University of Arkansas for Medical SciencesHigher Education

Head Start Cluster Head Start, ALN 93.600 Department of Health and Human Services Program Year 2022-2023 Criteria or specific requirement - Reporting - The requirements for reporting are contained in Section 200.328 which states unless otherwise approved by OMB, the Federal awarding agency must solicit only the OMB-approved governmentwide data elements for collection of financial information (at time of publication the Federal Financial Report or such future), OMB-approved, governmentwide data elements available from the OMB-designated standards lead. This information must be collected with the frequency required by the terms and conditions of the federal award. Condition - UAMS did not submit the annual Federal Financial Report (FFR) timely. Questioned costs - $0 Context - Out of the population of seven reports required to be submitted for the Head Start program during FY2023, 2 were selected for testing. Our sampling method was not, and was not intended to be, statistically valid. There were 5 attributes tested for each report selected for testing. Effect - UAMS did not submit the annual Federal Financial Report (FFR) timely. Cause - UAMS' processes did not ensure reports were submitted timely. Repeat finding - Yes, 2022-007 Recommendation - We recommend that management design and implement internal controls that will ensure that all required reports are submitted timely. View of Responsible Officials - In order to address the exceptions identified in the audit, UAMS has implemented new processes where the staff member assigned to the Head Start program meets weekly with the Head Start Finance Manager and Director to discuss expenses allocated to the grants, assign tasks to be completed each week, and discuss reporting needs and deadlines. This finding recurred due to UAMS not implementing the new process until after January 2023. The new implemented processes have proven to assist in proper oversight and accurate financial management of the grants and allowed UAMS to meet the last reporting deadline in November 2023.

Finding number: 2022 001 Type of finding: Material weakness in internal control and noncompliance Federal program: Research and Development Cluster ? various Assistance Listing numbers Federal agency: Various Pass through entity: Various Federal award year: July 1, 2021 to June 30, 2022 Compliance Requirement: Cash management Criteria The requirements for cash management are contained in Section 200.305 of Title 2 U.S. Code of Federal Regulations Part 200 (2 CFR 200), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (the Uniform Guidance), the A 102 Common Rule (?_.21), 0MB Circular A 110 (2 CFR section 215.22), Treasury regulations at 31 CFR part 205, program legislation, Federal awarding agency regulations, and the terms and conditions of the award. When entities are funded on a reimbursement basis, program costs must be paid for by entity funds before reimbursement is requested from the Federal Government. Additionally, Section 200.303 of the Uniform Guidance indicates that the nonfederal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. The Uniform Guidance also indicates that these internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? (Green Book) 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 Office of Management and Budget (OMB) has clarified that the references to the Green Book and COSO were only provided as best practices and not requirements. Condition During our test work over the Research and Development Cluster, we selected a sample of expenditures and cash draws/issued invoices to sponsors to verify the expenditures were paid prior to the date of the reimbursement request. We also verified the cash draw was supported by a detail of expenditures that reconciled. For the Research and Development Cluster, we noted 7 expenditures that totaled $4,061 of our sample of 40 expenditures that totaled $95,703 were not paid prior to the reimbursement request. Additionally, we noted 7 draws of our sample of 25 where the draw was over drawn. The total overdraw was $20,298 of the total cash draws tested of $601,919. Additionally, we noted 3 draws were not supported by a detail of expenditures that reconciled. The variance difference was $466. Cause UAMS did not maintain adequate support for cash draws causing unreconciled variances in the draw request detail. Additionally, cash draws were not appropriately reviewed to ensure that the expenditures were paid prior to the reimbursement requests. Effect Failure to properly complete cash draws may prevent UAMS from being in compliance with the requirements set forth by the Uniform Guidance. Questioned costs $463 related to interest on the over draw $466 related to unreconciled variances between the cash draw and the expenditure detail $929 total questioned costs Questioned costs related to the instances where the expenditure was not paid prior to the reimbursement request are not determinable. Statistical Sample The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding A similar finding was reported in prior year audit. Recommendation We recommend that management design and implement internal controls that will ensure that program costs are paid before a request for reimbursement is made. Additionally, we recommend that management keep records of what expenditures make up each draw. View of responsible officials We concur with the finding. The instances where expenditures were not paid prior to the reimbursement request was noted in the prior year audit and was corrected as soon as the finding was communicated to management. The exceptions identified in the current year audit were prior to the control process changes made by management to ensure all expenses are paid before reimbursement is requested. There were no exceptions noted after the date of the change from the prior year audit. During the fiscal year, the grants accounting office experienced a significant turnover in staff and leadership in addition to implementing a new financial system. With the new director and staff in place and completing the implementation of the financial system, we believe adequate controls have been established and are working properly to ensure compliance with cash management regulations.

Finding number: 2022-001 Type of finding: Material weakness in internal control and noncompliance Federal program: Research and Development Cluster – various Assistance Listing numbers Federal agency: Various Pass-through entity: Various Federal award year: July 1, 2021 to June 30, 2022 Compliance Requirement: Cash management Criteria The requirements for cash management are contained in Section 200.305 of Title 2 U.S. Code of Federal Regulations Part 200 (2 CFR 200), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (the Uniform Guidance), the A-102 Common Rule (§_.21), 0MB Circular A-110 (2 CFR section 215.22), Treasury regulations at 31 CFR part 205, program legislation, Federal awarding agency regulations, and the terms and conditions of the award. When entities are funded on a reimbursement basis, program costs must be paid for by entity funds before reimbursement is requested from the Federal Government. Additionally, Section 200.303 of the Uniform Guidance indicates that the nonfederal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. The Uniform Guidance also indicates that these internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” (Green Book) 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 Office of Management and Budget (OMB) has clarified that the references to the Green Book and COSO were only provided as best practices and not requirements. Condition During our test work over the Research and Development Cluster, we selected a sample of expenditures and cash draws/issued invoices to sponsors to verify the expenditures were paid prior to the date of the reimbursement request. We also verified the cash draw was supported by a detail of expenditures that reconciled. For the Research and Development Cluster, we noted 7 expenditures that totaled $4,061 of our sample of 40 expenditures that totaled $95,703 were not paid prior to the reimbursement request. Additionally, we noted 7 draws of our sample of 25 where the draw was over drawn. The total overdraw was $20,298 of the total cash draws tested of $601,919. Additionally, we noted 3 draws were not supported by a detail of expenditures that reconciled. The variance difference was $466. Cause UAMS did not maintain adequate support for cash draws causing unreconciled variances in the draw request detail. Additionally, cash draws were not appropriately reviewed to ensure that the expenditures were paid prior to the reimbursement requests. Effect Failure to properly complete cash draws may prevent UAMS from being in compliance with the requirements set forth by the Uniform Guidance. Questioned costs $463 related to interest on the over draw $466 related to unreconciled variances between the cash draw and the expenditure detail $929 total questioned costs Questioned costs related to the instances where the expenditure was not paid prior to the reimbursement request are not determinable. Statistical Sample The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding A similar finding was reported in prior year audit. Recommendation We recommend that management design and implement internal controls that will ensure that program costs are paid before a request for reimbursement is made. Additionally, we recommend that management keep records of what expenditures make up each draw. View of responsible officials We concur with the finding. The instances where expenditures were not paid prior to the reimbursement request was noted in the prior year audit and was corrected as soon as the finding was communicated to management. The exceptions identified in the current year audit were prior to the control process changes made by management to ensure all expenses are paid before reimbursement is requested. There were no exceptions noted after the date of the change from the prior year audit. During the fiscal year, the grants accounting office experienced a significant turnover in staff and leadership in addition to implementing a new financial system. With the new director and staff in place and completing the implementation of the financial system, we believe adequate controls have been established and are working properly to ensure compliance with cash management regulations.

Finding number: 2022 002 Type of finding: Material weakness in internal control and material noncompliance Federal program title: Research and Development Cluster ? various Assistance Listing numbers Federal agency: Various Pass through entity: Various Federal award year: July 1, 2021 to June 30, 2022 Compliance Requirement: Subrecipient monitoring Criteria The requirements for subrecipient monitoring are contained in Sections 200.330, .331, and .501(h) of Title 2 U.S. Code of Federal Regulations Part 200 (2 CFR 200), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (the Uniform Guidance), 31 USC 7502(f)(2) (Single Audit Act Amendments of 1996), Federal awarding agency regulations, and the terms and conditions of the award. When a pass-through entity (PTE) transfers awards to a subrecipient, the PTE must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. Conditions Found During our testwork over the Research and Development Cluster, we discovered that UAMS did not appropriately monitor subrecipient activities. UAMS is obligated to monitor the activities of subrecipients, including tracking subrecipient audits, requests, and other correspondence related to follow-up of corrective action items. UAMS did not complete these procedures. Cause UAMS did not have the personnel capacity during FY22 to effectively monitor subawards. Effect Failure to properly monitor subrecipients may prevent UAMS from being in compliance with the requirements set forth by the Uniform Guidance. Questioned costs Questioned costs are not determinable. Amounts passed through to subrecipients in FY22 totaled 11,860,890. Statistical Sample Not applicableRepeat Finding A similar finding was not reported in prior year audit. Recommendation We recommend that UAMS ensures the subrecipient monitoring compliance requirements are performed. View of responsible officials We concur with the finding. Due to staffing shortages and the implementation of a new financial system, we were unable to perform certain procedures related to subrecipient monitoring during the fiscal year. Management is hiring a new staff member who will be dedicated to ensure all activities related to subrecipient monitoring are in compliance with federal and program regulations.

