Finding 2024.003: Cash Management - Significant Deficiency Grantor: U.S. Department of Health and Human Services Federal Program Names: Substance Abuse and Mental Health Services Projects of Regional and National Significance Certified Community Behavioral Health Clinic Expansion Grants Federal Assistance Listing Number: 93.243 and 93.696 Federal Award Identification Number and Year: H79SM087223 - 2024, H79SM086969 - 2024 Criteria In accordance with §200.305, federal payment, grantees and subgrantees that receive grant funds are responsible for maintaining controls regarding the management of federal program funds under the Uniform Guidance in 2 CFR 200.302 and 200.303. Condition The Center's drawdowns did not illustrate review and approval by management. Cause The Center did not have adequate controls to ensure drawdowns were properly approved and such approval is documented. Effect The condition may lead to inaccurate or improper drawdowns. Questioned Costs None Context We selected seven drawdowns for testing of cash management relating to these major programs. We noted there was no formal approval or evidence of review for these drawdowns Identification of Repeat Finding Not a repeat finding. Recommendation The Center should develop written procedures to review all drawdowns that occur in order to ensure accuracy. Views of Responsible Officials and Planned Corrective Actions Management and the Board of Directors agree with the finding and will implement additional controls to ensure there is formal evidence of review being performed.
2024-001 Payment Timing Requirements Criteria: 2 CFR §200.305(b) requires payments methods must minimize the time elapsing between the transfer of funds from the federal agency and the disbursement of funds and that recipients must make timely payments to contractors in accordance with contract provisions. Condition: Instances were identified where subcontractors were not reimbursed in a timely manner. Recommendation: We recommend that the Organization make all necessary efforts to decrease the amount of time that passes between when funds are received and when subcontractors are reimbursed. Views of Responsible Officials and Planned Corrective Actions: HSNY was unable to submit monthly claims for their primary grant due to delays with New York State Office of Temporary and Disability Assistance (OTDA) drafting and approving a contract for the period. While OTDA approved appropriation of the funds to HSNY, without a contract in place, HSNY was unable to submit claims for payment for the period through June 30, 2024 until the contract was approved in May 2025. Changes to the submittal process implemented by OTDA also delayed HSNY’s ability to submit claims for approval. This had a detrimental impact to cash flow as operating costs needed to be paid during this period. With the approval of the contract and efforts being made at OTDA to expedite payment, HSNY’s cash flow position has since improved and reimbursements to subcontractors as of the audit date are being made timely.
2024-003 FEMA Working Capital Advances (NOT A MAJOR PROGRAM) Compliance Requirement Cash Management Category Material Weakness in Internal Control and Material Noncompliance ALN 97.036 Program Disaster Grants - Public Assistance (Presidentially Declared Disasters) Federal Agency US Department of Homeland Security Criteria Per 2 CFR §200.305(b)(1), when advances are made by a pass-through entity, the non-federal entity must maintain procedures to minimize the time elapsing between the receipt of federal funds and their disbursement for program purposes. Funds must be disbursed timely and only to meet immediate cash needs. Condition The Authority received FEMA Working Capital Advances through the pass-through entity, Central Office for Recovery, Reconstruction and Resiliency of Puerto Rico (COR3). As of the date of this review, the funds have remained in the Authority’s bank account for over 365 days without being expended. This prolonged retention violates federal cash management requirements under the Uniform Guidance. Cause The Authority lacks sufficient back-office personnel to effectively manage and track federal funds, as well as in-house project managers with the engineering and architectural expertise necessary to efficiently execute the projects tied to the FEMA advances. Additionally, the Authority does not have adequate internal controls or segregation of duties in place to ensure compliance with FEMA program requirements and federal cash management standards. These deficiencies have contributed to delays in project implementation and the prolonged retention of federal funds. Effect The retention of federal funds for over 365 days without use constitutes noncompliance with the cash management requirements of Uniform Guidance. This may result in increased scrutiny, potential repayment obligations, and administrative burden for both the subrecipient and the pass-through entity. Questioned Costs Amount in process to be returned, $8,090,354. Recommendation We recommend that the Authority strengthen its internal controls over cash management by updating its written procedures to ensure that federal advances are disbursed based on immediate cash needs, in accordance with 2 CFR §200.305(b). The Authority should implement a cash flow forecasting process to support the timing and amount of advances, assign responsibility to specific personnel for monitoring the aging and use of federal funds, and conduct periodic internal reviews to identify and address delays in fund disbursement. Additionally, staff involved in the management of federal funds should receive training on applicable cash management requirements under Uniform Guidance to ensure consistent compliance. Views of Responsible Official (Unaudited) Refer to Corrective Action Plan.
