EIN: 362167060
UEI: MBKKNQM9QME3
Data as of August 22, 2026
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on September 29, 2025. Under 2 CFR 200.521(d), a pass-through entity that provided federal funds to this organization for this audit period must issue a management decision on these findings by March 29, 2026 (146 days ago).
What is a management decision? →Certain expenditures related to the COVID-19 Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crisis and the COVID-19 Epidemiology and Laboratory Capacity for Infectious Diseases were overstated by $347,352 and $164,120, respectively, on the preliminary schedule of expenditures of federal awards (the Schedule) provided by management due to the inappropriate classification of costs within the general ledger; the final Schedule was corrected.Cause:Endeavor’s internal controls over the preparation of the Schedule were not sufficient to properly accumulate and accurately report all expenditures of federal awards.Effect or Potential Effect:Inaccurate or improper reporting of expenditures results in a misstated Schedule and can also potentially result in insufficient testing of the major programs or improper identification of major programs for audit purposes.Questioned costs:None.Context:Endeavor reported expenditures of $872,758 on the preliminary SEFA, but on the final SEFA reported $525,406 related to the COVID-19 Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crisis. Endeavor reported expenditures of $1,233,464 on the preliminary SEFA, but on the final SEFA reported $1,069,344 related to the COVID-19 Epidemiology and Laboratory Capacity for Infectious Diseases.Identification as a repeat finding, if applicable:This is a repeat finding of 2023-001.Recommendation:Management should implement internal controls to ensure amounts are appropriately accumulated and reported on the Schedule and all federal expenditures are appropriately identified and reported on the Schedule.Views of responsible officials:Management acknowledges the findings related to SEFA reporting. The issue arose from miscommunication in determining which expenditures should be reported for the programs in question. We recognize the importance of accurate and complete reporting. We will enhance our review and communication processes to ensure clarity between program managers and the finance team when identifying reportable expenditures. We have already taken steps to address this issue by:• Creating a new policy and procedure for SEFA reporting and establishing clear guidance and documentation for expenses that should be included in the SEFA.• Implementing an expanded review process to ensure accuracy prior to submission.
Show full finding ▾Hide full finding ▴Finding 2024-001 – ReportingInformation of the federal program:Federal Grantor: Department of Health and Human Services (HHS)Assistance Listing No.: 93.391, COVID-19 Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare CrisisPass-Through Grantor: Chicago Department of Public HealthFederal Grantor: Department of Health and Human Services (HHS)Assistance Listing No.: 93.323, COVID-19 Epidemiology and Laboratory Capacity for Infectious DiseasesPass-Through Grantor: Chicago Department of Public HealthCriteria or specific requirement (including statutory, regulatory, or other citation):Section 200.303 of the Uniform Guidance states the following regarding internal control: “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).”The Uniform Guidance 2 CFR section 200.510 states, “(b) Schedule of expenditures of Federal awards. The auditee must also prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with §200.502 Basis for determining Federal awards expended.”Condition:Certain expenditures related to the COVID-19 Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crisis and the COVID-19 Epidemiology and Laboratory Capacity for Infectious Diseases were overstated by $347,352 and $164,120, respectively, on the preliminary schedule of expenditures of federal awards (the Schedule) provided by management due to the inappropriate classification of costs within the general ledger; the final Schedule was corrected.Cause:Endeavor’s internal controls over the preparation of the Schedule were not sufficient to properly accumulate and accurately report all expenditures of federal awards.Effect or Potential Effect:Inaccurate or improper reporting of expenditures results in a misstated Schedule and can also potentially result in insufficient testing of the major programs or improper identification of major programs for audit purposes.Questioned costs:None.Context:Endeavor reported expenditures of $872,758 on the preliminary SEFA, but on the final SEFA reported $525,406 related to the COVID-19 Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crisis. Endeavor reported expenditures of $1,233,464 on the preliminary SEFA, but on the final SEFA reported $1,069,344 related to the COVID-19 Epidemiology and Laboratory Capacity for Infectious Diseases.Identification as a repeat finding, if applicable:This is a repeat finding of 2023-001.Recommendation:Management should implement internal controls to ensure amounts are appropriately accumulated and reported on the Schedule and all federal expenditures are appropriately identified and reported on the Schedule.Views of responsible officials:Management acknowledges the findings related to SEFA reporting. The issue arose from miscommunication in determining which expenditures should be reported for the programs in question. We recognize the importance of accurate and complete reporting. We will enhance our review and communication processes to ensure clarity between program managers and the finance team when identifying reportable expenditures. We have already taken steps to address this issue by:• Creating a new policy and procedure for SEFA reporting and establishing clear guidance and documentation for expenses that should be included in the SEFA.• Implementing an expanded review process to ensure accuracy prior to submission.
Finding 2024-001 – ReportingAssistance Listing No.: 93.391, COVID-19 Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crisis Assistance Listing No.: 93.323, COVID-19 Epidemiology and Laboratory Capacity for InfectiousDiseasesManagement will distribute the updated SEFA reporting policy and procedure, outlining the required reporting requirements and timelines. A SEFA preparation checklist will be implemented to ensure that all submissions are accurate and complete. At the end of the year, Finance and Grants Management will collaborate to review all grant activities to ensure proper inclusion in the SEFA.Responsible Official: Annaliza Villamin, System Director of Accounting, Endeavor Health
2023-001
Although subrecipient monitoring procedures were performed during the fiscal year, management did not perform and document a risk assessment upon entering into subaward agreements with its subrecipients in order to determine the extent of monitoring procedures that should be performed to be responsive to the assessed risk. In addition, management did not obtain the Uniform Guidance audit report from its subrecipients.Cause:Management did not have internal controls in place that required completion of the documentation evidencing review of the risk assessment of the subrecipients at the beginning of the award and monitoring of the Uniform Guidance audit reports of the subrecipients. The documentation was not completed as management considered the subrecipients to be vendors.Questioned costs:None.Context:Total federal expenditures passed through to subrecipients that required a risk assessment of and review of the Uniform Guidance audit report reported in the Schedule were $646,101, representing 60% of total ELC expenditures of $1,069,344 for the year ended December 31, 2024.Effect or potential effect:Monitoring performed over a subrecipient may not be responsive to the risk for that subrecipient. A subrecipient’s Uniform Guidance audit report could contain findings that are not properly reviewed and evaluated.Identification as a repeat finding, if applicable:The finding is not a repeat finding.Recommendation:Management should establish written internal controls and procedures related to subrecipient risk assessments in accordance with Uniform Guidance Section 200.33 2(b). In addition, Endeavor should modify the subrecipient Uniform Guidance audit report review process to include a section for Endeavor to document its review of and conclusions reached over the subrecipient’s Uniform Guidance audit report.Views of Responsible Officials:Management acknowledges the findings regarding subrecipient monitoring. The oversight occurred because a risk assessment was not conducted prior to entering into subaward agreements during the reporting period. We recognize the importance of ensuring that subrecipients comply with federal requirements, and we understand that effective monitoring is a key responsibility of the pass-through entity. Going forward, subrecipient monitoring will be integrated into all new subaward agreements to ensure adherence to federal requirements.
Show full finding ▾Hide full finding ▴Finding 2024-002 – Subrecipient MonitoringInformation of the federal program:Federal Grantor: United States Department of Health and Human ServicesPass-Through Grantor: Chicago Department of Public HealthAssistance Listing No.: 93.323, COVID-19 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC)Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation):Section 200.303 of the Uniform Guidance states the following regarding internal control: “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).”Section 200.332 of the Uniform Guidance states that all pass-through entities must:“(b) Evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraphs (d) and (e) of this section, which may include consideration of such factors as:(1) The subrecipient’s prior experience with the same or similar subawards,(2) The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F Audit Requirements of this part, and the extent to which the same or similar subaward has been audited as a major program,(3) Whether the subrecipient has new personnel or new or substantially changed systems, and(4) The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency).”Section 200.332 of the Uniform Guidance further states that all pass-through entities must:“(g) Consider whether the results of the subrecipient’s audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity’s own records.”Condition:Although subrecipient monitoring procedures were performed during the fiscal year, management did not perform and document a risk assessment upon entering into subaward agreements with its subrecipients in order to determine the extent of monitoring procedures that should be performed to be responsive to the assessed risk. In addition, management did not obtain the Uniform Guidance audit report from its subrecipients.Cause:Management did not have internal controls in place that required completion of the documentation evidencing review of the risk assessment of the subrecipients at the beginning of the award and monitoring of the Uniform Guidance audit reports of the subrecipients. The documentation was not completed as management considered the subrecipients to be vendors.Questioned costs:None.Context:Total federal expenditures passed through to subrecipients that required a risk assessment of and review of the Uniform Guidance audit report reported in the Schedule were $646,101, representing 60% of total ELC expenditures of $1,069,344 for the year ended December 31, 2024.Effect or potential effect:Monitoring performed over a subrecipient may not be responsive to the risk for that subrecipient. A subrecipient’s Uniform Guidance audit report could contain findings that are not properly reviewed and evaluated.Identification as a repeat finding, if applicable:The finding is not a repeat finding.Recommendation:Management should establish written internal controls and procedures related to subrecipient risk assessments in accordance with Uniform Guidance Section 200.33 2(b). In addition, Endeavor should modify the subrecipient Uniform Guidance audit report review process to include a section for Endeavor to document its review of and conclusions reached over the subrecipient’s Uniform Guidance audit report.Views of Responsible Officials:Management acknowledges the findings regarding subrecipient monitoring. The oversight occurred because a risk assessment was not conducted prior to entering into subaward agreements during the reporting period. We recognize the importance of ensuring that subrecipients comply with federal requirements, and we understand that effective monitoring is a key responsibility of the pass-through entity. Going forward, subrecipient monitoring will be integrated into all new subaward agreements to ensure adherence to federal requirements.
Finding 2024-002 – Subrecipient MonitoringAssistance Listing No.: 93.323, COVID-19 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC)Management will implement the established Research procedures for subrecipient risk assessments in accordance with Uniform Guidance Section 200.332(b). Update the Research subrecipient monitoring checklist and use the subrecipient forms. This approach will be applied to all new subrecipient relationships starting in 2025 and beyond. Additionally, management will collaborate with Endeavor Health's legal, finance, and compliance teams to assess current processes and make any necessary corrections to improve the review and documentation of results going forward.Responsible Officials: Ashlee Jean Roffe, Director of Nutrition and Community Health, Community CARE
Management did not have sufficiently designed internal controls to ensure all payments made to subrecipients were made within the required time frames.Cause:Management did not ensure that all subrecipient cash payments were made within the required time frame.Effect or potential effect:Subrecipients are not paid within the time frame established in the Uniform Guidance.Questioned costs:None.Context:We tested a sample of 10 subrecipient payments, and identified 4 payments that were not paid within 30 days of receipt. Total expenditures for the Research and Development Cluster were $13,427,764 at December 31, 2024. Total subrecipient expenditures for the year ended December 31, 2024, were $2,133,172.Identification as a repeat finding, if applicable:This finding is not a repeat finding from the prior year.Recommendation:Management should ensure subrecipient payments are made within the required time frames included in the Uniform Guidance.Views of responsible officials:Management concurs with the finding and will increase the priority around the 30-day processing deadline mandated by the Uniform Guidance 2 FR 200.305 (b)(3), including review of current processes, policies, and procedures to minimize the time between invoice receipt and the transfer of federal funds to the subrecipient.
Show full finding ▾Hide full finding ▴Finding 2024-003 – Subrecipient Cash ManagementIdentification of the federal program:Federal Grantor: Department of Health and Human Services (HHS)Assistance Listing No.: 12.420, Military Medical Research and DevelopmentGrant Award: W81XWH2010210Federal Grantor: Department of Health and Human Services (HHS)Assistance Listing No.: 93.395, Cancer Treatment ResearchGrant Award: R01CA248574Federal Grantor: Department of Health and Human Services (HHS)Assistance Listing No.: 93.847, Diabetes, Digestive, and Kidney Diseases Extramural ResearchGrant Award: R01DK133328Criteria or specific requirement (including statutory, regulatory or other citation):Section 200.303 of the Uniform Guidance states the following regarding internal control: “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).”2 CFR 200.305 (c) states, “…the Federal agency or pass-through entity must make payment within 30 calendar days after receipt of the payment request unless the Federal agency or pass-through entity reasonably believes the request to be improper.”Condition:Management did not have sufficiently designed internal controls to ensure all payments made to subrecipients were made within the required time frames.Cause:Management did not ensure that all subrecipient cash payments were made within the required time frame.Effect or potential effect:Subrecipients are not paid within the time frame established in the Uniform Guidance.Questioned costs:None.Context:We tested a sample of 10 subrecipient payments, and identified 4 payments that were not paid within 30 days of receipt. Total expenditures for the Research and Development Cluster were $13,427,764 at December 31, 2024. Total subrecipient expenditures for the year ended December 31, 2024, were $2,133,172.Identification as a repeat finding, if applicable:This finding is not a repeat finding from the prior year.Recommendation:Management should ensure subrecipient payments are made within the required time frames included in the Uniform Guidance.Views of responsible officials:Management concurs with the finding and will increase the priority around the 30-day processing deadline mandated by the Uniform Guidance 2 FR 200.305 (b)(3), including review of current processes, policies, and procedures to minimize the time between invoice receipt and the transfer of federal funds to the subrecipient.
Finding 2024-003 – Subrecipient Cash ManagementAssistance Listing No.: MultipleThe Office of Sponsored Programs ( OSP) will address the recommendation and review its current processes, policies, and procedures to minimize the time between invoice receipt and the transfer of federal funds to the subrecipient. This includes implementation of the following preventative controls to ensure that payments are made within the required timeline: a. Active communications with Principal Investigators of subawards on invoice approval timeline at award initiation and creation of procedures for documenting and advising OSP of invoices requiring correction and /or modification. b. Work with Post Award Staff to ensure that adequate documentation is created and maintained related to the follow-up that occurs when issues are being investigated and resolved that cause a delay in invoice processing.c. Development and utilization of a report for internal reporting and tracking of pending sub-invoices payments approaching the 30-day deadline. d. Implementation of the Invoice Receipt Date as a required field for subaward invoicing in Workday rather than the optional field it is at present. Responsible Official: Cate Ekstrom, Director of Research
FAC accepted this audit on September 30, 2024 — management decision was due March 30, 2025.
Certain grants related to the Research and Development Cluster were misstated by $233,405 on the preliminary schedule of expenditures of federal awards (the Schedule) provided by management due to the inappropriate classification of costs within the general ledger; the final Schedule was corrected. In addition, an award which was not a federal grant award with expenditures of $148,388 was included on the preliminary Schedule provided by management. The final Schedule was corrected. Cause: Endeavor’s internal controls over the preparation of the Schedule were not sufficient to properly accumulate and accurately report all expenditures of federal awards. Effect or Potential Effect: Inaccurate or improper reporting of expenditures results in a misstated Schedule and can also potentially result in insufficient testing of the major programs or improper identification of major programs for audit purposes. Questioned costs: None. Context: The table below reflects the preliminary and adjusted assistance listing balances on the Schedule (only assistance listing programs which changed are included below): Assistance Listing No. Name of Federal Program Preliminary Schedule Adjusted Schedule Change 12.420 Military Medical Research and Development $ 241,025 $ 224,418 $ 16,607 93.172 Human Genome Research 14,874 15,121 (247) 93.226 Research on Healthcare Costs, Quality and Outcomes 251,325 248,842 2,483 93.242 Mental Health Research Grants 1,616,503 1,617,376 (873) 93.307 Minority Health and Health Disparities Research 17,323 15,122 2,201 93.310 Trans-NIH Research Support 313,459 313,490 (31) 93.350 National Center for Advancing Translational Sciences 516,734 518,429 (1,695) 93.351 Research Infrastructure Program 242,436 232,058 10,378 93.361 Nursing Research 8,745 7,645 1,100 93.368 21st Century Cures Act – Precision Medicine Initiative 100,324 94,609 5,715 93.394 Cancer Detection and Diagnosis Research 847,959 816,528 31,431 93.395 Cancer Treatment Research 438,349 439,286 (937) 93.396 Cancer Biology Research 93,919 88,642 5,277 93.397 Cancer Centers Support Grants 15,552 14,078 1,474 93.667 Social Services Block Grant 19,619 27,170 (7,551) 93.837 Cardiovascular Diseases Research 193,160 188,850 4,310 93.838 Lung Diseases Research 482,934 471,427 11,507 93.847 Diabetes, Digestive, and Kidney Diseases Extramural Research 1,075,493 1,035,041 40,452 93.853 Extramural Research Programs in the Neurosciences and Neurological Disorders 1,645,025 1,596,611 48,414 93.855 Allergy, Immunology and Transplantation Research 73,869 72,630 1,239 93.859 Biomedical Research and Research Training 363,336 366,791 (3,455) 93.865 Child Health and Human Development Extramural Research 3,790,797 3,733,008 57,789 93.866 Aging Research 1,101,363 1,098,891 2,472 93.946 Cooperative Agreements to Support State-Based Safe Motherhood and Infant Health Initiative Programs 80,039 78,033 2,006 93.994 Maternal and Child Health Services Block Grant to the States 171,995 168,656 3,339 The Role of Oral Care in Nonventilator Hospital-Acquired Pneumonia (NVHAP) Prevention 148,388 – 148,388 Total $ 13,864,545 $ 13,482,752 $ 381,793 Identification as a repeat finding, if applicable: The finding is not a repeat finding from the prior year. Recommendation: Management should implement internal controls to ensure amounts are appropriately accumulated and reported on the Schedule and all federal expenditures are appropriately identified and reported on the Schedule. Views of responsible officials: Award amounts were changed on the Schedule after management’s review was executed. Management acknowledges that implementing the new Enterprise Resource Planning (ERP) system, in 2023 presented changes to the SEFA reporting. Management has identified and addressed the reporting issues within the new system to ensure that the grant totals are appropriately captured in the SEFA. Endeavor will enhance grant management award processes by revising its procedures and adding additional controls to monitor for accuracy of the core data. Management will reinforce the importance of timeliness and accuracy of the Schedule reporting totals to facilitate accurate reporting.