Finding number: 2022-002 Type of finding: Material weakness in internal control and material noncompliance Federal program title: Research and Development Cluster – various Assistance Listing numbers Federal agency: Various Pass-through entity: Various Federal award year: July 1, 2021 to June 30, 2022 Compliance Requirement: Subrecipient monitoring Criteria The requirements for subrecipient monitoring are contained in Sections 200.330, .331, and .501(h) of Title 2 U.S. Code of Federal Regulations Part 200 (2 CFR 200), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (the Uniform Guidance), 31 USC 7502(f)(2) (Single Audit Act Amendments of 1996), Federal awarding agency regulations, and the terms and conditions of the award. When a pass-through entity (PTE) transfers awards to a subrecipient, the PTE must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. Conditions Found During our testwork over the Research and Development Cluster, we discovered that UAMS did not appropriately monitor subrecipient activities. UAMS is obligated to monitor the activities of subrecipients, including tracking subrecipient audits, requests, and other correspondence related to follow-up of corrective action items. UAMS did not complete these procedures. Cause UAMS did not have the personnel capacity during FY22 to effectively monitor subawards. Effect Failure to properly monitor subrecipients may prevent UAMS from being in compliance with the requirements set forth by the Uniform Guidance. Questioned costs Questioned costs are not determinable. Amounts passed through to subrecipients in FY22 totaled 11,860,890. Statistical Sample Not applicable Repeat Finding A similar finding was not reported in prior year audit. Recommendation We recommend that UAMS ensures the subrecipient monitoring compliance requirements are performed. View of responsible officials We concur with the finding. Due to staffing shortages and the implementation of a new financial system, we were unable to perform certain procedures related to subrecipient monitoring during the fiscal year. Management is hiring a new staff member who will be dedicated to ensure all activities related to subrecipient monitoring are in compliance with federal and program regulations.

Finding number: 2022 003 Type of finding: Material Weakness in internal control Federal program title: Research and Development Cluster ? various Assistance Listing numbers Federal agency: Various Pass through entity: Various Federal award year: July 1, 2021 to June 30, 2022 Compliance Requirement: Other ? lack of management review procedures Criteria Per Federal Regulations Part 200 (2 CFR 200), Uniform Administrative Requirements, Cost principles, and Audit Requirements for Federal Awards (the Uniform Guidance), management must maintain several review procedures to ensure the grant program is operating as expected and all control and compliance procedures are being followed. Conditions Found The engagement team evaluated numerous internal control deficiencies that were identified during our audit procedures. These deficiencies arose due to a lack of management review of the compliance and control requirements for the program. This material weakness represents an overarching deficiency at UAMS of lacking management review procedures. Cause During FY22, UAMS was working on the transition of enterprise systems away from SAP to Workday. This caused numerous constraints on the UAMS team and caused some controls, such as management review, to be overlooked. The UAMS team lacked the capacity to appropriately review all aspects of their processes. Effect Failure to properly perform management review of compliance requirements may prevent UAMS from being in compliance with the requirements set forth by the Uniform Guidance.. Known questioned costs None Statistical Sample Not applicable Repeat Finding A similar finding was not reported in prior year audit. Recommendation We recommend that management perform more detailed review of all compliance requirements to ensure proper controls are in place and operating effectively and to help ensure compliance with program compliance requirements. View of responsible officials During the fiscal year, the grants accounting office experienced a significant turnover in staff and leadership in addition to implementing a new financial system. With the new director and staff in place and completing the implementation of the financial system, we believe adequate controls have been established and are working properly to ensure compliance with federal and program regulations.

Findings and Questioned Costs Relating to Federal Awards Finding number: 2022-003 Type of finding: Material Weakness in internal control Federal program title: Research and Development Cluster – various Assistance Listing numbers Federal agency: Various Pass-through entity: Various Federal award year: July 1, 2021 to June 30, 2022 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles and Period of Performance Criteria Per Federal Regulations Part 200 (2 CFR 200), Uniform Administrative Requirements, Cost principles, and Audit Requirements for Federal Awards (the Uniform Guidance), management must maintain several review procedures to ensure the grant program is operating as expected and all control and compliance procedures are being followed. Conditions Found The engagement team evaluated two internal control deficiencies that were identified during our audit procedures. These deficiencies arose due to a lack of management review of the compliance and control requirements for the program related to allowable costs – facilities and administration charges and period of performance. Cause During FY22, UAMS was working on the transition of enterprise systems away from SAP to Workday. This caused numerous constraints on the UAMS team and caused some controls, such as management review, to be overlooked. The UAMS team lacked the capacity to appropriately review all aspects of their processes related to allowable costs – facilities and administration charges and period of performance. Effect Failure to properly perform management review of compliance requirements may prevent UAMS from being in compliance with the requirements set forth by the Uniform Guidance. Known questioned costs None Statistical Sample Not applicable Repeat Finding A similar finding was not reported in prior year audit. Recommendation We recommend that management perform detailed review of all compliance requirements to ensure proper controls are in place and operating effectively and to help ensure compliance with program compliance requirements. View of responsible officials During the fiscal year, the grants accounting office experienced a significant turnover in staff and leadership in addition to implementing a new financial system. With the new director and staff in place and completing the implementation of the financial system, we believe adequate controls have been established and are working properly to ensure compliance with federal and program regulations.

Finding number: 2022 004 Type of finding: Material weakness in internal control and material noncompliance Federal program title: Research and Development Cluster ? various Assistance Listing numbers Federal agency: Various Pass through entity: Various Federal award year: July 1, 2021 to June 30, 2022 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Criteria Per Federal Regulations Part 200 (2 CFR 200), Uniform Administrative Requirements, Cost principles, and Audit Requirements for Federal Awards (the Uniform Guidance), costs must be adequately documented. Conditions Found We selected a sample of 40 expenditures totaling $121,033 to test activities allowed or unallowed and allowable costs/cost principles of the total population of $11,464,188. We noted 2 samples totaling $512 where adequate documentation to support the expenditure was not maintained, and therefore were considered unallowable. Cause UAMS did not maintain adequate support for each expenditure. Effect Failure to properly maintain adequate support for each expenditure may prevent UAMS from being in compliance with the requirements set forth by the Uniform Guidance. Known questioned costs $512 Statistical Sample The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding A similar finding was not reported in prior year audit. Recommendation We recommend that management design and implement internal controls that will ensure that all required support to adequately support expenditures is maintained. View of responsible officials We concur with the finding. The two exceptions noted were both unusual circumstances. With the additional staff and implementation of the new financial system, we believe established controls will ensure all expenditures are adequately supported and supporting documents are maintained.

Findings and Questioned Costs Relating to Federal Awards Finding number: 2022-004 Type of finding: Material weakness in internal control and material noncompliance Federal program title: Research and Development Cluster – various Assistance Listing numbers Federal agency: Various Pass-through entity: Various Federal award year: July 1, 2021 to June 30, 2022 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Criteria Per Federal Regulations Part 200 (2 CFR 200), Uniform Administrative Requirements, Cost principles, and Audit Requirements for Federal Awards (the Uniform Guidance), costs must be adequately documented. Conditions Found We selected a sample of 40 expenditures totaling $121,033 to test activities allowed or unallowed and allowable costs/cost principles of the total population of $11,464,188. We noted 2 samples totaling $512 where adequate documentation to support the expenditure was not maintained, and therefore were considered unallowable. Cause UAMS did not maintain adequate support for each expenditure. Effect Failure to properly maintain adequate support for each expenditure may prevent UAMS from being in compliance with the requirements set forth by the Uniform Guidance. Known questioned costs $512 Statistical Sample The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding A similar finding was not reported in prior year audit. Recommendation We recommend that management design and implement internal controls that will ensure that all required support to adequately support expenditures is maintained. View of responsible officials We concur with the finding. The two exceptions noted were both unusual circumstances. With the additional staff and implementation of the new financial system, we believe established controls will ensure all expenditures are adequately supported and supporting documents are maintained.

