CAL STATE L.A. UNIVERSITY AUXILIARY SERVICES, INC.

2025-003 SEFA and Expenditure Identification Criteria: Management is responsible for preparing a complete and accurate Schedule of Expenditures of Federal Awards (SEFA) in accordance with 2 CFR 200.510(b), which requires that the SEFA accurately present total federal expenditures for the period, including proper cutoff of costs to ensure expenditures are reported in the correct fiscal year. Condition: The SEFA was not complete and accurate. Specifically, certain federal program expenditures incurred in the current fiscal year were not accrued and included on the SEFA at year end, and in other instances, amounts from the prior fiscal year were reported on the current year SEFA. These errors were identified across multiple programs and required audit adjustments to properly state federal expenditures. Cause: The errors appear to be the result of inadequate controls over the preparation and review of the SEFA, including insufficient procedures to ensure proper cutoff of expenditures and reconciliation of reported amounts to the underlying accounting records and grant documentation. Effect: Failure to properly identify and report federal expenditures in the correct period increases the risk of noncompliance with federal reporting requirements and may impact major program determination and other compliance-related decisions. Repeat Finding: No. Recommendation: We recommend management implement and document formal procedures to ensure the SEFA is complete and accurate at year end. This should include reconciling SEFA amounts to the general ledger, reviewing grant activity for proper cutoff, recording all necessary accruals. Views of Responsible Officials: Management agrees with the finding and a response is included in the corrective action plan.

2025-004 Subrecipient Monitoring Program: 21.027 Coronavirus State and Local Fiscal Recovery Funds, 84.336 Teacher Quality Partnership Grants, 94.006 AmeriCorps State and National, 84.325 Special Education – Personnel Development to Improve Services, 16.812 Second Chance Act Reentry Initiative, Research and Development Cluster. Criteria: Per 2 CFR sections 200.332(d) through (f), a pass-through entity 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 the performance goals. Per 2 CFR section 200.502(a), the determination of when a Federal award is expended must be based on when the activity related to the Federal award occurs which is generally expenditure/expense transactions associated with awards. Condition: Subrecipients were not monitored timely enough to perform the necessary evaluation on subrecipient activities or to report expenditures on the schedule of expenditures of federal awards in the appropriate fiscal year. Cause: Cal State L.A. University Auxiliary Services, Inc. did not receive invoices for certain subrecipients until after year-end close and for amounts covering an entire fiscal year and no amounts were accrued. Effect: Activities of the subrecipient could not be reviewed timely to ensure authorized use or for allowability with grant terms and conditions. Activities of the subrecipient could not be reviewed timely to ensure inclusion or exclusion from the SEFA. Questioned Costs: The conditions did not result in questioned costs greater than $25,000 based on known costs. However, as a result of the lack of monitoring, questioned costs may have existed. Repeat Finding: Yes. Recommendation: Establish a timeline for subrecipients to provide required reports to Cal State L.A. University Auxiliary Services, Inc. in order to receive information during the fiscal year for monitoring during the post-award process. Review grant and subrecipient activity at year-end to evaluate whether all activity has been submitted and recorded. Views of Responsible Officials: Management agrees with the finding and a response is included in the corrective action plan.

2025-005 Report Submission Delay Program: 21.027 Coronavirus State and Local Fiscal Recovery Funds, 94.006 AmeriCorps State and National Criteria: In accordance with 2 CFR 200.328, non-Federal entities must submit financial reports at the interval required by the Federal awarding agency or pass-through entity no later than the specified due date. Additionally, reports are required to be reviewed prior to submission Condition: Three quarterly and two monthly reports were submitted after the stated due date and one monthly activity report did not have appropriate documentation to evidence approval. Cause: Inadequate internal controls over grant reporting, including the lack of a formalized process to track reporting requirements and due dates, and insufficient monitoring of compliance with reporting deadlines. Effect: Reports were not submitted to the grantor in a timely manner and requests for extension of the due date were not made. Questioned Costs: The conditions did not result in questioned costs greater than $25,000. Repeat Finding: Yes. Recommendation: Reports should be generated sooner to allow time for sufficient review and approval before the due date. When timely submission may not be possible, UAS should request an extension from the grantor by providing a notice of the delay and rationale for the late report, and, if approved, submit the report by the extended deadline. When extensions are not granted, UAS should submit reports by the initial stated due date. Views of Responsible Officials: Management agrees with the finding and a response is included in the corrective action plan.