Show full finding ▾Hide full finding ▴Finding 2023-001 – Reporting Information of the federal program: Federal Grantor: Department of Defense (DOD) Assistance Listing No.: 12.420, Military Medical Research and Development Pass-Through Grantor: Johns Hopkins University Federal Grantor: United States Department of Health and Human Services (HHS) Assistance Listing No.: 93.172, Human Genome Research Pass-Through Grantor: University of Chicago Federal Grantor: United States Department of Health and Human Services (HHS) Assistance Listing No.: 93.226, Research on Healthcare Costs, Quality and Outcomes Pass-Through Grantor: The Regents of the University of Michigan Federal Grantor: United States Department of Health and Human Services (HHS) Assistance Listing No.: 93.242, Mental Health Research Grants Pass-Through Grantor: Rutgers State University Federal Grantor: United States Department of Health and Human Services (HHS) Assistance Listing No.: 93.307, Minority Health and Health Disparities Research Pass-Through Grantor: Northwestern University Federal Grantor: United States Department of Health and Human Services (HHS) Assistance Listing No.: 93.310, Trans-NIH Research Support Pass-Through Grantor: University of Chicago Federal Grantor: United States Department of Health and Human Services (HHS) Assistance Listing No.: 93.350, National Center for Advancing Translational Sciences Pass-Through Grantor: University of Chicago Federal Grantor: United States Department of Health and Human Services (HHS) Assistance Listing No.: 93.351, Research Infrastructure Program Pass-Through Grantor: Northwestern University Federal Grantor: United States Department of Health and Human Services (HHS) Assistance Listing No.: 93.361, Nursing Research Pass-Through Grantor: Northwestern University Federal Grantor: United States Department of Health and Human Services (HHS) Assistance Listing No.: 93.368, 21st Century Cures Act – Precision Medicine Initiative Pass-Through Grantor: University of Chicago Federal Grantor: United States Department of Health and Human Services (HHS) Assistance Listing No.: 93.394, Cancer Detection and Diagnosis Research Federal Grantor: United States Department of Health and Human Services (HHS) Assistance Listing No.: 93.395, Cancer Treatment Research Federal Grantor: United States Department of Health and Human Services (HHS) Assistance Listing No.: 93.396, Cancer Biology Research Pass-Through Grantor: Tulane University, Louisiana State University Federal Grantor: United States Department of Health and Human Services (HHS) Assistance Listing No.: 93.397, Cancer Centers Support Grants Pass-Through Grantor: Northwestern University Federal Grantor: United States Department of Health and Human Services (HHS) Assistance Listing No.: 93.667, Social Services Block Grant Pass-Through Grantor: Northwestern University Federal Grantor: United States Department of Health and Human Services (HHS) Assistance Listing No.: 93.837, Cardiovascular Diseases Research Pass-Through Grantor: Northwestern University Federal Grantor: United States Department of Health and Human Services (HHS) Assistance Listing No.: 93.838, Lung Diseases Research Pass-Through Grantor: Northwestern University Federal Grantor: United States Department of Health and Human Services (HHS) Assistance Listing No.: 93.847, Diabetes, Digestive, and Kidney Diseases Extramural Research Pass-Through Grantors: Northwestern University, Duke University, University of Washington, The Regents of University of Michigan Federal Grantor: United States Department of Health and Human Services (HHS) Assistance Listing No.: 93.853, Extramural Research Programs in the Neurosciences and Neurological Disorders Pass-Through Grantor: Rush University Medical Center Federal Grantor: United States Department of Health and Human Services (HHS) Assistance Listing No.: 93.855, Allergy, Immunology and Transplantation Research Pass-Through Grantor: Northwestern University Federal Grantor: United States Department of Health and Human Services (HHS) Assistance Listing No.: 93.859, Biomedical Research and Research Training Pass-Through Grantor: University of Wisconsin – Madison Federal Grantor: United States Department of Health and Human Services (HHS) Assistance Listing No.: 93.865, Child Health and Human Development Extramural Research Pass-Through Grantors: Northwestern University, University of Washington, The Regents of the University of California Federal Grantor: United States Department of Health and Human Services (HHS) Assistance Listing No.: 93.866, Aging Research Federal Grantor: United States Department of Health and Human Services (HHS) Assistance Listing No.: 93.946, Cooperative Agreements to Support State-Based Safe Motherhood and Infant Health Initiative Programs Pass-Through Grantor: Northwestern University Federal Grantor: United States Department of Health and Human Services (HHS) Assistance Listing No.: 93.994, Maternal and Child Health Services Block Grant to the States Pass-Through Grantor: Northwestern Memorial Hospital Criteria or specific requirement (including statutory, regulatory, or other citation): Section 200.303 of the Uniform Guidance states the following regarding internal control: “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).” The Uniform Guidance 2 CFR section 200.510 states, “(b) Schedule of expenditures of Federal awards. The auditee must also prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with §200.502 Basis for determining Federal awards expended.” Condition: Certain grants related to the Research and Development Cluster were misstated by $233,405 on the preliminary schedule of expenditures of federal awards (the Schedule) provided by management due to the inappropriate classification of costs within the general ledger; the final Schedule was corrected. In addition, an award which was not a federal grant award with expenditures of $148,388 was included on the preliminary Schedule provided by management. The final Schedule was corrected. Cause: Endeavor’s internal controls over the preparation of the Schedule were not sufficient to properly accumulate and accurately report all expenditures of federal awards. Effect or Potential Effect: Inaccurate or improper reporting of expenditures results in a misstated Schedule and can also potentially result in insufficient testing of the major programs or improper identification of major programs for audit purposes. Questioned costs: None. Context: The table below reflects the preliminary and adjusted assistance listing balances on the Schedule (only assistance listing programs which changed are included below): Assistance Listing No. Name of Federal Program Preliminary Schedule Adjusted Schedule Change 12.420 Military Medical Research and Development $ 241,025 $ 224,418 $ 16,607 93.172 Human Genome Research 14,874 15,121 (247) 93.226 Research on Healthcare Costs, Quality and Outcomes 251,325 248,842 2,483 93.242 Mental Health Research Grants 1,616,503 1,617,376 (873) 93.307 Minority Health and Health Disparities Research 17,323 15,122 2,201 93.310 Trans-NIH Research Support 313,459 313,490 (31) 93.350 National Center for Advancing Translational Sciences 516,734 518,429 (1,695) 93.351 Research Infrastructure Program 242,436 232,058 10,378 93.361 Nursing Research 8,745 7,645 1,100 93.368 21st Century Cures Act – Precision Medicine Initiative 100,324 94,609 5,715 93.394 Cancer Detection and Diagnosis Research 847,959 816,528 31,431 93.395 Cancer Treatment Research 438,349 439,286 (937) 93.396 Cancer Biology Research 93,919 88,642 5,277 93.397 Cancer Centers Support Grants 15,552 14,078 1,474 93.667 Social Services Block Grant 19,619 27,170 (7,551) 93.837 Cardiovascular Diseases Research 193,160 188,850 4,310 93.838 Lung Diseases Research 482,934 471,427 11,507 93.847 Diabetes, Digestive, and Kidney Diseases Extramural Research 1,075,493 1,035,041 40,452 93.853 Extramural Research Programs in the Neurosciences and Neurological Disorders 1,645,025 1,596,611 48,414 93.855 Allergy, Immunology and Transplantation Research 73,869 72,630 1,239 93.859 Biomedical Research and Research Training 363,336 366,791 (3,455) 93.865 Child Health and Human Development Extramural Research 3,790,797 3,733,008 57,789 93.866 Aging Research 1,101,363 1,098,891 2,472 93.946 Cooperative Agreements to Support State-Based Safe Motherhood and Infant Health Initiative Programs 80,039 78,033 2,006 93.994 Maternal and Child Health Services Block Grant to the States 171,995 168,656 3,339 The Role of Oral Care in Nonventilator Hospital-Acquired Pneumonia (NVHAP) Prevention 148,388 – 148,388 Total $ 13,864,545 $ 13,482,752 $ 381,793 Identification as a repeat finding, if applicable: The finding is not a repeat finding from the prior year. Recommendation: Management should implement internal controls to ensure amounts are appropriately accumulated and reported on the Schedule and all federal expenditures are appropriately identified and reported on the Schedule. Views of responsible officials: Award amounts were changed on the Schedule after management’s review was executed. Management acknowledges that implementing the new Enterprise Resource Planning (ERP) system, in 2023 presented changes to the SEFA reporting. Management has identified and addressed the reporting issues within the new system to ensure that the grant totals are appropriately captured in the SEFA. Endeavor will enhance grant management award processes by revising its procedures and adding additional controls to monitor for accuracy of the core data. Management will reinforce the importance of timeliness and accuracy of the Schedule reporting totals to facilitate accurate reporting.
Finding 2023-001 – Reporting Assistance Listing Multiple In the immediate term, management will work with the grant consultant to modify the existing report to capture all the costs in the general ledger related to grants. Management will start a quarterly review process of the report with reconciliation to the grant detail. In addition, prior to the UG audit, management will start a year-end review process to ensure accurate and timely reporting. Responsible Official: Annaliza Villamin, System Director of Accounting, Endeavor Health
Certain grants related to the Research and Development Cluster were misstated by $233,405 on the preliminary schedule of expenditures of federal awards (the Schedule) provided by management due to the inappropriate classification of costs within the general ledger; the final Schedule was corrected.In addition, an award which was not a federal grant award with expenditures of $148,388 was included on the preliminary Schedule provided by management. The final Schedule was corrected.Cause:Endeavor’s internal controls in place over the preparation of the Schedule were not sufficient to properly accumulate and accurately report all expenditures of federal awards.Effect or Potential Effect:Inaccurate or improper reporting of expenditures results in a misstated Schedule and can also potentially result in insufficient testing of the major programs or improper identification of major programs for audit purposes.Questioned costs:None.Context:The table below reflects the preliminary and adjusted assistance listing balances on the Schedule (only assistance listing programs which changed are included below):Identification as a repeat finding, if applicable:The finding is not a repeat finding from the prior year.Recommendation:Management should implement internal controls to ensure amounts are appropriately accumulated and reported on the Schedule and all federal expenditures are appropriately identified and reported on the Schedule.Views of responsible officials:Award amounts were changed on the Schedule after management’s review was executed. Management acknowledges that implementing the new Enterprise Resource Planning (ERP) system, in 2023 presented changes to the SEFA reporting. Management has identified and addressed the reporting issues within the new system to ensure that the grant totals are appropriately captured in the SEFA.Endeavor will enhance grant management award processes by revising its procedures and adding additional controls to monitor for accuracy of the core data. Management will reinforce the importance of timeliness and accuracy of the Schedule reporting totals to facilitate accurate reporting.
Show full finding ▾Hide full finding ▴Finding 2023-001 – ReportingInformation of the federal program:Federal Grantor: Department of Defense (DOD)Assistance Listing No.: 12.420, Military Medical Research and DevelopmentPass-Through Grantor: Johns Hopkins UniversityFederal Grantor: United States Department of Health and Human Services (HHS)Assistance Listing No.: 93.172, Human Genome ResearchPass-Through Grantor: University of ChicagoFederal Grantor: United States Department of Health and Human Services (HHS)Assistance Listing No.: 93.226, Research on Healthcare Costs, Quality and OutcomesPass-Through Grantor: The Regents of the University of MichiganFederal Grantor: United States Department of Health and Human Services (HHS)Assistance Listing No.: 93.242, Mental Health Research GrantsPass-Through Grantor: Rutgers State UniversityFederal Grantor: United States Department of Health and Human Services (HHS)Assistance Listing No.: 93.307, Minority Health and Health Disparities ResearchPass-Through Grantor: Northwestern UniversityFederal Grantor: United States Department of Health and Human Services (HHS)Assistance Listing No.: 93.310, Trans-NIH Research SupportPass-Through Grantor: University of ChicagoFederal Grantor: United States Department of Health and Human Services (HHS)Assistance Listing No.: 93.350, National Center for Advancing Translational SciencesPass-Through Grantor: University of ChicagoFederal Grantor: United States Department of Health and Human Services (HHS)Assistance Listing No.: 93.351, Research Infrastructure ProgramPass-Through Grantor: Northwestern UniversityFederal Grantor: United States Department of Health and Human Services (HHS)Assistance Listing No.: 93.361, Nursing ResearchPass-Through Grantor: Northwestern UniversityFederal Grantor: United States Department of Health and Human Services (HHS)Assistance Listing No.: 93.368, 21st Century Cures Act – Precision Medicine InitiativePass-Through Grantor: University of ChicagoFederal Grantor: United States Department of Health and Human Services (HHS)Assistance Listing No.: 93.394, Cancer Detection and Diagnosis ResearchFederal Grantor: United States Department of Health and Human Services (HHS)Assistance Listing No.: 93.395, Cancer Treatment ResearchFederal Grantor: United States Department of Health and Human Services (HHS)Assistance Listing No.: 93.396, Cancer Biology ResearchPass-Through Grantor: Tulane University, Louisiana State UniversityFederal Grantor: United States Department of Health and Human Services (HHS)Assistance Listing No.: 93.397, Cancer Centers Support GrantsPass-Through Grantor: Northwestern UniversityFederal Grantor: United States Department of Health and Human Services (HHS)Assistance Listing No.: 93.667, Social Services Block GrantPass-Through Grantor: Northwestern UniversityFederal Grantor: United States Department of Health and Human Services (HHS)Assistance Listing No.: 93.837, Cardiovascular Diseases ResearchPass-Through Grantor: Northwestern UniversityFederal Grantor: United States Department of Health and Human Services (HHS)Assistance Listing No.: 93.838, Lung Diseases ResearchPass-Through Grantor: Northwestern UniversityFederal Grantor: United States Department of Health and Human Services (HHS)Assistance Listing No.: 93.847, Diabetes, Digestive, and Kidney Diseases Extramural ResearchPass-Through Grantors: Northwestern University, Duke University, University of Washington, The Regents of University of MichiganFederal Grantor: United States Department of Health and Human Services (HHS)Assistance Listing No.: 93.853, Extramural Research Programs in the Neurosciences and Neurological DisordersPass-Through Grantor: Rush University Medical CenterFederal Grantor: United States Department of Health and Human Services (HHS)Assistance Listing No.: 93.855, Allergy, Immunology and Transplantation ResearchPass-Through Grantor: Northwestern UniversityFederal Grantor: United States Department of Health and Human Services (HHS)Assistance Listing No.: 93.859, Biomedical Research and Research TrainingPass-Through Grantor: University of Wisconsin – MadisonFederal Grantor: United States Department of Health and Human Services (HHS)Assistance Listing No.: 93.865, Child Health and Human Development Extramural ResearchPass-Through Grantors: Northwestern University, University of Washington, The Regents of the University of CaliforniaFederal Grantor: United States Department of Health and Human Services (HHS)Assistance Listing No.: 93.866, Aging ResearchFederal Grantor: United States Department of Health and Human Services (HHS)Assistance Listing No.: 93.946, Cooperative Agreements to Support State-Based Safe Motherhood and Infant Health Initiative ProgramsPass-Through Grantor: Northwestern UniversityFederal Grantor: United States Department of Health and Human Services (HHS)Assistance Listing No.: 93.994, Maternal and Child Health Services Block Grant to the StatesPass-Through Grantor: Northwestern Memorial HospitalCriteria or specific requirement (including statutory, regulatory, or other citation):Section 200.303 of the Uniform Guidance states the following regarding internal control: “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).”The Uniform Guidance 2 CFR section 200.510 states, “(b) Schedule of expenditures of Federal awards. The auditee must also prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with §200.502 Basis for determining Federal awards expended.”Condition:Certain grants related to the Research and Development Cluster were misstated by $233,405 on the preliminary schedule of expenditures of federal awards (the Schedule) provided by management due to the inappropriate classification of costs within the general ledger; the final Schedule was corrected.In addition, an award which was not a federal grant award with expenditures of $148,388 was included on the preliminary Schedule provided by management. The final Schedule was corrected.Cause:Endeavor’s internal controls in place over the preparation of the Schedule were not sufficient to properly accumulate and accurately report all expenditures of federal awards.Effect or Potential Effect:Inaccurate or improper reporting of expenditures results in a misstated Schedule and can also potentially result in insufficient testing of the major programs or improper identification of major programs for audit purposes.Questioned costs:None.Context:The table below reflects the preliminary and adjusted assistance listing balances on the Schedule (only assistance listing programs which changed are included below):Identification as a repeat finding, if applicable:The finding is not a repeat finding from the prior year.Recommendation:Management should implement internal controls to ensure amounts are appropriately accumulated and reported on the Schedule and all federal expenditures are appropriately identified and reported on the Schedule.Views of responsible officials:Award amounts were changed on the Schedule after management’s review was executed. Management acknowledges that implementing the new Enterprise Resource Planning (ERP) system, in 2023 presented changes to the SEFA reporting. Management has identified and addressed the reporting issues within the new system to ensure that the grant totals are appropriately captured in the SEFA.Endeavor will enhance grant management award processes by revising its procedures and adding additional controls to monitor for accuracy of the core data. Management will reinforce the importance of timeliness and accuracy of the Schedule reporting totals to facilitate accurate reporting.
Finding 2023-001 – Reporting Assistance Listing Multiple In the immediate term, management will work with the grant consultant to modify the existing report to capture all the costs in the general ledger related to grants. Management will start a quarterly review process of the report with reconciliation to the grant detail. In addition, prior to the UG audit, management will start a year-end review process to ensure accurate and timely reporting. Responsible Official: Annaliza Villamin, System Director of Accounting, Endeavor Health
Management did not have sufficiently designed internal controls to retain documentation of the review of effort reports and, therefore, could not evidence the review of the effort reporting. Cause: Management did not retain evidence of approval of effort certifications for certain employees from January 1, 2023 to September 30, 2023. In addition, the review of effort reports was not timely performed from October 1, 2023 to December 31, 2023. Effect or potential effect: Unallowable payroll costs may be charged to the federal program. Questioned costs: None. Context: We tested a sample of 18 payroll expenses, which totaled $11,080, for the period January 1, 2023 to September 30, 2023 and identified 5 transactions tested, which totaled $826, for which management did not retain support to document the effort report was reviewed for the period. We tested a sample of 22 payroll expenses, which totaled $7,047, for the period October 1, 2023 to December 31, 2023 and noted that management did not perform a timely review of the effort certifications. The total R&D Cluster expenditures reported on the Schedule are $13,409,825 for the year ended December 31, 2023. Payroll costs totaled $5,471,507, representing 40.79% of the total R&D Cluster expenditures. Identification as a repeat finding, if applicable: This finding is not a repeat finding from the prior year. Recommendation: Management should ensure effort report certifications and approvals are retained and timely performed. Views of responsible officials: The effort reporting practice at the Research Institute used automated messages to send certifications to the appropriate supervisor responsible for certifying the effort of the individuals charged to grants. The emails were maintained in a file that was checked to confirm the receipt of certifications. Management maintained records for the months January through August but the month of September is indeed missing. The process was disrupted in the last quarter of 2023 with the implementation of the new accounting system, Workday. The new Workday time and effort certification was not functional until the early months of 2024 and was the cause of the untimely certifications. The new system is now operational. A new policy is being drafted along with new procedures. This system now requires that each individual certify their own time and effort and training will be provided to all staff this year.