2024-005 Delayed Requests for Reimbursement of Federal Funds Compliance Requirement Cash Management Category Material Weakness in Internal Control and Material Noncompliance ALN 12.607 Program Community Economic Adjustment of Establishment, Expansion, Realignment, or Closure of a Military Installation Federal Agency US Department of Defense Criteria Per 2 CFR §200.305(b) of the Uniform Guidance, when entities are funded on a reimbursement basis, they must submit payment requests in a timely manner after incurring eligible costs to ensure proper cash management and compliance with federal requirements. Condition During our review of the Authority’s grant management practices, we noted that requests for reimbursement of federal funds under the cost reimbursement method were delayed by approximately five to seven months after the incurrence of eligible expenditures. Cause The delay appears to be due to internal administrative inefficiencies and a lack of timely coordination between program and finance personnel responsible for grant reporting and fund drawdowns. Effect Delays in requesting reimbursement may result in cash flow constraints for the entity and could potentially impact program operations. Additionally, such delays may be viewed as noncompliance with federal grant management standards, which require timely and accurate reporting and drawdown of funds. Questioned Costs None. Recommendation We recommend that the Authority implement procedures to ensure reimbursement requests are submitted within a reasonable timeframe following the incurrence of costs, typically within 30 days, depending on the Authority's internal disbursement cycle and cash flow needs. Recommended actions include establishing internal deadlines, improving interdepartmental coordination, and conducting periodic reviews of outstanding expenditures eligible for reimbursement. Views of Responsible Official (Unaudited) Refer to Corrective Action Plan
Finding 2024-003 - Material Weakness in Internal Control over Compliance and Material Noncompliance (Qualified Opinion) - Inadequate Tracking of Expenditures and Retention of Documentation: Activities Allowed or Unallowed: Allowable Costs/Cost Principles and Reporting (A/B/L) for Assistance Listing Number 19.510 and 93.567 Criteria: The Code of Federal Regulations (CFR) Section 200.510(b) states in part, “The auditee must also prepare a schedule of federal expenditures for the period covered by the auditee’s consolidated financial statements which must include the total Federal awards expended as determined in accordance with 200.502.” Also, in accordance with CFR Section 200.302(b) - Financial Management, the auditees financial management system must provide 1) identification of all federal awards received and expended; 2) accurate, current, and complete disclosure of the financial results of each federal award or program; 3) records that identify adequately the source and application of funds for federally‐funded activities; 4) effective control over, and accountability for, all funds, property, and other assets; 5) comparison of expenditures with budget amounts for each Federal award; 6) written procedures to implement the requirements of section 200.305 and; 7) written procedures for determining the allowability of costs in accordance with Subpart E and the terms and conditions of the Federal award. Recipients of federal awards must submit accurate, complete and timely financial and performance reports. The Organization should have internal controls designed to ensure compliance with those provisions. The Organization should retain sufficient documentation such as invoice and allocation support for expenditures to retain documentation for audit purposes. Condition: During detail testing of expenditures, it was noted that the Organization did not maintain adequate documentation to support how certain costs were allocated to the federal program. Several transactions lacked sufficient detail, such as invoice or expense reimbursement form. Several expenditures selected for testing did not obtain sufficient approval by an individual at the Organization. There was one instance of employee compensation being processed at an approved pay rate and the Center could not provide any supporting documentation such as an offer letter, to substantiate the rate paid. It was noted that quarterly reports provided to the federal program were not reviewed by an individual at the Organization prior to submission to ensure accurate report of expenditures. 2 of the 8 monthly reports sampled were not submitted timely to the grantor. Cause: The Organization does not have an adequate system in place to ensure quarterly reports have sufficient supporting documentation, proper approval/review, and accurate reporting prior to submission. Responsibilities for expenditure tracking were not clearly assigned, and there was no formal review process in place. The Organization is not following their Document Retention Policy. Effect: The effect of this condition increases the possibility that quarterly financial reports are misstated or inaccurate and increase the risk of noncompliance with federal requirements. The effect of this condition also increases the risk that expenditures are unallowable per the grant, federal regulations, or cost principles due to the insufficient support of proper approval retained. Questioned costs: None Repeat Finding: Yes - 2023-003 Recommendation: Policies and procedures should be in place to ensure quarterly financial reports are properly supported, accurately reported, and adequately approved and reviewed. A formal review process should be established to ensure compliance. The Organization should follow the Document Retention Policy that was put in place and required by law and submit the required reporting documentation timely to the grantor to ensure compliance. Views of Responsible Officials: Management agrees with this finding and their response is included in the Corrective Action Plan.
2024-001 – Cash Management Federal Agency: U.S. Department of Education Federal Program: Arts in Education Federal Assistance Listing Number: 84.351A Pass-through Entity: Not applicable. Award Identification Number: S351A210115 Year: 2023 and 2024 Criteria: 2 CFR 200.305 requires recipients and subrecipients to minimize the time elapsing between receipt of federal funds and disbursement, ensuring advance payments are limited to the minimum needed and timed to actual, immediate cash requirements for program or project costs. Additionally, 2 CFR 200.303 requires non-Federal entities to maintain effective internal controls over Federal awards to ensure compliance with Federal laws, regulations, and award terms. Condition: During our audit, we noted instances whereby the basis for the funds drawn down from the G6 system were unsupported. Context: This issue appears to be recurring, as several drawdowns over multiple months exceeded actual expenses and were not identified through the Organization’s internal controls. During the audit period, 100% of drawdowns were tested, with cumulative drawdowns exceeding actual expenses by $260,490 out of $1,118,922 total drawdowns at year-end. Cause: Internal controls were not in place to ensure an accurate basis for drawdowns. Effect: The failure to maintain supporting documentation for draw requests could result in drawing funds in excess of actual expenses incurred. Questioned Costs: Known questioned costs are $260,490, calculated as the excess of cumulative federal drawdowns over allowable program expenses as of June 30, 2024. Repeat Finding: Yes Recommendation: We recommend that the Organization implement procedures to ensure that federal drawdowns are based on allowable program expenditures and are supported by general ledger reports of expenses incurred on the Federal program. Staff responsible for drawdowns should receive training on federal cash management requirements. Views of Responsible Officials: See Corrective Action Plan.