2025-006 Level of Effort Program: 84.325 Special Education Criteria: 2 CFR 200 requires recipients to meet specified matching and level of effort requirements. When changes in key personnel effort occur that could impact compliance with award terms, recipients are required to notify and obtain approval from the granting agency, when applicable. Condition: Out of the 9 awards tested, there were 2 instances where the project director did not meet their level of effort requirements as stated in the grant agreement. Additionally, communication to the granting agency did not occur prior to this being identified in the audit. Cause: The condition appears to be the result of insufficient monitoring controls over grant compliance requirements, including a lack of procedures to track and verify actual effort against required levels and to ensure timely communication with the granting agency when deviations occur. Effect: Failure to meet required level of effort and to notify the granting agency may result in noncompliance with matching and award requirements. Questioned Costs: None Repeat Finding: No Recommendation: We recommend management implement formal procedures to monitor level of effort requirements for key personnel throughout the grant period. This should include periodic comparisons of actual effort to required levels, with procedures to promptly notify and obtain approval from the granting agency when changes in effort occur. Views of Responsible Officials: Management agrees with the finding and a response is included in the corrective action plan.

2024-003 Subrecipient Monitoring Program: 21.027 Coronavirus State and Local Fiscal Recovery Funds Criteria: Per 2 CFR sections 200.332(d) through (f), a pass-through entity 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 the performance goals. Per 2 CFR section 200.502(a), the determination of when a Federal award is expended must be based on when the activity related to the Federal award occurs which is generally expenditure/expense transactions associated with awards. Condition: Subrecipients were not monitored timely enough to perform the necessary evaluation on subrecipient activities or to report expenditures on the schedule of expenditures of federal awards in the appropriate fiscal year. Cause: UAS did not receive invoices for certain subrecipients until after year-end close and for amounts covering an entire fiscal year and no amounts were accrued. Effect: Activities of the subrecipient could not be reviewed timely to ensure authorized use or for allowability with grant terms and conditions. Subrecipient expenditures on the schedule of expenditures of federal awards were understated by $344,948. Questioned Costs: The conditions did not result in questioned costs greater than $25,000. Context: Although subrecipient invoices were submitted after year-end close, UAS grant personnel reviewed expenses submitted for allowability and did not identify any disallowed costs. Repeat Finding: No. Recommendation: Establish a timeline for subrecipients to provide required reports to UAS in order to receive information during the fiscal year for monitoring during the post-award process. Review grant and subrecipient activity at year-end to evaluate whether all activity has been submitted and recorded. Views of Responsible Officials: Management agrees with the finding and a response is included in the corrective action plan.

2024-004 Payroll Allocation Programs: 16.820 Post Conviction DNA Testing, 21.027 Coronavirus State and Local Fiscal Recovery Funds, 84.047 TRIO Cluster – TRIO-Upward Bound Criteria: Per 2 CFR section 200.405, a cost is allocable to a particular Federal award if the goods or services involved are chargeable or assignable to that Federal award in accordance with relative benefits received, which can be met if the cost is incurred specifically for the Federal award. Condition: A payroll allocation change for an employee working on multiple grants was submitted in April 2024, but allocation was not updated in the payroll system timely. Cause: Human error and oversight resulted in delays in updating the change in allocation between grants. Effect: The 21.027 Coronavirus State and Local Fiscal Recovery Funds grant was overcharged by $4,673 for related payroll costs. Questioned Costs: The conditions did not result in questioned costs greater than $25,000. Context: While payroll allocation changes were properly approved in April 2024 and total pay to the employee was correct, human error resulted in delays in updating the change in allocation between grants. When the error was identified, updates were made to the allocation in September 2024. Repeat Finding: No. Recommendation: Grant management personnel should enhance review procedures for payroll-related expenditures after grant allocation changes are made to ensure that changes submitted are properly reflected in the accounting records in the appropriate period. Views of Responsible Officials: Management agrees with the finding and a response is included in the corrective action plan.

