3.10.5  

The institution maintains financial control over externally funded or sponsored research and programs.

RATIONALE FOR COMPLIANCE JUDGMENT

Externally-funded programs are subject to the same internal control procedures that apply to any other program at the college.  All policies and procedures established by the college apply equally to funds received from all sources unless specifically exempted in the policy.  Federally funded programs are also managed in compliance with Federal Circular A-110 [1]. 

The Grants Development Department [2] serves NSCC in competitively researching, developing, and obtaining grants in support of a variety of disciplines and areas.  The Grants Accounting Department is responsible for the financial accounting functions required by the grant.  A separate general ledger fund account is established in the college’s institutional funds for each externally funded program.  All revenues and expenditures of the program are tracked using this account.  The employee service access authorization form establishes expenditure authorities for the account.  Grant accounting functions are posted in the college public folders [3].

Transactions for externally-funded programs are included in the college’s annual audit.  In addition to the annual audit, the college is in the process of undergoing an audit from the National Science Foundation pertaining to National Science Foundation Grants that are expiring.  Although the final audit has not yet been received, preliminary discussions with the audit staff indicate that there were some internal control deficiencies created by grant personnel not following established college policies and procedures, errors caused by charging indirect costs at the budgeted rate versus the actual rate, and some weaknesses in documenting in-kind contributions.  It is anticipated that the completed audit report will be issued sometime in March of 2007. 

The Nashville State Community College Foundation accepts, processes, and manages private support to the college. The Foundation is a separate legal entity and is a not-for-profit tax exempt corporation with an independent board of trustees. It is audited as a component unit of the college by State of Tennessee Comptroller's Office, Division of State Audit as part of the state's comprehensive annual financial report covering all state funds and account groups. The relationship between the Foundation and the College is managed in accordance with TBR policy (04:01:07:02) [4] and the agreement between the two entities.