Finding 2024-003 Pass-Through Entity: Federated States of Micronesia National Government Federal Agency: U.S. Department of the Interior Assistance Listing: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: D24AF00341 Area: Procurement, Suspension, and Debarment Questioned Costs: $8,368 Criteria: Article VI, section 1(m)(i) of the FSM-U.S. Fiscal Procedures Agreement permits subrecipients of the Federated States of Micronesia National Government to use their own procurement procedures when those procedures are consistent with the Agreement. Sections 7.1.1(3)(b) and 7.2.5(1)(d) of the State's procurement regulations require three competitive quotations for applicable repair and maintenance purchases unless an approved waiver is documented. Any waiver must be documented, approved, and submitted to the State Treasury for inclusion in the procurement file. 2 CFR 200.318 requires documentation sufficient to detail the history of each procurement transaction, including the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and basis for contract price. 2 CFR 200.319 requires all procurement transactions under a federal award to be conducted in a manner providing full and open competition. 2 CFR 200.320 permits small purchases without soliciting competitive quotations if the price is deemed reasonable based on research, experience, or purchase history, provided supporting documentation is maintained. Condition: For 1 (2%) of 65 transactions tested, from a sample totaling $1,303,256 and a population totaling $24,317,028, the State did not document compliance with applicable procurement regulations. For test item 51, obligation 391218, the State did not solicit or document competitive quotations and did not provide an approved waiver or other documentation supporting the procurement method. The related contract expenditures recorded in fiscal year 2024 totaled $8,368. Retainage of $930 paid on October 31, 2024 was outside the fiscal year and is not included in known questioned costs.
Finding 2024-004 Pass-Through Entity: Federated States of Micronesia National Government Federal Agency: U.S. Department of the Interior Assistance Listing: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: D23AF00012-01 (Education), D22AF00326-01 (Supplemental Education). Area: Special Tests and Provisions Questioned Costs: $0 Criteria: The terms and conditions of the Compact Sector Education and Supplemental Education Grant awards require annual performance evaluations for grant-funded personnel and retention of those evaluations in personnel files. Condition: For 11 (69%) of 16 personnel records tested, the State did not provide documentation demonstrating that the required annual performance evaluation had been completed and retained. Cause: Controls over completion, monitoring, and retention of personnel evaluations were not operating effectively. Effect: The State did not comply with the personnel-evaluation requirement. The exception did not identify an amount expended or received that was unsupported or unallowable; therefore, no questioned costs are reported. Recommendation: The State should establish an annual evaluation calendar, assign responsibility for monitoring completion, and require supervisory and personnel-office review before evaluations are filed as complete. Identification as a Repeat Finding: 2023-004 View of Responsible Officials: The State’s response and corrective action plan addressing this finding is included in the accompanying corrective action plan.
Finding 2024-005 Pass-Through Entity: Federated States of Micronesia National Government Federal Agency: U.S. Department of the Interior Assistance Listing: 15.875 Federal Award No.: Various Area: Equipment and Real Property Management Questioned Costs: $0 Criteria: Article VI, section 1(f)(iv) of the FSM-U.S. Fiscal Procedures Agreement and 2 CFR 200.313(d)(1) require property records to include specified identifying, funding, ownership, acquisition, location, use, condition, and disposition information. 2 CFR §200.313(d)(1) requires property records to include a description, serial number or ID number, source of funding (including FAIN), title holder, acquisition date, cost, federal participation percentage, location, use and condition, and disposition data including disposal date and sale price. Condition: During compliance testing one government vehicle (GE-0807) identified on supporting fuel control forms, could not be traced to the State’s fixed asset lapsing schedule or other departmental tracking schedules. As a result, we are unable to determine whether the asset was capitalized, included in the State’s fixed asset inventory records, and traced as required by the above criteria. Cause: Property data were not maintained uniformly, and departments did not consistently report acquired assets to the central procurement and supply office. Effect: The State did not comply with property-record requirements, increasing the risk that federally funded property may not be safeguarded or properly reported. No specific award expenditure was identified as unallowable or unsupported solely because of the recordkeeping deficiency; therefore, no questioned costs are reported. Recommendation: The State should standardize and reconcile central and departmental property records ensuring that the data elements are uniform; investigate and record the vehicle; and require departments to report acquisitions, transfers, physical-inventory results, and dispositions to the central property custodian. Identification as a Repeat Finding: Not applicable View of Responsible Officials: The State’s response and corrective action plan addressing this finding is included in the accompanying corrective action plan.
