Audit 396873

Criteria or Specific Requirement – Uniform Guidance Section 200.346 requires the Organization to repay any federal funds paid to the Organization in excess of the amount the Organization is entitled to under the Federal award. Condition and Context – During the audit period, the entity submitted federal grant cash reimbursement requests of $75,693 in excess of expenditures, resulting in an overpayment of federal grant funds. The submissions caused the entity to receive federal funds in excess of allowable costs incurred. At year‑end, the excess funds were identified as owed back to the grantor. Effect – The Organization obtained federal funds in excess of allowable expenditures resulting in temporary noncompliance with federal cash management requirements, a liability owed to the federal grantor, and an increased risk of improper federal fund drawdowns in future periods. Cause – The excess reimbursement request occurred due to insufficient review and reconciliation controls over the grant reimbursement process. Specifically, there was no secondary verification to confirm that reimbursement requests had, or had not, already been submitted and approved. Recommendation – We recommend management strengthen internal controls over the grant reimbursement process, including enhanced review procedures, reconciliation of submitted reimbursement requests to accounting records, and document approvals of the reimbursement request prior to submission. Views of Responsible Officials and Planned Corrective Action – Management agrees with the finding. The Organization will return the overpaid federal funds to the grantor upon identification of the duplicate reimbursement. To prevent recurrence, management will implement the following corrective actions: (1) establish a formal reconciliation between reimbursement requests submitted and expenditures recorded in the general ledger prior to submission, (2) require secondary review and approval of all grant reimbursement requests by a supervisor not involved in preparation of the request, (3) maintain a centralized reimbursement tracking log documenting submission dates, amounts, and approval confirmations, and (4) provide refresher training on federal cash management training to staff responsible for grant drawdowns.