Internal Controls - Each grantee must establish and maintain effective internal controls over the federal awards that provide reasonable assurance that the entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal award.

Cash Management - Each grantee must minimize the time elapsing between the transfer of funds from the U.S. Treasury or pass-thru entity and disbursement by the entity. Typically, if interest is earned due to the grantee delaying disbursing funds after receiving them from the federal agency, those earnings on federal funds must be remitted to the federal government.

Allowability - The expenditure must be necessary and reasonable for the performance of the federal award and be adequately documented.

The University significantly improves its administration of federal grant funds. KSU should allocate sufficient staff and resources to ensure grant funds are spent in accordance with federal statutes, regulations, and the terms and conditions of the various federal awards. Specifically, the University should implement and maintain an effective system of internal controls over the administration of federal funds to ensure funds are spent appropriately and in accordance with the specific grant requirements. This includes establishing a chain of command that has the skills and knowledge to administer the funds and to ensure internal controls are not circumvented or overridden.

The University must ensure staff working in federal grant expenditures are provided adequate training to understand the specific requirements of each grant and federal spending in general, including the factors affecting the allowability of costs, that costs are necessary and reasonable for the performance of the award, and that sufficient documentation is maintained.

The University keep records that show the amount of funds under the grant, how they used the funds, the total cost of the project, any cost-sharing source, and any other documentation necessary to facilitate an effective audit.

The University utilizes software effectively and efficiently to post transactions that are properly supported to the correct grants and other operating accounts. Transactions should include the date they occur instead of the date they are entered into the accounting system.

The Foundation remit $31,815 in interest to the federal grantor as required.