Finding number: 2022 005 Type of finding: Material weakness in internal control and noncompliance Federal program title: COVID-19 - HRSA COVID-19 Claims Reimbursement for the Uninsured Program and the Covid-19 Coverage Assistance Fund, Assistance Listing No. 93.461 Federal agency: U.S. Department of Health and Human Services Pass through entity: Not applicable Federal award year: July 1, 2021 to June 30, 2022 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Criteria Charges to the HRSA COVID-19 Uninsured Program must adhere to the applicable terms and conditions of the award. As described in the terms and conditions of the HRSA COVID-19 Uninsured Program federal award, services not covered by traditional Medicare will not be covered under this program and services for any treatment without a COVID-19 primary diagnosis are excluded, except for 1) pregnancy when the COVID-19 diagnosis code may be listed as secondary; 2) hospice services; and 3) outpatient prescription drugs. Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and the terms and conditions of the federal award. Conditions Found We selected a sample of 60 patient samples that had claims and payments from HRSA totaling $1,311,291. We noted 3 patients from our sample that had claims and payments from HRSA totaling $7,615 for which services for treatment did not meet the COVID-19 primary diagnosis criteria, and therefore were considered unallowable activities. Additionally, UAMS did not have adequate internal controls to ensure accurate diagnosis codes were documented for the non-COVID-19 related services provided. Cause In discussing these conditions with UAMS, they stated that claims were not appropriately allocated between reimbursable COVID-19 tests and non-reimbursable visits using a non-COVID-19 primary diagnosis code and these claims were not effectively reviewed prior to submission to HRSA. Effect Failure to properly allocate services and use the proper diagnosis codes could result in unallowable activities under the HRSA COVID-19 Uninsured Program. Known questioned costs $7,615 Statistical Sample The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding A similar finding was reported in prior year audit. Recommendation We recommend that management review its current process for entering and reviewing diagnosis codes to ensure proper diagnosis codes are documented for all services in accordance with the federal award programs terms and conditions. View of responsible officials We concur with the finding. Fiscal year 2021 was the first time UAMS received funds for patient reimbursements through a Federal program that was required to be reported on the SEFA. The fiscal year 2021 expenditures were audited during fiscal year 2023, at the same time fiscal year 2022 expenditures were audited. The same exception was noted across both years and reported to management after the close of fiscal year 2022. The HRSA program ended and UAMS is no longer billing for these services. The charges and billing for the HRSA program was a very unique set of circumstances due to the pandemic. In the future, if such a program were available that required a review of diagnosis against a certain set of treatment and diagnostic charges, further program development of the IT systems will be put into place or a manual review will be developed and implemented.

Findings and Questioned Costs Relating to Federal Awards Finding number: 2022-005 Type of finding: Material weakness in internal control and noncompliance Federal program title: COVID-19 - HRSA COVID-19 Claims Reimbursement for the Uninsured Program and the Covid-19 Coverage Assistance Fund, Assistance Listing No. 93.461 Federal agency: U.S. Department of Health and Human Services Pass-through entity: Not applicable Federal award year: July 1, 2021 to June 30, 2022 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Criteria Charges to the HRSA COVID-19 Uninsured Program must adhere to the applicable terms and conditions of the award. As described in the terms and conditions of the HRSA COVID-19 Uninsured Program federal award, services not covered by traditional Medicare will not be covered under this program and services for any treatment without a COVID-19 primary diagnosis are excluded, except for 1) pregnancy when the COVID-19 diagnosis code may be listed as secondary; 2) hospice services; and 3) outpatient prescription drugs. Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and the terms and conditions of the federal award. Conditions Found We selected a sample of 60 patient samples that had claims and payments from HRSA totaling $1,311,291. We noted 3 patients from our sample that had claims and payments from HRSA totaling $7,615 for which services for treatment did not meet the COVID-19 primary diagnosis criteria, and therefore were considered unallowable activities. Additionally, UAMS did not have adequate internal controls to ensure accurate diagnosis codes were documented for the non-COVID-19 related services provided. Cause In discussing these conditions with UAMS, they stated that claims were not appropriately allocated between reimbursable COVID-19 tests and non-reimbursable visits using a non-COVID-19 primary diagnosis code and these claims were not effectively reviewed prior to submission to HRSA. Effect Failure to properly allocate services and use the proper diagnosis codes could result in unallowable activities under the HRSA COVID-19 Uninsured Program. Known questioned costs $7,615 Statistical Sample The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding A similar finding was reported in prior year audit. Recommendation We recommend that management review its current process for entering and reviewing diagnosis codes to ensure proper diagnosis codes are documented for all services in accordance with the federal award programs terms and conditions. View of responsible officials We concur with the finding. Fiscal year 2021 was the first time UAMS received funds for patient reimbursements through a Federal program that was required to be reported on the SEFA. The fiscal year 2021 expenditures were audited during fiscal year 2023, at the same time fiscal year 2022 expenditures were audited. The same exception was noted across both years and reported to management after the close of fiscal year 2022. The HRSA program ended and UAMS is no longer billing for these services. The charges and billing for the HRSA program was a very unique set of circumstances due to the pandemic. In the future, if such a program were available that required a review of diagnosis against a certain set of treatment and diagnostic charges, further program development of the IT systems will be put into place or a manual review will be developed and implemented.

Finding number: 2022 006 Type of finding: Material weakness in internal control and material noncompliance Federal program: Medical Student Education, Assistance Listing No. 93.680 Federal agency: US Department of Health and Human Services Pass through entity: Not applicable Federal award year: July 1, 2021 to June 30, 2022 Compliance Requirement: Cash management Criteria The requirements for cash management are contained in Section 200.305 of Title 2 U.S. Code of Federal Regulations Part 200 (2 CFR 200), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (the Uniform Guidance), the A 102 Common Rule (?_.21), 0MB Circular A 110 (2 CFR section 215.22), Treasury regulations at 31 CFR part 205, program legislation, Federal awarding agency regulations, and the terms and conditions of the award. When entities are funded on a reimbursement basis, program costs must be paid for by entity funds before reimbursement is requested from the Federal Government. Additionally, Section 200.303 of the Uniform Guidance indicates that the nonfederal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. The Uniform Guidance also indicates that these internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? (Green Book) 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 Office of Management and Budget (OMB) has clarified that the references to the Green Book and COSO were only provided as best practices and not requirements. Condition During our test work over the Medical Student Education Program, we selected a sample of expenditures and cash draws/issued invoices to sponsors to verify the expenditures were paid prior to the date of the reimbursement request. We also verified the cash draw was supported by a detail of expenditures that reconciled. For the Medical Student Education Program, we noted 3 expenditures totaling $105,643 of our sample of 40 expenditures totaling $556,930 were not paid prior to the reimbursement request. Additionally, we noted 2 draws of our sample of 13 where the draw was over drawn. The total overdraw was $69,800 of the total cash draws tested of $3,945,157. Additionally, we noted 9 draws were not supported by a detail of expenditures that reconciled. The variance difference was $48,745. Cause UAMS did not maintain adequate support for cash draws causing unreconciled variances in the draw request detail. Additionally, cash draws were not appropriately reviewed to ensure that the expenditures were paid prior to the reimbursement requests. Effect Failure to properly complete cash draws may prevent UAMS from being in compliance with the requirements set forth by the Uniform Guidance. Questioned costs $246 related to interest on the over draw $48,745 related to unreconciled variances between the cash draw and the expenditure detail $48,991 total questioned costs Questioned costs related to the instances where the expenditure was not paid prior to the reimbursement request are not determinable. Statistical Sample The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding A similar finding was not reported in prior year audit. Recommendation We recommend that management design and implement internal controls that will ensure that program costs are paid before a request for reimbursement is made. Additionally, we recommend that management keep records of what expenditures make up each draw. View of responsible officials We concur with the finding. The instances where expenditures were not paid prior to the reimbursement request was noted in the prior year audit and was corrected as soon as the finding was communicated to management. The exceptions identified in the current year audit were prior to the control process changes made by management to ensure all expenses are paid before reimbursement is requested. There were no exceptions noted after the date of the change from the prior year audit. During the fiscal year, the grants accounting office experienced a significant turnover in staff and leadership in addition to implementing a new financial system. With the new director and staff in place and completing the implementation of the financial system, we believe adequate controls have been established and are working properly to ensure compliance with cash management regulations.

