37

• Federal grant dates of expenditures cannot be verified due to Banner recording transaction dates, which are the dates when the information is entered instead of the date the transaction occurred as would be needed by grant management staff for proper administration.
• Cash management issues also caused transactions to be moved from one activity to another, and the journal entries failed to reflect actual expenses paid.

Due to ineligible and unsupported items being charged to the various federal grants, KSU is now at risk for having total questioned costs of $3,341,204 (Figure 7). If federal awarding agencies find the funds were spent inappropriately, KSU could be required to repay those funds. Additionally, KSU had excess earnings on federal funds of $31,815 that is due back to the federal government. These findings could cause increased scrutiny by the awarding agency and hurt KSU’s ability to receive federal grants in the future. Additionally, the Schedule of Expenditures of Federal Awards (SEFA) reporting could If federal awarding agencies find the funds were spent inappropriately, KSU could be required to repay those funds.

If federal awarding agencies find the funds were spent inappropriately, KSU could be required to repay those funds.

be incorrect due to dating issues in the Banner software. There is also the possibility that expenditures included on the SEFA had not yet actually been paid but were only entered into accounting software to post to grants. In fact, during our review of expenditures, the expenditure detail provided to APA auditors did not agree to the expenditure totals on KSU's SEFA for FY 20 or FY 21 for the following grants: Title III, Part B, HBCU and HEERF Institution Portion.

Figure 7: Potential Questioned Costs by Grant

Source: APA.

While each federal grant has specific requirements to determine how and when the funds may be spent, there are some general criteria that relate to most federal awards. The underlying federal regulation for the criteria noted below and additional criteria specific to each federal grant reviewed can be found in Appendix D.

• Sufficient Documentation - Each grantee financial management system and records documentation must be sufficient to determine that funds have been used in accordance with federal statutes, regulations, and the terms and conditions of the federal award. The records should show the amount of the federal funds, how the funds were spent, total costs for the project, any matching funds provided by other sources, and any other records necessary for the funds to be sufficiently audited.