Show full finding ▾Hide full finding ▴Finding 2023-002 – Activities Allowed or Unallowed and Allowable Costs/Cost Principles Identification of the federal program: Federal Grantor: Department of Defense (DOD) Assistance Listing No.: 12.420, Military Medical Research and Development Pass-Through Grantor: Johns Hopkins University Federal Grantor: United States Department of Health and Human Services (HHS) Assistance Listing No.: 93.242, Mental Health Research Grants Pass-Through Grantor: Rutgers State University Federal Grantor: United States Department of Health and Human Services (HHS) Assistance Listing No.: 93.350, National Center for Advancing Translational Sciences Pass-Through Grantor: University of Chicago Federal Grantor: United States Department of Health and Human Services (HHS) Assistance Listing No.: 93.368, 21st Century Cures Act – Precision Medicine Initiative Pass-Through Grantor: University of Chicago Federal Grantor: United States Department of Health and Human Services (HHS) Assistance Listing No.: 93.837, Cardiovascular Diseases Research Pass-Through Grantor: University of Rochester, University of Wisconsin – Madison. Federal Grantor: United States Department of Health and Human Services (HHS) Assistance Listing No.: 93.847, Diabetes, Digestive, and Kidney Diseases Extramural Research Pass-Through Grantor: University of Washington Federal Grantor: United States Department of Health and Human Services (HHS) Assistance Listing No.: 93.853, Extramural Research Programs in the Neurosciences and Neurological Disorders Pass-Through Grantor: Rush University Medical Center Federal Grantor: United States Department of Health and Human Services (HHS) Assistance Listing No.: 93.859, Biomedical Research and Research Training Federal Grantor: United States Department of Health and Human Services (HHS) Assistance Listing No.: 93.865, Child Health and Human Development Extramural Research Federal Grantor: United States Department of Health and Human Services (HHS) Assistance Listing No.: 93.946, Cooperative Agreements to Support State-Based Safe Motherhood and Infant Health Initiative Programs Pass-Through Grantor: Northwestern University Criteria or specific requirement (including statutory, regulatory or other citation): Section 200.303 of the Uniform Guidance states the following regarding internal control: “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).” Condition: Management did not have sufficiently designed internal controls to retain documentation of the review of effort reports and, therefore, could not evidence the review of the effort reporting. Cause: Management did not retain evidence of approval of effort certifications for certain employees from January 1, 2023 to September 30, 2023. In addition, the review of effort reports was not timely performed from October 1, 2023 to December 31, 2023. Effect or potential effect: Unallowable payroll costs may be charged to the federal program. Questioned costs: None. Context: We tested a sample of 18 payroll expenses, which totaled $11,080, for the period January 1, 2023 to September 30, 2023 and identified 5 transactions tested, which totaled $826, for which management did not retain support to document the effort report was reviewed for the period. We tested a sample of 22 payroll expenses, which totaled $7,047, for the period October 1, 2023 to December 31, 2023 and noted that management did not perform a timely review of the effort certifications. The total R&D Cluster expenditures reported on the Schedule are $13,409,825 for the year ended December 31, 2023. Payroll costs totaled $5,471,507, representing 40.79% of the total R&D Cluster expenditures. Identification as a repeat finding, if applicable: This finding is not a repeat finding from the prior year. Recommendation: Management should ensure effort report certifications and approvals are retained and timely performed. Views of responsible officials: The effort reporting practice at the Research Institute used automated messages to send certifications to the appropriate supervisor responsible for certifying the effort of the individuals charged to grants. The emails were maintained in a file that was checked to confirm the receipt of certifications. Management maintained records for the months January through August but the month of September is indeed missing. The process was disrupted in the last quarter of 2023 with the implementation of the new accounting system, Workday. The new Workday time and effort certification was not functional until the early months of 2024 and was the cause of the untimely certifications. The new system is now operational. A new policy is being drafted along with new procedures. This system now requires that each individual certify their own time and effort and training will be provided to all staff this year.
Finding 2023-002 – Activities Allowed or Unallowed and Allowable Costs/Cost Principles Assistance Listing Multiple The new Workday time and effort certification is now operational. Each individual is able to certify their own time and effort in the system, which eliminates manual tracking and paperwork. Management will follow up and validate the effort certification is occurring in a timely manner. Management is currently drafting the policy to align with the new process. There will be continuous staff training and monitoring in this area. Responsible Official: Robert Stanton, Assistant Vice President, Research and Financial Operations, NSH Research Central Office
Management did not have sufficiently designed internal controls to retain documentation of the review of effort reports and, therefore, could not evidence the review of the effort reporting.Cause:Management did not retain evidence of approval of effort certifications for certain employees from January 1, 2023 to September 30, 2023.In addition, the review of effort reports was not timely performed from October 1, 2023 to December 31, 2023.Effect or potential effect:Unallowable payroll costs may be charged to the federal program.Questioned costs:None.Context:We tested a sample of 18 payroll expenses for the period January 1, 2023 to September 30, 2023 and identified 5 transactions tested for which management did not retain support to document the effort report was reviewed for the period.We tested a sample of 22 payroll expenses for the period October 1, 2023 to December 31, 2023 and noted that management did not perform a timely review of the effort certifications.The total R&D Cluster expenditures reported on the Schedule are $13,409,825 for the year ended December 31, 2023. Payroll costs totaled $5,471,507, representing 40.79% of the total R&D Cluster expenditures.Identification as a repeat finding, if applicable:This finding is not a repeat finding from the prior year.Recommendation:Management should ensure effort report certifications and approvals are retained and timely performed.Views of responsible officials:The effort reporting practice at the Research Institute used automated messages to send certifications to the appropriate supervisor responsible for certifying the effort of the individuals charged to grants. The emails were maintained in a file that was checked to confirm the receipt of certifications. Management maintained records for the months January through August but the month of September is indeed missing. The process was disrupted in the last quarter of 2023 with the implementation of the new accounting system, Workday. The new Workday time and effort certification was not functional until the early months of 2024 and was the cause of the untimely certifications.The new system is now operational. A new policy is being drafted along with new procedures. This system now requires that each individual certify their own time and effort and training will be provided to all staff this year.
Show full finding ▾Hide full finding ▴Finding 2023-002 – Activities Allowed or Unallowed and Allowable Costs/Cost PrinciplesIdentification of the federal program:Federal Grantor: Department of Defense (DOD)Assistance Listing No.: 12.420, Military Medical Research and DevelopmentPass-Through Grantor: Johns Hopkins UniversityIdentification as a repeat finding, if applicable:Assistance Listing No.: 93.242, Mental Health Research GrantsPass-Through Grantor: Rutgers State UniversityManagement should ensure effort report certifications and approvals are retained and timely performed.Assistance Listing No.: 93.350, National Center for Advancing Translational SciencesPass-Through Grantor: University of ChicagoFederal Grantor: United States Department of Health and Human Services (HHS)Assistance Listing No.: 93.368, 21st Century Cures Act – Precision Medicine InitiativePass-Through Grantor: University of ChicagoFederal Grantor: United States Department of Health and Human Services (HHS)Assistance Listing No.: 93.837, Cardiovascular Diseases ResearchPass-Through Grantor: University of Rochester, University of Wisconsin – Madison.Federal Grantor: United States Department of Health and Human Services (HHS)Assistance Listing No.: 93.847, Diabetes, Digestive, and Kidney Diseases Extramural ResearchPass-Through Grantor: University of WashingtonFederal Grantor: United States Department of Health and Human Services (HHS)Assistance Listing No.: 93.853, Extramural Research Programs in the Neurosciences and Neurological DisordersPass-Through Grantor: Rush University Medical CenterFederal Grantor: United States Department of Health and Human Services (HHS)Assistance Listing No.: 93.859, Biomedical Research and Research TrainingSection III – Federal Award Findings and Questioned Costs (continued)Federal Grantor: United States Department of Health and Human Services (HHS)Assistance Listing No.: 93.865, Child Health and Human Development Extramural ResearchFederal Grantor: United States Department of Health and Human Services (HHS)Assistance Listing No.: 93.946, Cooperative Agreements to Support State-Based Safe Motherhood and Infant Health Initiative ProgramsPass-Through Grantor: Northwestern UniversityCriteria or specific requirement (including statutory, regulatory or other citation):Section 200.303 of the Uniform Guidance states the following regarding internal control: “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).”Condition:Management did not have sufficiently designed internal controls to retain documentation of the review of effort reports and, therefore, could not evidence the review of the effort reporting.Cause:Management did not retain evidence of approval of effort certifications for certain employees from January 1, 2023 to September 30, 2023.In addition, the review of effort reports was not timely performed from October 1, 2023 to December 31, 2023.Effect or potential effect:Unallowable payroll costs may be charged to the federal program.Questioned costs:None.Context:We tested a sample of 18 payroll expenses for the period January 1, 2023 to September 30, 2023 and identified 5 transactions tested for which management did not retain support to document the effort report was reviewed for the period.We tested a sample of 22 payroll expenses for the period October 1, 2023 to December 31, 2023 and noted that management did not perform a timely review of the effort certifications.The total R&D Cluster expenditures reported on the Schedule are $13,409,825 for the year ended December 31, 2023. Payroll costs totaled $5,471,507, representing 40.79% of the total R&D Cluster expenditures.Identification as a repeat finding, if applicable:This finding is not a repeat finding from the prior year.Recommendation:Management should ensure effort report certifications and approvals are retained and timely performed.Views of responsible officials:The effort reporting practice at the Research Institute used automated messages to send certifications to the appropriate supervisor responsible for certifying the effort of the individuals charged to grants. The emails were maintained in a file that was checked to confirm the receipt of certifications. Management maintained records for the months January through August but the month of September is indeed missing. The process was disrupted in the last quarter of 2023 with the implementation of the new accounting system, Workday. The new Workday time and effort certification was not functional until the early months of 2024 and was the cause of the untimely certifications.The new system is now operational. A new policy is being drafted along with new procedures. This system now requires that each individual certify their own time and effort and training will be provided to all staff this year.
Finding 2023-002 – Activities Allowed or Unallowed and Allowable Costs/Cost Principles Assistance Listing Multiple The new Workday time and effort certification is now operational. Each individual is able to certify their own time and effort in the system, which eliminates manual tracking and paperwork. Management will follow up and validate the effort certification is occurring in a timely manner. Management is currently drafting the policy to align with the new process. There will be continuous staff training and monitoring in this area. Responsible Official: Robert Stanton, Assistant Vice President, Research and Financial Operations, NSH Research Central Office
The salary expense recorded for employees above the NIH salary cap was not calculated correctly as it did not properly take into consideration the NIH salary cap requirements. Cause: Management did not calculate the NIH salary cap requirement correctly; therefore, the allowable payroll expense reported was overstated. Effect or potential effect: Payroll expenditures exceeding the NIH salary cap were charged to the research and development grants. Questioned costs: $819, which represents the payroll costs incurred for the pay period selected in excess of the salary cap amounts related to the following federal awards: 93.866 $434 93.837 $385 Context: We selected 40 payroll transactions which totaled $32,051 from a payroll population of $5,471,507 for the year ended December 31, 2023. We identified 4 instances, which represented total salary cost of $2,337, where the salary cap amounts were not calculated correctly and, therefore, the salary expense charged to the grants was overstated by $819. Identification as a repeat finding, if applicable: This finding is not a repeat finding from the prior year. Recommendation: Management should implement internal controls to review the salary cap adjustment calculation to ensure that the salary expenses charged to the program are appropriate. Views of responsible officials: The Research Institute has had a long-standing practice of reviewing salary cap limitations on grants. During the initial meeting for a new award (“The Kick-Off meeting”), the level of effort for proposed staff is confirmed, and any staff salaries exceeding the current salary cap were identified. This ensured that appointments on grants were appropriately updated. Due to changes in the GM10 not under the purview of the Research Institute select effort distributions were inadvertently changed to accommodate salary changes.
Show full finding ▾Hide full finding ▴Finding 2023-003 – Activities Allowed or Unallowed and Allowable Costs/Cost Principles Information of the federal program: Federal Grantor: United States Department of Health and Human Services Assistance Listing No.: 93.866, Aging Research Federal Grantor: United States Department of Health and Human Services (HHS) Assistance Listing No.: 93.837, Cardiovascular Diseases Research Pass-Through Grantor: University of Wisconsin – Madison Criteria or specific requirement (including statutory, regulatory or other citation): Section 200.303 of the Uniform Guidance states the following regarding internal control: “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).” Section 200.430 states the following: (d) Unallowable costs. The NIH allowable compensation for certain employees is subject to a ceiling in accordance with statute. (1) Costs which are unallowable under other sections of these principles must not be allowable under this section solely on the basis that they constitute personnel compensation. (2) For the amount of the ceiling for cost-reimbursement contracts, the covered compensation subject to the ceiling, the covered employees, and other relevant provisions, see 10 U.S.C. 2324(e)(1)(P), and 41 U.S.C. 1127 and 4304(a)(16). For other types of Federal awards, other statutory ceilings may apply.The NIH allowable compensation for certain employees is subject to a ceiling in accordance with statute. Condition: The salary expense recorded for employees above the NIH salary cap was not calculated correctly as it did not properly take into consideration the NIH salary cap requirements. Cause: Management did not calculate the NIH salary cap requirement correctly; therefore, the allowable payroll expense reported was overstated. Effect or potential effect: Payroll expenditures exceeding the NIH salary cap were charged to the research and development grants. Questioned costs: $819, which represents the payroll costs incurred for the pay period selected in excess of the salary cap amounts related to the following federal awards: 93.866 $434 93.837 $385 Context: We selected 40 payroll transactions which totaled $32,051 from a payroll population of $5,471,507 for the year ended December 31, 2023. We identified 4 instances, which represented total salary cost of $2,337, where the salary cap amounts were not calculated correctly and, therefore, the salary expense charged to the grants was overstated by $819. Identification as a repeat finding, if applicable: This finding is not a repeat finding from the prior year. Recommendation: Management should implement internal controls to review the salary cap adjustment calculation to ensure that the salary expenses charged to the program are appropriate. Views of responsible officials: The Research Institute has had a long-standing practice of reviewing salary cap limitations on grants. During the initial meeting for a new award (“The Kick-Off meeting”), the level of effort for proposed staff is confirmed, and any staff salaries exceeding the current salary cap were identified. This ensured that appointments on grants were appropriately updated. Due to changes in the GM10 not under the purview of the Research Institute select effort distributions were inadvertently changed to accommodate salary changes.
Finding 2023-003 – Activities Allowed or Unallowed and Allowable Costs/Cost Principles Assistance Listing Multiple Workday allows costing allocations, which automatically split salaries above and below the cap. This process ensures that only appropriate salaries are charged to the grant. Management will update the salary cap in the system in a timely manner and validate that the system is calculating correctly. Going forward, management will do a quarterly review of the effort distributions, and make adjustments when needed in a timely manner. Responsible Official: Robert Stanton, Assistant Vice President, Research and Financial Operations, NSH Research Central Office
The salary expense recorded for employees above the NIH salary cap was not calculated correctly as it did not properly take into consideration the NIH salary cap requirements.Cause:Management did not calculate the NIH salary cap requirement correctly; therefore, the allowable payroll expense reported was overstated.Effect or potential effect:Payroll expenditures exceeding the NIH salary cap were charged to the research and development grants.Questioned costs:$819 related to the following federal awards:93.86693.837Context:We selected 40 payroll transactions which totaled $32,051 from a population of $5,471,507 related payroll costs for the year ended December 31, 2023. We identified 4 instances, which represented total salary cost of $2,337, where the salary cap amounts were not calculated correctly and, therefore, the salary expense charged to the grants was overstated by $819.Identification as a repeat finding, if applicable:This finding is not a repeat finding from the prior year.Recommendation:Management should implement internal controls to review the salary cap adjustment calculation to ensure that the salary expenses charged to the program are appropriate.Views of responsible officials:The Research Institute has had a long-standing practice of reviewing salary cap limitations on grants. During the initial meeting for a new award (“The Kick-Off meeting”), the level of effort for proposed staff is confirmed, and any staff salaries exceeding the current salary cap were identified. This ensured that appointments on grants were appropriately updated. Due to changes in the GM10 not under the purview of the Research Institute select effort distributions were inadvertently changed to accommodate salary changes.
Show full finding ▾Hide full finding ▴Finding 2023-003 – Activities Allowed or Unallowed and Allowable Costs/Cost PrinciplesInformation of the federal program:Federal Grantor: United States Department of Health and Human ServicesAssistance Listing No.: 93.866, Aging ResearchFederal Grantor: United States Department of Health and Human Services (HHS)Assistance Listing No.: 93.837, Cardiovascular Diseases ResearchPass-Through Grantor: University of Wisconsin – MadisonCriteria or specific requirement (including statutory, regulatory or other citation):Section 200.303 of the Uniform Guidance states the following regarding internal control: “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).”Section 200.430 states the following: (d) Unallowable costs. (1) Costs which are unallowable under other sections of these principles must not be allowable under this section solely on the basis that they constitute personnel compensation.(2) The NIH allowable compensation for certain employees is subject to a ceiling in accordance with statute. For the amount of the ceiling for cost-reimbursement contracts, the covered compensation subject to the ceiling, the covered employees, and other relevant provisions, see 10 U.S.C. 2324(e)(1)(P), and 41 U.S.C. 1127 and 4304(a)(16). For other types of Federal awards, other statutory ceilings may apply.Condition:The salary expense recorded for employees above the NIH salary cap was not calculated correctly as it did not properly take into consideration the NIH salary cap requirements.Cause:Management did not calculate the NIH salary cap requirement correctly; therefore, the allowable payroll expense reported was overstated.Effect or potential effect:Payroll expenditures exceeding the NIH salary cap were charged to the research and development grants.Questioned costs:$819 related to the following federal awards:93.86693.837Context:We selected 40 payroll transactions which totaled $32,051 from a population of $5,471,507 related payroll costs for the year ended December 31, 2023. We identified 4 instances, which represented total salary cost of $2,337, where the salary cap amounts were not calculated correctly and, therefore, the salary expense charged to the grants was overstated by $819.Identification as a repeat finding, if applicable:This finding is not a repeat finding from the prior year.Recommendation:Management should implement internal controls to review the salary cap adjustment calculation to ensure that the salary expenses charged to the program are appropriate.Views of responsible officials:The Research Institute has had a long-standing practice of reviewing salary cap limitations on grants. During the initial meeting for a new award (“The Kick-Off meeting”), the level of effort for proposed staff is confirmed, and any staff salaries exceeding the current salary cap were identified. This ensured that appointments on grants were appropriately updated. Due to changes in the GM10 not under the purview of the Research Institute select effort distributions were inadvertently changed to accommodate salary changes.