Findings and Questioned Costs Relating to Federal Awards Finding number: 2022-006 Type of finding: Material weakness in internal control and material noncompliance Federal program: Medical Student Education, Assistance Listing No. 93.680 Federal agency: US Department of Health and Human Services Pass-through entity: Not applicable Federal award year: July 1, 2021 to June 30, 2022 Compliance Requirement: Cash management Criteria The requirements for cash management are contained in Section 200.305 of Title 2 U.S. Code of Federal Regulations Part 200 (2 CFR 200), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (the Uniform Guidance), the A-102 Common Rule (§_.21), 0MB Circular A-110 (2 CFR section 215.22), Treasury regulations at 31 CFR part 205, program legislation, Federal awarding agency regulations, and the terms and conditions of the award. When entities are funded on a reimbursement basis, program costs must be paid for by entity funds before reimbursement is requested from the Federal Government. Additionally, Section 200.303 of the Uniform Guidance indicates that the nonfederal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. The Uniform Guidance also indicates that these internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” (Green Book) 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 Office of Management and Budget (OMB) has clarified that the references to the Green Book and COSO were only provided as best practices and not requirements. Condition During our test work over the Medical Student Education Program, we selected a sample of expenditures and cash draws/issued invoices to sponsors to verify the expenditures were paid prior to the date of the reimbursement request. We also verified the cash draw was supported by a detail of expenditures that reconciled. For the Medical Student Education Program, we noted 3 expenditures totaling $105,643 of our sample of 40 expenditures totaling $556,930 were not paid prior to the reimbursement request. Additionally, we noted 2 draws of our sample of 13 where the draw was over drawn. The total overdraw was $69,800 of the total cash draws tested of $3,945,157. Additionally, we noted 9 draws were not supported by a detail of expenditures that reconciled. The variance difference was $48,745. Cause UAMS did not maintain adequate support for cash draws causing unreconciled variances in the draw request detail. Additionally, cash draws were not appropriately reviewed to ensure that the expenditures were paid prior to the reimbursement requests. Effect Failure to properly complete cash draws may prevent UAMS from being in compliance with the requirements set forth by the Uniform Guidance. Questioned costs $246 related to interest on the over draw $48,745 related to unreconciled variances between the cash draw and the expenditure detail $48,991 total questioned costs Questioned costs related to the instances where the expenditure was not paid prior to the reimbursement request are not determinable. Statistical Sample The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding A similar finding was not reported in prior year audit. Recommendation We recommend that management design and implement internal controls that will ensure that program costs are paid before a request for reimbursement is made. Additionally, we recommend that management keep records of what expenditures make up each draw. View of responsible officials We concur with the finding. The instances where expenditures were not paid prior to the reimbursement request was noted in the prior year audit and was corrected as soon as the finding was communicated to management. The exceptions identified in the current year audit were prior to the control process changes made by management to ensure all expenses are paid before reimbursement is requested. There were no exceptions noted after the date of the change from the prior year audit. During the fiscal year, the grants accounting office experienced a significant turnover in staff and leadership in addition to implementing a new financial system. With the new director and staff in place and completing the implementation of the financial system, we believe adequate controls have been established and are working properly to ensure compliance with cash management regulations.

Finding number: 2022 007 Type of finding: Significant deficiency in internal control and material noncompliance Federal program: Head Start Cluster, Assistance Listing No. 93.600 Federal agency: US Department of Health and Human Services Pass through entity: Not applicable Federal award year: July 1, 2021 to June 30, 2022 Compliance Requirement: Reporting Criteria The requirements for reporting are contained in Section 200.328 which states unless otherwise approved by OMB, the Federal awarding agency must solicit only the OMB-approved governmentwide data elements for collection of financial information (at time of publication the Federal Financial Report or such future, OMB-approved, governmentwide data elements available from the OMB-designated standards lead. This information must be collected with the frequency required by the terms and conditions of the Federal award. Condition During our test work over the Head Start program, we identified the annual Federal Financial Report (FFR) is due 90 days after the budget end period. The budget end period for project id #G2-54027 was October 31, 2021. However, the annual FFR was not submitted until January 17, 2023. Additionally, the annual Real Property Status Report (Form SF-429) for all Head Start grants is due the same time the annual FFR is submitted. The budget period end dates are October 31, 2021, resulting in a due date of January 30, 2022 for the SF-429 report. However, the report was not submitted by UAMS until January 30, 2023. Cause There were multiple accounts at UAMS that required reconciliation, resulting in an untimely process and a delayed submission of the Annual FFR. UAMS failed to submit the Real Property Status Report until requested by KPMG. Effect Failure to properly submit timely reporting submissions may prevent UAMS from being in compliance with the requirements set forth by the Uniform Guidance. Questioned costs None Statistical Sample The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding A similar finding was not reported in prior year audit. Recommendation We recommend that management design and implement internal controls that will ensure that all required reports are submitted timely. View of responsible officials We concur with the finding. The Head Start program has a dedicated financial manager position responsible for the daily operations and oversee the activities of the various grants. The position was vacant for a significant part of fiscal year 2022. Once the position was filled, the grants accounting team worked with the new financial manager to reconcile the various grants under the Head Start program. The reconciliation process took longer than anticipated causing the late submission of the FFR. The program financial manager was not aware that the SF-429 report was due until it was requested by the auditors. Management plans to hire an additional grants accounting staff member who will be dedicated to monitoring the head start program for compliance with Federal and program regulations and ensure reports are completed and filed timely.

Findings and Questioned Costs Relating to Federal Awards Finding number: 2022-007 Type of finding: Significant deficiency in internal control and material noncompliance Federal program: Head Start Cluster, Assistance Listing No. 93.600 Federal agency: US Department of Health and Human Services Pass-through entity: Not applicable Federal award year: July 1, 2021 to June 30, 2022 Compliance Requirement: Reporting Criteria The requirements for reporting are contained in Section 200.328 which states unless otherwise approved by OMB, the Federal awarding agency must solicit only the OMB-approved governmentwide data elements for collection of financial information (at time of publication the Federal Financial Report or such future, OMB-approved, governmentwide data elements available from the OMB-designated standards lead. This information must be collected with the frequency required by the terms and conditions of the Federal award. Condition During our test work over the Head Start program, we identified the annual Federal Financial Report (FFR) is due 90 days after the budget end period. The budget end period for project id #G2-54027 was October 31, 2021. However, the annual FFR was not submitted until January 17, 2023. Additionally, the annual Real Property Status Report (Form SF-429) for all Head Start grants is due the same time the annual FFR is submitted. The budget period end dates are October 31, 2021, resulting in a due date of January 30, 2022 for the SF-429 report. However, the report was not submitted by UAMS until January 30, 2023. Cause There were multiple accounts at UAMS that required reconciliation, resulting in an untimely process and a delayed submission of the Annual FFR. UAMS failed to submit the Real Property Status Report until requested by KPMG. Effect Failure to properly submit timely reporting submissions may prevent UAMS from being in compliance with the requirements set forth by the Uniform Guidance. Questioned costs None Statistical Sample The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding A similar finding was not reported in prior year audit. Recommendation We recommend that management design and implement internal controls that will ensure that all required reports are submitted timely. View of responsible officials We concur with the finding. The Head Start program has a dedicated financial manager position responsible for the daily operations and oversee the activities of the various grants. The position was vacant for a significant part of fiscal year 2022. Once the position was filled, the grants accounting team worked with the new financial manager to reconcile the various grants under the Head Start program. The reconciliation process took longer than anticipated causing the late submission of the FFR. The program financial manager was not aware that the SF-429 report was due until it was requested by the auditors. Management plans to hire an additional grants accounting staff member who will be dedicated to monitoring the head start program for compliance with Federal and program regulations and ensure reports are completed and filed timely.

Findings and Questioned Costs Relating to Federal Awards Finding number: 2022-008 Type of finding: Significant deficiency in internal control Federal program: COVID-19 Education Stabilization Fund, Higher Education Emergency Relief Fund, Assistance Living No. 84.425F Federal agency: US Department of Education Pass-through entity: Not applicable Federal award year: May 7, 2020 to June 30, 2023 Compliance Requirement: Procurement and Suspension and Debarment Criteria UAMS follows the State of Arkansas purchasing policies and procedures. Competitive Bid Quote Purchases ($20,000 to $75,000) require the requestor to price the good/service being purchased with at least three vendor quotes. Amounts less than $20,000 require one vendor quote. 2 CFR 200.303 requires non-Federal entities receiving Federal awards to 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. Effective internal controls should include procedures to comply with the State of Arkansas purchasing policies and procedures. Condition During our test work over the Education Stabilization Fund, Higher Education Emergency Relief Fund program, we identified one of 17 procurements where only one vendor quote was obtained when the purchase amount was approximately $21,400. Cause The original quote was less than $20,000 resulting in the requestor only obtaining the one quote as allowed per the State of Arkansas procurement policies. Upon final invoicing for the service, the price exceeded $20,000 and the requestor did not go back and amend the documentation with a sole source form explaining the circumstances and obtaining appropriate approvals for the increased price. Effect Failure to properly document procurements could result in noncompliance with the State of Arkansas procurement policies and procedures and/or the use of an inappropriate vendor. Questioned costs None Statistical Sample The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding A similar finding was not reported in prior year audit. Recommendation We recommend that management design and implement internal controls that will ensure the State of Arkansas procurement policies and procedures are adhered to in the event the original vendor cost increases resulting in the procurement requiring additional justification/documentation. View of responsible officials In April 2022, a restructure of the procurement team was completed, and a new APO was appointed. In July 2022, UAMS implemented a new financial system and updated procedures and processes around procurement contracting. The new system allows all documents to remain as attachments in the system and available to reviewers and approvers at each step in the procurement process. Staff dedicated to procurement contracting have been trained to ensure all required documents are provide in accordance with State procurement laws.

