Views of Responsible Officials: During 2025, the Foundation experienced an extraordinary period of uncertainty surrounding the continued availability and accessibility of Federal funding. In response to concerns regarding access to previously awarded Federal funds, the Foundation accelerated certain...
Views of Responsible Officials: During 2025, the Foundation experienced an extraordinary period of uncertainty surrounding the continued availability and accessibility of Federal funding. In response to concerns regarding access to previously awarded Federal funds, the Foundation accelerated certain cash draws associated with approved Federal awards and established work plans. Shortly thereafter, access to certain award accounts within the Federal payment system changed, with access subsequently restored. As circumstances stabilized, the Foundation returned a substantial portion of the advance funding in March 2025. As of December 31, 2025, approximately $7 million remained recorded as refundable Federal advances associated with existing Federal awards. Management anticipated that these funds would be applied to eligible program expenditures and existing award obligations as activities under the approved work plans progressed. The Foundation maintains cash within pooled operating accounts and did not maintain Federal advances in separately segregated bank accounts. While Federal award activity and expenditures were tracked within the Foundation's accounting system, the Foundation's existing cashmanagement and liquidity-monitoring processes did not provide sufficient visibility to demonstrate that cash and investments equal to outstanding refundable Federal advance obligations remained available as of December 31, 2025. The Foundation also maintained access to a $1 million line of credit that was available to provide additional liquidity for short-term organizational working-capital requirements. The line of credit had not been drawn as of December 31, 2025, and therefore was not included in the cash and investments used to measure available liquidity at year-end. Nevertheless, the facility represented an available non-Federal source of liquidity that could have been utilized to address short-term organizational cash-flow requirements. Importantly, as reflected in the auditors' findings, no questioned costs were identified because expenditures unrelated to the applicable Federal awards were not charged to those Federal programs. The Foundation recognizes the need to strengthen its cash-management controls and liquidity-monitoring processes to ensure that Federal cash draws are aligned with immediate program cash requirements and that sufficient liquidity is maintained to satisfy outstanding Federal advance obligations. To address the finding, management has implemented or will implement the following corrective actions: 1. Federal Cash Draw Review and Approval – CFO/Finance Finance will maintain a formal review and approval process for federal cash drawdowns. Draws will be supported by eligible expenditures and actual and immediate cash requirements consistent with applicable federal award requirements. Federal cash draws outside the Foundation's normal reimbursement or cash-management practices will require documented review and approval by the CFO. 2. Extraordinary Federal Cash Draw Protocol – President & CEO/CFO If extraordinary circumstances arise that could affect the Foundation's access to federal awards or federal payment systems, any decision to materially accelerate a federal cash draw will be documented and subject to enhanced executive review.The documentation will include the circumstances supporting the proposed action, affected federal awards, amount of the proposed draw, anticipated eligible expenditures, expected timing of those expenditures, applicable federal cash-management requirements, and identified compliance and liquidity risks. Material extraordinary draw decisions will require approval by the President & CEO and CFO and, when appropriate, consultation with legal counsel, the federal awarding agency, and/or the appropriate Board leadership. 3. Program Certification of Anticipated Eligible Expenditures – Program Leadership When a federal cash-management decision relies on anticipated program activity, the responsible Program Executive will provide Finance with documented projections of the eligible expenditures expected to be incurred under the applicable awards. The documentation will identify the anticipated expenditures, estimated amounts, expected timing, and applicable federal awards. Program Leadership will be responsible for the accuracy and completeness of the programmatic projections provided to Finance. Finance will remain responsible for evaluating the information against applicable federal cash-management requirements. 4. Federal Advance Retention Review – CFO/Finance When a material federal advance remains outstanding, Finance will perform and document an assessment of whether continued retention of the advance is appropriate. The assessment will consider the amount of the outstanding advance, cumulative eligible expenditures, anticipated eligible expenditures, expected timing of those expenditures, applicable award requirements, and the amount, if any, that should be returned. Material advance balances will be periodically reassessed until the funds have been applied to eligible federal program expenditures or returned, as appropriate. 5. Federal Advance Reconciliation – CFO/Finance Finance will maintain an award-level reconciliation of federal cash draws, cumulative eligible expenditures, and outstanding refundable advances. The reconciliation will provide management with visibility into the amount of federal cash advanced in excess of cumulative eligible expenditures and facilitate timely identification of amounts that may require repayment. The remaining refundable advances associated with the December 31, 2025, balance will continue to be monitored through final disposition. 6. Enhanced Cash-Flow and Liquidity Forecasting – CFO/Finance Management will maintain a rolling 90 day cash-flow forecast incorporating anticipated receipts, operating expenditures, federal award activity, refundable advances, unrestricted resources, and other significant obligations. The forecast will be regularly updated and used to identify projected liquidity shortfalls and required management actions. Status: Started September 20267. Federal Advance Liquidity Monitoring – CFO/Finance As part of the Foundation's liquidity reporting, Finance will specifically compare outstanding federal refundable advances with available financial resources. If available resources approach or fall below established thresholds necessary to satisfy federal advances and other restricted or committed obligations, the matter will be immediately escalated to the President & CEO and appropriate Board leadership. This control is intended to prevent a situation in which a significant federal advance remains outstanding without management having timely visibility into the Foundation's ability to satisfy the associated obligation. Status: Started July 2026 8. Executive Accountability Responsibility for remediation will be shared across executive leadership with clearly defined accountability: Finance/CFO will be accountable for federal cash-management compliance, federal draw review, refundable advance reconciliations, cash-flow forecasting, liquidity monitoring, and escalation of identified risks. Program Leadership will be accountable for providing Finance with timely and supportable projections of anticipated eligible program expenditures when those projections are necessary to support federal cash-management decisions. President & CEO will be accountable for ensuring that organizational expenditures and operating decisions are appropriately aligned with available and reasonably forecasted financial resources and for directing organizational corrective action when established liquidity or revenue thresholds are reached. Management believes these measures strengthen the control environment surrounding an extraordinary and unusual event while establishing sustainable controls for federal cash management going forward. Management is committed to ensuring that future federal drawdowns are appropriately aligned with the Foundation's actual and immediate cash requirements and that significant federal advances are subject to documented, ongoing monitoring through their final disposition.