Finding 2023-003 – Activities Allowed or Unallowed and Allowable Costs/Cost Principles Assistance Listing Multiple Workday allows costing allocations, which automatically split salaries above and below the cap. This process ensures that only appropriate salaries are charged to the grant. Management will update the salary cap in the system in a timely manner and validate that the system is calculating correctly. Going forward, management will do a quarterly review of the effort distributions, and make adjustments when needed in a timely manner. Responsible Official: Robert Stanton, Assistant Vice President, Research and Financial Operations, NSH Research Central Office
Although subrecipient monitoring procedures were performed during the fiscal year, management did not perform and document a risk assessment upon entering into subaward agreements with its subrecipients in order to determine the extent of monitoring procedures that should be performed to be responsive to the assessed risk. In addition, management did not obtain the Uniform Guidance audit report from its subrecipients. Cause: Management did not have internal controls in place that required completion of the documentation evidencing review of the risk assessment of the subrecipients at the beginning of the award and monitoring of the Uniform Guidance audit reports of the subrecipients. The documentation was not completed as management considered the subrecipients vendors. Questioned costs: None. Context: Total federal expenditures passed through to subrecipients that required a risk assessment of and review of the Uniform Guidance audit report reported in the Schedule were $885,840, representing 70.20% of total STLT expenditures of $1,261,948 for the year ended December 31, 2023. Effect or potential effect: Monitoring performed over a subrecipient may not be responsive to the risk for that subrecipient. A subrecipient’s Uniform Guidance audit report could contain findings that are not properly reviewed and evaluated. Identification as a repeat finding, if applicable: The finding is not a repeat finding. Recommendation: Management should establish written internal controls and procedures related to subrecipient risk assessments in accordance with Uniform Guidance Section 200.33 2(b). In addition, Endeavor should modify the subrecipient Uniform Guidance audit report review process to include a section for Endeavor to document its review of and conclusions reached over the subrecipient’s Uniform Guidance audit report. Views of Responsible Officials: Management will establish written internal procedures related to sub-recipient risk assessments in accordance with the Uniform Guidance Section 200.33 2(b). Management will leverage its key resources at the system level to improve the process for R&D sub-recipients assessment and monitoring. In addition, management will consult with legal, finance, and compliance teams to evaluate and correct, if necessary, current review processes and documentation of review results moving forward.
Show full finding ▾Hide full finding ▴Finding 2023-004 – Subrecipient Monitoring Information of the federal program: Federal Grantor: United States Department of Health and Human Services Pass-Through Grantor: City of Chicago Assistance Listing No.: 93.391, Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crisis Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Section 200.303 of the Uniform Guidance states the following regarding internal control: “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).” Section 200.332 of the Uniform Guidance states that all pass-through entities must: “(b) Evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraphs (d) and (e) of this section, which may include consideration of such factors as: (1) The subrecipient’s prior experience with the same or similar subawards, (2) The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F Audit Requirements of this part, and the extent to which the same or similar subaward has been audited as a major program, (3) Whether the subrecipient has new personnel or new or substantially changed systems, and (4) The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency).” Section 200.332 of the Uniform Guidance further states that all pass-through entities must: “(g) Consider whether the results of the subrecipient’s audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity’s own records.” Condition: Although subrecipient monitoring procedures were performed during the fiscal year, management did not perform and document a risk assessment upon entering into subaward agreements with its subrecipients in order to determine the extent of monitoring procedures that should be performed to be responsive to the assessed risk. In addition, management did not obtain the Uniform Guidance audit report from its subrecipients. Cause: Management did not have internal controls in place that required completion of the documentation evidencing review of the risk assessment of the subrecipients at the beginning of the award and monitoring of the Uniform Guidance audit reports of the subrecipients. The documentation was not completed as management considered the subrecipients vendors. Questioned costs: None. Context: Total federal expenditures passed through to subrecipients that required a risk assessment of and review of the Uniform Guidance audit report reported in the Schedule were $885,840, representing 70.20% of total STLT expenditures of $1,261,948 for the year ended December 31, 2023. Effect or potential effect: Monitoring performed over a subrecipient may not be responsive to the risk for that subrecipient. A subrecipient’s Uniform Guidance audit report could contain findings that are not properly reviewed and evaluated. Identification as a repeat finding, if applicable: The finding is not a repeat finding. Recommendation: Management should establish written internal controls and procedures related to subrecipient risk assessments in accordance with Uniform Guidance Section 200.33 2(b). In addition, Endeavor should modify the subrecipient Uniform Guidance audit report review process to include a section for Endeavor to document its review of and conclusions reached over the subrecipient’s Uniform Guidance audit report. Views of Responsible Officials: Management will establish written internal procedures related to sub-recipient risk assessments in accordance with the Uniform Guidance Section 200.33 2(b). Management will leverage its key resources at the system level to improve the process for R&D sub-recipients assessment and monitoring. In addition, management will consult with legal, finance, and compliance teams to evaluate and correct, if necessary, current review processes and documentation of review results moving forward.
Finding 2023-004 – Subrecipient Monitoring Assistance Listing 93.391, Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crisis. Management will use the system level policy and procedures related to sub-recipient assessment and monitoring that are in place from the Research department. We will leverage key resources within the organization to address areas of noncompliance. Responsible Official: Ashlee Jean Roffe, Director of Nutrition and Community Health, Community CARE
Although subrecipient monitoring procedures were performed during the fiscal year, management did not perform and document a risk assessment upon entering into subaward agreements with its subrecipients in order to determine the extent of monitoring procedures that should be performed to be responsive to the assessed risk. In addition, management did not obtain the Uniform Guidance audit report from its subrecipients.Cause:Management did not have internal controls in place that required completion of the documentation evidencing review of the risk assessment of the subrecipients at the beginning of the award and monitoring of the Uniform Guidance audit reports of the subrecipients. The documentation was not completed as management considered the subrecipients vendors.Questioned costs:None.Context:Endeavor’s total federal expenditures passed through to subrecipients that required a risk assessment of Uniform Guidance audit report reported in the Schedule were $885,840, representing 70.20% of total STLT expenditures of $1,261,948 for the year ended December 31, 2023.Effect or potential effect:Monitoring performed over a subrecipient may not be responsive to the risk for that subrecipient. A subrecipient’s Uniform Guidance audit report could contain findings that are not properly reviewed and evaluated.Identification as a repeat finding, if applicable:The finding is not a repeat finding.Recommendation:Management should establish written internal controls and procedures related to subrecipient risk assessments in accordance with Uniform Guidance Section 200.33 2(b). In addition, Endeavor should modify the subrecipient Uniform Guidance audit report review process to include a section for Endeavor to document its review of and conclusions reached over the subrecipient’s Uniform Guidance audit report.Views of Responsible Officials:Management will establish written internal procedures related to sub-recipient risk assessments in accordance with the Uniform Guidance Section 200.33 2(b). Management will leverage its key resources at the system level to improve the process for R&D sub-recipients assessment and monitoring. In addition, management will consult with legal, finance, and compliance teams to evaluate and correct, if necessary, current review processes and documentation of review results moving forward.
Show full finding ▾Hide full finding ▴Finding 2023-004 – Subrecipient MonitoringInformation of the federal program:Federal Grantor: United States Department of Health and Human ServicesPass-Through Grantor: City of ChicagoAssistance Listing No.: 93.391, Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare CrisisCriteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation):Section 200.303 of the Uniform Guidance states the following regarding internal control: “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).”Section 200.332 of the Uniform Guidance states that all pass-through entities must:“(b) Evaluate each subrecipient’s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraphs (d) and (e) of this section, which may include consideration of such factors as:(1) The subrecipient’s prior experience with the same or similar subawards,(2) The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F Audit Requirements of this part, and the extent to which the same or similar subaward has been audited as a major program,(3) Whether the subrecipient has new personnel or new or substantially changed systems, and(4) The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency).”Section 200.332 of the Uniform Guidance further states that all pass-through entities must:“(g) Consider whether the results of the subrecipient’s audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity’s own records.”Condition:Although subrecipient monitoring procedures were performed during the fiscal year, management did not perform and document a risk assessment upon entering into subaward agreements with its subrecipients in order to determine the extent of monitoring procedures that should be performed to be responsive to the assessed risk. In addition, management did not obtain the Uniform Guidance audit report from its subrecipients.Cause:Management did not have internal controls in place that required completion of the documentation evidencing review of the risk assessment of the subrecipients at the beginning of the award and monitoring of the Uniform Guidance audit reports of the subrecipients. The documentation was not completed as management considered the subrecipients vendors.Questioned costs:None.Context:Endeavor’s total federal expenditures passed through to subrecipients that required a risk assessment of Uniform Guidance audit report reported in the Schedule were $885,840, representing 70.20% of total STLT expenditures of $1,261,948 for the year ended December 31, 2023.Effect or potential effect:Monitoring performed over a subrecipient may not be responsive to the risk for that subrecipient. A subrecipient’s Uniform Guidance audit report could contain findings that are not properly reviewed and evaluated.Identification as a repeat finding, if applicable:The finding is not a repeat finding.Recommendation:Management should establish written internal controls and procedures related to subrecipient risk assessments in accordance with Uniform Guidance Section 200.33 2(b). In addition, Endeavor should modify the subrecipient Uniform Guidance audit report review process to include a section for Endeavor to document its review of and conclusions reached over the subrecipient’s Uniform Guidance audit report.Views of Responsible Officials:Management will establish written internal procedures related to sub-recipient risk assessments in accordance with the Uniform Guidance Section 200.33 2(b). Management will leverage its key resources at the system level to improve the process for R&D sub-recipients assessment and monitoring. In addition, management will consult with legal, finance, and compliance teams to evaluate and correct, if necessary, current review processes and documentation of review results moving forward.
Finding 2023-004 – Subrecipient Monitoring Assistance Listing 93.391, Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crisis. Management will use the system level policy and procedures related to sub-recipient assessment and monitoring that are in place from the Research department. We will leverage key resources within the organization to address areas of noncompliance. Responsible Official: Ashlee Jean Roffe, Director of Nutrition and Community Health, Community CARE
Management develops a fringe benefit rate annually that is used to allocate fringe benefits to the research and development programs from January 1, 2023 to December 31, 2023. Management did not have internal controls to review the appropriateness of the journal entries recorded for fringe benefit rates. Cause: Management does not have internal controls and policies and procedures to require an appropriate review of fringe benefit journal entries. Effect or potential effect: Unallowable expenses may be inappropriately applied to research and development grants. Questioned costs: None. Context: We tested a sample of 16 fringe benefit journal entries to review. Based on the procedures performed, we identified that the fringe benefit costs were not reviewed timely by the appropriate individual. The Company incurred $673,983 of fringe benefits in 2023 related to Research and Development grants that are included on the Schedule of Expenditures of Federal Awards. Total federal expenditures related to the research and development cluster were $13,409,825 for the year ended December 31, 2023. Identification as a repeat finding, if applicable: This finding is not a repeat finding from the prior year. Recommendation: Management should revise its internal controls and policies to require the appropriate review and approval of fringe benefit journal entries. Views of responsible officials: Management will document a policy to review the updated fringe rate on an annual basis and ensure the fringe expense charged to the grants is in line with the policy and the calculated rate.
Show full finding ▾Hide full finding ▴Finding 2023-005 – Activities Allowed or Unallowed and Allowable Costs/Cost Principles Identification of the federal program: Federal Grantor: United States Department of Health and Human Services (HHS) Assistance Listing No.: 93.172, Human Genome Research Pass-Through Grantor: University of Chicago Federal Grantor: United States Department of Health and Human Services (HHS) Assistance Listing No.: 93.242, Mental Health Research Grants Pass-Through Grantors: Rutgers State University, University of Chicago, Johns Hopkins University Federal Grantor: United States Department of Health and Human Services (HHS) Assistance Listing No.: 93.307, Minority Health and Health Disparities Research Pass-Through Grantor: Northwestern University Federal Grantor: United States Department of Health and Human Services (HHS) Assistance Listing No.: 93.350, National Center for Advancing Translational Sciences Pass-Through Grantors: University of Chicago, Duke University Federal Grantor: United States Department of Health and Human Services (HHS) Assistance Listing No.: 93.361, Nursing Research Pass-Through Grantor: Northwestern University Federal Grantor: United States Department of Health and Human Services (HHS) Assistance Listing No.: 93.395, Cancer Treatment Research Federal Grantor: United States Department of Health and Human Services (HHS) Assistance Listing No.: 93.847, Diabetes, Digestive, and Kidney Diseases Extramural Research Pass-Through Grantors: Northwestern University, Duke University, University of Washington, The Regents of the University of Michigan Federal Grantor: United States Department of Health and Human Services (HHS) Assistance Listing No.: 93.855, Allergy, Immunology and Transplantation Research Pass-Through Grantor: Northwestern University Federal Grantor: United States Department of Health and Human Services (HHS) Assistance Listing No.: 93.865, Child Health and Human Development Extramural Research Pass-Through Grantor: University of Chicago Federal Grantor: United States Department of Health and Human Services (HHS) Assistance Listing No.: 93.946, Cooperative Agreements to Support State-Based Safe Motherhood and Infant Health Initiative Programs Pass-Through Grantor: Northwestern University Criteria or specific requirement (including statutory, regulatory or other citation): Section 200.303 of the Uniform Guidance states the following regarding internal control: “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).” Condition: Management develops a fringe benefit rate annually that is used to allocate fringe benefits to the research and development programs from January 1, 2023 to December 31, 2023. Management did not have internal controls to review the appropriateness of the journal entries recorded for fringe benefit rates. Cause: Management does not have internal controls and policies and procedures to require an appropriate review of fringe benefit journal entries. Effect or potential effect: Unallowable expenses may be inappropriately applied to research and development grants. Questioned costs: None. Context: We tested a sample of 16 fringe benefit journal entries to review. Based on the procedures performed, we identified that the fringe benefit costs were not reviewed timely by the appropriate individual. The Company incurred $673,983 of fringe benefits in 2023 related to Research and Development grants that are included on the Schedule of Expenditures of Federal Awards. Total federal expenditures related to the research and development cluster were $13,409,825 for the year ended December 31, 2023. Identification as a repeat finding, if applicable: This finding is not a repeat finding from the prior year. Recommendation: Management should revise its internal controls and policies to require the appropriate review and approval of fringe benefit journal entries. Views of responsible officials: Management will document a policy to review the updated fringe rate on an annual basis and ensure the fringe expense charged to the grants is in line with the policy and the calculated rate.
Finding 2023-005 – Activities Allowed or Unallowed and Allowable Costs/Cost Principles Assistance Listing Multiple As soon as the annual rate is calculated and reviewed after the annual audit is complete, Research will provide the approved fringe rate to accounting. Accounting will use the approved rate prospectively. Accounting will assess the variance between the new approved rate and the prior rate used. Research will approve the adjustment based on materiality and document the adjustment process. Management will develop a policy around the fringe allocation and adjustment Responsible Official: Robert Stanton, Assistant Vice President, Research and Financial Operations, NSH Research Central Office and Annaliza Villamin, System Director of Accounting, Endeavor Health
Management develops a fringe benefit rate annually that is used to allocate fringe benefits to the research and development programs from January 1, 2023 to December 31, 2023. Management did not have internal controls to review the appropriateness of the journal entries for fringe benefit rates.Cause:Management does not have internal controls and policies and procedures to require an appropriate review of fringe benefit journal entries.Effect or potential effect:Unallowable expenses may be inappropriately applied to research and development grants.Questioned costs:None.Context:We tested a sample of 16 fringe benefit journal entries to review. Based on the procedures performed, we identified that the fringe benefit costs were not reviewed timely by the appropriate individual. The Company incurred $673,983 of fringe benefits in 2023 related to Research and Development grants that are included on the Schedule of Expenditures of Federal Awards. Total federal expenditures related to the research and development cluster were $13,409,825 for the year ended December 31, 2023.Identification as a repeat finding, if applicable:This finding is not a repeat finding from the prior year.Recommendation:Management should revise its internal controls and policies to require the appropriate review and approval of fringe benefit journal entries.Views of responsible officials:Management will document a policy to review the updated fringe rate on an annual basis and ensure the fringe expense charged to the grants is in line with the policy and the calculated rate.
Show full finding ▾Hide full finding ▴Finding 2023-005 – Activities Allowed or Unallowed and Allowable Costs/Cost PrinciplesIdentification of the federal program:Federal Grantor: United States Department of Health and Human Services (HHS)Assistance Listing No.: 93.172, Human Genome ResearchPass-Through Grantor: University of ChicagoFederal Grantor: United States Department of Health and Human Services (HHS)Assistance Listing No.: 93.242, Mental Health Research GrantsPass-Through Grantors: Rutgers State University, University of Chicago, Johns Hopkins UniversityFederal Grantor: United States Department of Health and Human Services (HHS)Assistance Listing No.: 93.307, Minority Health and Health Disparities ResearchPass-Through Grantor: Northwestern UniversityFederal Grantor: United States Department of Health and Human Services (HHS)Assistance Listing No.: 93.350, National Center for Advancing Translational SciencesPass-Through Grantors: University of Chicago, Duke UniversityFederal Grantor: United States Department of Health and Human Services (HHS)Assistance Listing No.: 93.361, Nursing ResearchPass-Through Grantor: Northwestern UniversityFederal Grantor: United States Department of Health and Human Services (HHS)Assistance Listing No.: 93.395, Cancer Treatment ResearchFederal Grantor: United States Department of Health and Human Services (HHS)Assistance Listing No.: 93.847, Diabetes, Digestive, and Kidney Diseases Extramural ResearchPass-Through Grantors: Northwestern University, Duke University, University of Washington, The Regents of the University of MichiganFederal Grantor: United States Department of Health and Human Services (HHS)Assistance Listing No.: 93.855, Allergy, Immunology and Transplantation ResearchPass-Through Grantor: Northwestern UniversityFederal Grantor: United States Department of Health and Human Services (HHS)Assistance Listing No.: 93.865, Child Health and Human Development Extramural ResearchPass-Through Grantor: University of ChicagoFederal Grantor: United States Department of Health and Human Services (HHS)Assistance Listing No.: 93.946, Cooperative Agreements to Support State-Based Safe Motherhood and Infant Health Initiative ProgramsPass-Through Grantor: Northwestern UniversityCriteria or specific requirement (including statutory, regulatory or other citation):Section 200.303 of the Uniform Guidance states the following regarding internal control: “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).”Condition:Management develops a fringe benefit rate annually that is used to allocate fringe benefits to the research and development programs from January 1, 2023 to December 31, 2023. Management did not have internal controls to review the appropriateness of the journal entries for fringe benefit rates.Cause:Management does not have internal controls and policies and procedures to require an appropriate review of fringe benefit journal entries.Effect or potential effect:Unallowable expenses may be inappropriately applied to research and development grants.Questioned costs:None.Context:We tested a sample of 16 fringe benefit journal entries to review. Based on the procedures performed, we identified that the fringe benefit costs were not reviewed timely by the appropriate individual. The Company incurred $673,983 of fringe benefits in 2023 related to Research and Development grants that are included on the Schedule of Expenditures of Federal Awards. Total federal expenditures related to the research and development cluster were $13,409,825 for the year ended December 31, 2023.Identification as a repeat finding, if applicable:This finding is not a repeat finding from the prior year.Recommendation:Management should revise its internal controls and policies to require the appropriate review and approval of fringe benefit journal entries.Views of responsible officials:Management will document a policy to review the updated fringe rate on an annual basis and ensure the fringe expense charged to the grants is in line with the policy and the calculated rate.