Finding number: 2022 001 Type of finding: Material weakness in internal control and noncompliance Federal program: Research and Development Cluster ? various Assistance Listing numbers Federal agency: Various Pass through entity: Various Federal award year: July 1, 2021 to June 30, 2022 Compliance Requirement: Cash management Criteria The requirements for cash management are contained in Section 200.305 of Title 2 U.S. Code of Federal Regulations Part 200 (2 CFR 200), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (the Uniform Guidance), the A 102 Common Rule (?_.21), 0MB Circular A 110 (2 CFR section 215.22), Treasury regulations at 31 CFR part 205, program legislation, Federal awarding agency regulations, and the terms and conditions of the award. When entities are funded on a reimbursement basis, program costs must be paid for by entity funds before reimbursement is requested from the Federal Government. Additionally, Section 200.303 of the Uniform Guidance indicates that the nonfederal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. The Uniform Guidance also indicates that these internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? (Green Book) 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 Office of Management and Budget (OMB) has clarified that the references to the Green Book and COSO were only provided as best practices and not requirements. Condition During our test work over the Research and Development Cluster, we selected a sample of expenditures and cash draws/issued invoices to sponsors to verify the expenditures were paid prior to the date of the reimbursement request. We also verified the cash draw was supported by a detail of expenditures that reconciled. For the Research and Development Cluster, we noted 7 expenditures that totaled $4,061 of our sample of 40 expenditures that totaled $95,703 were not paid prior to the reimbursement request. Additionally, we noted 7 draws of our sample of 25 where the draw was over drawn. The total overdraw was $20,298 of the total cash draws tested of $601,919. Additionally, we noted 3 draws were not supported by a detail of expenditures that reconciled. The variance difference was $466. Cause UAMS did not maintain adequate support for cash draws causing unreconciled variances in the draw request detail. Additionally, cash draws were not appropriately reviewed to ensure that the expenditures were paid prior to the reimbursement requests. Effect Failure to properly complete cash draws may prevent UAMS from being in compliance with the requirements set forth by the Uniform Guidance. Questioned costs $463 related to interest on the over draw $466 related to unreconciled variances between the cash draw and the expenditure detail $929 total questioned costs Questioned costs related to the instances where the expenditure was not paid prior to the reimbursement request are not determinable. Statistical Sample The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding A similar finding was reported in prior year audit. Recommendation We recommend that management design and implement internal controls that will ensure that program costs are paid before a request for reimbursement is made. Additionally, we recommend that management keep records of what expenditures make up each draw. View of responsible officials We concur with the finding. The instances where expenditures were not paid prior to the reimbursement request was noted in the prior year audit and was corrected as soon as the finding was communicated to management. The exceptions identified in the current year audit were prior to the control process changes made by management to ensure all expenses are paid before reimbursement is requested. There were no exceptions noted after the date of the change from the prior year audit. During the fiscal year, the grants accounting office experienced a significant turnover in staff and leadership in addition to implementing a new financial system. With the new director and staff in place and completing the implementation of the financial system, we believe adequate controls have been established and are working properly to ensure compliance with cash management regulations.

Finding number: 2022-001 Type of finding: Material weakness in internal control and noncompliance Federal program: Research and Development Cluster – various Assistance Listing numbers Federal agency: Various Pass-through entity: Various Federal award year: July 1, 2021 to June 30, 2022 Compliance Requirement: Cash management Criteria The requirements for cash management are contained in Section 200.305 of Title 2 U.S. Code of Federal Regulations Part 200 (2 CFR 200), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (the Uniform Guidance), the A-102 Common Rule (§_.21), 0MB Circular A-110 (2 CFR section 215.22), Treasury regulations at 31 CFR part 205, program legislation, Federal awarding agency regulations, and the terms and conditions of the award. When entities are funded on a reimbursement basis, program costs must be paid for by entity funds before reimbursement is requested from the Federal Government. Additionally, Section 200.303 of the Uniform Guidance indicates that the nonfederal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. The Uniform Guidance also indicates that these internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” (Green Book) 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 Office of Management and Budget (OMB) has clarified that the references to the Green Book and COSO were only provided as best practices and not requirements. Condition During our test work over the Research and Development Cluster, we selected a sample of expenditures and cash draws/issued invoices to sponsors to verify the expenditures were paid prior to the date of the reimbursement request. We also verified the cash draw was supported by a detail of expenditures that reconciled. For the Research and Development Cluster, we noted 7 expenditures that totaled $4,061 of our sample of 40 expenditures that totaled $95,703 were not paid prior to the reimbursement request. Additionally, we noted 7 draws of our sample of 25 where the draw was over drawn. The total overdraw was $20,298 of the total cash draws tested of $601,919. Additionally, we noted 3 draws were not supported by a detail of expenditures that reconciled. The variance difference was $466. Cause UAMS did not maintain adequate support for cash draws causing unreconciled variances in the draw request detail. Additionally, cash draws were not appropriately reviewed to ensure that the expenditures were paid prior to the reimbursement requests. Effect Failure to properly complete cash draws may prevent UAMS from being in compliance with the requirements set forth by the Uniform Guidance. Questioned costs $463 related to interest on the over draw $466 related to unreconciled variances between the cash draw and the expenditure detail $929 total questioned costs Questioned costs related to the instances where the expenditure was not paid prior to the reimbursement request are not determinable. Statistical Sample The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding A similar finding was reported in prior year audit. Recommendation We recommend that management design and implement internal controls that will ensure that program costs are paid before a request for reimbursement is made. Additionally, we recommend that management keep records of what expenditures make up each draw. View of responsible officials We concur with the finding. The instances where expenditures were not paid prior to the reimbursement request was noted in the prior year audit and was corrected as soon as the finding was communicated to management. The exceptions identified in the current year audit were prior to the control process changes made by management to ensure all expenses are paid before reimbursement is requested. There were no exceptions noted after the date of the change from the prior year audit. During the fiscal year, the grants accounting office experienced a significant turnover in staff and leadership in addition to implementing a new financial system. With the new director and staff in place and completing the implementation of the financial system, we believe adequate controls have been established and are working properly to ensure compliance with cash management regulations.

Finding number: 2022 002 Type of finding: Material weakness in internal control and material noncompliance Federal program title: Research and Development Cluster ? various Assistance Listing numbers Federal agency: Various Pass through entity: Various Federal award year: July 1, 2021 to June 30, 2022 Compliance Requirement: Subrecipient monitoring Criteria The requirements for subrecipient monitoring are contained in Sections 200.330, .331, and .501(h) of Title 2 U.S. Code of Federal Regulations Part 200 (2 CFR 200), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (the Uniform Guidance), 31 USC 7502(f)(2) (Single Audit Act Amendments of 1996), Federal awarding agency regulations, and the terms and conditions of the award. When a pass-through entity (PTE) transfers awards to a subrecipient, the PTE must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. Conditions Found During our testwork over the Research and Development Cluster, we discovered that UAMS did not appropriately monitor subrecipient activities. UAMS is obligated to monitor the activities of subrecipients, including tracking subrecipient audits, requests, and other correspondence related to follow-up of corrective action items. UAMS did not complete these procedures. Cause UAMS did not have the personnel capacity during FY22 to effectively monitor subawards. Effect Failure to properly monitor subrecipients may prevent UAMS from being in compliance with the requirements set forth by the Uniform Guidance. Questioned costs Questioned costs are not determinable. Amounts passed through to subrecipients in FY22 totaled 11,860,890. Statistical Sample Not applicableRepeat Finding A similar finding was not reported in prior year audit. Recommendation We recommend that UAMS ensures the subrecipient monitoring compliance requirements are performed. View of responsible officials We concur with the finding. Due to staffing shortages and the implementation of a new financial system, we were unable to perform certain procedures related to subrecipient monitoring during the fiscal year. Management is hiring a new staff member who will be dedicated to ensure all activities related to subrecipient monitoring are in compliance with federal and program regulations.

Finding number: 2022-002 Type of finding: Material weakness in internal control and material noncompliance Federal program title: Research and Development Cluster – various Assistance Listing numbers Federal agency: Various Pass-through entity: Various Federal award year: July 1, 2021 to June 30, 2022 Compliance Requirement: Subrecipient monitoring Criteria The requirements for subrecipient monitoring are contained in Sections 200.330, .331, and .501(h) of Title 2 U.S. Code of Federal Regulations Part 200 (2 CFR 200), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (the Uniform Guidance), 31 USC 7502(f)(2) (Single Audit Act Amendments of 1996), Federal awarding agency regulations, and the terms and conditions of the award. When a pass-through entity (PTE) transfers awards to a subrecipient, the PTE must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, complies with the terms and conditions of the subaward, and achieves performance goals. Conditions Found During our testwork over the Research and Development Cluster, we discovered that UAMS did not appropriately monitor subrecipient activities. UAMS is obligated to monitor the activities of subrecipients, including tracking subrecipient audits, requests, and other correspondence related to follow-up of corrective action items. UAMS did not complete these procedures. Cause UAMS did not have the personnel capacity during FY22 to effectively monitor subawards. Effect Failure to properly monitor subrecipients may prevent UAMS from being in compliance with the requirements set forth by the Uniform Guidance. Questioned costs Questioned costs are not determinable. Amounts passed through to subrecipients in FY22 totaled 11,860,890. Statistical Sample Not applicable Repeat Finding A similar finding was not reported in prior year audit. Recommendation We recommend that UAMS ensures the subrecipient monitoring compliance requirements are performed. View of responsible officials We concur with the finding. Due to staffing shortages and the implementation of a new financial system, we were unable to perform certain procedures related to subrecipient monitoring during the fiscal year. Management is hiring a new staff member who will be dedicated to ensure all activities related to subrecipient monitoring are in compliance with federal and program regulations.

