INSTITUTE FOR LEARNING INNOVATIONNon-Profit

Finding 2019-004 Research and Development Cluster Material Weakness National Science Foundation Condition: The Institute?s policies and procedures inadequately address the Institutes responsibilities as it relates to subrecipient monitoring and management. This includes the Institutes responsibilities when a subaward is made and when agreements are created. Also, this includes the Institute?s responsibility to monitor subrecipients during the term of the subaward agreement. Criteria: 2 CFR sections 200.331 and 200.332 of the Uniform Guidance (UG) outlines the Institute?s responsibilities as it relates to subrecipient monitoring and management. Cause: The Institute is a small, virtual organization with few employees. As a result, during the period under audit, adequate policies and procedures relating to subrecipient monitoring and management had not been prepared. Effect: Failure to establish adequate policies and procedures increases the risk of noncompliance with federal requirements. Questioned Costs: None Repeat Finding: No Recommendation: We recommend the Institute implement policies and procedures for subrecipient monitoring and management that comply with 2 CFR sections 200.331 and 200.332 of the UG. Views of Responsible Officials This deficiency was brought to our attention in early 2020 via the and Planned Corrective Actions: NSF desk audit as well. We revised our subrecipient monitoring and management policies shortly thereafter to bring them into compliance with 2 CFR sections 200.331 and 200.332 of the UG. As of July 2020, all subawardees? invoices are reviewed in compliance with these sections; supporting documents are also reviewed. A subaward monitoring checklist is maintained by the Finance Administrator for each subawardee. These revisions to policy were reviewed by an independent national accounting firm, MFA, LLP, and based on their recommendation to adopt these changes as policy, approved by the Finance Committee of the Institute?s Board in December 2020.

Finding 2019-005 Research and Development Cluster Material Weakness National Science Foundation Condition: We noted the Institute did not adequately monitor its subrecipients. During the audit period, the Institute discovered it was overbilled by a subrecipient by approximately $60,000. Inadequate monitoring activities was the primary reason this occurred. Criteria: 2 CFR section 200.332 of the UG outlines required monitoring activities. Such activities may include review of the subrecipient?s financial statements and Single Audit reports, review and approval of invoices and supporting documentation, and verification that subrecipients were audited in conformance with 2 CFR 200 Subpart F ? Audit Requirements. Cause: As noted in Finding 2019-004, the Institute?s policies and procedures did not adequately address the Institutes responsibilities as it relates to subrecipient monitoring and management, which includes its monitoring activities. As a result, the Institute did not adequately monitor its subrecipients. Effect: Failure to establish adequate subrecipient monitoring activities could lead to ineffective stewardship of funds. Questioned Costs: The amount of questioned costs was approximately $60,000. However, at December 31, 2019, the Institute recorded a liability in its financial statements equaling the amount payable to the NSF, which was returned to the NSF in September 2020. Repeat Finding: No Recommendation: We recommend the Institute implement subrecipient monitoring activities as outlined in 2 CFR section 200.332 of the UG and obtain written documentation of monitoring activities performed in compliance with federal requirements. Views of Responsible Officials This deficiency was brought to our attention in early 2020 via the NSF and Planned Corrective Actions: desk audit. We revised our subrecipient monitoring and management and management policies shortly thereafter to bring them into compliance with 2 CFR section 200.332 of the UG. In consultation with MFA, LLP, subrecipient monitoring and management policies and procedures were revised and implemented beginning in July 2020. This work is now complete, and these new subrecipient monitoring and management policies were approved by the Finance Committee of the Institute Board in December 2020. Conformance with both 2 CFC section 200.331 and 200.332 of the UG is now an integral part of the Institute?s accounting process and procedures.

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