Finding 2023-005 – Activities Allowed or Unallowed and Allowable Costs/Cost Principles Assistance Listing Multiple As soon as the annual rate is calculated and reviewed after the annual audit is complete, Research will provide the approved fringe rate to accounting. Accounting will use the approved rate prospectively. Accounting will assess the variance between the new approved rate and the prior rate used. Research will approve the adjustment based on materiality and document the adjustment process. Management will develop a policy around the fringe allocation and adjustment Responsible Official: Robert Stanton, Assistant Vice President, Research and Financial Operations, NSH Research Central Office and Annaliza Villamin, System Director of Accounting, Endeavor Health
Endeavor did not provide a complete and accurate listing of all federal awards in the SEFA. Cause:Endeavor did not include all funds expended under the Coronavirus State and Local Fiscal Recovery Fund on the SEFA. Effect or potential effect:The SEFA prepared by Endeavor in fiscal year 2023 was misstated but was subsequently corrected. Themisstated SEFA resulted in the improper identification of federal award major programs, and therefore resulted in a restatement of a previously issued Uniform Guidance report. Questioned costs:None Context:Expenditures for ALN 21.027 were understated by $1,399,999, which resulted in the program being identified as a major program upon inclusion of the costs. Identification as a repeat finding, if applicable:This finding is not a repeat finding. Recommendation:Endeavor should review its internal controls over the process of accumulating and reporting expenditures of federal awards to ensure a completed and accurate SEFA presentation. Views of responsible officials:The grant was received and expended during a period that overlapped fiscal years, and internal miscommunication led to its initial exclusion from the SEFA submitted for audit. Management will enhance the SEFA preparation process by revising its procedures and adding additional controls to monitor for completeness of the data. This will include comparisons to the prior year programs, enhancing the Company’s grant tracking process, and review of the SEFA with key stakeholders. Upon identification of the omission, management reviewed the grant activity and has taken corrective action to ensure proper inclusion in future SEFA reports.
Show full finding ▾Hide full finding ▴Finding 2023-006 – Reporting – SEFA Preparation Information of the federal program:Federal Grantor: United States Department of Health and Human Services Assistance Listing No.: 21.027, Coronavirus State and Local Fiscal Recovery Fund Criteria or specific requirement (including statutory, regulatory or other citation): Section 200.303 of the Uniform Guidance states the following regarding internal control: “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).” The Uniform Guidance 2 CFR section 200.510 states, “(b) Schedule of expenditures of Federal awards. The auditee must also prepare a schedule of expenditures of federal awards (SEFA) for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with §200.502 Basis for determining Federal awards expended.” Condition: Endeavor did not provide a complete and accurate listing of all federal awards in the SEFA. Cause:Endeavor did not include all funds expended under the Coronavirus State and Local Fiscal Recovery Fund on the SEFA. Effect or potential effect:The SEFA prepared by Endeavor in fiscal year 2023 was misstated but was subsequently corrected. Themisstated SEFA resulted in the improper identification of federal award major programs, and therefore resulted in a restatement of a previously issued Uniform Guidance report. Questioned costs:None Context:Expenditures for ALN 21.027 were understated by $1,399,999, which resulted in the program being identified as a major program upon inclusion of the costs. Identification as a repeat finding, if applicable:This finding is not a repeat finding. Recommendation:Endeavor should review its internal controls over the process of accumulating and reporting expenditures of federal awards to ensure a completed and accurate SEFA presentation. Views of responsible officials:The grant was received and expended during a period that overlapped fiscal years, and internal miscommunication led to its initial exclusion from the SEFA submitted for audit. Management will enhance the SEFA preparation process by revising its procedures and adding additional controls to monitor for completeness of the data. This will include comparisons to the prior year programs, enhancing the Company’s grant tracking process, and review of the SEFA with key stakeholders. Upon identification of the omission, management reviewed the grant activity and has taken corrective action to ensure proper inclusion in future SEFA reports.
Finding 2023-006 – Reporting Assistance Listing 21.027, Coronavirus State and Local Fiscal Recovery Fund The management has taken corrective action to ensure accurate SEFA reporting. These actions include clarifying reporting timelines, improving coordination between finance and the grants management team, and implementing new policy and procedures for SEFA reporting. Finance and grants management staff will jointly review all grant activity at year-end to ensure proper inclusion in SEFA. Management acknowledges the importance of accurate SEFA reporting and is committed to strengthening internal controls to prevent similar issues in future reporting periods. Responsible Official: Annaliza Villamin, System Director of Accounting, Endeavor Health
FAC accepted this audit on September 28, 2023 — management decision was due March 28, 2024.
The Company did not retain audit evidence to support the report logic that was developed to extract patients from the patient billing systems that were identified as having an allowable COVID-19 testing and treatment diagnosis code with uninsured eligibility determination and eligible for reimbursement under this federal program. In addition, supporting documentation was not retained to validate who had access to modify and run the script, what changes were made to the script and how any changes to the script were tested and implemented during the fiscal year based on changes to HRSA guidance and how management validated the completeness and accuracy of the data extracted by the script. Cause: The Revenue Cycle department did not develop and maintain effective internal control over report writing, program changes and user access. In addition, while management represented that the report logic and subsequent changes to the report logic were reviewed, no audit evidence was retained to support that process. Questioned costs: None. Context: Total federal expenditures for Assistance Listing 93.461 totaled $1,214,572 for the year ended December 31, 2022. Effect or potential effect: The key report used to identify eligible federal program participants could be inaccurate or incomplete. Identification as a repeat finding, if applicable: The finding is a repeat of finding 2021-004 from the prior year. Recommendation: Although the program has now ended, the Company should retain evidence of internal controls related to access and change management over the report should the program be reinstated. Additionally, management should implement a quality review process of eligible claims identified on a monthly basis to ensure that patients identified meet the required eligibility requirements. Views of Responsible Officials: As part of the prior year audit finding, the Company implemented a process as of January 2022 to document internal controls related to the quality review of claims to ensure patients meet the eligibility requirements. HRSA reviewed the documentation and determined that the finding had been satisfactorily resolved. Although the program has now ended, the Company will ensure the internal controls are documented should the HRSA program be reinstated.
Show full finding ▾Hide full finding ▴Finding 2022-001 Activities Allowed or Unallowed and Eligibility, Information on the federal program: Federal Grantor: United States Department of Health and Human Services, Health Resources and Services Administration (HRSA) Assistance Listing No.: 93.461, COVID-19 Testing for the Uninsured Pass-Through Award Period of Performance: 01/01/2022-03/31/2022; Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Section 200.303 of the Uniform Guidance states the following regarding internal control: ?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).? Condition: The Company did not retain audit evidence to support the report logic that was developed to extract patients from the patient billing systems that were identified as having an allowable COVID-19 testing and treatment diagnosis code with uninsured eligibility determination and eligible for reimbursement under this federal program. In addition, supporting documentation was not retained to validate who had access to modify and run the script, what changes were made to the script and how any changes to the script were tested and implemented during the fiscal year based on changes to HRSA guidance and how management validated the completeness and accuracy of the data extracted by the script. Cause: The Revenue Cycle department did not develop and maintain effective internal control over report writing, program changes and user access. In addition, while management represented that the report logic and subsequent changes to the report logic were reviewed, no audit evidence was retained to support that process. Questioned costs: None. Context: Total federal expenditures for Assistance Listing 93.461 totaled $1,214,572 for the year ended December 31, 2022. Effect or potential effect: The key report used to identify eligible federal program participants could be inaccurate or incomplete. Identification as a repeat finding, if applicable: The finding is a repeat of finding 2021-004 from the prior year. Recommendation: Although the program has now ended, the Company should retain evidence of internal controls related to access and change management over the report should the program be reinstated. Additionally, management should implement a quality review process of eligible claims identified on a monthly basis to ensure that patients identified meet the required eligibility requirements. Views of Responsible Officials: As part of the prior year audit finding, the Company implemented a process as of January 2022 to document internal controls related to the quality review of claims to ensure patients meet the eligibility requirements. HRSA reviewed the documentation and determined that the finding had been satisfactorily resolved. Although the program has now ended, the Company will ensure the internal controls are documented should the HRSA program be reinstated.
Corrective Action Plan Finding 2022-001 Assistance Listing #93.461 Internal Control over Compliance? Activities Allowed or Unallowed and Eligibility, Due to the evolving nature of the COVID-19 pandemic, and the rapid pace in which programs were implemented, documentation of controls related to the reporting of COVID-19 uninsured patients was not maintained. However, controls were in place and proper submission of claims was accurate. As part of the prior year audit finding, NorthShore implemented a process as of January 2022 to document internal controls related to the quality review of claims to ensure patients meet the eligibility requirements. HRSA reviewed the documentation and determined that the finding had been satisfactorily resolved. Although the program has now ended, NorthShore will ensure the internal controls are documented should the HRSA program be reinstated. Responsible Official: John Skeans, Senior Vice President, Patient Financial Services.
2021-004
FAC accepted this audit on September 27, 2022 — management decision was due March 27, 2023.
NorthShore did not retain audit evidence of their internal controls over their review and approval of supporting documentation of Provider Relief Fund reported lost revenue calculation. Cause: Management designed a process to accumulate and review schedules related to the Provider Relief Fund; however, they did not retain supporting documentation to evidence that the internal review controls were appropriately designed and functioning throughout the process. Questioned costs: None. Context: Northshore prepared two lost revenue calculations in order to complete the two Provider Relief Fund HRSA portal submissions that covered four TINs receiving distributions. The lost revenue calculations were reviewed and approved by senior leadership to ensure the completeness and accuracy of the supporting schedules. However, management did not maintain evidence of the review to support the completeness and precision of the review occurred for the approval of the lost revenue calculation. Total federal expenditures for Assistance Listing 93.498 totaled $108,878,436 for the three months ended December 31, 2021. Effect or potential effect: The key reports used to develop the lost revenue calculation submitted for the federal program could be inaccurate or incomplete. The portal submission may not be correct or representative of the lost revenue calculation. Identification as a repeat finding, if applicable: The finding is a repeat finding of 2021-005 in FY21 audit. Recommendation: NorthShore should retain evidence of internal controls that are sufficiently precise and require that supporting documentation be retained over Reporting requirements of the federal program. Views of Responsible Officials: NorthShore agrees with the finding and has developed a plan to correct the finding. NorthShore will develop a checklist to document the review and approval of supporting documentation of Provider Relief Fund reported lost revenue calculations to evidence the in-place process as of fiscal year 2022.
Show full finding ▾Hide full finding ▴A02.09e NorthShore University Health System ? UG Audit Provider Relief Fund (Assistance Listing 93.498) Reporting Finding 12/31/2021 PBEY Finding Stub 2021-008 Reporting Information on the federal program: Federal Grantor: United States Department of Health and Human Services, Health Resources and Services Administration (HRSA) Assistance Listing No.: 93.498, Provider Relief Fund Award Number: Various Award Period of Performance: 1/01/2020?12/31/2021 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Section 200.303 of the Uniform Guidance states the following regarding internal control: ?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).? Condition: NorthShore did not retain audit evidence of their internal controls over their review and approval of supporting documentation of Provider Relief Fund reported lost revenue calculation. Cause: Management designed a process to accumulate and review schedules related to the Provider Relief Fund; however, they did not retain supporting documentation to evidence that the internal review controls were appropriately designed and functioning throughout the process. Questioned costs: None. Context: Northshore prepared two lost revenue calculations in order to complete the two Provider Relief Fund HRSA portal submissions that covered four TINs receiving distributions. The lost revenue calculations were reviewed and approved by senior leadership to ensure the completeness and accuracy of the supporting schedules. However, management did not maintain evidence of the review to support the completeness and precision of the review occurred for the approval of the lost revenue calculation. Total federal expenditures for Assistance Listing 93.498 totaled $108,878,436 for the three months ended December 31, 2021. Effect or potential effect: The key reports used to develop the lost revenue calculation submitted for the federal program could be inaccurate or incomplete. The portal submission may not be correct or representative of the lost revenue calculation. Identification as a repeat finding, if applicable: The finding is a repeat finding of 2021-005 in FY21 audit. Recommendation: NorthShore should retain evidence of internal controls that are sufficiently precise and require that supporting documentation be retained over Reporting requirements of the federal program. Views of Responsible Officials: NorthShore agrees with the finding and has developed a plan to correct the finding. NorthShore will develop a checklist to document the review and approval of supporting documentation of Provider Relief Fund reported lost revenue calculations to evidence the in-place process as of fiscal year 2022.
Corrective Action Plan Finding 2021-008 Provider Relief Fund (Assistance Listing #93.498) Reporting At the beginning of the pandemic, NorthShore created a working group to evaluate the requirements for the COVID-19 funding received and ensure the funds were only used for allowable purposes. The working group was assisted by outside consultants to keep the group updated on the reporting requirements as they continued to evolve as additional funds were received. As part of the Uniform Guidance audit, NorthShore provided documentation of the Provider Relief Fund review process, including working group meeting agendas, email correspondence, as well as management sign-off on the lost revenue calculations and expenses submitted as part of the Provider Relief Fund Period 1 and 2 reports. To ensure our internal controls are documented to level necessary under current audit standards, NorthShore developed and distributed a checklist on August 31, 2022 to document the review and approval of supporting documentation of Provider Relief Fund federal expenditures and reported lost revenue calculations. The checklist (copy attached) is retained with the existing support of Provider Relief Fund federal expenditures. After review of the Provider Relief Fund checklist, Douglas D. Welday, Chief Financial Officer, will sign and date the form to demonstrate due diligence. Responsible Party: Douglas D. Welday, Chief Financial Officer Completion Date: August 31, 2022
2021-005
FAC accepted this audit on June 29, 2022 — management decision was due December 29, 2022.
Although subrecipient monitoring procedures were performed during the fiscal year, management did not perform and document a risk assessment upon entering into subaward agreements with its subrecipients in order to determine the extent of monitoring procedures that should be performed to be responsive to the assessed risk. In addition, although NorthShore obtained the Uniform Guidance audit report from its subrecipients, NorthShore did not document its review of and conclusions reached on the subrecipient Uniform Guidance audit reports. Cause: NorthShore did not maintain documentation evidencing review of the risk assessment and monitoring of the subrecipients. Questioned costs: None. Context: NorthShore had one subrecipient that required a risk assessment during the fiscal year. Federal expenditures passed through to the new subrecipients as reported in the schedule of expenditures of federal awards were $67,512 for the fiscal year ended September 30, 2021, representing 0.6% of total R&D Cluster expenditures of $11,262,280. NorthShore?s total federal expenditures passed through to subrecipients that required continuous monitoring during the fiscal year as reported in the schedule of expenditures of federal awards were $1.7m, representing 15% of total R&D Cluster expenditures of $11,262,280. Effect or potential effect: Monitoring performed over a subrecipient may not be responsive to the risk for that subrecipient. A subrecipient?s Uniform Guidance audit report could contain findings that are not properly reviewed and evaluated. Identification as a repeat finding, if applicable: This is a repeat finding of 2020-003 in the FY20 audit. Recommendation: Management should establish a written subrecipient monitoring policy to address all aspects of the subrecipient monitoring compliance requirements outlined in Uniform Guidance Section 200.331 and perform and document a risk assessment of its subrecipients in accordance with Uniform Guidance Section 200.33 l(b). In addition, NorthShore should modify the subrecipient Uniform Guidance audit report certification to include a section for NorthShore to document its review of and conclusions reached over the subrecipient?s Uniform Guidance audit report. Views of Responsible Officials: Management agrees with the comment. Management will prepare a subrecipient monitoring questionnaire and review the UG audit report for the subrecipient institution, and then will determine and designate whether the risk of entering into the subcontract agreement with the entity is low, medium, or high via a checklist. The subrecipient monitoring questionnaire will then be scanned and retained as evidence of review. Management completed and distributed the plan on February 1, 2022.
Show full finding ▾Hide full finding ▴Finding 2021-001 Internal Control over Compliance ? Subrecipient Monitoring Information on the federal program: Federal Grantor: United States Department of Health and Human Services Pass-Through Grantor: Various Assistance Listing No.: Research and Development (R&D) Pass-Through Award Number: Various Pass-Through Award Period: Various Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): The Uniform Guidance 2 CFR section 200.303 states, ?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).? Section 200.308 of the Uniform Guidance states that all pass-through entities must: (b) Evaluate each subrecipient?s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraphs (d) and (e) of this section, which may include consideration of such factors as: (1) The subrecipient?s prior experience with the same or similar subawards, (2) The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F Audit Requirements of this part, and the extent to which the same or similar subaward has been audited as a major program, (3) Whether the subrecipient has new personnel or new or substantially changed systems, and(4) The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency). Section 200.331 of the Uniform Guidance further states that all pass-through entities must: (g) (Consider whether the results of the subrecipient?s audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity?s own records. Condition: Although subrecipient monitoring procedures were performed during the fiscal year, management did not perform and document a risk assessment upon entering into subaward agreements with its subrecipients in order to determine the extent of monitoring procedures that should be performed to be responsive to the assessed risk. In addition, although NorthShore obtained the Uniform Guidance audit report from its subrecipients, NorthShore did not document its review of and conclusions reached on the subrecipient Uniform Guidance audit reports. Cause: NorthShore did not maintain documentation evidencing review of the risk assessment and monitoring of the subrecipients. Questioned costs: None. Context: NorthShore had one subrecipient that required a risk assessment during the fiscal year. Federal expenditures passed through to the new subrecipients as reported in the schedule of expenditures of federal awards were $67,512 for the fiscal year ended September 30, 2021, representing 0.6% of total R&D Cluster expenditures of $11,262,280. NorthShore?s total federal expenditures passed through to subrecipients that required continuous monitoring during the fiscal year as reported in the schedule of expenditures of federal awards were $1.7m, representing 15% of total R&D Cluster expenditures of $11,262,280. Effect or potential effect: Monitoring performed over a subrecipient may not be responsive to the risk for that subrecipient. A subrecipient?s Uniform Guidance audit report could contain findings that are not properly reviewed and evaluated. Identification as a repeat finding, if applicable: This is a repeat finding of 2020-003 in the FY20 audit. Recommendation: Management should establish a written subrecipient monitoring policy to address all aspects of the subrecipient monitoring compliance requirements outlined in Uniform Guidance Section 200.331 and perform and document a risk assessment of its subrecipients in accordance with Uniform Guidance Section 200.33 l(b). In addition, NorthShore should modify the subrecipient Uniform Guidance audit report certification to include a section for NorthShore to document its review of and conclusions reached over the subrecipient?s Uniform Guidance audit report. Views of Responsible Officials: Management agrees with the comment. Management will prepare a subrecipient monitoring questionnaire and review the UG audit report for the subrecipient institution, and then will determine and designate whether the risk of entering into the subcontract agreement with the entity is low, medium, or high via a checklist. The subrecipient monitoring questionnaire will then be scanned and retained as evidence of review. Management completed and distributed the plan on February 1, 2022.