Finding 2024-007 Pass-Through Entity: Federated States of Micronesia National Government Federal Agency: U.S. Department of the Interior Assistance Listing: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: D24AF00340, D24AF00341, D23AF00263, D24AF00335 Area: Reporting Questioned Costs: $11,237 Criteria: Article VI, section 1(b)(i) of the FSM-U.S. Fiscal Procedures Agreement requires effective internal control over accurate and complete federal financial reporting. Condition: All four SF-425 reports tested differed from the underlying accounting records. Federal cash receipts for D23AF00263 differed by $99,526 and could not be recalculated from contemporaneous support. Reported disbursements exceeded accounting records by an aggregate $663,986. Of this amount, $11,237 related to a duplicate obligation that should have been reversed; $652,749 resulted from allowable cost-of-living reclassifications recorded after the reports were filed, as follows:Condition: (Continued) a) $99,526 - The federal cash receipts difference could not be recalculated or traced to the general ledger. No affected award expenditure or receipt was identified; therefore, no questioned costs are reported for this difference. b) $11,237 - Reported federal cash disbursements included obligation 386833, the original version of a corrected transaction that should have been reversed. c) $652,749 - These differences resulted from allowable cost-of-living reclassifications between the general and sector funds recorded after the SF-425s were filed. The underlying expenditures remained allowable; therefore, no questioned costs are reported. Cause: The State did not retain contemporaneous SF-425 support, did not detect the duplicate obligation, and did not timely reconcile post-filing payroll reclassifications to filed reports. Effect: The State did not comply with applicable reporting requirements. The $11,237 is questioned as an unallowable expenditure charged to the grant which was reported on the SF-425. Recommendation: The State should retain each filed SF-425, certification, summary report, transaction-level detail, and reconciliation as one contemporaneous reporting package. Require supervisory review of the reconciliation and investigate duplicate or unreversed transactions before submission. Identification as a Repeat Finding: Not applicable View of Responsible Officials: The State’s response and corrective action plan addressing this finding is included in the accompanying corrective action plan.
Finding 2024-006 Pass-Through Entity: Federated States of Micronesia National Government Federal Agency: U.S. Department of the Interior Assistance Listing: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: D20AF00050-02 Area: Period of performance Questioned Costs: $0 Criteria: Article VI, section 1(c)(ii) of the FSM-U.S. Fiscal Procedures Agreement requires obligations to be incurred within the authorized award period and liquidated no later than 120 days after the end of the funding period, unless otherwise agreed. Funding for sector grants for public infrastructure shall be available for obligation for the time period described in the terms and conditions of the sector grants. The Government of the Federated States of Micronesia shall liquidate obligations incurred under a grant not later than 120 days after the end of the funding period or as otherwise mutually agreed. Condition: Grant D20AF00050, which is not a sector grant for public infrastructure, was originally awarded in May 2020 and subsequently reprogrammed. Among other changes, the reprogramming authorized the obligation of certain grant funds for medical infrastructure projects. The final extension of the grant, identified as D20AF00050-02, lapsed on September 30, 2023. No documentation was provided demonstrating that the grantor approved a waiver of the applicable period-of-performance requirements for the reprogrammed expenditures or granted a no-cost extension beyond September 30, 2023. The two closing payments were made on March 5 and May 21, 2024, 37 and 114 days, respectively, after the stated liquidation deadline for the following transactions:Cause: The State did not adequately monitor the grant’s closeout requirements or establish procedures to ensure that obligations incurred before the end of the period of performance were liquidated within the prescribed timeframe. Effect: The State did not comply with the grant’s liquidation and closeout requirements. However, because the costs were allowable and the related obligations were properly incurred within the period of performance, the late payments do not, by themselves, affect the allowability of the underlying expenditures. Recommendation: The State should strengthen its grant closeout procedures to ensure that all allowable obligations are liquidated within the timeframe established by the grant agreement and applicable federal requirements. When timely liquidation is not possible, the State should request and obtain written approval from the grantor for an extension before the liquidation deadline and retain the approval with the grant records. Identification as a Repeat Finding: Not applicable View of Responsible Officials: The State’s response and corrective action plan addressing this finding is included in the accompanying corrective action plan.
