AL Program: 15.875 – Economic, Social, and Political Development of the Territories Area: Cash Management Questioned Costs: $972,335 Contact Person(s): Angelina Phillips, Financial Analyst, Office of Management and Budget (OMB) Corrective Action Plan: Condition 1-2: The Office of Management and Budg...
AL Program: 15.875 – Economic, Social, and Political Development of the Territories Area: Cash Management Questioned Costs: $972,335 Contact Person(s): Angelina Phillips, Financial Analyst, Office of Management and Budget (OMB) Corrective Action Plan: Condition 1-2: The Office of Management and Budget (OMB) agrees with this finding. The underlying cause of this issue was the absence of succession planning and cross training, which resulted in a loss of institutional compliance knowledge during a staff transition. When the primary grant administrator unexpectedly left the organization, there was no transition plan, no cross trained backup staff, and no documented standard operating procedure in place. As a result, the departing administrator processed a drawdown request without leaving documentation of the drawdown or the corresponding vendor invoices. The untrained coverage staff, having only been informed that funds were received, subsequently processed the invoices for payment, which led to the timing discrepancy noted in the finding. To correct this issue, we have formally adopted the CNMI Department of Finance’s Internal Control for Federal Grants Management Manual effective May 1, 2025; the Department of Finance’s Federal Grant Drawdown Procedures effective June 20, 2025; and the Department of Finance’s Cash Management Policies and Procedures effective October 1, 2025. Collectively, these policies ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. The step by step Standard Operating Procedures we have adopted for internal controls and the drawdown process clearly outline required documentation, approval workflows, and compliance timelines. In addition, we have initiated succession and continuity planning to ensure that at least Finding No.: 2023-016, continued AL Program: 15.875 – Economic, Social, and Political Development of the Territories Area: Cash Management Questioned Costs: $972,335 Contact Person(s): Angelina Phillips, Financial Analyst, Office of Management and Budget (OMB) Corrective Action Plan: one alternate staff member is trained and capable of performing grant administration responsibilities to prevent future disruptions. Proposed Completion Date: Completed