AUBURN UNIVERSITYHigher Education

2025-001 – Procurement – Lack of cost or price analysis Cluster: Research and Development and also applies to Expanded Food and Nutrition Education Program, which is not a cluster Sponsoring Agency: National Aeronautics and Space Administration and Department of Agriculture Award Name: NASA-90NSSC24K0999 and NI22EFNEPXXXG004-0003 Award Numbers: 208905 and 385076 Assistance Listing Title: Mission Support and Expanded Food and Nutrition Education Program Assistance Listing Number: 43.009 and 10.514 Award Year: 2024 – 2025 Criteria In accordance with 2 CFR 200.324 (a), the recipient or subrecipient must perform a cost or price analysis for every procurement transaction, including contract modifications, in excess of the simplified acquisition threshold. The method and degree of analysis conducted depend on the facts surrounding the particular procurement transaction. For example, the recipient or subrecipient should consider potential workforce impacts in their analysis if the procurement transaction will displace public sector employees. However, as a starting point, the recipient or subrecipient must make independent estimates before receiving bids or proposals. Condition Through our testing of the various procurement requirements, we noted that the University did not complete a cost or price analysis in the following instances for all transactions over the simplified acquisition threshold (SAT) in our samples: • Research and Development cluster - 1 selection was above the SAT (out of 15 selections) totaling $300,000. • 10.514 – Expanded Food and Nutrition Education Program – 1 selection was above the SAT (out of 2 selections) totaling $265,000. Cause Management’s current policy does not require an independent cost or price analysis to be documented as part of the procurement process for those items meeting the University’s simplified acquisition threshold. Effect The University could be entering into transactions which are not the most economical or practical procurements for the Federal Government and such transactions could be unallowed or result in unallowable costs. Questioned Costs None noted. Repeat Finding Yes. Repeat of finding 2024-001. Recommendation We recommend that the University update its procurement policy so that contemporaneous documentation and retention of evidence for the selection of each vendor that meets the University’s simplified acquisition threshold is maintained consistently in the procurement files. Documentation should clearly outline the University’s independent cost or price analysis. Management’s Views and Corrective Action Plan Management’s Views and Corrective Action Plan are included at the end of this report after the summary schedule of prior auidt findings and status

2025-002 – Subrecipient Monitoring - Lack of evidence of subrecipient Uniform Guidance report reviews Cluster: Research and Development Sponsoring Agency: Various agencies Award Names: Southeast Region Cybersecurity Collaboration Center (SERC3), Establish, manage, and maintain a public-private partnership (PPP) additive manufacturing (AM) consortium for the Rapid Manufacturing Propulsion Technology (RAMPT), Developing effective adaptation strategies to enhance the resilience of farmers under changing climate, Towards a sustainable bioeconomy: Biotransformation of paper mill sludge for value-added chirally pure (R)-1,3-butanediol production, A systems approach to perennial forage management using plant growth-promoting rhizobacteria Award Numbers: 212514, 208409, 200987, 205258, and 205264 Assistance Listing Title: Cybersecurity, Energy Security & Emergency Response (CESER), Science, Integrative Activities, and Agriculture and Food Research Initiative (AFRI) Assistance Listing Number: 81.008, 43.RD, 47.083, and 10.310 Award Year: 2024 - 2025 Pass-through entity: UT-Batelle LLC, RPM Innovations, Inc., New Mexico State University, Regents of the University of California, and University of Tennessee Criteria 2 CFR 200.332(f) notes that a pass-through entity must verify that every subrecipient is audited as required by the Uniform Guidance when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in 2 CFR 200.501. Condition Through our testing of 24 subrecipients, we noted the following: • For the Research and Development Cluster, 5 out of 24 samples tested did not have supporting documentation to verify Auburn’s review of subrecipient’s financial statements and/or Uniform Guidance report available. Cause The University indicated subrecipient reviews were not consistently performed in accordance with 2 CFR 200.501. Additionally, due to a lack of clearly defined roles, responsibilities, and documentation practices among the existing team members within the Office of Sponsored Programs, the Uniform Guidance requirements (and related University procedures) around subrecipient reviews were not consistently performed and/or documented. Effect The inconsistency of reviews performed over subrecipient financial statements and Uniform Guidance reports may result in ineligible subrecipients receiving federal awards, subrecipient findings not being fully remediated, and other applicable procedures not being performed timely and appropriately. Questioned Costs None noted. Repeat Finding Yes. Repeat of finding 2024-002. Recommendation We recommend that the University reassess the design of its controls around the review process of subrecipient financial statements and Uniform Guidance reports. The University should ensure its procedures properly address the review process of this information, including timeliness and appropriate personnel. The University should also ensure these annual reviews are being appropriately documented and the documentation is being maintained properly. Management’s Views and Corrective Action Plan Management’s Views and Corrective Action Plan are included at the end of this report after the summary schedule of prior audit findings and status

