Cal Poly Pomona Foundation, Inc.

2021-002 Significant Deficiency in Internal Control over Compliance- Allowable Costs Program: R&D Program Criteria: Per Uniform Grant Guidance (2 CFR 200.430(i)) ?Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.? Management identified that the key control over allowable costs and activities is the approval of the program administrator. Condition: From our sample of 96 employee records, 33 of the timesheets did not have approval of the program administrator. All of the timesheets, except 1, had documented approval, it was just not by the program administrator. One timesheet in our selection did not have any documented approval. Cause: The payroll system allows for the approver to be assigned for the employee. In the items without proper approval, the system was not set up to have the program administrator approve the timesheets. Effect: Payroll cost are allowable for the grant awards but there are specific requirements in each award regarding the personnel allowed to charge time to the program. Without the approval of an individual who is knowledgeable of the terms of each specific grant, there is a risk that time could be charged to a program that is not allowable. Questioned costs: None Context: During the audit of the R&D program we selected a sample of 40 payroll transactions to test the controls over compliance and compliance. In those 40 transactions were 96 individual timesheets for employees working on the various grant programs. Recommendation: We recommend that the program administrators be assigned as the approver of the timesheets for any individual working on their program. If they do not have the capacity or ability to perform this function then we recommend that they assign the authority, in writing, to another individual who is knowledgeable of the terms and conditions for their specific grant award. Views of responsible officials: The payroll system in use has the ability to allow program administrators to not only approve timesheets, but also to assign authority for approvals to other individuals. Action has been initiated as of the date of this letter, in discussion and collaboration with department supervisors and program administrators, to customize the system to track the approvals and delegations for this purpose.

2021-003 Significant Deficiency in Internal Control over Compliance ? Equipment and Real Property Management Program: R&D Program Criteria: Per the Uniform Grant Guidance (2 CFR 200.313(d)(2)) ?A physical inventory of the property must be taken and the results reconciled with the property records at least once every two years.? Condition: A physical inventory of equipment has not been taken since 2018. Cause: The campus was operating at a reduced level due to the Coronavirus pandemic. There was limited access to the various buildings where the equipment is maintained. Effect: As many of the employees of the campus were working remote and there has been limited ability to oversee and monitor the equipment, there is a risk that it may have been misplaced or be in disrepair and management would not be aware. Questioned costs: None Context: There are several federal award programs with property and equipment purchased utilizing federal funds. This finding impacts all awards with equipment purchases. OMB issued Memo M-21-20 which included wording regarding a possible extension for 12 months "Awarding agencies may provide grantees up to a 12-month extension for the biennial physical inventory of equipment purchased under a Federal award" and that the extension was not obtained by the Foundation. Recommendation: We recommend that a full inventory of all property and equipment be completed as soon as possible. Views of responsible officials: The Foundation began full physical inventory of all property and equipment purchased using federal funds beginning in August 2021 when facilities began to reopen. The inventory count is on track to be completed in October 2021.

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