EIN: 951757119
UEI: MGDJHS6B2BP1
Data as of August 26, 2026
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on April 16, 2023. Under 2 CFR 200.521(d), a pass-through entity that provided federal funds to this organization for this audit period must issue a management decision on these findings by October 16, 2023 (1046 days ago).
What is a management decision? →FINDING 2022-001 ? Allowable Costs and Cost Principles: Significant Deficiency in Internal Control Over Compliance - See Schedule of Findings and Questioned Costs for chart/table. - Criteria ? 2 CFR 200.445 Goods or services for personal use ? The non-federal entity must adhere to certain principles establishing the allowability of items involved in determining cost. The following considerations must be made for goods or services for personal use: (a) Costs of goods or services for personal use of the non-federal entity?s employees are unallowable regardless of whether the cost is reported as taxable income to the employees. (b) Costs of housing (e.g., depreciation, maintenance, utilities, furnishings, rent), housing allowances, and personal living expenses are only allowable as direct costs regardless of whether reported as taxable income to the employees. In addition, to be allowable direct costs must be approved in advance by a federal awarding agency. Condition/Context ? A sample of 73 costs totaling $184,495 charged to federal research and development grants were selected from the population of all costs charged to federal research and development grants during the year ended September 30, 2022. The sample was not statistically valid. One selected cost was a gift to a retiring employee who had worked on the federal grant. The cost was not allowable per the above federal regulation. Cause ? Due to turnover in certain positions, control procedures in place did not detect the unallowable cost. Effect ? An unallowable cost was charged to a federal grant. Since the grant was still open, management returned the amount to the federal government. Repeat finding ? This is not a repeat finding. Recommendation ? We recommend management provide training to employees who charge costs to federal grants and review costs charged to grants to ensure they are aware of the above and all pertinent cost principles. - View of responsible officials ? Management agrees with the auditor?s finding regarding detecting the $73 of unallowable cost. HMRI has control procedures in place to detect unallowable costs; however, due to turnovers within the organization, the insignificant amount of the unallowable cost was not detected. HMRI hired a new Grants Director on February 6, 2023, who along with the accounting team will ensure all costs are being charged to their respective federal revenue streams in accordance with the federal agreements and guidelines. The employees who charge costs to federal grants are aware that this is an unallowable cost. In addition, HMRI will conduct training to refresh and reinforce the guidelines with employees who charge costs to federal grants. The $73 unallowable cost was returned to NIH as the grant is still open.
Show full finding ▾Hide full finding ▴FINDING 2022-001 ? Allowable Costs and Cost Principles: Significant Deficiency in Internal Control Over Compliance - See Schedule of Findings and Questioned Costs for chart/table. - Criteria ? 2 CFR 200.445 Goods or services for personal use ? The non-federal entity must adhere to certain principles establishing the allowability of items involved in determining cost. The following considerations must be made for goods or services for personal use: (a) Costs of goods or services for personal use of the non-federal entity?s employees are unallowable regardless of whether the cost is reported as taxable income to the employees. (b) Costs of housing (e.g., depreciation, maintenance, utilities, furnishings, rent), housing allowances, and personal living expenses are only allowable as direct costs regardless of whether reported as taxable income to the employees. In addition, to be allowable direct costs must be approved in advance by a federal awarding agency. Condition/Context ? A sample of 73 costs totaling $184,495 charged to federal research and development grants were selected from the population of all costs charged to federal research and development grants during the year ended September 30, 2022. The sample was not statistically valid. One selected cost was a gift to a retiring employee who had worked on the federal grant. The cost was not allowable per the above federal regulation. Cause ? Due to turnover in certain positions, control procedures in place did not detect the unallowable cost. Effect ? An unallowable cost was charged to a federal grant. Since the grant was still open, management returned the amount to the federal government. Repeat finding ? This is not a repeat finding. Recommendation ? We recommend management provide training to employees who charge costs to federal grants and review costs charged to grants to ensure they are aware of the above and all pertinent cost principles. - View of responsible officials ? Management agrees with the auditor?s finding regarding detecting the $73 of unallowable cost. HMRI has control procedures in place to detect unallowable costs; however, due to turnovers within the organization, the insignificant amount of the unallowable cost was not detected. HMRI hired a new Grants Director on February 6, 2023, who along with the accounting team will ensure all costs are being charged to their respective federal revenue streams in accordance with the federal agreements and guidelines. The employees who charge costs to federal grants are aware that this is an unallowable cost. In addition, HMRI will conduct training to refresh and reinforce the guidelines with employees who charge costs to federal grants. The $73 unallowable cost was returned to NIH as the grant is still open.
