2022-004 Cash Management
Federal Program – All federal programs
Criteria – Advances received on federal awards should be expended within 30 days of being drawn down to comply with relevant cash management requirements.
Condition and Context – During the performance of our audit, we noted that th...
2022-004 Cash Management
Federal Program – All federal programs
Criteria – Advances received on federal awards should be expended within 30 days of being drawn down to comply with relevant cash management requirements.
Condition and Context – During the performance of our audit, we noted that the Organization had a significant amount of refundable advances on federal awards and had cash on hand that exceeded the anticipated expenses over the next 30 days. As a result of a conversion to a new accounting system, the impact of COVID-19, cash advances were not routinely reconciled during the year ended December 31, 2022.
Questioned Costs – None.
Effect – The Organization was not in compliance with the Uniform Guidance cash management requirements.
Cause – With the conversion to a new accounting system, combined with the COVID-19, new accounting staff, refundable advances were not reconciled timely.
Recommendation – The refundable advances of the Organization should be reconciled on a monthly basis, which will permit more accurate draws on federal awards.
Views of Responsible Officials and Planned Corrective Actions
Management partially agrees with this finding as, in certain instances, the Organization must comply with the payment schedules of our grantors, which typically are on a quarterly basis. In some cases, there are strict schedules of draws in our grant agreements and no requests to draw funds are made. In situations when the Organization has the ability to draw funds, we agree not to make additional draw requests until the Organization has expended the funds already received. In 2022, due to the pandemic and the uncertainty of when programs would continue, many programs were suspended while waiting for travel restrictions to be lifted so that the Organization’s programs could be implemented.
We will take the following steps:
We will improve procedures to ensure that the drawdown of funds, from those grantors who require drawdowns will not exceed the Organization’s immediate use and we will develop additional procedures, as necessary, to assist in monitoring cash management.
Anticipated Completion Date: December 31, 2023
Contact Person: Natalia Arno, President, 916-849-3057