2024-001 – Procurement – Lack of cost or price analysis Cluster: Research and Development, SNAP, and also applies to COVID-19 – Coronavirus State and Local Fiscal Recovery Funds, which is not a cluster Sponsoring Agency: Various agencies Award Names: DE-CR0000033, USDA-58-6010-9-011, WICHITA ST UN-23-01534, AL DHR-AGREE 4153-FY24, and ADF-RURAL HLTH INITIATIVE-OPS Award Numbers: 212514, 204805, 245195, 376563, and 223331 Assistance Listing Title: Cybersecurity, Energy Security & Emergency Response (CESER), Agricultural Research Basic and Applied Research, Other Financial Assistance, State Administrative Matching Grants for the Supplemental Nutrition Assistance Program, and COVID-19 – Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 81.008, 10.001, 12.RD, 10.561, and 21.027 Award Year: 2023 – 2024 Criteria In accordance with 2 CFR 200.324 (a), the recipient or subrecipient must perform a cost or price analysis for every procurement transaction, including contract modifications, in excess of the simplified acquisition threshold. The method and degree of analysis conducted depend on the facts surrounding the particular procurement transaction. For example, the recipient or subrecipient should consider potential workforce impacts in their analysis if the procurement transaction will displace public sector employees. However, as a starting point, the recipient or subrecipient must make independent estimates before receiving bids or proposals. Condition Through our testing of the various procurement requirements, we noted that the University did not complete a cost or price analysis in the following instances for all transactions over the simplified acquisition threshold (SAT)in our samples: • Research and Development cluster - 3 selections were above the SAT (out of 24 selections) totaling $4,009,243. • SNAP cluster - 1 selection was above the SAT (out of 4 selections) totaling $385,000. • COVID-19- Coronavirus State And Local Fiscal Recovery Funds - 1 selection was above the SAT (out of 1 selection) totaling $950,400. Cause Management’s current policy does not require an independent cost or price analysis to be documented as part of the procurement process for those items meeting the University’s simplified acquisition threshold. Effect The University could be entering into transactions which are not the most economical or practical procurements for the Federal Government and such transactions could be unallowed or result in unallowable costs. Questioned Costs None noted. Recommendation We recommend that the University update its procurement policy so that contemporaneous documentation and retention of evidence for the selection of each vendor that meets the University’s simplified acquisition threshold is maintained consistently in the procurement files. Documentation should clearly outline the University’s independent cost or price analysis. Management’s Views and Corrective Action Plan Management’s Views and Corrective Action Plan are included at the end of this report after the summary schedule of prior audit findings and status.

2024-002 – Subrecipient Monitoring - Lack of evidence of subrecipient Uniform Guidance report reviews Cluster: Research and Development Sponsoring Agency: Various agencies Award Names: Enabling Low Temperature Plasma (LTP) Ignition Technologies for Multi- Mode Engines Through the Development of a Validated High Fidelity LTP Model for Predictive Simulation Tools, Greater Alabama Black Belt Region (GABBR) LSAMP, and Reimagining controlled environment agriculture in a low carbon world Award Numbers: 211809, 200634, and 205280 Assistance Listing Title: Conservation Research and Development, STEM Education (formerly Education and Human Resources), and Agriculture and Food Research Initiative (AFRI) Assistance Listing Number: 81.086, 47.076, and 10.310 Award Year: 2023 - 2024 Pass-through entity: University of Texas Dallas, Association of Public & Land Grant Universities, Tuskegee University, and Clemson University Criteria 2 CFR 200.332(f) notes that a pass-through entity must verify that every subrecipient is audited as required by the Uniform Guidance when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in 2 CFR 200.501. Condition Through our testing of 25 subrecipients, we noted the following: • For the Research and Development Cluster, 3 out of 25 samples tested did not have supporting documentation to verify Auburn’s review of subrecipient’s financial statements and/or Uniform Guidance report available. Cause The University indicated subrecipient reviews were not consistently performed in accordance with 2 CFR 200.501. Additionally, due to a lack of clearly defined roles, responsibilities, and documentation practices among the existing team members within the Office of Sponsored Programs, the Uniform Guidance requirements (and related University procedures) around subrecipient reviews were not consistently performed and/or documented. Effect The inconsistency of reviews performed over subrecipient financial statements and Uniform Guidance reports may result in ineligible subrecipients receiving federal awards, subrecipient findings not being fully remediated, and other applicable procedures not being performed timely and appropriately. Questioned Costs None noted. Recommendation We recommend that the University reassess the design of its controls around the review process of subrecipient financial statements and Uniform Guidance reports. The University should ensure its procedures properly address the review process of this information, including timeliness and appropriate personnel. The University should also ensure these annual reviews are being appropriately documented and the documentation is being maintained properly. Management’s Views and Corrective Action Plan Management’s Views and Corrective Action Plan are included at the end of this report after the summary schedule of prior audit findings and status.