Finding 2022-001 Condition: The auditor selected 73 samples out of which one cost was a gift to a retiring employee who had worked on the federal grant. The cost was not allowable per the above federal regulation. Corrective action plan: We put in place the following: 1. HMRI hired a new Grants Director on February 6, 2023, who along with the accounting team ensures all costs are being charged to their respective federal revenue streams in accordance with the federal agreements and guidelines. CFO reviews and approves after Grants Director?s review. 2. HMRI has conducted training to refresh and reinforce the guidelines with employees who charge costs to federal grants. 3. HMRI will continuously provide Federal Allowable Expense Trainings to all staff involved. Responsible Individual: Chief Financial Officer: Gabriel Rincon Planned Completion date: The unallowable cost of $73 was returned to NIH in January 2023.
FAC accepted this audit on June 27, 2022 — management decision was due December 27, 2022.
FINDING 2021-001 ? Subrecipient Monitoring: Significant Deficiency in Internal Control Over Compliance See Schedule of Findings and Questioned Costs for chart/table Criteria ? 2 CFR 200.332 Requirements for pass-through entities.? All pass-through entities must: (b) Evaluate each subrecipient?s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraphs (d) and (e) of this section, which may include consideration of such factors as: (1) The subrecipient?s prior experience with the same or similar subawards; (2) The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F of this part, and the extent to which the same or similar subaward has been audited as a major program; (3) Whether the subrecipient has new personnel or new or substantially changed systems; and (4) The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency). (f) Verify that every subrecipient is audited as required by Subpart F of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in ? 200.501. Condition/Context ? A sample of 3 subrecipients were selected from the population of all subrecipients in which Huntington Medical Research Institutes (?HMRI?) passed federal research and development funds to during the year ended September 30, 2021. We requested among other items, supporting documentation for HMRI?s risk assessment and review of subrecipient single audit reports. HMRI includes a clause in all subrecipient contracts requiring the subrecipient to report any audit findings impacting HMRI funding, including identified non-compliance or questioned costs, to HMRI. In addition, HMRI personnel, including the PI, review all invoices received from their subrecipients. However, HMRI did not perform the required risk assessment or review of subrecipient single audit reports for its subrecipients during the year ended September 30, 2021. Cause ? Management did not have an established policy and procedures for subrecipient monitoring. Effect ? Without established policy and procedures documented and in place, HMRI became out of compliance with federal rules and regulations. Repeat finding ? This is not a repeat finding. Recommendation ? We recommend HMRI establish written policies and procedures around the subrecipient monitoring process which includes both a documented risk assessment of subrecipients and annual review of single audit reports in order to identify potential deficiencies and non-compliance. View of responsible officials ? Management agrees with the auditor?s finding regarding the establishment of written policies and procedures surrounding the subrecipient monitoring process. While policies and procedures are being formalized, HMRI has completed the following review: 1. Reviewed the subrecipients Single Audit reports and determined there are no material or significant findings. 2. Confirmed that subrecipient contracts include certification that subrecipient will comply with the audit and access to records clause to give notice to HMRI of any adverse findings which impact the subaward. 3. Verified subrecipient is a member of the Federal Demonstration Partnership, a partnership among universities, nonprofit organizations, and government entities, for the purpose of reducing the administrative burdens associated with research grants and contracts. In addition, HMRI hired a Post-Award Grant Manager on June 21, 2022, who will be responsible for the continuing subrecipient monitoring outlined above and other steps that will be outlined in the formal policy.
