Audit 369854

Criteria: Management is responsible for only changing allowable costs to the federal award. In accordance with cash management requirements for cost-reimbursed contracts, the Foundation is required to request reimbursement for (a) only allocable, allowable, and reasonable contract costs that have already been paid or (b) if the non-federal entity is not delinquent in paying costs of contract performance in the ordinary course of business, costs incurred, but not necessarily paid. Condition: We selected a sample of expenditures requested for reimbursement. In our testing of the sample, we noted expenditures between $7,429 and $807,372 (average expenditure of $168,903) that were incurred and requested for reimbursement; however, the payment for the expenditure was not made until 47-135 days after reimbursement (average delay in payment of 97 days). Cause: The Foundation waited for reimbursement funds to be received to pay the expenditure for cash flow purposes. Effect or potential effect: Since the federal award is a cost-reimbursement contract, the request for reimbursement was not in compliance with the cash management requirements of the federal award. Recommendation: We recommend that management limit the time between requests to the federal government for reimbursement and payment of the expense to 30 days or less. Views of responsible officers: Management acknowledges this finding and will address remediation in the accompanying management’s corrective action plan in appendix A.