Federal Agency: Major Program- U.S. Department of Health and Human Services. Other Program- U.S. Department of Justice Context: We noted through our testing of drawdowns and related expenses that as of June 30, 2024 Mazzoni Center had drawn down $53,675 more funds than it had expended on the contract for Assistance Listing No. 93.939 HIV Prevention Activities. It was also identified that $66,629 of funds were drawn down in excess of funds expended for Assistance Listing No. 16.889 Grants for Outreach and Services to Underserved Populations which was not deemed to be a major program. The individual drawing down funds from the federal agencies did not draw down funds based on the expenses incurred each month. Cause: The entity lacked effective internal controls to reconcile actual drawdowns with expenditures incurred. Effect: This deficiency resulted in noncompliance with federal cash management requirements and exposed the entity to potential interest liabilities and reputational risk. It also indicates a reasonable possibility that material noncompliance with federal requirements may not be prevented or detected and corrected on a timely basis. Repeat finding: No Recommendation: We recommend that management ensure drawdowns are strictly aligned with incurred and allowable expenses. This should include: • Pre-drawdown verification of expense documentation. • Monthly reconciliations of drawdown activity to actual expenditures. • Training for staff involved in federal fund management on Uniform Guidance requirements. Views of responsible officials: There is no disagreement with the audit finding. See Corrective Action Plan. Federal Program Name: Major Program- HIV Prevention Activities: Non-Governmental Organization Based. Other Program- Grants for Outreach and Services to Underserved Populations Assistance Listing Number: Major Program- 93.939. Other Program- 16.889 Federal Award Identification Number: Major Program- NU65PS923746. Other Program- 15JOVW-22-GG-00404-UNDE Award Period: Major Program- July 1, 2023 through June 30, 2024. Other Program October 1, 2023 through September 30, 2024. Type of Finding: Material Weakness in Internal Control over Compliance and Compliance - Cash Management Criteria or specific requirement: Per the Uniform Guidance (2 CFR §200.305), non-federal entities must minimize the time between the transfer of funds from the U.S. Treasury and the disbursement for program purposes. Drawdowns must be based on immediate cash needs and supported by incurred expenses. Condition: During the audit of federal program compliance, it was identified that the entity drew down federal funds in excess of the amounts incurred for allowable expenses. Specifically, cash management procedures did not ensure that funds drawn down were limited to actual expenditures incurred, resulting in excess cash balances held temporarily beyond the allowable timeframe. Questioned costs: Major Program- $53,675. Other Program- $66,629 Context: We noted through our testing of drawdowns and related expenses that as of June 30, 2024 Mazzoni Center had drawn down $53,675 more funds than it had expended on the contract for Assistance Listing No. 93.939 HIV Prevention Activities. It was also identified that $66,629 of funds were drawn down in excess of funds expended for Assistance Listing No. 16.889 Grants for Outreach and Services to Underserved Populations which was not deemed to be a major program. The individual drawing down funds from the federal agencies did not draw down funds based on the expenses incurred each month. Cause: The entity lacked effective internal controls to reconcile actual drawdowns with expenditures incurred. Effect: This deficiency resulted in noncompliance with federal cash management requirements and exposed the entity to potential interest liabilities and reputational risk. It also indicates a reasonable possibility that material noncompliance with federal requirements may not be prevented or detected and corrected on a timely basis. Repeat finding: No Recommendation: We recommend that management ensure drawdowns are strictly aligned with incurred and allowable expenses. This should include: • Pre-drawdown verification of expense documentation. • Monthly reconciliations of drawdown activity to actual expenditures. • Training for staff involved in federal fund management on Uniform Guidance requirements. Views of responsible officials: There is no disagreement with the audit finding. See Corrective Action Plan.
Assistance Listing Number(s): 17.258, 17.259, 17.278 Name of Federal Program or Cluster: WIOA Cluster Name of Federal Agency: Department of Labor Name of Pass-through Entity: Wisconsin Department of Workforce Development Award Period: July 1, 2023 through June 30, 2024 Criteria: Under 2 CFR Part 200.305, non-federal entities must minimize the time elapsing between the transfer of funds from the U.S. Treasury and the disbursement of those funds for program purposes. Funds should be drawn down only as needed to meet immediate cash requirements. Condition: The Organization drew down federal funds in advance of immediate cash needs, resulting in excess cash balances being held for extended periods. Cause: The Organization has controls over draws of federal awards but the controls were not followed. Effect or Potential Effect: Holding excess federal funds for extended periods can result in non-compliance with federal regulations and could potentially increase the risk of mismanagement or misuse of funds. Recommendation: We recommend the Organization revise federal award draw procedures to ensure compliance with cash management requirements. Such draws should be made for immediate cash needs. Views of Responsible Officials: The Organization agrees with the finding and is implementing procedures.
Finding No. 2024-001 – Repayment agreement requested in voucher. Federal Program ALN 14.157 - U.S. Department of Housing and Urban Development Section 202 Capital Advance Program – Supportive Housing for the Elderly Name of Federal Agency U. S. Department of Housing and Urban Development (HUD) Category Other Matter Compliance requirement Cash Management Criteria Under CFR 200.305 Federal payment states the following: (1) The non-Federal entity must be paid in advance, provided it maintains or demonstrates the willingness to maintain both written procedures that minimize the time elapsing between the transfer of funds and disbursement by the non-Federal entity, and financial management systems that meet the standards for fund control and accountability as established in this part. Advance payments to a non-Federal entity must be limited to the minimum amounts needed and be timed to be in accordance with the actual, immediate cash requirements of the non-Federal entity in carrying out the purpose of the approved program or project. The timing and amount of advance payments must be as close as is administratively feasible to the actual disbursements by the non_x0002_Federal entity for direct program or project costs and the proportionate share of any allowable indirect costs. The non-Federal entity must make timely payment to contractors in accordance with the contract provisions. Condition During the audit testing of cash management, we identified one voucher for the month of August 2023, that incorrectly included $1,348 of funds pertaining to a tenant repayment agreement. The management of the Project acknowledged that they did not detect that the repayment agreement amount had been included in the voucher. Additionally, the tenant disappeared after signing the repayment agreement without fulfilling her obligation. Cause The inclusion of the incorrect amount corresponding to a repayment agreement was due to administrative errors and to lack of effective internal controls for the review and approval of vouchers to be submitted to HUD. Effect Funds amounting to $1,348 had to be returned due to inaccuracies in the original voucher requests submitted to HUD. Questioned Cost Total known question cost to be reimbursed to HUD amounting to $1,348. Context The population consists of twelve vouchers. We selected a sample of two vouchers from this population. Upon audit procedures, we identified an error in one of the vouchers, which amounted to a total of $1,348 that needs to be refunded. Prior year finding No Recommendation We recommended that the Project administrator implement a more thorough review process for voucher details before finalization. This should include a verification step specifically focused on ensuring all amounts, including repayment agreement amounts, are accurately included. Training on the importance of detailed data entry and implementing a secondary review by another staff member could also help identify and correct errors before vouchers are processed. Views of responsible officials and planned corrective actions. The Project’s management agrees with this finding. Please refer to the corrective action plan on page 41
Information on the Federal Program: Assistance Listing Number 47.050—Geosciences, National Science Foundation. Award Number: 224242, 2303562, 2243827, 2246223, 2246225. Compliance Requirements: Cash Management Type of Finding: Material Noncompliance and Significant Deficiency. Criteria: Under 2 CFR § 200.305 - The recipient or subrecipient may retain up to $500 per year of interest earned on Federal funds to use for administrative expenses of the recipient or subrecipient. Any additional interest earned on Federal funds must be returned annually to the Department of Health and Human ServicesPayment Management System (PMS). All interest in excess of $500 per year must be returned to PMS regardless of whether the recipient or subrecipient was paid through PMS. Condition: For the year ended March 31, 2024, Future Earth did not comply with the requirement to minimize the time between the drawdown of federal funds and their disbursement. This resulted in interest accumulation on these advance payments. Future Earth failed to remit interest earned in excess of $500 annually to the PMS as stipulated by the regulations. Cause: This was the second year Future Earth was awarded Federal funding and was unaware of this requirement. Effect: Financial liabilities due to unremitted interest, subjecting the entity to potential penalties and repayment obligations. Questioned Costs: We were not able to determine the amount of interest earned on federal funds held during the year ended March 31, 2024. Context: In our review of the 4 grant draws occurring during the year, we noted that in 3 of 4 draw requests, funds were requested before expenditures. In 1 of the 4 draws, we noted that funds were drawn on September 8, 2023 were not yet expended as of March 31, 2024. Interest earned on these funds was in excess of $500, but was not tracked or remitted to the grantor. No controls were identified to ensure interest was tracked and remitted as required by the regulations. Recommendation: We recommend that Future Earth establish a policy to minimize the time between draw and expenditure. We would also recommend that any federal funds received in advance of expenditure be segregated into a separate bank account in order to better track any interest earned on federal funding. Views of Responsible Official: Management agrees with this finding. Please see corrective action plan at the end of this report.