Show full finding ▾Hide full finding ▴FINDING 2021-001 ? Subrecipient Monitoring: Significant Deficiency in Internal Control Over Compliance See Schedule of Findings and Questioned Costs for chart/table Criteria ? 2 CFR 200.332 Requirements for pass-through entities.? All pass-through entities must: (b) Evaluate each subrecipient?s risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring described in paragraphs (d) and (e) of this section, which may include consideration of such factors as: (1) The subrecipient?s prior experience with the same or similar subawards; (2) The results of previous audits including whether or not the subrecipient receives a Single Audit in accordance with Subpart F of this part, and the extent to which the same or similar subaward has been audited as a major program; (3) Whether the subrecipient has new personnel or new or substantially changed systems; and (4) The extent and results of Federal awarding agency monitoring (e.g., if the subrecipient also receives Federal awards directly from a Federal awarding agency). (f) Verify that every subrecipient is audited as required by Subpart F of this part when it is expected that the subrecipient's Federal awards expended during the respective fiscal year equaled or exceeded the threshold set forth in ? 200.501. Condition/Context ? A sample of 3 subrecipients were selected from the population of all subrecipients in which Huntington Medical Research Institutes (?HMRI?) passed federal research and development funds to during the year ended September 30, 2021. We requested among other items, supporting documentation for HMRI?s risk assessment and review of subrecipient single audit reports. HMRI includes a clause in all subrecipient contracts requiring the subrecipient to report any audit findings impacting HMRI funding, including identified non-compliance or questioned costs, to HMRI. In addition, HMRI personnel, including the PI, review all invoices received from their subrecipients. However, HMRI did not perform the required risk assessment or review of subrecipient single audit reports for its subrecipients during the year ended September 30, 2021. Cause ? Management did not have an established policy and procedures for subrecipient monitoring. Effect ? Without established policy and procedures documented and in place, HMRI became out of compliance with federal rules and regulations. Repeat finding ? This is not a repeat finding. Recommendation ? We recommend HMRI establish written policies and procedures around the subrecipient monitoring process which includes both a documented risk assessment of subrecipients and annual review of single audit reports in order to identify potential deficiencies and non-compliance. View of responsible officials ? Management agrees with the auditor?s finding regarding the establishment of written policies and procedures surrounding the subrecipient monitoring process. While policies and procedures are being formalized, HMRI has completed the following review: 1. Reviewed the subrecipients Single Audit reports and determined there are no material or significant findings. 2. Confirmed that subrecipient contracts include certification that subrecipient will comply with the audit and access to records clause to give notice to HMRI of any adverse findings which impact the subaward. 3. Verified subrecipient is a member of the Federal Demonstration Partnership, a partnership among universities, nonprofit organizations, and government entities, for the purpose of reducing the administrative burdens associated with research grants and contracts. In addition, HMRI hired a Post-Award Grant Manager on June 21, 2022, who will be responsible for the continuing subrecipient monitoring outlined above and other steps that will be outlined in the formal policy.
Finding 2021-001 ? Subrecipient Monitoring: Significant Deficiency in Internal Control Over Compliance See Corrective Action Plan for chart/table Condition: The auditor identified that Huntington Medical Research Institutes (?HMRI?) did not have an established policy and procedures for subrecipient monitoring. The auditor reviewed a sample of 3 subrecipients from the population of all subrecipients in which HMRI passed federal research and development funds during the year ended September 30, 2021, and requested among other items, supporting documentation for HMRI?s risk assessment and review of subrecipient single audit reports. The auditor noted HMRI includes a clause in all subrecipient contracts requiring the subrecipient to report any audit findings impacting HMRI funding, including identified non-compliance or questioned costs, to HMRI. In addition, HMRI personnel, including the principal investigators, review all invoices received from their subrecipients. However, HMRI did not perform the required risk assessment or review of subrecipient single audit reports for its subrecipients during the year ended September 30, 2021. Corrective action plan: Management agrees with the auditor?s finding regarding the establishment of written policies and procedures surrounding the subrecipient monitoring process. While policies and procedures are being formalized, HMRI has completed the following review: 1. Reviewed the subrecipients Single Audit reports and determined there are no material or significant findings. 2. Confirmed that subrecipient contracts include certification that subrecipient will comply with the audit and access to records clause to give notice to HMRI of any adverse findings which impact the subaward. 3. Verified subrecipient is a member of the Federal Demonstration Partnership, a partnership among universities, nonprofit organizations, and government entities, for the purpose of reducing the administrative burdens associated with research grants and contracts. Responsible Individual: On June 21, 2022, HMRI hired a Post-Award Grant Manager, who will develop the formal policy and procedures for subrecipient monitoring. The Post-Award Grant Manager will also ensure the policy for continued subrecipient monitoring as outlined above and in the formal policy is strictly adhered followed. Planned Completion date: The policy and procedures for subrecipient monitoring will be formally adopted by July 15, 2022.
FINDING 2021-002 ? Allowable Costs and Cost Principles: Significant Deficiency in Internal Control Over Compliance See Schedule of Findings and Questioned Costs for chart/table Criteria ? 2 CFR 200.303 Internal controls.? The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition/Context ? A sample of 7 journal entries recorded to federal research and development grants were selected from the population of all journal entries recorded to federal research and development grants during the year ended September 30, 2021. We requested a copy of each journal entry, supporting schedules and documentation and evidence of review and approval of the selected journal entries HMRI did not retain evidence of supervisory review of 5 of the 7 journal entries tested. In those cases there was documentation of the individual preparing the entry but not documentation supporting the individual reviewing the entry. Cause ? Management entered a period of significant turnover during the year ended September 30, 2021 which did not allow for the proper documentation of reviews and approvals and approvals. Effect ? Without consistent documentation, the books and records may be incomplete. If the books and records associated with federal grants are incomplete, federal agencies may question any unsupported costs. Repeat finding ? This is not a repeat finding. Recommendation ? We recommend HMRI establish clear documentation standards and require employees to retain formal documentation of reviews and approvals. We also recommend that for any journal entries impacting federal grants, and more critically, cost transfers between federal grants, be reviewed by key personnel within the laboratories. View of responsible officials ? Management agrees with the auditor?s finding regarding the establishment of clear documentation standards and requirement to retain formal documentation of reviews and approvals. During the fiscal year, HMRI experienced turnover in the accounting department which resulted in a new team of accountants. With the new team, HMRI implemented clear documentation standards, and a greater level of controls and procedures to ensure that supporting documentation is properly referenced and retained for all journal entries. Additionally, HMRI hired a Post-Award Grant Manager on June 21, 2022, who will ensure HMRI is distributing and reviewing monthly financial reports on federal grants with key personnel within the laboratories.
