THE TEXAS HEART INSTITUTE

Finding #2020-001 ? Material Weakness and Other Non-Compliance Applicable federal programs: National Aeronautics and Space Administration Passed through Brigham and Women?s Hospital, Inc.: CFDA #43.007 Space Operations 119422 11/01/19 ? 05/31/21 U. S. Department of Health and Human Services Direct: CFDA #93.837 Cardiovascular Diseases Research 2R01HL127717-05 01/01/20 ? 12/31/20 CFDA #93.837 Cardiovascular Diseases Research 1R56HL143489-01 09/24/18 ? 08/31/20 CFDA #93.837 Cardiovascular Diseases Research 1R01HL144683-01A1 09/01/19 ? 07/31/20 CFDA #93.837 Cardiovascular Diseases Research 5R01HL144683-02 08/01/20 ? 07/31/21 CFDA #93.837 Cardiovascular Diseases Research 1R21HL144244-01 05/01/19 ? 04/30/20 CFDA #93.837 Cardiovascular Diseases Research 5R21HL144244-02 05/01/20 ? 04/30/22 CFDA #93.837 Cardiovascular Diseases Research 1R01HL153538-01 08/01/20 ? 06/30/21 CFDA #93.853 Extramural Research Programs in the 5R03NS110442-02 09/30/19 ? 08/31/21 Neurosciences and Neurological Disorders Passed through 7 Hills Pharma, LLC: CFDA #93.395 Cancer Treatment Research 5R42CA203456-03 04/01/19 ? 03/31/21 CFDA #93.395 Cancer Treatment Research 1R44CA250646-01A1 09/11/20 ? 03/31/22 CFDA #93.837 Cardiovascular Diseases Research 2R42HL129612-02 03/15/20 ? 02/02/21 CFDA #93.855 Allergy and Infectious Diseases 1R41AI45507-01 03/08/19 ? 02/28/21 Research Passed through University of Texas Health Science Center at Houston: CFDA #93.837 Cardiovascular Diseases Research 0011624F-11 03/01/19 ? 02/29/20 Passed through The University of Texas at Austin: CFDA #93.837 Cardiovascular Diseases Research UTA18-0014-5 09/01/18 ? 08/31/20 Passed through Texas A&M Engineering Experiment Station: CFDA #93.837 Cardiovascular Diseases Research M2001900 04/15/20 ? 03/31/21 Passed through Icahn School of Medicine Mount Sinai: CFDA #93.837 Cardiovascular Diseases Research 0254-B071-4609 09/27/19 ? 03/20/20 National Science Foundation Passed through William Marsh Rice University: CFDA #47.070 Computer and Information R3H831 10/01/18 ? 09/30/22 Science and Engineering Criteria: Procurement ? The Uniform Guidance ?200.318 requires that THI maintain records sufficient to document procurement decisions. The records must include the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Condition and context: During our testing of 4 transactions subject to procurement, we noted 1 lab supply vendor with aggregate expenditures greater than $10,000 with no contemporaneous documentation for procurement rationale. This finding occurred in fiscal year 2019 as finding #2019-005. Cause: The finding occurred as a result of THI?s failure to follow its procurement policy. Effect: Failure to perform and document the procurement process can result in noncompliance and lack of competition in selected vendors. Questioned costs: Unknown Recommendation: Provide additional training on maintenance of documentation of procurement decisions in accordance with THI?s procurement policy reflecting the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Views of responsible officials and planned corrective actions: Management agrees with the finding. See Corrective Action Plan.