Corrective Action Plan Finding 2021-001 Research & Development Internal Control over Compliance - Subrecipient Monitoring The policy and procedure for subrecipient monitoring we follow when reviewing and assessing the risk associated with each subcontract agreement was completed and distributed on February 1, 2022 (copy attached). The practice at The Research Institute is that at Notice of Award receipt, and every year thereafter during the entirety of the project period, a "Subrecipient Monitoring Questionnaire" (copy attached) is sent to all subawardees for completion. The Research Manager, Grant Funding, Mihai Bora reviews the Subrecipient Monitoring Questionnaire and the most current UG audit report which can be found in the Federal Audit Clearing house: https://facweb.census.gov/uploadpdf.aspx and also in the FDP expanded clearinghouse: https://fdpclearinghouse.org/organizaions?order=common_name&orderdir=asc&search=Prisma&pagesize=15. After careful review of the UG Audit report for the subrecipient institution, the Research Manager, Grant Funding, will determine and designate whether the risk of entering into a subcontract agreement with the entity is low, medium or high via a checklist (copy attached). Once the review process has been followed, the Research Manager, Grant Funding will sign and date the form to demonstrate due diligence. The Subrecipient Monitoring Questionnaire is then scanned and saved.
2020-003
NorthShore discusses the payroll change requirements with the Principal Investigator (PI) prior to the start of the award at a kickoff meeting. The expectation is that the PI then reports to the R&D department and the Research Budget Analyst any changes, if necessary. Management does not monitoring change in key personnel or the change in effort by 25% or more for key personnel. The reliance is on the PI to report if there is a change that needs to be reported. Cause: NorthShore does not have a formal process or internal controls in place to monitor changes in key personnel and change in effort that are required to be reported. Questioned costs: None. Context: Salaries and wages and the related fringes and indirect costs incurred from October 1, 2020 to September 30, 2021 totaled $5,851,652, or 52% of total R&D expenditures. Total R&D expenditures for the year ended September 30, 2021 were $11,262,280. Effect or potential effect: A change in key personnel or effort may not be identified and reported to the grantor on a timely basis Identification as a repeat finding, if applicable: This is a repeat finding of 2020-004 in FY20 the audit.Recommendation: NorthShore should establish internal controls and written monitoring policy to track changes in key personnel or effort exceeding the 25% threshold. Views of Responsible Officials: Management agrees with the comment. The principal investigator will complete a form to request for a change in payroll distribution, and then notify the research finance team to initiate the changes for the key personnel effort. The document will be retained. Management completed and distributed the plan on February 1, 2022.
Show full finding ▾Hide full finding ▴Finding 2021-002 ? Special Tests and Provisions Information on the federal program: Federal Grantor: United States Department of Health and Human Services Pass-Through Grantor: Various Assistance Listing No.: Research and Development (R&D) Pass-Through Award Number: Various Pass-Through Award Period: Various Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): The Uniform Guidance 2 CFR section 200.303 states, ?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).? Section 200.308 of the Uniform Guidance states that all entities must: (c)(1) For non-construction Federal awards, recipients must request prior approvals from Federal awarding agencies for one or more of the following program or budgetrelated reasons: (i) Change in the scope or the objective of the project or program (even if there is no associated budget revision requiring prior written approval). (ii) Change in a key person specified in the application or the Federal award. (iii)The disengagement from the project for more than three months, or a 25% reduction in time devoted to the project, by the approved project director or principal investigator. Condition: NorthShore discusses the payroll change requirements with the Principal Investigator (PI) prior to the start of the award at a kickoff meeting. The expectation is that the PI then reports to the R&D department and the Research Budget Analyst any changes, if necessary. Management does not monitoring change in key personnel or the change in effort by 25% or more for key personnel. The reliance is on the PI to report if there is a change that needs to be reported. Cause: NorthShore does not have a formal process or internal controls in place to monitor changes in key personnel and change in effort that are required to be reported. Questioned costs: None. Context: Salaries and wages and the related fringes and indirect costs incurred from October 1, 2020 to September 30, 2021 totaled $5,851,652, or 52% of total R&D expenditures. Total R&D expenditures for the year ended September 30, 2021 were $11,262,280. Effect or potential effect: A change in key personnel or effort may not be identified and reported to the grantor on a timely basis Identification as a repeat finding, if applicable: This is a repeat finding of 2020-004 in FY20 the audit.Recommendation: NorthShore should establish internal controls and written monitoring policy to track changes in key personnel or effort exceeding the 25% threshold. Views of Responsible Officials: Management agrees with the comment. The principal investigator will complete a form to request for a change in payroll distribution, and then notify the research finance team to initiate the changes for the key personnel effort. The document will be retained. Management completed and distributed the plan on February 1, 2022.
Corrective Action Plan Finding 2021-002 Research & Development Internal Control over Compliance - Special Tests and Provisions The policy and procedure for changes in effort was completed and distributed on February 1, 2022 (copy attached). The Research Institute form RI-10.9 "Request for Change in Payroll Distribution" (copy attached), is completed by Principal Investigators and/or administrators to notify the Research Finance Team to initiate changes to the Payroll Transaction Report for key personnel effort changes. This form also confirms that the federal program officer has provided prior approval for changes in effort exceeding the 25% threshold. This document will be retained in the award file and is the responsibility of Mihai Bora, Research Manager, Grant Funding. Monitoring of the level of effort is done through Time & Effort Reporting.
2020-004
NorthShore discusses the special tests and provision requirements with the Principal Investigator (PI) prior to the start of the award at a kickoff meeting. Management does not retain documentation of the kick-off meeting to support that special tests and provisions were discussed, nor do they maintain documentation to show that they were in compliance with the special tests and provisions during the fiscal period. Cause: NorthShore does not have a internal controls or a formal process to document and discuss with the PI if there is special test or provision for an award and then to monitor compliance with the special tests and provision. Questioned costs: None. Context: Total R&D expenditures for the year ended September 30, 2021 were $11,262,280. Effect or potential effect: Federal awards could contain special tests and provisions that were not monitored for compliance during the fiscal year. NorthShore may not be in compliance with special tests and provisions of a federal award. Identification as a repeat finding, if applicable: The finding is a repeat finding of 2020-005. Recommendation: Management should establish internal controls and a written policy to communicate and monitor special tests and provisions throughout the grant award. Views of Responsible Officials: Management agrees with the comment. Management will complete a kick-off meeting checklist to discuss a number of items such as: special terms and conditions, restrictions, reductions, time and effort and other topics of concern or action. The file will be signed, dated, and retained. Management completed and distributed the plan on February 1, 2022.
Show full finding ▾Hide full finding ▴Finding 2021-003 ? Special Tests and Provisions (Other) Information on the federal program: Federal Grantor: United States Department of Health and Human Services Pass-Through Grantor: Various Assistance Listing No.: Research and Development (R&D) Pass-Through Award Number: Various Pass-Through Award Period: Various Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): The Uniform Guidance 2 CFR section 200.303 states, ?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).? Condition: NorthShore discusses the special tests and provision requirements with the Principal Investigator (PI) prior to the start of the award at a kickoff meeting. Management does not retain documentation of the kick-off meeting to support that special tests and provisions were discussed, nor do they maintain documentation to show that they were in compliance with the special tests and provisions during the fiscal period. Cause: NorthShore does not have a internal controls or a formal process to document and discuss with the PI if there is special test or provision for an award and then to monitor compliance with the special tests and provision. Questioned costs: None. Context: Total R&D expenditures for the year ended September 30, 2021 were $11,262,280. Effect or potential effect: Federal awards could contain special tests and provisions that were not monitored for compliance during the fiscal year. NorthShore may not be in compliance with special tests and provisions of a federal award. Identification as a repeat finding, if applicable: The finding is a repeat finding of 2020-005. Recommendation: Management should establish internal controls and a written policy to communicate and monitor special tests and provisions throughout the grant award. Views of Responsible Officials: Management agrees with the comment. Management will complete a kick-off meeting checklist to discuss a number of items such as: special terms and conditions, restrictions, reductions, time and effort and other topics of concern or action. The file will be signed, dated, and retained. Management completed and distributed the plan on February 1, 2022.
Corrective Action Plan Finding 2021-003 Research & Development Internal Control over Compliance - Special Tests and Provisions (Other) The policy and procedure for terms and conditions was completed and distributed on February 1, 2022 (copy attached). The procedure includes a Grant Kick-off Meeting Checklist (copy attached). This checklist documents items of discussion such as: special terms and conditions, restrictions, reductions, time and effort and other topics of concern or actions. Robert Stanton, Assistant Vice President, Research Administration is responsible. The form is signed and dated and maintained in the award file.
2020-005
NorthShore did not retain audit evidence to support the report logic that was developed to extract patients from the patient billing systems that were identified as having an allowable COVID-19 testing and treatment diagnosis code with uninsured eligibility determination and eligible for reimbursement under this federal program. In addition, supporting documentation was not retained to validate who had access to modify and run the script, what changes were made to the script and how any changes to the script were tested and implemented during the fiscal year based on changes to HRSA guidance and how management validated the completeness and accuracy of the data extracted by the script. Cause: The Revenue Cycle department did not develop and maintain effective internal control over report writing, program changes and user access. In addition, while management represented that the report logic and subsequent changes to the report logic were reviewed, no audit evidence was retained to support that process. Questioned costs: None. Context: Total federal expenditures for Assistance Listing 93.461 totaled $4,655,169 for the year ended September 30, 2021. Effect or potential effect: A material weakness in internal controls over the activities allowed or unallowed and eligibility compliance requirements exists. The key report used to identify eligible federal program participants could be inaccurate or incomplete. Identification as a repeat finding, if applicable: The finding is a repeat of finding 2020-002 from the prior year. Recommendation: NorthShore should retain evidence of internal controls related to access and change management over the report. Management should implement a quality review process of eligible claims identified on a monthly basis to ensure that patients identified meet the required eligibility requirements. Views of Responsible Officials: NorthShore agrees with the finding and has developed a plan to correct the finding. As part of the prior year finding 2020-002, NorthShore implemented a process to document internal controls related to the quality review of claims to ensure patients meet the eligibility requirements. As the program ceased to accept claims for testing and treatment effective March 22, 2022, management will ensure the internal controls are documented should the HRSA program be reinstated.
Show full finding ▾Hide full finding ▴Finding 2021-004 ? Activities Allowed or Unallowed and Eligibility Information on the federal program: Federal Grantor: United States Department of Health and Human Services, Health Resources and Services Administration (HRSA) Assistance No.: 93.461, COVID-19 Testing for the Uninsured Pass-Through Award Number: Various Pass-Through Award Period of Performance: 10/01/2020?09/30/2021 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Section 200.303 of the Uniform Guidance states the following regarding internal control: ?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).? Condition: NorthShore did not retain audit evidence to support the report logic that was developed to extract patients from the patient billing systems that were identified as having an allowable COVID-19 testing and treatment diagnosis code with uninsured eligibility determination and eligible for reimbursement under this federal program. In addition, supporting documentation was not retained to validate who had access to modify and run the script, what changes were made to the script and how any changes to the script were tested and implemented during the fiscal year based on changes to HRSA guidance and how management validated the completeness and accuracy of the data extracted by the script. Cause: The Revenue Cycle department did not develop and maintain effective internal control over report writing, program changes and user access. In addition, while management represented that the report logic and subsequent changes to the report logic were reviewed, no audit evidence was retained to support that process. Questioned costs: None. Context: Total federal expenditures for Assistance Listing 93.461 totaled $4,655,169 for the year ended September 30, 2021. Effect or potential effect: A material weakness in internal controls over the activities allowed or unallowed and eligibility compliance requirements exists. The key report used to identify eligible federal program participants could be inaccurate or incomplete. Identification as a repeat finding, if applicable: The finding is a repeat of finding 2020-002 from the prior year. Recommendation: NorthShore should retain evidence of internal controls related to access and change management over the report. Management should implement a quality review process of eligible claims identified on a monthly basis to ensure that patients identified meet the required eligibility requirements. Views of Responsible Officials: NorthShore agrees with the finding and has developed a plan to correct the finding. As part of the prior year finding 2020-002, NorthShore implemented a process to document internal controls related to the quality review of claims to ensure patients meet the eligibility requirements. As the program ceased to accept claims for testing and treatment effective March 22, 2022, management will ensure the internal controls are documented should the HRSA program be reinstated.
Corrective Action Plan Finding 2021-004 Assistance Listing #93.461 Internal Control over Compliance? Activities Allowed or Unallowed and Eligibility Due to the evolving nature of the COVID-19 pandemic, and the rapid pace in which programs were implemented, documentation of controls related to the reporting of COVID-19 uninsured patients was not maintained. However, controls were in place and proper submission of claims was accurate. As part of the prior year audit finding, NorthShore implemented a process to document internal controls related to the quality review of claims to ensure patients meet the eligibility requirements. HRSA reviewed the documentation and determined that the finding had been satisfactorily resolved. Although the program has now ended, NorthShore will ensure the internal controls are documented should the HRSA program be reinstated. Responsible Official: John Skeans, Senior Vice President, Patient Financial Services
2020-002
NorthShore did not retain audit evidence of its internal controls over its review and approval of supporting documentation of Provider Relief Fund federal expenditures and reported lost revenue calculation. Cause: Management designed a process to accumulate and review expenditures related to the Provider Relief Fund; however, they did not retain supporting documentation to evidence that the internal review controls were appropriately designed and functioning throughout the process. Questioned costs: None. Context: All expenditures related to the Provider Relief Fund were approved by the payroll and procurement department and coded to COVID-19 cost centers. Northshore developed protocols of which efforts and expenses should be charged to the COVID-19 cost centers and communicated these protocols throughout Northshore to ensure costs were being appropriately recorded. Management then developed a process to review the costs in the COVID-19 cost centers to determine which ones were applicable to the Coronavirus Relief Fund. However, management did not maintain evidence supporting the review and approval of expenses under the grant. The lost revenue calculation prepared to complete the Provider Relief Fund HRSA portal was reviewed and approved by senior leadership to ensure the completeness and accuracy of the supporting schedules. However, management did not maintain evidence of the review to support the completeness and precision of the review occurred for the approval of the lost revenue calculation. Total federal expenditures for Assistance Listing 93.498 totaled $89,551,262 for the year ended September 30, 2021. Effect or potential effect: A material weakness in internal controls over the activities allowed or unallowed, period of performance, and reporting compliance requirements exists. The key reports used to identify allowable reimbursements from the federal program could be inaccurate or incomplete. Identification as a repeat finding, if applicable: The finding is not a repeat finding. Recommendation: NorthShore should retain evidence of internal controls that are sufficiently precise and require that supporting documentation be retained over Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Period of Performance, and Reporting Requirements of the federal program. Views of Responsible Officials: NorthShore agrees with the finding. NorthShore will develop a checklist to document the review and approval of supporting documentation of Provider Relief Fund federal expenditures and reported lost revenue calculations to evidence the in-place process as of year end 2021.
Show full finding ▾Hide full finding ▴Finding 2021-005 Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Reporting Information on the federal program: Federal Grantor: United States Department of Health and Human Services, Health Resources and Services Administration (HRSA) Assistance Listing No.: 93.498, COVID-19 Provider Relief Fund Pass-Through Award Number: Various Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Section 200.303 of the Uniform Guidance states the following regarding internal control: ?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).? Condition: NorthShore did not retain audit evidence of its internal controls over its review and approval of supporting documentation of Provider Relief Fund federal expenditures and reported lost revenue calculation. Cause: Management designed a process to accumulate and review expenditures related to the Provider Relief Fund; however, they did not retain supporting documentation to evidence that the internal review controls were appropriately designed and functioning throughout the process. Questioned costs: None. Context: All expenditures related to the Provider Relief Fund were approved by the payroll and procurement department and coded to COVID-19 cost centers. Northshore developed protocols of which efforts and expenses should be charged to the COVID-19 cost centers and communicated these protocols throughout Northshore to ensure costs were being appropriately recorded. Management then developed a process to review the costs in the COVID-19 cost centers to determine which ones were applicable to the Coronavirus Relief Fund. However, management did not maintain evidence supporting the review and approval of expenses under the grant. The lost revenue calculation prepared to complete the Provider Relief Fund HRSA portal was reviewed and approved by senior leadership to ensure the completeness and accuracy of the supporting schedules. However, management did not maintain evidence of the review to support the completeness and precision of the review occurred for the approval of the lost revenue calculation. Total federal expenditures for Assistance Listing 93.498 totaled $89,551,262 for the year ended September 30, 2021. Effect or potential effect: A material weakness in internal controls over the activities allowed or unallowed, period of performance, and reporting compliance requirements exists. The key reports used to identify allowable reimbursements from the federal program could be inaccurate or incomplete. Identification as a repeat finding, if applicable: The finding is not a repeat finding. Recommendation: NorthShore should retain evidence of internal controls that are sufficiently precise and require that supporting documentation be retained over Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Period of Performance, and Reporting Requirements of the federal program. Views of Responsible Officials: NorthShore agrees with the finding. NorthShore will develop a checklist to document the review and approval of supporting documentation of Provider Relief Fund federal expenditures and reported lost revenue calculations to evidence the in-place process as of year end 2021.