Finding 2024-008 Pass-Through Entity: Federated States of Micronesia National Government Federal Agency: U.S. Department of the Interior Assistance Listing: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: D19AF00079 Area: Cash management Questioned Costs: $0 Criteria: Article IV, sections 1(b) and 1(c) of the FSM-U.S. Fiscal Procedures Agreement require the State to maintain accounting records that identify the source and application of grant funds and to establish effective controls over grant cash to ensure that such funds are used solely for authorized purposes. Condition: The State recorded a $3.5 million transfer from the Sector Cash account to the General Fund cash account as reimbursement for sector expenditures initially financed by the General Fund. However, the supporting voucher did not include a reconciliation or detailed listing, prepared at the time of the transfer, identifying the expenditures comprising the reimbursement. Reports generated after the transfer also did not demonstrate how management originally calculated the $3.5 million amount. Nevertheless, the available accounting records established that total unreimbursed eligible sector expenditures before the transfer exceeded $3.5 million. Cause: The State did not maintain an ongoing reconciliation of eligible sector expenditures temporarily financed by the General Fund, including amounts subsequently reimbursed and any remaining unreimbursed balances. Effect: The State did not maintain adequate support for amounts due between the General Fund cash account and the Sector Fund cash account. As a result, the State had to rely on other available documentation during the audit to substantiate the related due to and due from balances. Recommendation: The State should maintain a current interfund receivable and payable reconciliation that identifies each eligible grant expenditure advanced by the General Fund, amounts subsequently reimbursed, remaining unreimbursed balances, and evidence of management’s review and approval of each transfer. The reconciliation and supporting expenditure detail should be completed and retained when each reimbursement is calculated and approved Identification as a Repeat Finding: Not applicable View of Responsible Officials: The State’s response and corrective action plan addressing this finding is included in the accompanying corrective action plan.
Pass-Through Entity: Federated States of Micronesia National Government Federal Agency: U.S. Department of the Interior Assistance Listing: 15.875 Economic, Social, and Political Development of the Territories Federal Award No.: D24AF00340, D24AF00341, D23AF00263, D20AP00054, D24AF00350 Area: Allowable Costs/Cost Principles Questioned Costs: $27,217 Criteria: Article VI, section 1(a)(ii) of the FSM-U.S. Fiscal Procedures Agreement requires accounting records sufficient to support the source and application of grant funds, including canceled checks, paid bills, payroll and time-and-attendance records, contracts, subaward documents, and other financial data. Under 2 CFR 200.403, costs charged to a federal award must be necessary, reasonable, allocable, and adequately documented. Under 2 CFR 200.430(g), salary and wage charges must be supported by records that accurately reflect the work performed. Condition: The instances of noncompliance were as follows: 1) For 5 (8%) of 65 nonpayroll transactions tested, from a sample totaling $1,303,256 and a population totaling $24,317,028, the State did not provide sufficient financial or programmatic records, such as vendor invoices, contracts, receiving reports, or approved budgets, to establish allowability:2) For 22 (37%) of 60 payroll transactions tested, from a sample totaling $36,422 and a population totaling $24,317,028, the State either (a) did not provide uniform or departmental timecards or timesheets supporting compensation, taxes, and fringe benefits; (b) provided departmental records supporting fewer hours than the uniform timesheet; (c) had unexplained differences between regular and leave hours in the two records; or (d) did not provide underlying support for retroactive regular pay, as follows:2) For 22 (37%) of 60 payroll transactions tested, from a sample totaling $36,422 and a population totaling $24,317,028, the State either (a) did not provide uniform or departmental timecards or timesheets supporting compensation, taxes, and fringe benefits; (b) provided departmental records supporting fewer hours than the uniform timesheet; (c) had unexplained differences between regular and leave hours in the two records; or (d) did not provide underlying support for retroactive regular pay, as follows: Cause: Documentation-retention controls at the State Treasury and responsible departments were not operating effectively. Departmental and uniform timekeeping records were not consistently reconciled, and supporting personnel records were not consistently retained. • For Conditions 1, 2(a), and 2(d), disbursement and timekeeping records were not consistently filed and retained by the State Treasury and responsible departments. • For Conditions 2(b) and 2(c), departmental controls did not ensure reconciliation of departmental timesheets to the uniform timesheets submitted to the State Treasury. The Treasury did not consistently receive departmental support and relied on agency review and certification. Cause: (continued) • For Conditions 3(a) and 3(b), personnel-record retention controls were not operating effectively. Effect: The State did not comply with applicable allowable-cost and compensation requirements. Unsupported expenditures constitute known questioned costs of $27,217. Likely questioned costs exceeded $25,000 based on projection of the sample results. Recommendation: The State should: • Strengthen centralized documentation filing and retention controls for disbursement, payroll, and personnel records. • Because the State Treasury relies on departmental monitoring, the State should: 1. Enhance monitoring at the departmental level or implement a uniform timekeeping system. 2. Require departments to submit timekeeping reports to the State Treasury for secondary reconciliation. 3. Require retention of explanations and approvals for changes affecting uniform timesheets that are not reflected in departmental records. Identification as a Repeat Finding: 2023-002 View of Responsible Officials: The State’s response and corrective action plan addressing this finding is included in the accompanying corrective action plan.