Show full finding ▾Hide full finding ▴FINDING 2021-002 ? Allowable Costs and Cost Principles: Significant Deficiency in Internal Control Over Compliance See Schedule of Findings and Questioned Costs for chart/table Criteria ? 2 CFR 200.303 Internal controls.? The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition/Context ? A sample of 7 journal entries recorded to federal research and development grants were selected from the population of all journal entries recorded to federal research and development grants during the year ended September 30, 2021. We requested a copy of each journal entry, supporting schedules and documentation and evidence of review and approval of the selected journal entries HMRI did not retain evidence of supervisory review of 5 of the 7 journal entries tested. In those cases there was documentation of the individual preparing the entry but not documentation supporting the individual reviewing the entry. Cause ? Management entered a period of significant turnover during the year ended September 30, 2021 which did not allow for the proper documentation of reviews and approvals and approvals. Effect ? Without consistent documentation, the books and records may be incomplete. If the books and records associated with federal grants are incomplete, federal agencies may question any unsupported costs. Repeat finding ? This is not a repeat finding. Recommendation ? We recommend HMRI establish clear documentation standards and require employees to retain formal documentation of reviews and approvals. We also recommend that for any journal entries impacting federal grants, and more critically, cost transfers between federal grants, be reviewed by key personnel within the laboratories. View of responsible officials ? Management agrees with the auditor?s finding regarding the establishment of clear documentation standards and requirement to retain formal documentation of reviews and approvals. During the fiscal year, HMRI experienced turnover in the accounting department which resulted in a new team of accountants. With the new team, HMRI implemented clear documentation standards, and a greater level of controls and procedures to ensure that supporting documentation is properly referenced and retained for all journal entries. Additionally, HMRI hired a Post-Award Grant Manager on June 21, 2022, who will ensure HMRI is distributing and reviewing monthly financial reports on federal grants with key personnel within the laboratories.
Finding 2021-002 ? Allowable Costs and Cost Principles: Significant Deficiency in Internal Control Over Compliance See Corrective Action Plan for chart/table Condition: The auditor selected a sample of 7 journal entries recorded to federal research and development grants selected from the population of all journal entries recorded to federal research and development grants during the year ended September 30, 2021, and then requested a copy of each journal entry, supporting schedules and documentation and evidence of review and approval of the selected journal entries. HMRI did not retain evidence of supervisory review of 5 of the 7 journal entries tested. In those cases, there was documentation of the individual preparing the entry but not documentation supporting the individual reviewing the entry. It was noted that management entered a period of significant turnover during the year ended September 30, 2021, which did not allow for the proper documentation of reviews and approvals. Corrective action plan: Management agrees with the auditor?s finding regarding the establishment of clear documentation standards and requirement to retain formal documentation of reviews and approvals. During the fiscal year, HMRI experienced turnover in the accounting department which resulted in a new team of accountants. With the new team, HMRI implemented clear documentation standards, and a greater level of controls and procedures to ensure that supporting documentation is properly referenced and retained for all journal entries. HMRI also hired a Post-Award Grant Manager on June 21, 2022, who will ensure HMRI is distributing and reviewing monthly financial reports on federal grants with key personnel within the laboratories. Responsible Individual: On June 21, 2022, HMRI hired a Post-Award Grant Manager, who will ensure HMRI is distributing and reviewing monthly financial reports on federal grants with key personnel within the laboratories. Planned Completion date: HMRI implemented clear documentation standards, and a greater level of controls and procedures to ensure that supporting documentation is properly referenced and retained for all journal entries, effective with the fiscal month-end close of June 2021. Additionally, the coordination of reporting with review by key personnel within the laboratories will be performed by the Post-Award Grant Manager on an ongoing basis. This will be fully implemented by July 15, 2022.
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