Corrective Action Plan Finding 2021-005 Provider Relief Fund (Assistance Listing #93.498) Activities Allowed or Unallowed and Reporting At the beginning of the pandemic, NorthShore created a working group to evaluate the requirements for the COVID-19 funding received and ensure the funds were only used for allowable purposes. The working group was assisted by outside consultants to keep the group updated on the reporting requirements as they continued to evolve as additional funds were received. As part of the Uniform Guidance audit, NorthShore provided documentation of the Provider Relief Fund review process, including working group meeting agendas, email correspondence, as well as management sign-off on the lost revenue calculations and expenses submitted as part of the Provider Relief Fund Period 1 report. To ensure our internal controls are documented to level necessary under current audit standards, NorthShore will develop a checklist to document the review and approval of supporting documentation of Provider Relief Fund federal expenditures and reported lost revenue calculations. The checklist will be retained with our existing support of Provider Relief Fund federal expenditures. Responsible Official: Douglas D. Welday, Chief Financial Officer
NorthShore did not retain audit evidence of its internal controls over its review and approval of supporting documentation of Presidentially Declared Disaster federal expenditures and reports submitted. Cause: Management designed a process to accumulate and review expenditures and reports submitted related to the Presidentially Declared Disaster; however, they did not retain supporting documentation to evidence that the internal review controls were sufficiently designed and operating effectively throughout the process. Questioned costs: None. Context: All expenditures related to the Presidentially Declared Disaster were approved by the procurement department and coded to COVID-19 cost centers. Northshore developed protocols of which efforts and expenses should be charged to the COVID-19 cost centers and communicated these protocols throughout Northshore to ensure costs were being appropriately recorded. Management then developed a process to review the costs in the COVID-19 cost centers to determine which ones were applicable to the Presidentially Declared Disaster. However, management did not maintain evidence supporting the review and approval of expenses under the Presidentially Declared Disaster. Total federal expenditures for Assistance Listing 97.036 totaled $ 17,928,685 for the year ended September 30, 2021. Effect or potential effect: The amounts submitted for reimbursement and the reports submitted could be inaccurate or incomplete. Identification as a repeat finding, if applicable: The finding is not a repeat finding. Recommendation: NorthShore should design and implement internal controls that are sufficiently precise and require supporting documentation be retained over the review and approval of the expenses. Views of Responsible Officials: NorthShore agrees with the finding. NorthShore will develop a checklist to document the review and approval of supporting documentation of FEMA federal expenditures to evidence the in-place process as of year end 2021.
Show full finding ▾Hide full finding ▴Finding 2021-006 Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Period of Performance, Reporting and Special Test and Provisions Information on the federal program: Federal Grantor: Department of Homeland Security Assistance Listing No.: 97.036, COVID-19 Disaster Grants ? Public Assistance (Presidentially Declared Disasters) Pass-Through Award Number: Various Pass-Through Award Period of Performance: 03/31/2020?09/30/2021 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Section 200.303 of the Uniform Guidance states the following regarding internal control: ?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).? Condition: NorthShore did not retain audit evidence of its internal controls over its review and approval of supporting documentation of Presidentially Declared Disaster federal expenditures and reports submitted. Cause: Management designed a process to accumulate and review expenditures and reports submitted related to the Presidentially Declared Disaster; however, they did not retain supporting documentation to evidence that the internal review controls were sufficiently designed and operating effectively throughout the process. Questioned costs: None. Context: All expenditures related to the Presidentially Declared Disaster were approved by the procurement department and coded to COVID-19 cost centers. Northshore developed protocols of which efforts and expenses should be charged to the COVID-19 cost centers and communicated these protocols throughout Northshore to ensure costs were being appropriately recorded. Management then developed a process to review the costs in the COVID-19 cost centers to determine which ones were applicable to the Presidentially Declared Disaster. However, management did not maintain evidence supporting the review and approval of expenses under the Presidentially Declared Disaster. Total federal expenditures for Assistance Listing 97.036 totaled $ 17,928,685 for the year ended September 30, 2021. Effect or potential effect: The amounts submitted for reimbursement and the reports submitted could be inaccurate or incomplete. Identification as a repeat finding, if applicable: The finding is not a repeat finding. Recommendation: NorthShore should design and implement internal controls that are sufficiently precise and require supporting documentation be retained over the review and approval of the expenses. Views of Responsible Officials: NorthShore agrees with the finding. NorthShore will develop a checklist to document the review and approval of supporting documentation of FEMA federal expenditures to evidence the in-place process as of year end 2021.
Corrective Action Plan Finding 2021-006 FEMA (Assistance Listing 97.036) Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Period of Performance, and Special Test and Provisions NorthShore created a working group that included Finance, Supply Chain, and Human Resources to gather eligible COVID-19 expenses to submit for reimbursement to FEMA. The working group was assisted by outside consultants who specialize in FEMA claims and provided guidance with the claim submission and review by FEMA prior to payment. As part of the Uniform Guidance audit, NorthShore provided documentation of the FEMA claim review process, including meeting agendas of the working group, along with email correspondence during the review process. To ensure our internal controls are documented to level necessary under current audit standards, NorthShore will develop a checklist to document the review and approval of supporting documentation of FEMA federal expenditures. The checklist will be retained with our existing support of FEMA federal expenditures. Responsible Official: Douglas D. Welday, Chief Financial Officer Anticipated Completion Date: August 31, 2022
NorthShore did not retain audit evidence of its internal controls over its review and approval of supporting documentation of CRF federal expenditures. Cause: Management designed a process to accumulate and review expenditures related to the Coronavirus Relief Fund grant; however, they did not retain supporting documentation to evidence the review and approval of CRF expenditures. Questioned costs: None. Context: All expenditures related to the Coronavirus Relief Fund were approved by the payroll and procurement department and coded to COVID-19 cost centers. Northshore developed protocols of which efforts and expenses should be charged to the COVID-19 cost centers and communicated these protocols throughout Northshore to ensure costs were being appropriately recorded. Management then developed a process to review the costs in the COVID-19 cost centers to determine which ones were applicable to the Coronavirus Relief Fund. However, management did not maintain evidence supporting the review and approval of expenses under the grant. Total federal expenditures for Assistance Listing 21.019 totaled $6,887,253 for the year ended September 30, 2021. Effect or potential effect: Expenditures claimed for reimbursement may not be allowable. Identification as a repeat finding, if applicable: The finding is not a repeat finding. Recommendation: NorthShore should design and implement internal controls that are sufficiently precise and require supporting documentation be retained over the review and approval of expenses. Views of Responsible Officials: NorthShore agrees with the finding. NorthShore will develop a checklist to document the review and approval of supporting documentation of Coronavirus Relief Fund federal expenditures to evidence the in-place process as of year end 2021.
Show full finding ▾Hide full finding ▴Finding 2021-007 Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Period of Performance Information on the federal program: Federal Grantor: Department of the Treasury Pass-Through Entity: Illinois Department of Healthcare and Family Services Assistance Listing No.: 21.019, COVID-19 Coronavirus Relief Fund (CRF) Pass-Through Award Number: Various Pass-Through Award Period of Performance: 03/01/2020?12/30/2020 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Section 200.303 of the Uniform Guidance states the following regarding internal control: ?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).? Condition: NorthShore did not retain audit evidence of its internal controls over its review and approval of supporting documentation of CRF federal expenditures. Cause: Management designed a process to accumulate and review expenditures related to the Coronavirus Relief Fund grant; however, they did not retain supporting documentation to evidence the review and approval of CRF expenditures. Questioned costs: None. Context: All expenditures related to the Coronavirus Relief Fund were approved by the payroll and procurement department and coded to COVID-19 cost centers. Northshore developed protocols of which efforts and expenses should be charged to the COVID-19 cost centers and communicated these protocols throughout Northshore to ensure costs were being appropriately recorded. Management then developed a process to review the costs in the COVID-19 cost centers to determine which ones were applicable to the Coronavirus Relief Fund. However, management did not maintain evidence supporting the review and approval of expenses under the grant. Total federal expenditures for Assistance Listing 21.019 totaled $6,887,253 for the year ended September 30, 2021. Effect or potential effect: Expenditures claimed for reimbursement may not be allowable. Identification as a repeat finding, if applicable: The finding is not a repeat finding. Recommendation: NorthShore should design and implement internal controls that are sufficiently precise and require supporting documentation be retained over the review and approval of expenses. Views of Responsible Officials: NorthShore agrees with the finding. NorthShore will develop a checklist to document the review and approval of supporting documentation of Coronavirus Relief Fund federal expenditures to evidence the in-place process as of year end 2021.
Corrective Action Plan Finding 2021-007 Coronavirus Relief Fund (Assistance Listing #21.019) Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Period of Performance At the beginning of the pandemic, NorthShore created a working group to evaluate the requirements for COVID-19 funding received and ensure the funds were only used for allowable purposes. The working group was assisted by outside consultants to keep the group updated on the reporting requirements as they continued to evolve as additional funds were received. As part of the Uniform Guidance audit, NorthShore provided documentation of the Coronavirus Relief Fund review process, including working group meeting agendas, email correspondence, and the narratives provided with the report submissions that explained how eligible costs were identified. To ensure our internal controls are documented to level necessary under current audit standards, NorthShore will develop a checklist to document the review and approval of supporting documentation of Coronavirus Relief Fund federal expenditures. The checklist will be retained with our existing support of Coronavirus Relief Fund federal expenditures. Responsible Official: Douglas D. Welday, Chief Financial Officer
FAC accepted this audit on December 29, 2021 — management decision was due June 29, 2022.
Management utilized estimates determined before the performance of services to charge salaries and wages, however, the Corporation did not consistently obtain monthly estimates of actual performance of service subsequent to the performance of services on a timely basis. Cause: The verification of salaries and wages in the effort calculation and certification report was not timely performed within the prescribed timeline of the grant?s guidelines. NorthShore?s internal controls and procedures in place over the monitoring of the effort reports were not functioning as designed. Questioned costs: Various CFDA #s: $2,992 ? represents the salaries and wages and the related fringes and indirect costs where a monthly estimate of actual performance subsequent to the performance of services was not obtained for the period from October 1, 2019 to September 30, 2020. Context: Total R&D expenditures for the year ended September 30, 2020 were $10,889,125. Salaries and wages and the related fringes and indirect costs incurred from October 1, 2019 to September 30, 2020 totaled $4,511,516. We selected a sample of 60 salaries and wages charged from October 1, 2019 to September 30, 2020 totaling $66,811. There were 7 total errors in the amount of $2,992 which resulted in an error rate of 11.6% of the samples tested and a 4.5% rate of dollars tested. Effect or potential effect: Salaries and wages in the amount of $2,992 could not be supported with timely monthly estimates of actual performance of service. Identification as a repeat finding, if applicable: The finding is related to a repeat finding. Recommendation: Management should implement internal controls to enhance the monitoring of the certification of effort spent on a monthly basis to ensure that grant expenditures are based on actual efforts spent in a timely manner. Views of Responsible Officials: Management agrees with the comment. Refer to the correction action plan.
Show full finding ▾Hide full finding ▴Finding 2020-001 ? Activities Allowed or Unallowed and Allowable Costs/Cost Principles Information on the federal program:Federal Grantor: United States Department of Health and Human Services Pass-Through Grantor: Various Research and Development Cluster Assistance Listing No.: Various Pass-Through Award Number: Various Pass-Through Award Period: Various Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): The Uniform Guidance 2 CFR section 200.303 states, ?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).? 45 CFR Part 75 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HHS Awards, Appendix IX to Part 75?Principles for Determining Costs Applicable to Research and Development Under Grants and Contracts with Hospitals, states: ?Charges for salaries and wages of individuals other than members of the professional staff will be supported by daily time and attendance and payroll distribution records. For members of the professional staff, current and reasonable estimates of the percentage distribution of their total effort may be used as support in the absence of actual time records. In order to qualify as current and reasonable, estimates must be made no later than one month (though not necessarily a calendar month) after the month in which the services were performed. Estimates determined before the performance of services, such as budget estimates on a monthly, quarterly, or yearly basis do not qualify as estimates of effort spent.? Condition: Management utilized estimates determined before the performance of services to charge salaries and wages, however, the Corporation did not consistently obtain monthly estimates of actual performance of service subsequent to the performance of services on a timely basis. Cause: The verification of salaries and wages in the effort calculation and certification report was not timely performed within the prescribed timeline of the grant?s guidelines. NorthShore?s internal controls and procedures in place over the monitoring of the effort reports were not functioning as designed. Questioned costs: Various CFDA #s: $2,992 ? represents the salaries and wages and the related fringes and indirect costs where a monthly estimate of actual performance subsequent to the performance of services was not obtained for the period from October 1, 2019 to September 30, 2020. Context: Total R&D expenditures for the year ended September 30, 2020 were $10,889,125. Salaries and wages and the related fringes and indirect costs incurred from October 1, 2019 to September 30, 2020 totaled $4,511,516. We selected a sample of 60 salaries and wages charged from October 1, 2019 to September 30, 2020 totaling $66,811. There were 7 total errors in the amount of $2,992 which resulted in an error rate of 11.6% of the samples tested and a 4.5% rate of dollars tested. Effect or potential effect: Salaries and wages in the amount of $2,992 could not be supported with timely monthly estimates of actual performance of service. Identification as a repeat finding, if applicable: The finding is related to a repeat finding. Recommendation: Management should implement internal controls to enhance the monitoring of the certification of effort spent on a monthly basis to ensure that grant expenditures are based on actual efforts spent in a timely manner. Views of Responsible Officials: Management agrees with the comment. Refer to the correction action plan.
Corrective Action Plan Finding 2020-001 Research & Development Internal Control over Compliance? Activities Allowed or Unallowed and Allowable Costs/Cost Principles The Research Budget Analyst, Michelle Bonifacio generates the monthly Time and Effort reports and prepares payroll corrections as required. The Research Manager, Grant Funding, Joan Ciapas ensures that the monthly review and certification of time and effort is completed within the requisite period. 1. The Assistant Vice President, Research Finance, Robert L. Stanton and the Research Manager, Grant Funding, Joan Ciapas meet with the Principal Investigators at the inception of each grant and they discuss the requirement for ensuring the monthly review and certification of time and effort and that it must be completed within the calendar month received. 2. The certification is done on a monthly basis and the reports are sent to the Principal Investigators via email from a solely dedicated inbox called Time&EffortCertification@northshore.org. a. The policy for reporting time and effort specifies that it is required on a monthly basis. This policy was effective July 1, 2019 and is posted on the Research Institute internal website. b. The policy is described to each Principal Investigator at the inception of an award or subaward as mentioned above and this is repeated at subsequent meetings when the grant or subaward is renewed. c. The Research Budget Analyst, Michelle Bonifacio prepares the Time and Effort Reports as soon as the prior monthly financial reports are available and submits the reports to the Principal Investigators via an email from Time&EffortCertification@northshore.org. d. The Principal Investigator certifies the level of effort is correct or notes any change(s) in the level of effort. The Principal Investigators have 30 business days from the time they receive the report to reply via email or to make any changes and scan the corrections to the Research Budget Analyst, Michelle Bonifacio. To move the process along, a first reminder email is sent to the Principal Investigators after 5 business days and again at 10 business days. When a third reminder is required, the Chair of the Department/Division Chief will be copied and the matter will be escalated accordingly. FY2020 was not a typical year and as such the time and effort reporting system was tested. Due to the COVID-19 pandemic, the State of IL and local government established regulations to enforce social distancing for health and safety concerns in 2020. NorthShore University HealthSystem complied with the regulations to access the campus and as a result made half of FY2020 a challenge. Both Principal Investigators and staff worked remotely making scanning problematic in some cases along with hand delivery.
2019-001
NorthShore did not retain audit evidence to support the report logic that was developed to extract patients from the patient billing systems that were identified as uninsured and as having an allowable COVID-19 testing and treatment diagnosis code and were in accordance with the terms of the federal program. In addition, management did not retain audit evidence to support the report logic that was developed to ensure eligible patients of the federal program were not billed for any remaining patient charges after HRSA paid on the account. In addition, supporting documentation was not retained to validate who had access to modify and run the script, what changes were made to the script and how any changes to the script were tested and implemented during the fiscal year based on changes to HRSA guidance and how management validated the completeness and accuracy of the data extracted by the script.Cause: The Revenue Cycle department did not design effective internal controls over report writing, program changes and user access. In addition, while management represented that the report logic and subsequent changes to the report logic were reviewed, no audit evidence was retained to support that process. Questioned costs: None. Context: Total federal expenditures for Assistance Listing 93.461 totaled $3,442,840 for the year ended September 30, 2020. Effect or potential effect: The report used to identify eligible federal program participants could be inaccurate or incomplete or patients could be inappropriately billed for charges after HRSA pays. Identification as a repeat finding, if applicable: The finding is not a repeat finding. Recommendation: NorthShore should retain evidence of internal controls related to access and change management over the report. Management should implement a quality review process of eligible claims identified on a monthly basis to ensure that patients identified meet the required eligibility requirements. Views of Responsible Officials: NorthShore agrees with the finding and has developed a plan to correct the finding.
Show full finding ▾Hide full finding ▴Finding 2020-002 ? Activities Allowed or Unallowed and Eligibility Information on the federal program: Federal Grantor: United States Department of Health and Human Services, Health Resources and Services Administration (HRSA) Assistance Listing No.: 93.461, COVID-19 Testing for the Uninsured Pass-Through Award Number: Various Pass-Through Award Period of Performance: 02/04/2020?09/30/2020 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Section 200.303 of the Uniform Guidance states the following regarding internal control: ?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).? Condition: NorthShore did not retain audit evidence to support the report logic that was developed to extract patients from the patient billing systems that were identified as uninsured and as having an allowable COVID-19 testing and treatment diagnosis code and were in accordance with the terms of the federal program. In addition, management did not retain audit evidence to support the report logic that was developed to ensure eligible patients of the federal program were not billed for any remaining patient charges after HRSA paid on the account. In addition, supporting documentation was not retained to validate who had access to modify and run the script, what changes were made to the script and how any changes to the script were tested and implemented during the fiscal year based on changes to HRSA guidance and how management validated the completeness and accuracy of the data extracted by the script.Cause: The Revenue Cycle department did not design effective internal controls over report writing, program changes and user access. In addition, while management represented that the report logic and subsequent changes to the report logic were reviewed, no audit evidence was retained to support that process. Questioned costs: None. Context: Total federal expenditures for Assistance Listing 93.461 totaled $3,442,840 for the year ended September 30, 2020. Effect or potential effect: The report used to identify eligible federal program participants could be inaccurate or incomplete or patients could be inappropriately billed for charges after HRSA pays. Identification as a repeat finding, if applicable: The finding is not a repeat finding. Recommendation: NorthShore should retain evidence of internal controls related to access and change management over the report. Management should implement a quality review process of eligible claims identified on a monthly basis to ensure that patients identified meet the required eligibility requirements. Views of Responsible Officials: NorthShore agrees with the finding and has developed a plan to correct the finding.
