Finding 6: KSU Failed to Implement an Effective System of Internal Controls Over Federal Grant Expenditures Putting Over $3 Million Dollars in Federal Funds at Risk.
The University significantly improve 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 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.
The Manager has implemented new processes to include grant drawdowns and reconciliations of Grant Accounts. Internal controls have been established. All Title III grant expenditures must obtain the signature of the Director of Title III Programs. All approvals in Banner have been established and the Director is in all approval queues. Depending on the item being purchased (i.e., computers), the Chief Information Officer is also in the line of approvals.
KSU staff working in federal grant expenditures have been provided adequate training and are scheduled to attend additional training to understand the specific requirements of each grant and federal spending in general, including the factors affecting allowability of costs, that costs are necessary and reasonable for the performance of the award. The training documentation will be maintained in employee's personal and historical records.