Finding number: 2022 003 Type of finding: Material Weakness in internal control Federal program title: Research and Development Cluster ? various Assistance Listing numbers Federal agency: Various Pass through entity: Various Federal award year: July 1, 2021 to June 30, 2022 Compliance Requirement: Other ? lack of management review procedures Criteria Per Federal Regulations Part 200 (2 CFR 200), Uniform Administrative Requirements, Cost principles, and Audit Requirements for Federal Awards (the Uniform Guidance), management must maintain several review procedures to ensure the grant program is operating as expected and all control and compliance procedures are being followed. Conditions Found The engagement team evaluated numerous internal control deficiencies that were identified during our audit procedures. These deficiencies arose due to a lack of management review of the compliance and control requirements for the program. This material weakness represents an overarching deficiency at UAMS of lacking management review procedures. Cause During FY22, UAMS was working on the transition of enterprise systems away from SAP to Workday. This caused numerous constraints on the UAMS team and caused some controls, such as management review, to be overlooked. The UAMS team lacked the capacity to appropriately review all aspects of their processes. Effect Failure to properly perform management review of compliance requirements may prevent UAMS from being in compliance with the requirements set forth by the Uniform Guidance.. Known questioned costs None Statistical Sample Not applicable Repeat Finding A similar finding was not reported in prior year audit. Recommendation We recommend that management perform more detailed review of all compliance requirements to ensure proper controls are in place and operating effectively and to help ensure compliance with program compliance requirements. View of responsible officials During the fiscal year, the grants accounting office experienced a significant turnover in staff and leadership in addition to implementing a new financial system. With the new director and staff in place and completing the implementation of the financial system, we believe adequate controls have been established and are working properly to ensure compliance with federal and program regulations.

Findings and Questioned Costs Relating to Federal Awards Finding number: 2022-003 Type of finding: Material Weakness in internal control Federal program title: Research and Development Cluster – various Assistance Listing numbers Federal agency: Various Pass-through entity: Various Federal award year: July 1, 2021 to June 30, 2022 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles and Period of Performance Criteria Per Federal Regulations Part 200 (2 CFR 200), Uniform Administrative Requirements, Cost principles, and Audit Requirements for Federal Awards (the Uniform Guidance), management must maintain several review procedures to ensure the grant program is operating as expected and all control and compliance procedures are being followed. Conditions Found The engagement team evaluated two internal control deficiencies that were identified during our audit procedures. These deficiencies arose due to a lack of management review of the compliance and control requirements for the program related to allowable costs – facilities and administration charges and period of performance. Cause During FY22, UAMS was working on the transition of enterprise systems away from SAP to Workday. This caused numerous constraints on the UAMS team and caused some controls, such as management review, to be overlooked. The UAMS team lacked the capacity to appropriately review all aspects of their processes related to allowable costs – facilities and administration charges and period of performance. Effect Failure to properly perform management review of compliance requirements may prevent UAMS from being in compliance with the requirements set forth by the Uniform Guidance. Known questioned costs None Statistical Sample Not applicable Repeat Finding A similar finding was not reported in prior year audit. Recommendation We recommend that management perform detailed review of all compliance requirements to ensure proper controls are in place and operating effectively and to help ensure compliance with program compliance requirements. View of responsible officials During the fiscal year, the grants accounting office experienced a significant turnover in staff and leadership in addition to implementing a new financial system. With the new director and staff in place and completing the implementation of the financial system, we believe adequate controls have been established and are working properly to ensure compliance with federal and program regulations.

Finding number: 2022 004 Type of finding: Material weakness in internal control and material noncompliance Federal program title: Research and Development Cluster ? various Assistance Listing numbers Federal agency: Various Pass through entity: Various Federal award year: July 1, 2021 to June 30, 2022 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Criteria Per Federal Regulations Part 200 (2 CFR 200), Uniform Administrative Requirements, Cost principles, and Audit Requirements for Federal Awards (the Uniform Guidance), costs must be adequately documented. Conditions Found We selected a sample of 40 expenditures totaling $121,033 to test activities allowed or unallowed and allowable costs/cost principles of the total population of $11,464,188. We noted 2 samples totaling $512 where adequate documentation to support the expenditure was not maintained, and therefore were considered unallowable. Cause UAMS did not maintain adequate support for each expenditure. Effect Failure to properly maintain adequate support for each expenditure may prevent UAMS from being in compliance with the requirements set forth by the Uniform Guidance. Known questioned costs $512 Statistical Sample The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding A similar finding was not reported in prior year audit. Recommendation We recommend that management design and implement internal controls that will ensure that all required support to adequately support expenditures is maintained. View of responsible officials We concur with the finding. The two exceptions noted were both unusual circumstances. With the additional staff and implementation of the new financial system, we believe established controls will ensure all expenditures are adequately supported and supporting documents are maintained.

Findings and Questioned Costs Relating to Federal Awards Finding number: 2022-004 Type of finding: Material weakness in internal control and material noncompliance Federal program title: Research and Development Cluster – various Assistance Listing numbers Federal agency: Various Pass-through entity: Various Federal award year: July 1, 2021 to June 30, 2022 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Criteria Per Federal Regulations Part 200 (2 CFR 200), Uniform Administrative Requirements, Cost principles, and Audit Requirements for Federal Awards (the Uniform Guidance), costs must be adequately documented. Conditions Found We selected a sample of 40 expenditures totaling $121,033 to test activities allowed or unallowed and allowable costs/cost principles of the total population of $11,464,188. We noted 2 samples totaling $512 where adequate documentation to support the expenditure was not maintained, and therefore were considered unallowable. Cause UAMS did not maintain adequate support for each expenditure. Effect Failure to properly maintain adequate support for each expenditure may prevent UAMS from being in compliance with the requirements set forth by the Uniform Guidance. Known questioned costs $512 Statistical Sample The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding A similar finding was not reported in prior year audit. Recommendation We recommend that management design and implement internal controls that will ensure that all required support to adequately support expenditures is maintained. View of responsible officials We concur with the finding. The two exceptions noted were both unusual circumstances. With the additional staff and implementation of the new financial system, we believe established controls will ensure all expenditures are adequately supported and supporting documents are maintained.

Finding number: 2022 005 Type of finding: Material weakness in internal control and noncompliance Federal program title: COVID-19 - HRSA COVID-19 Claims Reimbursement for the Uninsured Program and the Covid-19 Coverage Assistance Fund, Assistance Listing No. 93.461 Federal agency: U.S. Department of Health and Human Services Pass through entity: Not applicable Federal award year: July 1, 2021 to June 30, 2022 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Criteria Charges to the HRSA COVID-19 Uninsured Program must adhere to the applicable terms and conditions of the award. As described in the terms and conditions of the HRSA COVID-19 Uninsured Program federal award, services not covered by traditional Medicare will not be covered under this program and services for any treatment without a COVID-19 primary diagnosis are excluded, except for 1) pregnancy when the COVID-19 diagnosis code may be listed as secondary; 2) hospice services; and 3) outpatient prescription drugs. Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and the terms and conditions of the federal award. Conditions Found We selected a sample of 60 patient samples that had claims and payments from HRSA totaling $1,311,291. We noted 3 patients from our sample that had claims and payments from HRSA totaling $7,615 for which services for treatment did not meet the COVID-19 primary diagnosis criteria, and therefore were considered unallowable activities. Additionally, UAMS did not have adequate internal controls to ensure accurate diagnosis codes were documented for the non-COVID-19 related services provided. Cause In discussing these conditions with UAMS, they stated that claims were not appropriately allocated between reimbursable COVID-19 tests and non-reimbursable visits using a non-COVID-19 primary diagnosis code and these claims were not effectively reviewed prior to submission to HRSA. Effect Failure to properly allocate services and use the proper diagnosis codes could result in unallowable activities under the HRSA COVID-19 Uninsured Program. Known questioned costs $7,615 Statistical Sample The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding A similar finding was reported in prior year audit. Recommendation We recommend that management review its current process for entering and reviewing diagnosis codes to ensure proper diagnosis codes are documented for all services in accordance with the federal award programs terms and conditions. View of responsible officials We concur with the finding. Fiscal year 2021 was the first time UAMS received funds for patient reimbursements through a Federal program that was required to be reported on the SEFA. The fiscal year 2021 expenditures were audited during fiscal year 2023, at the same time fiscal year 2022 expenditures were audited. The same exception was noted across both years and reported to management after the close of fiscal year 2022. The HRSA program ended and UAMS is no longer billing for these services. The charges and billing for the HRSA program was a very unique set of circumstances due to the pandemic. In the future, if such a program were available that required a review of diagnosis against a certain set of treatment and diagnostic charges, further program development of the IT systems will be put into place or a manual review will be developed and implemented.