2023-001 – Non-Compliance with Monthly Direct Loan Reconciliations Grantor: U.S. Department of Education Cluster: Student Financial Assistance Cluster – AUM Campus Award Names: Federal Direct Loan Program Award Numbers: Not applicable Assistance Listing Number: 84.268 Award Year: 2022 – 2023 Criteria In accordance with 34 CFR 685.300(b)(5), on a monthly basis, institutions are required to reconcile institutional records with Direct Loan funds received from the Department of Education and Direct Loan disbursement records submitted to and accepted by the Department of Education. Condition Through our testing of the Common Origination and Disbursement (COD) School Account Statements (SAS) reports and the University’s direct loan reconciliations, we noted the following: • For 1 of the 4 sampled months of reconciliations selected, a reconciliation was not completed. • For 1 of the 4 sampled months of reconciliations selected, there was no evidence that the reconciling items were identified or addressed by the University in a timely manner. Cause The University indicated there was turnover within the Financial Aid Office at the AUM Campus during the year. The previous employee performing the reconciliations left the University. Due to the turnover within the Financial Aid Office at the AUM Campus, the direct loan reconciliations were not consistently performed in accordance with 34 CFR. Effect A direct loan reconciliation was not prepared in the month following the previous Financial Aid Office employee’s departure. Additionally, the University did not notate or resolve differences on the direct loan reconciliations themselves. Questioned Costs None noted. Recommendation We recommend that the University update/enhance its procedures related to ensuring reconciliations are performed monthly and the audit evidence associated with the direct loan reconciliation and disbursements process is retained. Management’s Views and Corrective Action Plan Management’s Views and Corrective Action Plan are included at the end of this report after the summary schedule of prior audit findings and status.

2023-002 – Non-Compliance with Timely Student Enrollment Change Submissions to the National Student Loan Data System (NSLDS) Grantor: U.S. Department of Education Cluster: Student Financial Assistance Cluster – AUM Campus Award Names: Federal Pell Grant Program and Federal Direct Loan Program Award Numbers: Not applicable Assistance Listing Number: 84.063 and 84.268 Award Year: 2022 – 2023 Criteria In accordance with 34 CFR 690.83(b)(2) and 685.309, institutions are required to report enrollment information under the Federal Pell Grant and Federal Direct Loan programs through the NSLDS. The enrollment information, inclusive of Campus Level and Program Level data, must be reviewed, updated, and validated by the institution in a timely manner. Furthermore, specific to the Federal Direct Loan program, for a student who received a Direct Loan and was enrolled or accepted for enrollment at the institution, and the student had ceased to be enrolled on at least a half-time basis or failed to enroll on at least a half-time basis for the period for which the loan was intended, the institution must report the change within 60 days from which the change was identified. Condition During our testing of enrollment reporting, we noted the following: • For 1 of the 25 samples selected, the length of time between the effective date of the status change to withdrawal, at both the campus and program level, and the date the change was certified by the NSLDS was greater than 30 days, and further, was not included within the subsequent roster file reported within 60 days from the date of the change. Cause The University's AUM Campus did not have a process in place to verify all changes reported to the National Student Clearinghouse (NSC) were submitted timely to the NSLDS within the prescribed period in accordance with 34 CFR. Effect The University's AUM Campus reported the change to the NSC within the standard timeframe; however, the change was not submitted to the NSLDS from NSC within the required 30–60-day window. Questioned Costs None noted. Recommendation We recommend that the University update its procedures related to verifying the completeness and timeliness of the NSC/NSLDS reporting. Management’s Views and Corrective Action Plan Management’s Views and Corrective Action Plan are included at the end of this report after the summary schedule of prior audit findings and status.

