Audit 370077

Condition Funds were drawn down by the Institute in excess of the three-day period recommended by its funding agency, and did not minimize the time elapsing between the transfers of funds from the grantor to the issue of payment by the recipient during the year ended December 31, 2024. Criteria Cash management under 2 CFR 215.22 states that payment methods shall minimize the time elapsing between the transfers of funds from the grantor to the issue of payment by the recipient. Cause The Institute’s preparation and review procedures over the draw-down of funds were insufficient to minimize the time elapsing between the transfers of funds from the grantor to the issue of payments by the Institute. Effect The Institute was not in compliance with the cash management compliance requirements stated in 2 CFR 215.22 during the year. Recommendation The Institute should improve policies and procedures regarding cash management. This should include the procedure for calculating the allowable cash draw for actual immediate cash needs for expenses to be paid within the three-day period, in order to minimize the time elapsing between the transfer of funds from the grantor to the issue of payment by the recipient to cover operating cash flow needs. Views of Responsible Officials and Planned Corrective Actions Management acknowledges the finding and the management staff of the Institute take seriously the federal compliance requirements that apply to drawing funds from the DHHS Payment Management System. The Institute recognizes that it has drawn down excess funds. The Institute plans to improve policies and procedures for cash management in 2025 that will ensure the calculation for allowable cash draw for actual immediate cash needs is complete and accurate.