Findings and Questioned Costs Relating to Federal Awards Finding number: 2022-005 Type of finding: Material weakness in internal control and noncompliance Federal program title: COVID-19 - HRSA COVID-19 Claims Reimbursement for the Uninsured Program and the Covid-19 Coverage Assistance Fund, Assistance Listing No. 93.461 Federal agency: U.S. Department of Health and Human Services Pass-through entity: Not applicable Federal award year: July 1, 2021 to June 30, 2022 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Criteria Charges to the HRSA COVID-19 Uninsured Program must adhere to the applicable terms and conditions of the award. As described in the terms and conditions of the HRSA COVID-19 Uninsured Program federal award, services not covered by traditional Medicare will not be covered under this program and services for any treatment without a COVID-19 primary diagnosis are excluded, except for 1) pregnancy when the COVID-19 diagnosis code may be listed as secondary; 2) hospice services; and 3) outpatient prescription drugs. Additionally, 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and the terms and conditions of the federal award. Conditions Found We selected a sample of 60 patient samples that had claims and payments from HRSA totaling $1,311,291. We noted 3 patients from our sample that had claims and payments from HRSA totaling $7,615 for which services for treatment did not meet the COVID-19 primary diagnosis criteria, and therefore were considered unallowable activities. Additionally, UAMS did not have adequate internal controls to ensure accurate diagnosis codes were documented for the non-COVID-19 related services provided. Cause In discussing these conditions with UAMS, they stated that claims were not appropriately allocated between reimbursable COVID-19 tests and non-reimbursable visits using a non-COVID-19 primary diagnosis code and these claims were not effectively reviewed prior to submission to HRSA. Effect Failure to properly allocate services and use the proper diagnosis codes could result in unallowable activities under the HRSA COVID-19 Uninsured Program. Known questioned costs $7,615 Statistical Sample The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding A similar finding was reported in prior year audit. Recommendation We recommend that management review its current process for entering and reviewing diagnosis codes to ensure proper diagnosis codes are documented for all services in accordance with the federal award programs terms and conditions. View of responsible officials We concur with the finding. Fiscal year 2021 was the first time UAMS received funds for patient reimbursements through a Federal program that was required to be reported on the SEFA. The fiscal year 2021 expenditures were audited during fiscal year 2023, at the same time fiscal year 2022 expenditures were audited. The same exception was noted across both years and reported to management after the close of fiscal year 2022. The HRSA program ended and UAMS is no longer billing for these services. The charges and billing for the HRSA program was a very unique set of circumstances due to the pandemic. In the future, if such a program were available that required a review of diagnosis against a certain set of treatment and diagnostic charges, further program development of the IT systems will be put into place or a manual review will be developed and implemented.

Finding number: 2022 006 Type of finding: Material weakness in internal control and material noncompliance Federal program: Medical Student Education, Assistance Listing No. 93.680 Federal agency: US Department of Health and Human Services Pass through entity: Not applicable Federal award year: July 1, 2021 to June 30, 2022 Compliance Requirement: Cash management Criteria The requirements for cash management are contained in Section 200.305 of Title 2 U.S. Code of Federal Regulations Part 200 (2 CFR 200), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (the Uniform Guidance), the A 102 Common Rule (?_.21), 0MB Circular A 110 (2 CFR section 215.22), Treasury regulations at 31 CFR part 205, program legislation, Federal awarding agency regulations, and the terms and conditions of the award. When entities are funded on a reimbursement basis, program costs must be paid for by entity funds before reimbursement is requested from the Federal Government. Additionally, Section 200.303 of the Uniform Guidance indicates that the nonfederal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. The Uniform Guidance also indicates that these internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? (Green Book) 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 Office of Management and Budget (OMB) has clarified that the references to the Green Book and COSO were only provided as best practices and not requirements. Condition During our test work over the Medical Student Education Program, we selected a sample of expenditures and cash draws/issued invoices to sponsors to verify the expenditures were paid prior to the date of the reimbursement request. We also verified the cash draw was supported by a detail of expenditures that reconciled. For the Medical Student Education Program, we noted 3 expenditures totaling $105,643 of our sample of 40 expenditures totaling $556,930 were not paid prior to the reimbursement request. Additionally, we noted 2 draws of our sample of 13 where the draw was over drawn. The total overdraw was $69,800 of the total cash draws tested of $3,945,157. Additionally, we noted 9 draws were not supported by a detail of expenditures that reconciled. The variance difference was $48,745. Cause UAMS did not maintain adequate support for cash draws causing unreconciled variances in the draw request detail. Additionally, cash draws were not appropriately reviewed to ensure that the expenditures were paid prior to the reimbursement requests. Effect Failure to properly complete cash draws may prevent UAMS from being in compliance with the requirements set forth by the Uniform Guidance. Questioned costs $246 related to interest on the over draw $48,745 related to unreconciled variances between the cash draw and the expenditure detail $48,991 total questioned costs Questioned costs related to the instances where the expenditure was not paid prior to the reimbursement request are not determinable. Statistical Sample The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding A similar finding was not reported in prior year audit. Recommendation We recommend that management design and implement internal controls that will ensure that program costs are paid before a request for reimbursement is made. Additionally, we recommend that management keep records of what expenditures make up each draw. View of responsible officials We concur with the finding. The instances where expenditures were not paid prior to the reimbursement request was noted in the prior year audit and was corrected as soon as the finding was communicated to management. The exceptions identified in the current year audit were prior to the control process changes made by management to ensure all expenses are paid before reimbursement is requested. There were no exceptions noted after the date of the change from the prior year audit. During the fiscal year, the grants accounting office experienced a significant turnover in staff and leadership in addition to implementing a new financial system. With the new director and staff in place and completing the implementation of the financial system, we believe adequate controls have been established and are working properly to ensure compliance with cash management regulations.

Findings and Questioned Costs Relating to Federal Awards Finding number: 2022-006 Type of finding: Material weakness in internal control and material noncompliance Federal program: Medical Student Education, Assistance Listing No. 93.680 Federal agency: US Department of Health and Human Services Pass-through entity: Not applicable Federal award year: July 1, 2021 to June 30, 2022 Compliance Requirement: Cash management Criteria The requirements for cash management are contained in Section 200.305 of Title 2 U.S. Code of Federal Regulations Part 200 (2 CFR 200), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (the Uniform Guidance), the A-102 Common Rule (§_.21), 0MB Circular A-110 (2 CFR section 215.22), Treasury regulations at 31 CFR part 205, program legislation, Federal awarding agency regulations, and the terms and conditions of the award. When entities are funded on a reimbursement basis, program costs must be paid for by entity funds before reimbursement is requested from the Federal Government. Additionally, Section 200.303 of the Uniform Guidance indicates that the nonfederal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. The Uniform Guidance also indicates that these internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” (Green Book) 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 Office of Management and Budget (OMB) has clarified that the references to the Green Book and COSO were only provided as best practices and not requirements. Condition During our test work over the Medical Student Education Program, we selected a sample of expenditures and cash draws/issued invoices to sponsors to verify the expenditures were paid prior to the date of the reimbursement request. We also verified the cash draw was supported by a detail of expenditures that reconciled. For the Medical Student Education Program, we noted 3 expenditures totaling $105,643 of our sample of 40 expenditures totaling $556,930 were not paid prior to the reimbursement request. Additionally, we noted 2 draws of our sample of 13 where the draw was over drawn. The total overdraw was $69,800 of the total cash draws tested of $3,945,157. Additionally, we noted 9 draws were not supported by a detail of expenditures that reconciled. The variance difference was $48,745. Cause UAMS did not maintain adequate support for cash draws causing unreconciled variances in the draw request detail. Additionally, cash draws were not appropriately reviewed to ensure that the expenditures were paid prior to the reimbursement requests. Effect Failure to properly complete cash draws may prevent UAMS from being in compliance with the requirements set forth by the Uniform Guidance. Questioned costs $246 related to interest on the over draw $48,745 related to unreconciled variances between the cash draw and the expenditure detail $48,991 total questioned costs Questioned costs related to the instances where the expenditure was not paid prior to the reimbursement request are not determinable. Statistical Sample The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding A similar finding was not reported in prior year audit. Recommendation We recommend that management design and implement internal controls that will ensure that program costs are paid before a request for reimbursement is made. Additionally, we recommend that management keep records of what expenditures make up each draw. View of responsible officials We concur with the finding. The instances where expenditures were not paid prior to the reimbursement request was noted in the prior year audit and was corrected as soon as the finding was communicated to management. The exceptions identified in the current year audit were prior to the control process changes made by management to ensure all expenses are paid before reimbursement is requested. There were no exceptions noted after the date of the change from the prior year audit. During the fiscal year, the grants accounting office experienced a significant turnover in staff and leadership in addition to implementing a new financial system. With the new director and staff in place and completing the implementation of the financial system, we believe adequate controls have been established and are working properly to ensure compliance with cash management regulations.

