What OIG Evaluated:
The objectives of this audit were to evaluate 1) the adequacy of the Library’s grants operations policies and procedures, 2) the Contracts and Grants Directorate and the Program Office’s compliance with those procedures, and 3) the grantees’ compliance with those procedures.
What OIG Found:
- The Library Could Improve Its Procedures for Performing Financial Monitoring of Grantees
- The Library Could Improve Its Procedures for Performing Financial Reviews of Proposed Grant Costs
- The Library Should Consider Limiting Extensions to a Grants Period of Performance
- The Library Did Not Follow Its Procedures for the Closeout and Award of Grants
What OIG Recommends:
- Conduct training for Contracts and Grants Directorate on how to obtain and review grantees’ Single Audit reports. The training should also include the process for Identify Fiscal Yearly internal control deficiencies, performing follow-up activities, and reviewing SEFA expenditures. In addition, the training should define audit terminology.
- Require grantees to provide grant expenditure reports that detail the grantee’s expenditures at the cost code and transaction level at least on an annual basis. These reports should come directly from the grantees accounting system. Also, require the grantee to reconcile these expenditures to the expenditures it reported by budget category in the Budget Summary Reports that it submitted to the Library. Ensure that the grantee researches and resolves any differences.
- Require that any grantees that are not subject to A-133 undergo an independent audit.
- Include the following steps in its grantee risk assessment procedures: (1) If a Single Audit report is available for the grantee, review the report for any internal control or compliance findings that could affect the grantee’s performance under a Library award. Determine whether the grantee has taken any corrective actions to address the Audit findings. (2) Reconcile the expenditures that the grantee reported in its FFR, Budget Summary Report, and drawdowns or advances to the expenditures that the grantee may have reported in its SEFA or Audit report. Research and resolve any discrepancies. (3) Reconcile the grant expenditure reports that detail the grantee’s expenditures at the cost code and transaction level to the expenditures reported by budget category in the Budget Summary Reports that it submitted to the Library. Research and resolve any differences. (4) Review the transactions in the grantee’s expenditure reports and request explanations for any large transactions, transactions that do not appear to be allowable or allocable to the grant, and unusual journal entries.
- Implement writ ten procedures for performing and documenting its financial reviews of costs included in grantees’ original proposals and proposal amendments. Writ ten procedures could include verification that (1) Labor costs are supported by payroll records (2)Proposed fringe benefit cost rates are supported by grantee records. (3) Subgrantee and consultant costs are based on existing proposals and commitments to perform work under the grant. (4) Travel costs are reasonable. (5) The grantee applied its indirect cost rates to the correct allocation base. (6) Other direct costs are supported by vendor quotes. (7)The grantee’s Single Audit reports do not include internal control or compliance weaknesses that could affect the grantee’s performance. (8) For nonpublic entities, Audit reports are available to support that the organization is solvent and is able to perform under the award.
- Consider limiting the number of times that it can extend a grant’s period of performance.
- Consider updating its guidelines and procedures to include policies for the novation or transfer of a grant to a new organization, and consulting with the Library’s Office of General Counsel.
