as per the cost principles of the Uniform Guidance. View of Responsible Officials – See Corrective Action Plan.

Finding No. 2022-003: Allowable Costs/Cost Principles Program: AL# 10.331 - Gus Schumacher Nutrition Incentive Program (GUSNIP) AL# 93.667 - Illinois Department of Human Services - Social Service Block Grant (IDHS) Federal Grantor: U.S. Department of Agriculture U.S. Department of Health and Human Services Criteria – The Organization should follow the Uniform Guidance requirements around tracking effort for employees who work on more than one program. The Uniform Guidance documentation requirements for payroll require Organizations to track 100% of employees time or effort if they benefit more than one program. The Organization is required to have control procedures in place to ensure that the payroll charges are accurate, and allowable to the grant. Condition – A sample of payroll disbursements were selected to test internal control over compliance and compliance with allowable costs/cost principles. Out of the items selected, we noted the Organization did not accurately reconcile actual payroll to approved budget, and overcharged payroll for the year to the grants. Cause – The Organization’s policies and procedures require employees who benefit more than one program, to track the time spent on the Federal program and charge actual payroll expense to the program. Effect – Possible disallowance of funds requiring a return of funds received from grant agencies. Questioned Costs – $26,296 Context – Out of a total population of 7 employees whose payroll is directly charged to the grants that were tested, we noted deficiencies in the documentation support for 6 of the individuals’ payroll costs. Repeat Finding – Yes – Finding 2021-003. Please see Summary Schedule of Prior Year Audit Findings. Recommendation – We recommend that the Organization updates its policies and procedures to ensure compliance with proper payroll documentation. We strongly recommend a tracking sheet to track hours spent on each program by each employee to ensure that costs are properly charged to the applicable grants. Views of Responsible Officials – See Corrective Action Plan.

Finding No. 2021-002 - Allowable Costs/Cost Principles Questioned Costs: Unknown Program: Food Insecurity Nutrition Incentive Grants Program (GUSNIP) Federal Grantor: U.S. Department of Agriculture Period: 01/01/21-12/31/21 Condition: Upon review of the Expimental Station's cost allocation methodology, it was noted the Organization charges its Federal program using a 10% de-minimis rate for its fair share of shared costs. However, the Organization is not charging it's other programs an allocated of shared costs using the same methodology. Criteria - The Organization should follow federal cost principles to ensure that it is allocating shared costs using a consistent method across all programs in the Organization Effect - The Organization did not charge all programs its fair share of shared costs using a consistent method. Cause - The Organization has recently accepted Federal grants and was not aware of noncompliance issues. Recommendation - We recommend that the Organization update its policies and procedures to ensure it is in compliance with the cost priciniples of the Uniform Guidance. View of Responsible Officials - Responsible officials agree with the finding and will work on updating policies and procedures to ensure compliance.

Finding No. 2021-003 - Allowable Costs/Cost Principles Questioned Costs: Unknown Program: Food Insecurity Nutrition Incentive Grants Program (GUSNIP) Federal Grantor: U.S. Department of Agriculture Period: 01/01/21-12/31/21 Condition: A sample of payroll disbursements were selected to test internal control over compliance and compliance with allowable costs/cost principles. Out of the items selected, we noted insufficient documentation for employees that work on more than one program. Criteria - The Organization should follow the Uniform Guidance requirements around tracking effort for employees who work on more than one program. The Uniform Guidance documentation requirements for payroll require Organizations to track 100% of employees time or effort, if they benefit more than one program. Effect - The Organization could not provide support for 2 employees who work on more than one program. Cause - The Organization's policies and procedures require employees who benefis more than one program, to track the time spent on the Federal program. Recommendation - We recommend that the Organization update its policies and procedures to ensure it is in compliance with the payroll documentation requirements of the Uniform Guidance. View of Responsible Officials - Responsible officials agree with the finding and will work on updating policies and procedures to ensure compliance.