2022-001 ? Subrecipient Monitoring Cluster: Research and Development Sponsoring Agency: Various agencies Award Names: Various awards Award Numbers: Various award numbers Assistance Listing Title: Various assistance listing titles Assistance Listing Number: Various assistance listing numbers Award Year: 2021 ? 2022 Pass-through entity: Various pass-through entities Criteria 2 CFR 200.332(d) notes that pass-through entity monitoring of the subrecipient must include: 1. Reviewing financial and performance reports required by the pass-through entity. 2. Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient, highlighting the status of actions planned or taken to address Single Audit findings related to the particular subaward. 3. Issuing a management decision for applicable audit findings pertaining only to the Federal award provided to the subrecipient from the pass-through entity as required by 2 CFR 200.521. 2 CFR 200.332(f) notes that a pass-through entity must verify that every subrecipient is audited as required by the Uniform Guidance when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in 2 CFR 200.501. Additionally, 2 CFR 200.332(b) indicates that entities must 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 of the guidance. In this respect, University procedures include (amongst other items) obtaining a certification letter from the subrecipient, performing an initial risk assessment on all subrecipients and updating that risk assessment based on the Office of Sponsored Programs judgement. Condition Through our testing of 11 subrecipients, we noted the following: - For 4 of the 11 samples of subrecipients selected, we were unable to obtain the initial risk assessment form. - For 2 of the 11 samples of subrecipients selected, we were unable to obtain the certification letter. - For 8 of the 11 samples of subrecipients selected, there was a current year modification to the subaward agreement, however, we were unable to obtain evidence of management?s judgement with regards to whether a risk assessment form was necessary to be completed in accordance with the University?s procedures. - For 1 of the 11 samples of subrecipients selected, we were unable to obtain the original subrecipient commitment form. - For 11 of the 11 samples of subrecipients selected, we were unable to obtain evidence of the University?s annual review of the Uniform Guidance report. Cause The University indicated subrecipient reviews were not consistently performed in accordance with 2 CFR. Certain risk assessment forms were completed in prior years; however, the Office of Sponsored Programs was unable to locate the original completed forms. Additionally, due to reduced staffing levels within the Office of Sponsored Programs, the Uniform Guidance requirements (and related University procedures) around subrecipient reviews were not consistently performed and/or documented. Effect The lack of written procedures, and annual review of subrecipient awards in accordance with the procedures, may result in ineligible subrecipients receiving federal awards, subrecipient findings not being fully remediated and other monitoring procedures (based on risk level) not being performed. Questioned Costs None noted. Recommendation We recommend that the University reassess the design of its controls around subrecipient monitoring both prior to the execution of a subaward agreement and during the ongoing monitoring process. The University should also update its procedures related to the annual monitoring of subrecipients, inclusive of annual reviews of Uniform Guidance reports along with other required ongoing monitoring based on the risk rating of the subrecipient. Management?s Views and Corrective Action Plan Management?s Views and Corrective Action Plan are included at the end of this report after the summary schedule of prior audit findings and status.

Finding 2019-001: 2018 Expenditures on the 2019 Schedule of Expenditures of Federal Awards Federal Agency: Department of Agriculture Program: Cooperative Extension Service (?CES?) Program CFDA #: 10.500 Award #: Various Award Year: 2018-2019 Criteria: OMB A-110, Paragraph 21, ?Standards for financial management systems? Questioned Costs: None. Condition: During the 2018-2019 award year, University management through their Schedule of Expenditures of Federal Awards (?SEFA?) reconciliation controls identified $2.2 million of CES Program expenditures included in the 2019 SEFA which should have been included on the 2018 SEFA as the amount related to funds expended in 2018. Cause: The University received additional federal appropriations for Smith Lever grants in the 2017-2018 award year. The internal grant set-up process did not allocate these additional appropriations to funds with federal grant identifiers. As a result, these expenditures were included on the 2019 SEFA instead of the 2018 SEFA when SEFA reconciliation controls identified the error. The additional appropriation has a duration of 5 years and has no impact on period of performance. This instance does not impact the cumulative reporting of the awards or the allowability of the costs. Effect: $2.2 million of CES Program expenditures are included in the 2019 SEFA when they should have been reported on the 2018 SEFA. Recommendation: The University should review its standard operating procedures to ensure that procedures and reviews are in place related to the grant set-up process. Views of Responsible Officials/Management Response: See Management?s view and corrective action plan included at the end of this report.

Finding 2019-002: Return of title IV funds calculation error Federal Agency: Department of Education Program: Student Financial Aid Cluster CFDA #: Various Award #: Various Award Year: 2018-2019 Criteria: 34 CFR 668.22, An institution must determine the amount of title IV grant or loan assistance that the student earned as of the student's withdrawal date Questioned Costs: None. Condition: During the 2018-2019 award year, one out of thirteen students tested in our sample specific to the Auburn University at Montgomery (AUM) campus withdrew from the University and although the returned dollar amount was correct, the return of title IV funds calculation omitted an institutional charge and was not performed as prescribed by 34 CFR 668.22. Cause: In fiscal 2018, a similar finding (Finding 2018-001) was identified at the AUM campus, and prior to the implementation of management?s corrective action plan in response to that finding the University?s internal control over title IV return calculations failed to identify a $47 institutional charge that should have been input into a calculation during the Fall 2018 term. The University recalculated the title IV calculation noting no difference in amounts required to be returned to the Department of Education. Effect: None. Recommendation: We recommend the University reiterate to control owners the importance of detailed reviews of inputs into return calculations and to perform independent, internal reviews to ensure returns are accurately calculated and processed within the required timeframe. Views of Responsible Officials/Management Response: See Management?s view and corrective action plan included at the end of this report.

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