Finding 2024-009 Pass-Through Entity: Federated States of Micronesia National Government Federal Agency: U.S. Department of Education Assistance Listing: 84.027 Special Education – Grants to States (IDEA, Part B) Federal Award No.: H027A230005 Area: Allowable Costs/Cost Principles Questioned Costs: $4,165 Criteria: Under 2 CFR 200.403, costs must be necessary, reasonable, allocable, and adequately documented. Under 2 CFR 200.430(g), salary and wage charges must be based on records that accurately reflect work performed. 2 CFR 200.441 establishes that expenditures for fines related to the violation of laws or regulations are generally unallowable unless specifically required by the award or approved in writing by the awarding agency. Condition: 1) For 5 (8%) of 60 nonpayroll transactions tested, from a sample totaling $79,617 and a population totaling $951,629, the State either (a) did not provide sufficient financial or programmatic support to establish allowability or (b) charged a cost that was unallowable under 2 CFR 200.441, as follows: 2) For 9 (15%) of 60 payroll transactions tested, from a sample totaling $28,999 and a population totaling $951,629, the State either (a) did not provide timekeeping documentation supporting compensation, taxes, and fringe benefits or (b) reported full regular hours while the time export showed leave and no approved leave request was provided, as follows: Condition: (continued) 3) Of the payroll transactions tested and cited above, we noted that personnel action forms or contracts were unavailable for two employees, and authorized direct-deposit forms were unavailable for three employees. Cause: Documentation-retention and review controls at the State Treasury and responsible departments were not operating effectively, and personnel did not understand or consider 2 CFR 200.441. • For Conditions 1(a), 2(a), and 2(b), disbursement and timekeeping documentation was not consistently filed and retained. • For Condition 1(b), personnel did not consistently understand or apply 2 CFR 200.441. • For Conditions 3(a) and 3(b), personnel-record retention controls were not operating effectively. Effect: The State did not comply with applicable allowable-cost and compensation requirements. Unsupported or unallowable expenditures constitute known questioned costs of $4,165. Likely questioned costs exceeded $25,000 based on projection of the sample results. Recommendation: The State should strengthen document-retention, payroll reconciliation, and personnel-authorization controls and incorporate review of entertainment-cost restrictions into preapproval and payment checklists and periodically monitor compliance. Identification as a Repeat Finding: 2023-006 View of Responsible Officials: The State’s response and corrective action plan addressing this finding is included in the accompanying corrective action plan.
Finding 2024-010 Pass-Through Entity: Federated States of Micronesia National Government Federal Agency: U.S. Department of Education Assistance Listing: 84.027 Special Education – Grants to States (IDEA, Part B) Federal Award No.: H027A230005 Area: Equipment and Real Property Management Questioned Costs: $0 Criteria: 2 CFR §200.313(d)(1) requires property records to include a description, serial number or ID number, source of funding (including FAIN), title holder, acquisition date, cost, federal participation percentage, location, use and condition, and disposition data including disposal date and sale price. Condition: Six government vehicles identified on fuel-control forms (GE-1042, GE-1043, GE-1045, GE-1205, GE-1206, and GE-1288) could not be traced to the State fixed-asset schedule or departmental property records. Cause: Property data was not maintained uniformly, and departments did not consistently report acquired assets to the central procurement and supply office. Effect: The State did not comply with equipment-record requirements, increasing the risk that federally funded property may not be safeguarded or properly reported. No specific award expenditure was identified as unsupported or unallowable solely because of this recordkeeping deficiency; therefore, no questioned costs are reported. Recommendation: The State should standardize and reconcile central and departmental property records ensuring that the data elements are uniform; investigate and record the six vehicles; and require departments to report acquisitions, transfers, physical-inventory results, and dispositions to the central property custodian. Identification as a Repeat Finding: Not applicable View of Responsible Officials: The State’s response and corrective action plan addressing this finding is included in the accompanying corrective action plan.
