Audit 389399

Cash Management - Significant Deficiency in Internal Controls over Major Programs Condition: The Organization requested reimbursement of certain federal grant awards in excess of actual, allowable expenditures incurred at the time of the request. Major Programs: ALN 93.138 - Protection and Advocacy or Individuals with Mental Illness; ALN 84.240A - Program of Protection and Advocacy of Individual Rights. Criteria: 2 CFR §200.305(b) requires non-federal entities to minimize the time elapsing between the transfer of federal funds and disbursement or incurrence of costs. Under the reimbursement method, drawdowns should be limited to actual, allowable expenditures incurred and not estimates or projections of future expenditures. Cause: The Organization did not follow their internal control procedures in place to ensure that reimbursement requests were supported by expenditures incurred prior to submission. Management relied on estimated expenditures rather than reconciling to actual amounts incurred at the time of the request. Effect: Federal funds were drawn in excess of actual expenditures incurred, increasing the risk of noncompliance with Uniform Guidance cash management requirements. Questioned Costs: While funds were drawn in advance, all amounts were subsequently expended on allowable program costs. Ultimately no questioned costs were noted, however, the excess funds were matched against allowable costs incurred after the grant period end of September 30, 2025. Recommendation: The Organization should follow internal control procedures necessary to ensure requests for reimbursement are based solely on allowable expenditures that have been incurred prior to the date of the request. View of Responsible Officials: The Organization agrees with the finding and will implement corrective action necessary to address the condition.