Condition: Out of the 36 grant drawdowns during the year, of the 15 drawdowns that were tested, 3 of the drawdowns were made in advance of the supporting invoices being paid and subsequently the invoices were not paid within the 72-hours, as required. Context: The auditor haphazardly selected 15 grant drawdowns from the population, which we consider to be a statistically valid sample size. The auditor reviewed the drawdowns and supporting documentation to ensure proper procedures are being followed and that the Authority is in compliance with HUD requirements. Criteria: The U.S. Treasury per 2 CFR section 200.305 (2 CFR section 200.302(b)(6)) requires grant funds received by the Authority to be properly spent within 72 hours of receipt. HUD regulations require that proper documentation be maintained for all Capital Fund Program per 24 CFR 905.326. Cause: The Authority experienced staff turnover in the finance department as well as difficulty replacing personnel knowledgeable with HUD and grant reporting requirements. Effect: The Authority did not disburse the capital funds in a timely manner for some of the draws made during the year. Questioned Costs: $379,570 Auditor’s Recommendations: The Authority should continue to develop and implement internal controls over grant management to coordinate capital fund draws with the timing of invoice payments. View of Responsible Officials: See Corrective Action Plan
Finding No. 2024-001 – Repayment agreement requested in voucher. Federal Program ALN 14.157 - U.S. Department of Housing and Urban Development Section 202 Capital Advance Program – Supportive Housing for the Elderly Name of Federal Agency U. S. Department of Housing and Urban Development (HUD) Category Other Matter Compliance requirement Cash Management Criteria Under CFR 200.305 Federal payment states the following: (1) The non-Federal entity must be paid in advance, provided it maintains or demonstrates the willingness to maintain both written procedures that minimize the time elapsing between the transfer of funds and disbursement by the non-Federal entity, and financial management systems that meet the standards for fund control and accountability as established in this part. Advance payments to a non-Federal entity must be limited to the minimum amounts needed and be timed to be in accordance with the actual, immediate cash requirements of the non-Federal entity in carrying out the purpose of the approved program or project. The timing and amount of advance payments must be as close as is administratively feasible to the actual disbursements by the non_x0002_Federal entity for direct program or project costs and the proportionate share of any allowable indirect costs. The non-Federal entity must make timely payment to contractors in accordance with the contract provisions. Condition During the audit testing of cash management, we identified one voucher for the month of August 2023, that incorrectly included $1,348 of funds pertaining to a tenant repayment agreement. The management of the Project acknowledged that they did not detect that the repayment agreement amount had been included in the voucher. Additionally, the tenant disappeared after signing the repayment agreement without fulfilling her obligation. Cause The inclusion of the incorrect amount corresponding to a repayment agreement was due to administrative errors and to lack of effective internal controls for the review and approval of vouchers to be submitted to HUD. Effect Funds amounting to $1,348 had to be returned due to inaccuracies in the original voucher requests submitted to HUD. Questioned Cost Total known question cost to be reimbursed to HUD amounting to $1,348. Context The population consists of twelve vouchers. We selected a sample of two vouchers from this population. Upon audit procedures, we identified an error in one of the vouchers, which amounted to a total of $1,348 that needs to be refunded. Prior year finding No Recommendation We recommended that the Project administrator implement a more thorough review process for voucher details before finalization. This should include a verification step specifically focused on ensuring all amounts, including repayment agreement amounts, are accurately included. Training on the importance of detailed data entry and implementing a secondary review by another staff member could also help identify and correct errors before vouchers are processed. Views of responsible officials and planned corrective actions. The Project’s management agrees with this finding. Please refer to the corrective action plan on page 41
Information on the Federal Program: Assistance Listing Number 47.050—Geosciences, National Science Foundation. Award Number: 224242, 2303562, 2243827, 2246223, 2246225. Compliance Requirements: Cash Management Type of Finding: Material Noncompliance and Significant Deficiency. Criteria: Under 2 CFR § 200.305 - The recipient or subrecipient may retain up to $500 per year of interest earned on Federal funds to use for administrative expenses of the recipient or subrecipient. Any additional interest earned on Federal funds must be returned annually to the Department of Health and Human ServicesPayment Management System (PMS). All interest in excess of $500 per year must be returned to PMS regardless of whether the recipient or subrecipient was paid through PMS. Condition: For the year ended March 31, 2024, Future Earth did not comply with the requirement to minimize the time between the drawdown of federal funds and their disbursement. This resulted in interest accumulation on these advance payments. Future Earth failed to remit interest earned in excess of $500 annually to the PMS as stipulated by the regulations. Cause: This was the second year Future Earth was awarded Federal funding and was unaware of this requirement. Effect: Financial liabilities due to unremitted interest, subjecting the entity to potential penalties and repayment obligations. Questioned Costs: We were not able to determine the amount of interest earned on federal funds held during the year ended March 31, 2024. Context: In our review of the 4 grant draws occurring during the year, we noted that in 3 of 4 draw requests, funds were requested before expenditures. In 1 of the 4 draws, we noted that funds were drawn on September 8, 2023 were not yet expended as of March 31, 2024. Interest earned on these funds was in excess of $500, but was not tracked or remitted to the grantor. No controls were identified to ensure interest was tracked and remitted as required by the regulations. Recommendation: We recommend that Future Earth establish a policy to minimize the time between draw and expenditure. We would also recommend that any federal funds received in advance of expenditure be segregated into a separate bank account in order to better track any interest earned on federal funding. Views of Responsible Official: Management agrees with this finding. Please see corrective action plan at the end of this report.