Corrective Action Plan Finding 2020-002 Assistance Listing #93.461 Internal Control over Compliance? Activities Allowed or Unallowed and Eligibility NorthShore agrees with the finding and has developed a plan to correct the finding. Due to the evolving nature of the COVID-19 pandemic, and the rapid pace in which programs were implemented, documentation of controls related to the reporting of COVID-19 uninsured patients was not maintained. However, proper submission of claims was accurate. NorthShore will document implemented internal controls related to access and change management over the report and quality review process of eligible claims identified to ensure that patients identified meet the required eligibility requirements. Responsible Official: John Skeans, Senior Vice President, Patient Financial Services Anticipated completion date: June 30, 2022
Management did not perform and document a risk assessment upon entering into subaward agreements with its subrecipients in order to determine the extent of monitoring procedures that should be performed to be responsive to the assessed risk. In addition, although NorthShore obtained the Uniform Guidance audit report from its subrecipients, NorthShore did not document its review and conclusions reached on the subrecipient Uniform Guidance audit reports. Cause: NorthShore did not have internal controls in place that required supporting documentation be maintained evidencing review of the risk assessment of the subrecipients at the beginning of the award or monitoring of the Uniform Guidance audit report certifications of the subrecipients. Questioned costs: None. Context: Total R&D expenditures for the year ended September 30, 2020 were $10,889,125. NorthShore had two subrecipients that required a risk assessment during the fiscal year. Federal expenditures passed through to the new subrecipients as reported in the schedule of expenditures of federal awards were $490,232 for the fiscal year ended September 30, 2020, representing 4.5% of total R&D Cluster expenditures.NorthShore?s total federal expenditures passed through to subrecipients that required NorthShore to obtain the subrecipient audits during the fiscal year as reported in the schedule of expenditures of federal awards were $2.4M, representing 22% of total R&D Cluster expenditures. Effect or potential effect: Monitoring performed over a subrecipient may not be responsive to the risk for that subrecipient. A subrecipient?s Uniform Guidance audit report could contain findings that are not properly reviewed and evaluated for their impact on NorthShore?s federal programs. Identification as a repeat finding, if applicable: The finding is not a repeat finding. Recommendation: Management should develop internal controls and procedures related subrecipient risk assessments in accordance with Uniform Guidance Section 200.33 l(b). In addition, NorthShore should modify the subrecipient Uniform Guidance audit report certification to include a section for NorthShore to document its review of and conclusions reached over the subrecipient?s Uniform Guidance audit report. Views of Responsible Officials: Management agrees with the comment. Refer to the correction action plan.
Show full finding ▾Hide full finding ▴Finding 2020-003 ? Subrecipient Monitoring Information on the federal program: Federal Grantor: United States Department of Health and Human Services Pass-Through Grantor: Various Research and Development Cluster Assistance Listing No.: Various Pass-Through Award Number: Various Pass-Through Award Period: Various Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): The Uniform Guidance 2 CFR section 200.303 states, ?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).? Section 200.308 of the Uniform Guidance states that all pass-through entities must: (b) ?Evaluate each subrecipient?s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraphs (d) and (e) of this section, which may include consideration of such factors as: (1) The subrecipient?s prior experience with the same or similar subawards, (2) The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F Audit Requirements of this part, and the extent to which the same or similar subaward has been audited as a major program, (3) Whether the subrecipient has new personnel or new or substantially changed systems, and(4) The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency).? Section 200.331 of the Uniform Guidance further states that all pass-through entities must: (g) Consider whether the results of the subrecipient?s audits, on-site reviews, or other monitoring indicate conditions that necessitate adjustments to the pass-through entity?s own records.? Condition: Management did not perform and document a risk assessment upon entering into subaward agreements with its subrecipients in order to determine the extent of monitoring procedures that should be performed to be responsive to the assessed risk. In addition, although NorthShore obtained the Uniform Guidance audit report from its subrecipients, NorthShore did not document its review and conclusions reached on the subrecipient Uniform Guidance audit reports. Cause: NorthShore did not have internal controls in place that required supporting documentation be maintained evidencing review of the risk assessment of the subrecipients at the beginning of the award or monitoring of the Uniform Guidance audit report certifications of the subrecipients. Questioned costs: None. Context: Total R&D expenditures for the year ended September 30, 2020 were $10,889,125. NorthShore had two subrecipients that required a risk assessment during the fiscal year. Federal expenditures passed through to the new subrecipients as reported in the schedule of expenditures of federal awards were $490,232 for the fiscal year ended September 30, 2020, representing 4.5% of total R&D Cluster expenditures.NorthShore?s total federal expenditures passed through to subrecipients that required NorthShore to obtain the subrecipient audits during the fiscal year as reported in the schedule of expenditures of federal awards were $2.4M, representing 22% of total R&D Cluster expenditures. Effect or potential effect: Monitoring performed over a subrecipient may not be responsive to the risk for that subrecipient. A subrecipient?s Uniform Guidance audit report could contain findings that are not properly reviewed and evaluated for their impact on NorthShore?s federal programs. Identification as a repeat finding, if applicable: The finding is not a repeat finding. Recommendation: Management should develop internal controls and procedures related subrecipient risk assessments in accordance with Uniform Guidance Section 200.33 l(b). In addition, NorthShore should modify the subrecipient Uniform Guidance audit report certification to include a section for NorthShore to document its review of and conclusions reached over the subrecipient?s Uniform Guidance audit report. Views of Responsible Officials: Management agrees with the comment. Refer to the correction action plan.
Corrective Action Plan Finding 2020-003 Research & Development Internal Control over Compliance? Subrecipient Monitoring The Assistant Vice President, Research Finance, Robert L. Stanton and the Research Manager, Grant Funding, Joan Ciapas will draft a policy and procedure for the process it follows when reviewing and assessing the risk associated with each subcontract agreement it enters. The policy and procedure will be completed and distributed by February 1, 2022. The practice at The Research Institute is that during proposal preparation, at Notice of Award receipt, and every year thereafter during the entirety of the project period a Subrecipient Monitoring Questionnaire is submitted to all subawardees. All returned questionnaires are scanned and saved and updated yearly. The Research Manager, Grant Funding, Joan Ciapas will review the most current UG audit report which can be found in the Federal Audit Clearing house: https://facweb.census.gov/uploadpdf.aspx and also in the FDP expanded clearinghouse: https://fdpclearinghouse.org/organizations?order=common_name&orderDir=asc&search=Prisma&pageSize=15. After careful review of the UG Audit report for the subrecipient institution, the Research Manager, Grant Funding, Joan Ciapas will determine and designate whether the risk of entering into a subcontract agreement with the entity is low, medium or high via a checklist. Once the review processes have been followed, the Research Manager, Grant Funding, Joan Ciapas will sign and date the form to demonstrate due diligence.
NorthShore reviews the requirements for reporting changes in effort the payroll change requirements with the Principal Investigator (PI) prior to the start of the award at a kickoff meeting. The PI then reports to the Manager of Research Finance and the Research Budget Analyst any changes in effort, if necessary. NorthShore does not retain minutes of the kickoff to support the communication of the payroll special tests and provision requirements. In addition, there is no monitoring of whether the changes in key personnel or the change in effort by 25% or more occur and are being appropriately reported the research and development program.Cause: NorthShore does not have internal controls or procedures over monitoring changes in key personnel and change in effort that are required to be reported nor do they retain supporting documentation over the communication of the payroll requirements to the PI. Questioned costs: None. Context: Total R&D expenditures for the year ended September 30, 2020 were $10,889,125. Salaries and wages and the related fringes and indirect costs incurred from October 1, 2019 to September 30, 2020 totaled $4,511,516, or 41% of total R&D expenditures. Effect or potential effect: A change in key personnel or change in effort greater than 25% over a three month period may not be appropriately reported to the required federal awarding agency. Identification as a repeat finding, if applicable: The finding is not a repeat finding. Recommendation: NorthShore should develop internal controls and procedures over monitoring changes in key personnel and effort that are required to be reported to the federal awarding agency. In addition, an appropriate supporting documentation should be maintained to monitor changes in key personnel and effort. Views of Responsible Officials: Management agrees with the comment. Refer to the correction action plan.
Show full finding ▾Hide full finding ▴Finding 2020-004 ? Special Tests and Provisions Information on the federal program: Federal Grantor: United States Department of Health and Human Services Pass-Through Grantor: Various Research and Development Cluster Assistance Listing No.: Various Pass-Through Award Number: Various Pass-Through Award Period: Various Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): The Uniform Guidance 2 CFR section 200.303 states, ?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).? Condition: NorthShore reviews the requirements for reporting changes in effort the payroll change requirements with the Principal Investigator (PI) prior to the start of the award at a kickoff meeting. The PI then reports to the Manager of Research Finance and the Research Budget Analyst any changes in effort, if necessary. NorthShore does not retain minutes of the kickoff to support the communication of the payroll special tests and provision requirements. In addition, there is no monitoring of whether the changes in key personnel or the change in effort by 25% or more occur and are being appropriately reported the research and development program.Cause: NorthShore does not have internal controls or procedures over monitoring changes in key personnel and change in effort that are required to be reported nor do they retain supporting documentation over the communication of the payroll requirements to the PI. Questioned costs: None. Context: Total R&D expenditures for the year ended September 30, 2020 were $10,889,125. Salaries and wages and the related fringes and indirect costs incurred from October 1, 2019 to September 30, 2020 totaled $4,511,516, or 41% of total R&D expenditures. Effect or potential effect: A change in key personnel or change in effort greater than 25% over a three month period may not be appropriately reported to the required federal awarding agency. Identification as a repeat finding, if applicable: The finding is not a repeat finding. Recommendation: NorthShore should develop internal controls and procedures over monitoring changes in key personnel and effort that are required to be reported to the federal awarding agency. In addition, an appropriate supporting documentation should be maintained to monitor changes in key personnel and effort. Views of Responsible Officials: Management agrees with the comment. Refer to the correction action plan.
Corrective Action Plan Finding 2020-004 Research & Development Internal Control over Compliance? Special Tests and Provisions The Assistant Vice President, Research Finance, Robert L. Stanton and the Research Manager, Grant Funding, Joan Ciapas will draft a formal policy and procedure including the Research Institute form RI-10.9, Request for Change in Payroll Distribution, in which Principal Investigators and/or administrators can notify the Research Finance Team to initiate changes to the Payroll Transaction Report for key personnel in which effort changes exceed the 25% threshold. This will also confirm that the program officer has provided prior approval. This document will be retained in the award file. The policy and procedure will be completed and distributed by February 1, 2022.
NorthShore discusses the special tests and provision requirements with the Principal Investigator (PI) prior to the start of the award at a kickoff meeting. Management does not retain documentation to support that special tests and provisions were appropriately communicated including supporting documentation of what the special tests and provisions were. Cause: NorthShore does not have internal controls or procedures over the communicating and monitoring of special test or provision for an award.Questioned costs: None. Context: Total R&D expenditures for the year ended September 30, 2020 were $10,889,125. Effect or potential effect: NorthShore could not be in compliance with a special tests and provisions outlined in the award agreement. Identification as a repeat finding, if applicable: The finding is not a repeat finding. Recommendation: Management should develop internal controls and procedures to communicate and monitor special tests and provisions Views of Responsible Officials: Management agrees with the comment. Refer to the correction action plan.
Show full finding ▾Hide full finding ▴Finding 2020-005 ? Special Tests and Provisions ? Other Information on the federal program: Federal Grantor: United States Department of Health and Human Services Pass-Through Grantor: Various Research and Development Cluster Assistance Listing No.: Various Pass-Through Award Number: Various Pass-Through Award Period: Various Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): The Uniform Guidance 2 CFR section 200.303 states, ?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).? Condition: NorthShore discusses the special tests and provision requirements with the Principal Investigator (PI) prior to the start of the award at a kickoff meeting. Management does not retain documentation to support that special tests and provisions were appropriately communicated including supporting documentation of what the special tests and provisions were. Cause: NorthShore does not have internal controls or procedures over the communicating and monitoring of special test or provision for an award.Questioned costs: None. Context: Total R&D expenditures for the year ended September 30, 2020 were $10,889,125. Effect or potential effect: NorthShore could not be in compliance with a special tests and provisions outlined in the award agreement. Identification as a repeat finding, if applicable: The finding is not a repeat finding. Recommendation: Management should develop internal controls and procedures to communicate and monitor special tests and provisions Views of Responsible Officials: Management agrees with the comment. Refer to the correction action plan.
Corrective Action Plan Finding 2020-005 Research & Development Internal Control over Compliance? Special Tests and Provisions (Other) The Assistant Vice President, Research Finance, Robert L. Stanton and the Research Manager, Grant Funding, Joan Ciapas will draft a policy and procedure which will include a Grant Kick-off Meeting Checklist. This checklist will document items of discussion such as: special terms and conditions, restrictions, reductions, time and effort and other topics of concern or actions. The form will be signed and dated and maintained in the award file. The policy and procedure will be completed and distributed by February 1, 2022.
FAC accepted this audit on June 24, 2020 — management decision was due December 24, 2020.
The Company utilized estimates determined before the performance of services to charge salaries and wages, however, they did not obtain timely monthly estimates of actual performance of service subsequent to the performance of services. Cause: The Company?s internal controls and procedures in place over charges of salaries and wages do not require estimates of actual performance of services subsequent to performance of services. Effect or potential effect: Salaries and wages could not be supported. Questioned costs: Various CFDA #s: $3,403,635 ? represents total salaries and wages for the period from October 1, 2018 to June 30, 2019. Context: This is a repeat finding from the prior year finding 2018-001. We inquired of management of the status of remediation from the prior year and they stated the control remediation was implemented on July 1, 2019 immediately after the finding was identified in the prior year audit. Total R&D expenditures for the year ended September 30, 2019 were $10,189,370. Salaries and wages and the related fringes and indirect costs incurred from October 1, 2018 to June 30, 2019 totaled $3,403,635. We selected a sample of 10 salaries and wages charged from July 1, 2019 to September 30, 2019 totaling $17,891. Total salaries and wages charged from July 1, 2019 to September 30, 2019 were $1,098,380. The Company provided the relevant effort reporting documentation for the fourth quarter sample. We noted no exceptions in the testing of that sample. Identification as a repeat finding, if applicable: This is a repeat finding. Recommendation: Individuals should certify their effort spent on a monthly basis to ensure that grant expenditures are based on actual efforts spent in a timely manner. Views of responsible officials: The Company agrees with the comment. Refer to the correction action plan.
Show full finding ▾Hide full finding ▴Federal Grantor: United States Department of Health and Human Services Pass-Through Grantor: Various CDFA No.: Various Pass-Through Award Number: Various Pass-Through Award Period: Various Criteria or specific requirement (including statutory, regulatory or other citation): The Uniform Guidance 2 CFR section 200.303 states, ?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).? 45 CFR Part 75 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HHS Awards, Appendix IX to Part 75?Principles for Determining Costs Applicable to Research and Development Under Grants and Contracts with Hospitals, states: ?Charges for salaries and wages of individuals other than members of the professional staff will be supported by daily time and attendance and payroll distribution records. For members of the professional staff, current and reasonable estimates of the percentage distribution of their total effort may be used as support in the absence of actual time records. In order to qualify as current and reasonable, estimates must be made no later than one month (though not necessarily a calendar month) after the month in which the services were performed. Estimates determined before the performance of services, such as budget estimates on a monthly, quarterly, or yearly basis do not qualify as estimates of effort spent.? Condition: The Company utilized estimates determined before the performance of services to charge salaries and wages, however, they did not obtain timely monthly estimates of actual performance of service subsequent to the performance of services. Cause: The Company?s internal controls and procedures in place over charges of salaries and wages do not require estimates of actual performance of services subsequent to performance of services. Effect or potential effect: Salaries and wages could not be supported. Questioned costs: Various CFDA #s: $3,403,635 ? represents total salaries and wages for the period from October 1, 2018 to June 30, 2019. Context: This is a repeat finding from the prior year finding 2018-001. We inquired of management of the status of remediation from the prior year and they stated the control remediation was implemented on July 1, 2019 immediately after the finding was identified in the prior year audit. Total R&D expenditures for the year ended September 30, 2019 were $10,189,370. Salaries and wages and the related fringes and indirect costs incurred from October 1, 2018 to June 30, 2019 totaled $3,403,635. We selected a sample of 10 salaries and wages charged from July 1, 2019 to September 30, 2019 totaling $17,891. Total salaries and wages charged from July 1, 2019 to September 30, 2019 were $1,098,380. The Company provided the relevant effort reporting documentation for the fourth quarter sample. We noted no exceptions in the testing of that sample. Identification as a repeat finding, if applicable: This is a repeat finding. Recommendation: Individuals should certify their effort spent on a monthly basis to ensure that grant expenditures are based on actual efforts spent in a timely manner. Views of responsible officials: The Company agrees with the comment. Refer to the correction action plan.
Corrective Action Plan Finding 2019-01 Internal Control over Compliance?Time and Effort Reporting The Assistant Vice President is responsible for ensuring that the monthly review and certification of time and effort is completed in a timely fashion 1. The Assistant Vice President for Research Finance met with the majority of Principal Investigators and discussed the requirement for ensuring the monthly review and certification of time and effort and that it must be completed in a timely fashion. 2. The certification is now done on a monthly basis. a. The policy for reporting time was updated on June 19, 2019 and specified that it will be required on a monthly basis. The policy was effective July 1, 2019. Principal Investigators were informed of and trained on these policies prior to July 1, 2019. b. The policy was provided to each Principal Investigator at the inception of an award or sub-grant. They were provided examples of the report format and timeline. c. The Research Finance Staff generate the Time and Effort Report as soon as the prior monthly financial reports are available and submit to the Principal Investigators within 15 days of close of the monthly fiscal period. d. The Principal Investigator certifies the level of effort is correct or notes any change(s) in the level of effort. The Principal Investigators then have 5 business days to return the reports and/or make any change(s). The changes are entered within 5 business days after receipt from the Principal Investigator. e. The Research Finance staff maintains the forms in the Research office. 3. The Research Institute staff did work with all the Principal Investigators and their staff to ensure that the FY19 information was retroactively reviewed and the effort certified/attested.
2018-001
FAC accepted this audit on June 27, 2019 — management decision was due December 27, 2019.
GSA_MIGRATION
Show full finding ▾Hide full finding ▴GSA_MIGRATION
GSA_MIGRATION
Data source: This information comes from the Federal Audit Clearinghouse, the official repository of Single Audit data. All data is public domain. Verify this organization's audit history at fac.gov.
Track your findings and corrective action plans across audit cycles.
Start tracking findings →Monitor subrecipient audit findings and compliance status.
Start monitoring →© 2026 Single Audit Intelligence. All data is public domain.