Finding #2019-005 ? Material Weakness and Other Non-Compliance Applicable federal programs: National Aeronautics and Space Administration CFDA #43.007 Space Operations NNX15AB55G 11/01/14 ? 12/31/20 U. S. Department of Health and Human Services Direct: CFDA #93.837 Cardiovascular Diseases Research 5UM1HL087365-12 03/01/18 ? 02/28/21 CFDA #93.837 Cardiovascular Diseases Research 5R01HL127717-04 01/01/19 ? 12/31/19 CFDA #93.837 Cardiovascular Diseases Research 1R56HL143489-01 09/24/18 ? 08/31/20 CFDA #93.837 Cardiovascular Diseases Research 1R21HL144244-01 05/01/19 ? 04/30/20 CFDA #93.837 Cardiovascular Diseases Research 1R01HL144683-01A1 09/01/19 ? 07/31/20 CFDA #93.853 Extramural Research Programs in the 1R03NS110442-01 09/30/18 ? 08/31/19 Neurosciences and Neurological Disorders CFDA #93.853 Extramural Research Programs in the 5R03NS110442-02 09/30/19 ? 08/31/20 Neurosciences and Neurological Disorders Passed through 7 Hills Pharma, LLC: CFDA #93.395 Cancer Treatment Research 2R41CA203456-THI 04/09/18 ? 03/31/19 CFDA #93.855 Allergy and Infectious Diseases 1R41AI45507-01 03/08/19 ? 02/29/20 Research Passed through University of Texas Health Science Center at Houston: CFDA #93.837 Cardiovascular Diseases Research 0011624F-10 03/01/18 ? 02/28/19 CFDA #93.837 Cardiovascular Diseases Research 0011624F-11 03/01/19 ? 02/29/20 CFDA #93.837 Cardiovascular Diseases Research 0011624J-15 03/01/18 ? 02/28/19 0011624J-16 03/01/19 ? 02/29/20 0011624J-14 Passed through BIVACOR: CFDA #93.837 Cardiovascular Diseases Research 1R44HL137454-01A1 09/01/18 ? 08/31/19 Passed through Baylor College of Medicine: CFDA #93.837 Cardiovascular Diseases Research T32-HL00676-28 08/01/18 ? 07/31/19 Passed through Icahn School of Medicine Mount Sinai: CFDA #93.837 Cardiovascular Diseases Research 0254-B071-4609 09/27/18 ? 09/26/19 Passed through Alleviant Medical, Inc.: CFDA #93.837 Cardiovascular Diseases Research 1R43HL142440-01 09/01/18 ? 09/13/19 Passed through The University of Texas at Austin: CFDA #93.837 Cardiovascular Diseases Research UTA18-0014-5 09/01/18 ? 08/31/20 Passed through Vapogenix, Inc.: CFDA #93.846 Arthritis, Musculoskeletal and 1R43AR074838-01 09/10/18 ? 08/31/19 Skin Diseases Research National Science Foundation Passed through William Marsh Rice University: CFDA #47.070 Computer and Information R3H831 10/01/18 ? 09/30/22 Science and Engineering Criteria: Procurement ? The Uniform Guidance ?200.318 requires that THI maintain records sufficient to document procurement decisions. The records must include the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Condition and context: During our testing of federal expenditures, we noted a lack of documentation for procurement decisions for supplies which is required to be procured in accordance with the Uniform Guidance and THI?s policies and procedures. All 11 vendors selected for testing had no documentation of procurement. This finding occurred in fiscal year 2018 as finding #2018-004. Cause: THI is not following its procurement policy and has not recently performed procurement procedures for supplies and relied upon prior year procurement decisions. Effect: Failure to perform and document the procurement process can result in noncompliance and lack of competition in selected vendors. Questioned costs: Unknown Recommendation: Maintain documentation of procurement decisions in accordance with THI?s procurement policy reflecting the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Views of responsible officials and planned corrective actions: Management agrees with the finding. See Corrective Action Plan.

Finding #2019-006 ? Material Weakness and Other Non-Compliance Applicable federal programs: U. S. Department of Health and Human Services Passed through 7 Hills Pharma, LLC: CFDA #93.395 Cancer Treatment Research 2R41CA203456-THI 04/09/18 ? 03/31/21 Criteria: Allowable costs Condition and context: During our testing of allowable costs, we noted 1 out of 21 items the goods were never received but were billed to the grant. Cause: THI does not have a system in place to match invoices to purchase order to make sure that amount ordered and billed to the grant are actually received. Effect: Failure to match purchase orders to invoices to ensure that goods have been received resulted in amounts being billed erroneously to the grant. Questioned costs: $765 Recommendation: Implement policies and procedures to match invoices to purchase orders to verify goods and services have been received prior to billing to grants. Views of responsible officials and planned corrective actions: Management agrees with the finding. See Correction Action Plan.