Finding 2024-011 Federal Agency: U.S. Department of Health and Human Services Assistance Listing: 93.224 – Health Center Program (Community Health Centers, Migrant Health Center Health Care for the Homeless, and Public Housing Primary Care). Federal Award No.: 5 H80CS04302-19-00, 6 H80CS04302-20-02, 2 H80CS04302-20-00, and H80CS04302-20-05 Area: Allowable Costs/Cost Principles Questioned Costs: $3,816 Criteria: Sections 200.403 and 200.430(g) of Title 2 of the CFR require adequately documented costs and compensation records that accurately reflect work performed. Section 200.302(b) requires financial records that identify the source and application of federal funds and permit transactions to be traced to the applicable award. Condition: 1. For 15 (25%) of 60 payroll transactions tested, from a sample totaling $62,084 and a population totaling $1,094,077, the State either (a) did not provide sufficient timekeeping support; (b) provided departmental records supporting fewer hours than the uniform timesheet; (c) had unexplained differences between regular and leave hours; or (d) did not provide support for retroactive regular pay, as follows: Condition: (continued) 2. Of the payroll transactions tested and cited above, we additionally noted the following: a. For two employees, the State did not provide the personnel action form or employment contract applicable to the tested pay period. b. For test items 9, 10, 11, 12, 13, 20, 22, 31, and 33, the general ledger did not identify which of the three Health Center awards was charged. Cause: Payroll documentation-retention controls were ineffective, and the chart of accounts was not designed to identify the specific Health Center award applicable to each transaction. a. For Conditions 1(a) through 1(d) and 2(a), payroll and personnel support was not consistently retained. b. For Condition 2(b), the chart of accounts did not include award-level coding for each Health Center award. Effect: The State did not comply with allowable-cost, compensation, and financial-management requirements. Unsupported payroll charges constitute known questioned costs of $3,816. Likely questioned costs exceeded $25,000 based on projection of the sample results. Recommendation: The State should: 1. Strengthen payroll documentation-retention and departmental monitoring controls or implement a uniform timekeeping system. 2. Require departments to submit supporting timekeeping reports to the State Treasury for secondary reconciliation. 3. Retain explanations for differences between uniform and departmental records and establish award-level codes in the chart of accounts. Identification as a Repeat Finding: Not applicable View of Responsible Officials: The State’s response and corrective action plan addressing this finding is included in the accompanying corrective action plan.
Finding 2024-012 Federal Agency: U.S. Department of Health and Human Services Assistance Listing: 93.224 – Health Center Program (Community Health Centers, Migrant Health Center Health Care for the Homeless, and Public Housing Primary Care). Federal Award No.: 4 H8FCS41736-01-02, 4 H8FCS41736-01-03, 1 C8ECS44059-01-06. Area: Reporting Questioned Costs: $0 Criteria: The terms and conditions of the cited awards require annual Federal Financial Reports (SF-425s) that are timely, accurate, complete, and supported by records reflecting cumulative activity for the applicable project period. • 4 H8FCS41736-01-02 the subject FFR was due by 07/30/2024. • 4 H8FCS41736-01-03 the subject FFR was due by 07/30/2025. • 1 C8ECS44059-01-06 the subject FFR was due by 01/30/2025. Condition: The following exceptions were identified: 1) All three SF-425s were submitted after their respective due dates. 2) For award 4 H8FCS41736-01-02, the State did not retain contemporaneous expenditure support demonstrating how reported federal cash disbursements were determined. Cause: Deadline-monitoring controls were ineffective, and the State did not retain a complete contemporaneous reporting package. 1) The State did not effectively monitor SF-425 reporting deadlines. 2) The State did not retain the contemporaneous records used to prepare the reported federal cash disbursement amounts. Effect: The State did not comply with reporting requirements, and the lack of support increased the risk of inaccurate reporting. The audit did not identify an amount expended or received that was affected by the reporting noncompliance; therefore, no questioned costs are reported. 1) Late submission of the SF-425s constituted reporting noncompliance. No negative awarding-agency comments were identified. 2) The absence of contemporaneous support increased the risk of inaccurate reporting and increased the effort required to substantiate reported amounts during audits and monitoring. No questioned costs are reported. Recommendation: The State should: 1) Establish an award-reporting calendar with assigned responsibility and supervisory review, and retain copies of all submissions. 2) Retain the filed SF-425, certification, transaction-level receipt and expenditure detail, and reconciliation to the general ledger as one contemporaneous reporting package. Identification as a Repeat Finding: 2023-007 View of Responsible Officials: The State’s response and corrective action plan addressing this finding is included in the accompanying corrective action plan.