Condition: Out of the 36 grant drawdowns during the year, of the 15 drawdowns that were tested, 3 of the drawdowns were made in advance of the supporting invoices being paid and subsequently the invoices were not paid within the 72-hours, as required. Context: The auditor haphazardly selected 15 grant drawdowns from the population, which we consider to be a statistically valid sample size. The auditor reviewed the drawdowns and supporting documentation to ensure proper procedures are being followed and that the Authority is in compliance with HUD requirements. Criteria: The U.S. Treasury per 2 CFR section 200.305 (2 CFR section 200.302(b)(6)) requires grant funds received by the Authority to be properly spent within 72 hours of receipt. HUD regulations require that proper documentation be maintained for all Capital Fund Program per 24 CFR 905.326. Cause: The Authority experienced staff turnover in the finance department as well as difficulty replacing personnel knowledgeable with HUD and grant reporting requirements. Effect: The Authority did not disburse the capital funds in a timely manner for some of the draws made during the year. Questioned Costs: $379,570 Auditor’s Recommendations: The Authority should continue to develop and implement internal controls over grant management to coordinate capital fund draws with the timing of invoice payments. View of Responsible Officials: See Corrective Action Plan
2024-008 Cash Management Program Information Federal Organization U.S Department of Health and Human Services Assistance Listing Numbers 93.224 & 93.527 Health Center Program Cluster Award Numbers H80CS00513, H8FCS41684, H8GC48547, H8LCS51197 Criteria [X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness Title 2 CFR 200.305 requires that organizations “must minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-federal entity whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means.” Condition Cash draws were made without support of approved documentation. Supporting documentation for other draws included invoices for expenditures that were dated several months after the draw was made. This finding appears to be a systemic problem Cause The Organization’s internal controls over cash management and PMS draws does not include procedures for non-payroll expenditures. As a result, draws were made without supporting documentation. In addition, the Organization did not always maintain documentation of the payroll calculations supporting draws, as required by company policy. Effect The Organization may not have minimized the timing between draws from the PMS and the related payments for expenditures incurred as required. Questioned Costs Indeterminable. Context Out of thirteen draws tested, the Organization was not able to provide supporting documentation for one draw and support for two additional draws included expenses that were not incurred within a reasonable time after the draw. Recommendation We recommend the Organization implement controls requiring all draws from the Payment Management System (PMS) to be based on detailed reports of expenditures claimed for reimbursement and retain this documentation along with the supporting invoices and payroll reports supporting the expenditures. In addition, we recommend that the listing of expenditures be reviewed by qualified personnel to ensure that the expenditures claimed are allowable and cash payments for the expenditures are made before the date of the draw or within a reasonable time after the draw. Views of responsible officials and planned corrective action Management is in agreement with this finding and will take corrective action as outlined below.
2024-008 Cash Management Program Information Federal Organization U.S Department of Health and Human Services Assistance Listing Numbers 93.224 & 93.527 Health Center Program Cluster Award Numbers H80CS00513, H8FCS41684, H8GC48547, H8LCS51197 Criteria [X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness Title 2 CFR 200.305 requires that organizations “must minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-federal entity whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means.” Condition Cash draws were made without support of approved documentation. Supporting documentation for other draws included invoices for expenditures that were dated several months after the draw was made. This finding appears to be a systemic problem Cause The Organization’s internal controls over cash management and PMS draws does not include procedures for non-payroll expenditures. As a result, draws were made without supporting documentation. In addition, the Organization did not always maintain documentation of the payroll calculations supporting draws, as required by company policy. Effect The Organization may not have minimized the timing between draws from the PMS and the related payments for expenditures incurred as required. Questioned Costs Indeterminable. Context Out of thirteen draws tested, the Organization was not able to provide supporting documentation for one draw and support for two additional draws included expenses that were not incurred within a reasonable time after the draw. Recommendation We recommend the Organization implement controls requiring all draws from the Payment Management System (PMS) to be based on detailed reports of expenditures claimed for reimbursement and retain this documentation along with the supporting invoices and payroll reports supporting the expenditures. In addition, we recommend that the listing of expenditures be reviewed by qualified personnel to ensure that the expenditures claimed are allowable and cash payments for the expenditures are made before the date of the draw or within a reasonable time after the draw. Views of responsible officials and planned corrective action Management is in agreement with this finding and will take corrective action as outlined below.
2024-008 Cash Management Program Information Federal Organization U.S Department of Health and Human Services Assistance Listing Numbers 93.224 & 93.527 Health Center Program Cluster Award Numbers H80CS00513, H8FCS41684, H8GC48547, H8LCS51197 Criteria [X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness Title 2 CFR 200.305 requires that organizations “must minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-federal entity whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means.” Condition Cash draws were made without support of approved documentation. Supporting documentation for other draws included invoices for expenditures that were dated several months after the draw was made. This finding appears to be a systemic problem Cause The Organization’s internal controls over cash management and PMS draws does not include procedures for non-payroll expenditures. As a result, draws were made without supporting documentation. In addition, the Organization did not always maintain documentation of the payroll calculations supporting draws, as required by company policy. Effect The Organization may not have minimized the timing between draws from the PMS and the related payments for expenditures incurred as required. Questioned Costs Indeterminable. Context Out of thirteen draws tested, the Organization was not able to provide supporting documentation for one draw and support for two additional draws included expenses that were not incurred within a reasonable time after the draw. Recommendation We recommend the Organization implement controls requiring all draws from the Payment Management System (PMS) to be based on detailed reports of expenditures claimed for reimbursement and retain this documentation along with the supporting invoices and payroll reports supporting the expenditures. In addition, we recommend that the listing of expenditures be reviewed by qualified personnel to ensure that the expenditures claimed are allowable and cash payments for the expenditures are made before the date of the draw or within a reasonable time after the draw. Views of responsible officials and planned corrective action Management is in agreement with this finding and will take corrective action as outlined below.