2024-005 Suspension and Debarment Programs: 16.820 Post Conviction DNA Testing, 21.027 Coronavirus State and Local Fiscal Recovery Funds Criteria: The Uniform Guidance and 2 CFR section 180.300 require that, for covered transactions, the non-Federal entity verify that entities are not suspended, debarred, or otherwise excluded. Condition: UAS’s suspension and debarment procedures only apply to subrecipient contracts and goods and services obtained via purchase order which allows for covered transactions to occur without sufficient review of entity status if not transacted in one of these two ways. Cause: UAS’s policy does not define when suspension and debarment procedures should be performed. Effect: UAS engaged in covered transactions without reviewing the entity’s suspended or debarred status. Questioned Costs: The conditions did not result in questioned costs greater than $25,000. Context: While UAS’s Subrecipient Commitment form and CSU General Provisions for Service Acquisitions referred to in the standard Purchase Order form contain either a self-declaration or suspension and debarment clause, the Contractor Service Agreement does not include this language. Two covered transactions tested with a Contractor Service Agreement did not appear to be reviewed for suspension and debarment prior to entering the transaction, although did appear to adhere to other applicable procurement policies. Auditors tested a selection of expenditures to determine if any of the selected vendors were suspended or debarred. None were identified as suspended or debarred in this testing. Repeat Finding: No. Recommendation: Enhance the current policy to include checking suspension and debarment status for vendors without a purchase order meeting the covered transaction definition, either through checking SAM Exclusions, obtaining a self-declaration/certification, or by adding a clause or condition to the transaction. Expand the policy to include ongoing monitoring of active vendors by checking for suspension and debarment status on a regular basis, but at least annually. Views of Responsible Officials: Management agrees with the finding and a response is included in the corrective action plan.

2024-006 Report Submission Delay Program: 21.027 Coronavirus State and Local Fiscal Recovery Funds Criteria: In accordance with 2 CFR 200.328, non-Federal entities must submit financial reports at the interval required by the Federal awarding agency or pass-through entity no later than the specified due date. If a justified request is submitted by a non-Federal entity, the Federal entity may extend the due date for any financial report. Condition: Two monthly financial reports were submitted after the stated due date. Cause: Monthly reports were generated prior to the due date, but were not reviewed and approved by the deadline for submission. Effect: Reports were not submitted to the grantor in a timely manner and requests for extension of the due date were not made. Questioned Costs: The conditions did not result in questioned costs greater than $25,000. Context: In both instances, the reports were submitted within 5 days of the stated due date. Repeat Finding: No. Recommendation: Reports should be generated sooner to allow time for sufficient review and approval before the due date. When timely submission may not be possible, UAS should request an extension from the grantor by providing a notice of the delay and rationale for the late report, and, if approved, submit the report by the extended deadline. When extensions are not granted, UAS should submit reports by the initial stated due date. Views of Responsible Officials: Management agrees with the finding and a response is included in the corrective action plan.

Reference Number: 2019-001 Federal Program Title: Fund for the Improvement of Postsecondary Education Federal Catalog Number: 84.116 Federal Agency: Department of Education Federal Award Number and Year: P116F150055 - 2015 Category of Finding: Subrecipient Monitoring Criteria In accordance with Title 2 Code of Federal Regulations (CFR) ?200.331(a) Requirements for pass-through entities, all pass-through entities must ensure that every subaward is clearly identified to the subrecipient as a subaward and includes the following information at the time of the subaward and if any of these data elements change, include the changes in subsequent subaward modification. (1) Federal Award Identification: (xii) Identification of whether the award is Research and Development (R&D) Condition During our review of two (2) subrecipients with active contracts during FY 18-19, we noted that the identification of whether the award is R&D, a required federal award element, was not communicated to the two (2) subrecipients. Cause Cal State L.A. University Auxiliary Services, Inc. was unaware that the identification of whether the award is R&D was a requirement to communicate to their subrecipients. Effect Failure to provide the required subaward information results in noncompliance with 2 CFR ?200.331 (a). Questioned Costs Questioned costs were not identified. Context In reviewing the population of two (2) subrecipients totaling $341,372, the identification of whether the award is R&D was not communicated to two (2) subrecipients. Recommendation We recommend the following procedures: 1. Provide the subaward information as required by 2 CFR ?200.331(a) to subrecipients at the time of the subaward and communicate any changes in subsequent subaward modifications. 2. For the existing subrecipients that were not previously provided the required elements, ensure the required element is communicated prior to the end of FY 19-20.

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