Finding #2019-007 ? Material Weakness and Other Non-Compliance Applicable federal programs: National Aeronautics and Space Administration CFDA #43.007 Space Operations NNX15AB55G 11/01/14 ? 12/31/19 National Science Foundation Passed through William Marsh Rice University: CFDA #47.070 Computer and Information R3H831 10/01/18 ? 09/30/22 Science and Engineering U. S. Department of Health and Human Services Direct: CFDA #93.837 Cardiovascular Diseases Research 5UM1HL087365-12 03/01/18 ? 02/28/21 CFDA #93.837 Cardiovascular Diseases Research 5R01HL127717-04 01/01/19 ? 12/31/19 CFDA #93.837 Cardiovascular Diseases Research 1R56HL143489-01 09/24/18 ? 08/31/20 CFDA #93.837 Cardiovascular Diseases Research 1R21HL144244-01 05/01/19 ? 04/30/20 CFDA #93.837 Cardiovascular Diseases Research 1R01HL144683-01A1 09/01/19 ? 07/31/20 CFDA #93.853 Extramural Research Programs in the 1R03NS110442-01 09/30/18 ? 08/31/19 Neurosciences and Neurological Disorders CFDA #93.853 Extramural Research Programs in the 5R03NS110442-02 09/30/19 ? 08/31/20 Neurosciences and Neurological Disorders Passed through Vapogenix, Inc.: CFDA #93.846 Arthritis, Musculoskeletal and 1R43AR074838-01 09/10/18 ? 08/31/19 Skin Diseases Research Passed through 7 Hills Pharma, LLC: CFDA #93.395 Cancer Treatment Research 2R41CA203456-THI 04/09/18 ? 03/31/21 CFDA #93.855 Allergy and Infectious Diseases 1R41AI45507-01 03/08/19 ? 02/29/20 Research Passed through University of Texas Health Science Center at Houston: CFDA #93.837 Cardiovascular Diseases Research 0011624F-10 03/01/18 ? 02/28/19 CFDA #93.837 Cardiovascular Diseases Research 0011624F-11 03/01/19 ? 02/28/20 Passed through BIVACOR: CFDA #93.837 Cardiovascular Diseases Research 1R44HL137454-01A1 09/01/18 ? 08/31/19 Passed through Baylor College of Medicine: CFDA #93.837 Cardiovascular Diseases Research T32-HL00676-28 08/01/18 ? 07/31/19 Passed through Icahn School of Medicine Mount Sinai: CFDA #93.837 Cardiovascular Diseases Research 0254-B071-4609 09/27/18 ? 09/26/19 Passed through Alleviant Medical, Inc: CFDA #93.837 Cardiovascular Diseases Research 1R43HL142440-01 09/01/18 ? 09/13/19 Passed through The University of Texas at Austin: CFDA #93.837 Cardiovascular Diseases Research UTA18-0014-5 09/01/18 ? 08/31/20 Criteria: Period of Performance ? The Uniform Guidance ?200.309 indicates that only allowable costs incurred during the period of performance may be charged to the Federal award. Costs incurred before the start date and after the end date of the Federal award may not be charged to the award without prior approval. Condition and context: During the testing of 21 federal grant expense transactions, we identified 4 federal expense transactions coded to an incorrect period based on when the goods and services were received. Three of the transactions were within the contract period and one was outside of the contract period. Cause: There is not an effective system of internal controls to ensure that expenses are recorded in the appropriate period. Effect: Failure to have effective internal controls over recording expenses to the correct period may result in costs charged to grants outside of the period of performance. Questioned costs: Unknown Recommendation: Provide additional training on the review of proper period for recognition of expense transactions. Views of responsible officials and planned corrective actions: Management agrees with the finding. See Correction Action Plan.

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