2024-008 Cash Management Program Information Federal Organization U.S Department of Health and Human Services Assistance Listing Numbers 93.224 & 93.527 Health Center Program Cluster Award Numbers H80CS00513, H8FCS41684, H8GC48547, H8LCS51197 Criteria [X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness Title 2 CFR 200.305 requires that organizations “must minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-federal entity whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means.” Condition Cash draws were made without support of approved documentation. Supporting documentation for other draws included invoices for expenditures that were dated several months after the draw was made. This finding appears to be a systemic problem Cause The Organization’s internal controls over cash management and PMS draws does not include procedures for non-payroll expenditures. As a result, draws were made without supporting documentation. In addition, the Organization did not always maintain documentation of the payroll calculations supporting draws, as required by company policy. Effect The Organization may not have minimized the timing between draws from the PMS and the related payments for expenditures incurred as required. Questioned Costs Indeterminable. Context Out of thirteen draws tested, the Organization was not able to provide supporting documentation for one draw and support for two additional draws included expenses that were not incurred within a reasonable time after the draw. Recommendation We recommend the Organization implement controls requiring all draws from the Payment Management System (PMS) to be based on detailed reports of expenditures claimed for reimbursement and retain this documentation along with the supporting invoices and payroll reports supporting the expenditures. In addition, we recommend that the listing of expenditures be reviewed by qualified personnel to ensure that the expenditures claimed are allowable and cash payments for the expenditures are made before the date of the draw or within a reasonable time after the draw. Views of responsible officials and planned corrective action Management is in agreement with this finding and will take corrective action as outlined below.
2024-008 Cash Management Program Information Federal Organization U.S Department of Health and Human Services Assistance Listing Numbers 93.224 & 93.527 Health Center Program Cluster Award Numbers H80CS00513, H8FCS41684, H8GC48547, H8LCS51197 Criteria [X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness Title 2 CFR 200.305 requires that organizations “must minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-federal entity whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means.” Condition Cash draws were made without support of approved documentation. Supporting documentation for other draws included invoices for expenditures that were dated several months after the draw was made. This finding appears to be a systemic problem Cause The Organization’s internal controls over cash management and PMS draws does not include procedures for non-payroll expenditures. As a result, draws were made without supporting documentation. In addition, the Organization did not always maintain documentation of the payroll calculations supporting draws, as required by company policy. Effect The Organization may not have minimized the timing between draws from the PMS and the related payments for expenditures incurred as required. Questioned Costs Indeterminable. Context Out of thirteen draws tested, the Organization was not able to provide supporting documentation for one draw and support for two additional draws included expenses that were not incurred within a reasonable time after the draw. Recommendation We recommend the Organization implement controls requiring all draws from the Payment Management System (PMS) to be based on detailed reports of expenditures claimed for reimbursement and retain this documentation along with the supporting invoices and payroll reports supporting the expenditures. In addition, we recommend that the listing of expenditures be reviewed by qualified personnel to ensure that the expenditures claimed are allowable and cash payments for the expenditures are made before the date of the draw or within a reasonable time after the draw. Views of responsible officials and planned corrective action Management is in agreement with this finding and will take corrective action as outlined below.
2024-008 Cash Management Program Information Federal Organization U.S Department of Health and Human Services Assistance Listing Numbers 93.224 & 93.527 Health Center Program Cluster Award Numbers H80CS00513, H8FCS41684, H8GC48547, H8LCS51197 Criteria [X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness Title 2 CFR 200.305 requires that organizations “must minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-federal entity whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means.” Condition Cash draws were made without support of approved documentation. Supporting documentation for other draws included invoices for expenditures that were dated several months after the draw was made. This finding appears to be a systemic problem Cause The Organization’s internal controls over cash management and PMS draws does not include procedures for non-payroll expenditures. As a result, draws were made without supporting documentation. In addition, the Organization did not always maintain documentation of the payroll calculations supporting draws, as required by company policy. Effect The Organization may not have minimized the timing between draws from the PMS and the related payments for expenditures incurred as required. Questioned Costs Indeterminable. Context Out of thirteen draws tested, the Organization was not able to provide supporting documentation for one draw and support for two additional draws included expenses that were not incurred within a reasonable time after the draw. Recommendation We recommend the Organization implement controls requiring all draws from the Payment Management System (PMS) to be based on detailed reports of expenditures claimed for reimbursement and retain this documentation along with the supporting invoices and payroll reports supporting the expenditures. In addition, we recommend that the listing of expenditures be reviewed by qualified personnel to ensure that the expenditures claimed are allowable and cash payments for the expenditures are made before the date of the draw or within a reasonable time after the draw. Views of responsible officials and planned corrective action Management is in agreement with this finding and will take corrective action as outlined below.
2024-008 Cash Management Program Information Federal Organization U.S Department of Health and Human Services Assistance Listing Numbers 93.224 & 93.527 Health Center Program Cluster Award Numbers H80CS00513, H8FCS41684, H8GC48547, H8LCS51197 Criteria [X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness Title 2 CFR 200.305 requires that organizations “must minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-federal entity whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means.” Condition Cash draws were made without support of approved documentation. Supporting documentation for other draws included invoices for expenditures that were dated several months after the draw was made. This finding appears to be a systemic problem Cause The Organization’s internal controls over cash management and PMS draws does not include procedures for non-payroll expenditures. As a result, draws were made without supporting documentation. In addition, the Organization did not always maintain documentation of the payroll calculations supporting draws, as required by company policy. Effect The Organization may not have minimized the timing between draws from the PMS and the related payments for expenditures incurred as required. Questioned Costs Indeterminable. Context Out of thirteen draws tested, the Organization was not able to provide supporting documentation for one draw and support for two additional draws included expenses that were not incurred within a reasonable time after the draw. Recommendation We recommend the Organization implement controls requiring all draws from the Payment Management System (PMS) to be based on detailed reports of expenditures claimed for reimbursement and retain this documentation along with the supporting invoices and payroll reports supporting the expenditures. In addition, we recommend that the listing of expenditures be reviewed by qualified personnel to ensure that the expenditures claimed are allowable and cash payments for the expenditures are made before the date of the draw or within a reasonable time after the draw. Views of responsible officials and planned corrective action Management is in agreement with this finding and will take corrective action as outlined below.