Finding number: 2022 007 Type of finding: Significant deficiency in internal control and material noncompliance Federal program: Head Start Cluster, Assistance Listing No. 93.600 Federal agency: US Department of Health and Human Services Pass through entity: Not applicable Federal award year: July 1, 2021 to June 30, 2022 Compliance Requirement: Reporting Criteria The requirements for reporting are contained in Section 200.328 which states unless otherwise approved by OMB, the Federal awarding agency must solicit only the OMB-approved governmentwide data elements for collection of financial information (at time of publication the Federal Financial Report or such future, OMB-approved, governmentwide data elements available from the OMB-designated standards lead. This information must be collected with the frequency required by the terms and conditions of the Federal award. Condition During our test work over the Head Start program, we identified the annual Federal Financial Report (FFR) is due 90 days after the budget end period. The budget end period for project id #G2-54027 was October 31, 2021. However, the annual FFR was not submitted until January 17, 2023. Additionally, the annual Real Property Status Report (Form SF-429) for all Head Start grants is due the same time the annual FFR is submitted. The budget period end dates are October 31, 2021, resulting in a due date of January 30, 2022 for the SF-429 report. However, the report was not submitted by UAMS until January 30, 2023. Cause There were multiple accounts at UAMS that required reconciliation, resulting in an untimely process and a delayed submission of the Annual FFR. UAMS failed to submit the Real Property Status Report until requested by KPMG. Effect Failure to properly submit timely reporting submissions may prevent UAMS from being in compliance with the requirements set forth by the Uniform Guidance. Questioned costs None Statistical Sample The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding A similar finding was not reported in prior year audit. Recommendation We recommend that management design and implement internal controls that will ensure that all required reports are submitted timely. View of responsible officials We concur with the finding. The Head Start program has a dedicated financial manager position responsible for the daily operations and oversee the activities of the various grants. The position was vacant for a significant part of fiscal year 2022. Once the position was filled, the grants accounting team worked with the new financial manager to reconcile the various grants under the Head Start program. The reconciliation process took longer than anticipated causing the late submission of the FFR. The program financial manager was not aware that the SF-429 report was due until it was requested by the auditors. Management plans to hire an additional grants accounting staff member who will be dedicated to monitoring the head start program for compliance with Federal and program regulations and ensure reports are completed and filed timely.

Findings and Questioned Costs Relating to Federal Awards Finding number: 2022-007 Type of finding: Significant deficiency in internal control and material noncompliance Federal program: Head Start Cluster, Assistance Listing No. 93.600 Federal agency: US Department of Health and Human Services Pass-through entity: Not applicable Federal award year: July 1, 2021 to June 30, 2022 Compliance Requirement: Reporting Criteria The requirements for reporting are contained in Section 200.328 which states unless otherwise approved by OMB, the Federal awarding agency must solicit only the OMB-approved governmentwide data elements for collection of financial information (at time of publication the Federal Financial Report or such future, OMB-approved, governmentwide data elements available from the OMB-designated standards lead. This information must be collected with the frequency required by the terms and conditions of the Federal award. Condition During our test work over the Head Start program, we identified the annual Federal Financial Report (FFR) is due 90 days after the budget end period. The budget end period for project id #G2-54027 was October 31, 2021. However, the annual FFR was not submitted until January 17, 2023. Additionally, the annual Real Property Status Report (Form SF-429) for all Head Start grants is due the same time the annual FFR is submitted. The budget period end dates are October 31, 2021, resulting in a due date of January 30, 2022 for the SF-429 report. However, the report was not submitted by UAMS until January 30, 2023. Cause There were multiple accounts at UAMS that required reconciliation, resulting in an untimely process and a delayed submission of the Annual FFR. UAMS failed to submit the Real Property Status Report until requested by KPMG. Effect Failure to properly submit timely reporting submissions may prevent UAMS from being in compliance with the requirements set forth by the Uniform Guidance. Questioned costs None Statistical Sample The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding A similar finding was not reported in prior year audit. Recommendation We recommend that management design and implement internal controls that will ensure that all required reports are submitted timely. View of responsible officials We concur with the finding. The Head Start program has a dedicated financial manager position responsible for the daily operations and oversee the activities of the various grants. The position was vacant for a significant part of fiscal year 2022. Once the position was filled, the grants accounting team worked with the new financial manager to reconcile the various grants under the Head Start program. The reconciliation process took longer than anticipated causing the late submission of the FFR. The program financial manager was not aware that the SF-429 report was due until it was requested by the auditors. Management plans to hire an additional grants accounting staff member who will be dedicated to monitoring the head start program for compliance with Federal and program regulations and ensure reports are completed and filed timely.

Findings and Questioned Costs Relating to Federal Awards Finding number: 2022-008 Type of finding: Significant deficiency in internal control Federal program: COVID-19 Education Stabilization Fund, Higher Education Emergency Relief Fund, Assistance Living No. 84.425F Federal agency: US Department of Education Pass-through entity: Not applicable Federal award year: May 7, 2020 to June 30, 2023 Compliance Requirement: Procurement and Suspension and Debarment Criteria UAMS follows the State of Arkansas purchasing policies and procedures. Competitive Bid Quote Purchases ($20,000 to $75,000) require the requestor to price the good/service being purchased with at least three vendor quotes. Amounts less than $20,000 require one vendor quote. 2 CFR 200.303 requires non-Federal entities receiving Federal awards to 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. Effective internal controls should include procedures to comply with the State of Arkansas purchasing policies and procedures. Condition During our test work over the Education Stabilization Fund, Higher Education Emergency Relief Fund program, we identified one of 17 procurements where only one vendor quote was obtained when the purchase amount was approximately $21,400. Cause The original quote was less than $20,000 resulting in the requestor only obtaining the one quote as allowed per the State of Arkansas procurement policies. Upon final invoicing for the service, the price exceeded $20,000 and the requestor did not go back and amend the documentation with a sole source form explaining the circumstances and obtaining appropriate approvals for the increased price. Effect Failure to properly document procurements could result in noncompliance with the State of Arkansas procurement policies and procedures and/or the use of an inappropriate vendor. Questioned costs None Statistical Sample The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding A similar finding was not reported in prior year audit. Recommendation We recommend that management design and implement internal controls that will ensure the State of Arkansas procurement policies and procedures are adhered to in the event the original vendor cost increases resulting in the procurement requiring additional justification/documentation. View of responsible officials In April 2022, a restructure of the procurement team was completed, and a new APO was appointed. In July 2022, UAMS implemented a new financial system and updated procedures and processes around procurement contracting. The new system allows all documents to remain as attachments in the system and available to reviewers and approvers at each step in the procurement process. Staff dedicated to procurement contracting have been trained to ensure all required documents are provide in accordance with State procurement laws.

Finding number: 2021-001 Type of finding: Material weakness in internal control and material noncompliance Federal program: Research and Development Cluster ? various Assistance Listing numbers Federal agency: Various Pass-through entity: Not applicable Federal award year: July 1, 2020 to June 30, 2021 Compliance Requirement: Cash management Criteria The requirements for cash management are contained in Section 200.305 of Title 2 U.S. Code of Federal Regulations Part 200 (2 CFR 200), Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (the Uniform Guidance), the A-102 Common Rule (?_.21), 0MB Circular A-110 (2 CFR section 215.22), Treasury regulations at 31 CFR part 205, program legislation, Federal awarding agency regulations, and the terms and conditions of the award. When entities are funded on a reimbursement basis, program costs must be paid for by entity funds before reimbursement is requested from the Federal Government. Additionally, Section 200.303 of the Uniform Guidance indicates that the nonfederal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. The Uniform Guidance also indicates that these internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? (Green Book) 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 Office of Management and Budget (0MB) has clarified that the references to the Green Book and COSO were only provided as best practices and not requirements. Condition During our test work over the Research and Development Cluster, we selected a sample of expenditures and cash draws/issued invoices to sponsors to verify the expenditures were paid prior to the date of the reimbursement request. For the Research and Development Cluster, we noted 1 expenditure of our sample of 25 was not paid prior to the reimbursement request. We further extended our sample by 15 expenditures and noted 3 additional expenditures were not paid prior to the reimbursement request. Amounts in question were requested for reimbursement by UAMS from between 1 day and 11 days prior to being paid.We noted that UAMS? internal controls over cash management include process-level controls in place that ensure invoices or personnel costs are incurred before draw requests are made. However, there were no controls to ensure that the incurred costs have also been paid before an invoice to the sponsor is issued. This deficiency is isolated to grants in which an invoice is issued to the sponsor for reimbursement, rather than a cash draw. Cause The review of program costs ensures costs are incurred before a draw request is made. This review does not include a determination of whether the incurred costs have also been paid to the vendor. Effect Material weakness in internal control and material noncompliance with the cash management requirement. Questioned costs Questioned costs are not determinable. Statistical Sample The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding A similar finding was not reported in prior year audit. Recommendation We recommend that management design and implement internal controls that will ensure that program costs are paid before a request for reimbursement is made. View of responsible officials We concur with the finding. The current process for invoicing utilizes a report that does not identify the date an expense has been paid. Beginning immediately, we will utilize the draw report that identifies cleared expenses by period and reconcile it to the invoicing report to ensure only cleared expenses are invoiced. UAMS is implementing a new financial system on July 5, 2022. With the implementation of the new system, expenses will be categorized so that the billing process for cash draws and invoicing will only allow cleared expenses.

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