Audit 374530

Federal Program: U.S. Department of Education: Fund for the Improvement of Postsecondary Education, ALN 84.116Z Criteria: Federal regulations (2 CFR section 200.305) require that recipients minimize the time between the drawdown of federal funds and their disbursement for allowable project costs. Advances of federal funds must be limited to the minimum amounts needed and timed to be in accordance with the actual, immediate cash requirements of the project. Condition: The College drew down federal funds in April 2025 for project expenses that were not spent until May and June 2025. Cause: The issue occurred due to internal miscommunication regarding which account code should be used to record the grant activity. The incorrect code was used when processing the April drawdown, which led to drawing funds before eligible expenditures were incurred. Effect: Although the funds were ultimately spent within the same fiscal year, the timing of the drawdown did not meet the requirements for advance drawdowns. Questioned Costs: None Context: The College requested and received two drawdowns related to this award. This error occurred in only the first drawdown. Project expenses reimbursed by the second drawdown were appropriately incurred prior to the drawdown request. Repeat Finding: No Recommendation: Crowe recommends the College establish clear guidance and training on the proper use of organization codes for federal grants. Views of Responsible Officials and Planned Corrective Actions: College officials acknowledge the error and attribute it to the misclassification of the grant under an incorrect organization code. They note that the funds were ultimately expended for allowable project costs within the same fiscal year. The College agrees to enhance training and implement additional review procedures to ensure compliance with cash management requirements going forward.