2024-008 Cash Management Program Information Federal Organization U.S Department of Health and Human Services Assistance Listing Numbers 93.224 & 93.527 Health Center Program Cluster Award Numbers H80CS00513, H8FCS41684, H8GC48547, H8LCS51197 Criteria [X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness Title 2 CFR 200.305 requires that organizations “must minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-federal entity whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means.” Condition Cash draws were made without support of approved documentation. Supporting documentation for other draws included invoices for expenditures that were dated several months after the draw was made. This finding appears to be a systemic problem Cause The Organization’s internal controls over cash management and PMS draws does not include procedures for non-payroll expenditures. As a result, draws were made without supporting documentation. In addition, the Organization did not always maintain documentation of the payroll calculations supporting draws, as required by company policy. Effect The Organization may not have minimized the timing between draws from the PMS and the related payments for expenditures incurred as required. Questioned Costs Indeterminable. Context Out of thirteen draws tested, the Organization was not able to provide supporting documentation for one draw and support for two additional draws included expenses that were not incurred within a reasonable time after the draw. Recommendation We recommend the Organization implement controls requiring all draws from the Payment Management System (PMS) to be based on detailed reports of expenditures claimed for reimbursement and retain this documentation along with the supporting invoices and payroll reports supporting the expenditures. In addition, we recommend that the listing of expenditures be reviewed by qualified personnel to ensure that the expenditures claimed are allowable and cash payments for the expenditures are made before the date of the draw or within a reasonable time after the draw. Views of responsible officials and planned corrective action Management is in agreement with this finding and will take corrective action as outlined below.
2023-003 U.S. Department of Transportation – AL #20.106 Airport Improvement Program – Reporting Grant Award: 3-38-0022-064-2022 Criteria The Authority is required to submit payment requests using the DOT Electronic Grants payment system, Delphi e-Invoicing. These requests must meet the standards described in 2 CFR ss 200.302 and 200.305. Condition During review of submitted Request for Reimbursements and Outlay reports, it was noted that one request submitted was not accurately prepared as there were two instances in which the amount requested was greater than invoice documentation, additionally the request included a request for reimbursement of AIP ineligible costs. As of December 31, 2023 no funds have been returned to U.S. DOT. Questioned Costs N/A Context We reviewed the project financial summary for two of the 19 requests submitted during 2023 Cause Employee oversight. Effect The Authority could have had federal funding delayed or reduced. Recommendation We recommend that the Authority implement internal controls to ensure all reporting is accurately filed. Repeat Finding This is not a repeat finding. Views of Responsible Officials Management recognizes the deficiency and plans to implement the auditor’s recommendation.
2023-003 U.S. Department of Transportation – AL #20.106 Airport Improvement Program – Reporting Grant Award: 3-38-0022-064-2022 Criteria The Authority is required to submit payment requests using the DOT Electronic Grants payment system, Delphi e-Invoicing. These requests must meet the standards described in 2 CFR ss 200.302 and 200.305. Condition During review of submitted Request for Reimbursements and Outlay reports, it was noted that one request submitted was not accurately prepared as there were two instances in which the amount requested was greater than invoice documentation, additionally the request included a request for reimbursement of AIP ineligible costs. As of December 31, 2023 no funds have been returned to U.S. DOT. Questioned Costs N/A Context We reviewed the project financial summary for two of the 19 requests submitted during 2023 Cause Employee oversight. Effect The Authority could have had federal funding delayed or reduced. Recommendation We recommend that the Authority implement internal controls to ensure all reporting is accurately filed. Repeat Finding This is not a repeat finding. Views of Responsible Officials Management recognizes the deficiency and plans to implement the auditor’s recommendation.
Significant Deficiency in Internal Control over Federal Programs Lack of Fiscal Policies and Procedures in Accordance with the Uniform Guidance Assistance Listing Number: 93.328 Name of Federal Program or Cluster: Epidemiology and Laboratory Capacity for Infectious Diseases Name of Federal Agency: Department of Health and Human Services Name of Pass-Through Entities: State of Wisconsin Department of Health Services The Code of Federal Regulations (CFR) Section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. 2 CFR§200.302(b)(6-7) Financial Management: - Written procedures are required to implement the requirements of §200.305. - Written procedures are required for determining the allowability of costs in accordance with subpart E of this part and the terms and conditions of the Federal award.WHCA’s written policies and procedures lack some of the requirements required by the Code of Federal Regulations. There is an increased risk that the Association could potentially charge unallowable costs to federal awards or be noncompliant with other areas of the Code of Federal Regulations. We recommend the Association create formal written fiscal policies and procedures that conform to the uniform guidance. No Staff at the WHCA are dedicated to adhering to the regulations. The Executive Director, Vice President of Workforce Development, and the Director of Administration & Association completed a certification course on Federal allowable costs. In managing the federal awards, staff references this knowledge to guide the spending of the award.
Significant Deficiency in Internal Control over Federal Programs Lack of Fiscal Policies and Procedures in Accordance with the Uniform Guidance Assistance Listing Number: 93.328 Name of Federal Program or Cluster: Epidemiology and Laboratory Capacity for Infectious Diseases Name of Federal Agency: Department of Health and Human Services Name of Pass-Through Entities: State of Wisconsin Department of Health Services The Code of Federal Regulations (CFR) Section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. 2 CFR§200.302(b)(6-7) Financial Management: - Written procedures are required to implement the requirements of §200.305. - Written procedures are required for determining the allowability of costs in accordance with subpart E of this part and the terms and conditions of the Federal award.WHCA’s written policies and procedures lack some of the requirements required by the Code of Federal Regulations. There is an increased risk that the Association could potentially charge unallowable costs to federal awards or be noncompliant with other areas of the Code of Federal Regulations. We recommend the Association create formal written fiscal policies and procedures that conform to the uniform guidance. No Staff at the WHCA are dedicated to adhering to the regulations. The Executive Director, Vice President of Workforce Development, and the Director of Administration & Association completed a certification course on Federal allowable costs. In managing the federal awards, staff references this knowledge to guide the spending of the award.