Finding 2024-013 Federal Agency: U.S. Department of Health and Human Services Assistance Listing: 93.224 - Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Federal Award No.: Various Area: Cash Management Questioned Costs: $221,521 Criteria: Under 2 CFR 200.302(b)(3), (6), and (7), a non-federal entity must maintain records that identify the source and application of federal funds, establish effective control over and accountability for all funds, and support compliance with federal requirements through written procedures. In addition, 2 CFR 200.305(b) requires the non-federal entity to minimize the time between the transfer of federal funds and their disbursement and, when reimbursement is used, to request payment only after costs have been incurred. Accordingly, each drawdown should be supported by contemporaneous expenditure records and a reconciliation demonstrating the amount of eligible, unreimbursed program expenditures. Condition: 1. For 1 of 2 cash-management transactions tested, the State could not provide documentation supporting the calculation or amount of a $435,026 federal cash drawdown requested on June 5, 2024, under award 4 H8FCS41736-01-03 (the award). Specifically, the documentation provided for JV240324 did not include a contemporaneous expenditure report or reconciliation identifying (a) eligible award expenditures incurred through the drawdown date, (b) amounts previously reimbursed, and (c) the remaining unreimbursed expenditures available to support the drawdown. Our review of other available documentation disclosed the following: • On August 24, 2022, and April 27, 2023, the State drew down $110,269 and $74,899, respectively, totaling $185,168. Available documentation indicated that these drawdowns reimbursed expenditures incurred from program inception through March 31, 2023. • For the period from October 1, 2022, through August 31, 2024, available records identified approximately $745,597 of federal expenditures charged to the award. • On June 12, 2023, September 26, 2023, and June 5, 2024, the State drew down $148,366, $198,558, and $435,026, respectively, totaling $781,950. Based on the available records, the State had $560,429 of potentially eligible unreimbursed expenditures after the April 27, 2023, drawdown ($745,597 of reported expenditures less $185,168 of prior documented drawdowns). However, the subsequent drawdowns totaled $781,950. Therefore, the available documentation did not support $221,521 of the June 5, 2024, drawdown ($781,950 less $560,429). We question $221,521 because the State did not demonstrate that this portion of the drawdown reimbursed eligible, unreimbursed award expenditures. 2. In addition, the State did not consistently implement its established procedures for monitoring program cash needs and making drawdowns on a regular schedule. During fiscal year 2024, the State made only two drawdowns: one requested on June 5, 2024, and received on June 7, 2024, and another requested on August 2, 2024, and received on August 6, 2024.Cause: The State did not consistently enforce its cash-management procedures and did not maintain a complete, contemporaneous audit trail supporting each drawdown. Specifically, responsibility for preparing, reviewing, and retaining expenditure reports and cumulative reimbursement reconciliations was not effectively implemented. Effect: The State could not demonstrate that $221,521 of the June 5, 2024, drawdown was supported by eligible, unreimbursed award expenditures. As a result, federal funds may have been drawn in excess of immediate program needs, and the unsupported amount is questioned. Recommendation: The State should: 1. Strengthen and enforce its cash-management procedures. For each drawdown, the State should prepare, review, and retain a reconciliation that identifies cumulative eligible expenditures, prior reimbursements, adjustments or reconciling items, and the resulting balance of unreimbursed expenditures by federal award. The reconciliation and supporting expenditure reports should be reviewed and approved before the drawdown request is submitted. 2. Monitor program cash needs and submit reimbursement requests on a regular, timely schedule consistent with its written procedures. Management should review the $221,521 questioned amount and provide additional support to the federal awarding agency if available. Identification as a Repeat Finding: 2023-008 Views of Responsible Officials: The State's response and corrective action plan addressing this finding are included in the accompanying corrective action plan.