Audit 397630

U.S. Department of Health and Human Services Research and Development Cluster – 93.RD 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 June 30, 2025. 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 drawdown 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 and the Institute had an overdrawn balance of $719,817 at June 30, 2025. Recommendation The Institute should improve its procedures over advances of federal funds. Management Response Management acknowledges the finding regarding the timing of federal fund drawdowns and the requirements under 2 CFR 215.22 to minimize the time between receipt of federal funds and the disbursement of those funds for allowable program costs. The Institute recognizes the importance of maintaining compliance with federal cash management requirements and ensuring that drawdowns are aligned as closely as possible with immediate funding needs. Management has enhanced its oversight of federal cash management processes to ensure that drawdowns are closely aligned with actual expenditures and immediate cash needs in accordance with 2 CFR 215.22. Additional review procedures for drawdown requests have been implemented, and regular monitoring of grant expenditure and cash balances has been incorporated into the Institute’s ongoing financial management and oversight activities.