Cleveland Clinic Lerner College of Medicine Inappropriately Drew Down Hurricane Sandy Disaster Relief Act Funds and Did Not Always Implement Effective Internal Controls

Cleveland Clinic Lerner College of Medicine of Case Western Reserve University (Lerner College) inappropriately drew down some Disaster Relief Act funds and did not implement effective internal controls to monitor Disaster Relief Act funds. Of the $588,000 in Disaster Relief Act funds that we reviewed, $299,000 in funds were drawn down without an immediate cash need for a Hurricane Sandy-related activity. We did not determine whether the Disaster Relief Act funds were used for allowable costs.

According to Lerner College officials, Lerner College inappropriately drew down Disaster Relief Act funds because of human error and inadequate staff training on the Department's payment management system. Lerner College stated that it did not monitor NYU School of Medicine's subaward activities because it had a longstanding relationship of trust with the entity.

We recommended that NIH work with Lerner College to ensure that (1) the $299,000 in Disaster Relief Act funds inappropriately drawn down were returned to the Department and not used for unallowable activities, (2) Lerner College adheres to Federal requirements for drawing down Federal funds, (3) Lerner College personnel are adequately trained on the use of the Department's payment management system, and (4) Lerner College follows its policies and procedures for managing and monitoring its subaward to NYU School of Medicine. Lerner College partially agreed with our first finding and disagreed with our second finding. NIH concurred with our recommendations and described actions it plans to take to address them.