Audit 379231

Finding Type. Immaterial Noncompliance / Significant Deficiency in Internal Control over Compliance (Cash Management). Program. Research and Development Cluster; all Assistance Listing Numbers; all Award Numbers. Criteria. Per 2 CFR §200.305(b), non-federal entities must minimize the time elapsing between the transfer of funds and disbursement. Entities must also ensure that drawdowns are based on actual, allowable expenditures and supported by adequate documentation. Condition. The University did not have documented review procedures in place for federal grant drawdowns under the Research and Development cluster. Drawdowns were processed without a formal review or approval process to verify that amounts requested were based on allowable expenditures. Cause. The University lacked formal internal controls and oversight mechanisms to ensure drawdowns were reviewed prior to submission. The process relied on informal practices without documented policies or designated reviewers. Effect. This deficiency increases the risk of drawing federal funds in excess of actual expenditures or for unallowable costs, potentially resulting in noncompliance with federal regulations. Questioned Costs. No costs were questioned related to this finding. Recommendation. The University should implement formal review procedures for all federal grant drawdowns, including documented policies, designated reviewers, and system controls to ensure drawdowns are accurate, allowable, and properly supported. View of Responsible Officials. Management agrees with this finding and has prepared a Corrective Action Plan.