Finding No. 2023-001 U.S. Department of the Treasury, Community Development Financial Institutions Fund Federal Assistance Listing Number #21.011 Capital Magnet Fund - Compliance Requirement: J – Program Income Criteria In accordance with 2 CFR, Part 200.305(9), interest earned on advance payments in excess of $500 per year must be remitted annually to the Department of Health and Human Services, Payment Management System. Condition During our testing, we noted that the Organization did not remit interest earned on advance payments. Cause Interest earned on advance payments was calculated, however the Organization did not have adequate procedures and controls in place to ensure the interest was remitted. Effect or Potential Effect Failure to remit interest earned on advance payments could result in misuse of funds. Questioned Costs: Not applicable. Context For two program income samples out of a total two tested, management did not remit a total of $148,180 related to 2023 interest earned on advance payments. Repeat Finding: No Recommendation Management should establish controls to ensure the annual remittance of interest earned on advance payments in excess of $500. Views of Responsible Officials In 2024, all required interest refunds were remitted. Additionally, management established a policy to remit annual calculated interest refunds by March 31st of the subsequent year.
Ineffective Controls Over the Cash Management Requirement Federal Agency: Department of Health and Human Service Federal Program: Health Center Program Assistance Listing Number: 93:224/93.527 Type of Finding: Significant Deficiency Condition Community Health Concern, Inc. (“CHC”) did not minimize the times between drawdowns and disbursements of Federal funds in accordance with Federal regulations. There were three cash drawdowns made by management that were at least two months (60 days) in advance of actual expenditures or immediate requirement need for payment. Possible Asserted Criteria: In accordance with 2 CFR 200.305 (b), for non-Federal entities other than states, payment methods must minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-Federal entity whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means. Advance payments to a non-Federal entity must be limited to the minimum amounts needed and be timed to be in accordance with the actual, immediate cash requirements of the non-Federal entity in carrying out the purpose of the approved program or project. Possible Asserted Cause: Management made two (2) early drawdowns to have funds available fearing a government shutdown. An additional early drawdown was made to meet a project deadline. Potential Asserted Effect of Condition: The Federal government may: • Require the funds to be paid back immediately. • Require the use of a more stringent cash drawdown method for the program. • Potential interest liability may be required. Questioned Costs: $967,117. Recommendation: We recommend that CHC improve its procedures to ensure that Federal cash is requested based on immediate cash needs and within the correct period. Additionally, management should consult with its Project Officer for helpful guidance and/or actions to take during cases of looming uncertainties such as government shutdowns, missing project deadlines, etc. Management’s Views: Management’s response is included inthe “Management’s Views and Corrective Action Plan” included at the end of this report after “Section IV – Status of Financial Statements Findings of Prior Audits.”
Statement of Condition/Criteria 2 CFR Section 3603.1 gives regulatory effect to the Office of National Drug Control Policy for 2 CFR Section 200.305(b) which states, in part: Non-Federal entities other than states must minimize the time elapsing between the transfer of funds from the United States Treasury or pass-through entity and disbursement by the non-Federal entity whether the payment is made by electronic funds transfer or issuance or redemption of checks, warrants, or payment by other means. Section 7.25.2 of the High Intensity Drug Trafficking Area (HIDTA) Program Policy and Guidance states if an advance of funds is requested, details specifying the need for the advance must accompany the request. Documentation of how the advance was spent must be submitted within 21 days of use of funds and prior to another advance or reimbursement request. During our testing, we noted in 7 out of 34 receipts the advance was not spent within 21 days after the advance was deposited into HIDTA’s account. The timeliness of the submissions was not in compliance with the above-mentioned requirements. Cause/Effect Failure to properly document how advances are spent per the HIDTA Program Policy and Guidance may result in a reduction of future funding. Recommendation We recommend the City review this matter with the HIDTA Financial Manager to establish procedures in order to submit support for expenses within the 21-day requirement. HIDTA may consider requesting advances of smaller dollar amounts, or requesting reimbursement rather than advances of funds. Client’s Response See Corrective Action Plan on the next page of this document.
Identification of the federal program U.S. Department of Health and Human Services Research and Development Cluster All Assistance Listing Numbers with amounts provided to subrecipients: 93.242 – Mental Health Research Grants 93.279 – Drug Abuse and Addiction Research Programs 93.351 – Research Infrastructure Programs 93.838 – Lung Diseases Research 93.855 – Allergy and Infectious Diseases Research 93.866 – Aging Research Federal Award Numbers Award Period R01MH116844-05 2/1/2022-1/31/2024 1R01MH130193-01 4/5/2022-2/28/2023 5R01MH130193-02 3/1/2023-2/29/2024 5R01DA052845-03 7/1/2022-6/30/2023 5R01DA052845-04 7/1/2023-6/30/2024 5P51OD011133-24 5/1/2022-4/30/2023 5P51OD011133-25 5/1/2023-4/30/2024 7R01HL145411-05 1/1/2023-12/31/2024 2R01AI048071-21 12/1/2022-11/30/2023 5R01AI133749-05 7/1/2021-6/30/2023 5R01AI138587-05 5/1/2022-4/30/2024 5R01AI136831-04 8/1/2022-7/31/2024 5R21AI150445-02 2/1/2021-1/31/2024 7R01AI134245-05 9/1/2021-4/30/2022 5R01AI134245-06 2/1/2022-4/30/2023 5R01AI134245-07 5/1/2023-4/30/2025 1P30AI168439-01 3/10/2022-2/28/2023 5P30AI168439-02 3/1/2023-2/29/2024 1R61AI169026-01 5/10/2022-4/30/2023 5R61AI169026-02 5/1/2023-4/30/2024 1R56AI174877-01 4/1/2023-3/31/2025 1R01AI176309-01 4/1/2023-3/31/2024 5U34AG068482-03 6/1/2022-5/31/2024 5R01AG065546-03 6/1/2022-5/31/2023 5R01AG065546-04 6/1/2023-5/31/2024 1R56AG073316-01 9/1/2021-8/31/2023 Criteria or specific requirement (including statutory, regulatory, or other citation) 2 CFR 200.303(a) requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Criteria or specific requirement (including statutory, regulatory, or other citation) (continued) 2 CFR 200.305(b)(1) requires “The non-Federal entity must be paid in advance, provided it maintains or demonstrates the willingness to maintain both written procedures that minimize the time elapsing between the transfer of funds and disbursement by the non-Federal entity, and financial management systems that meet the standards for fund control and accountability as established in this part. Advance payments to a non-Federal entity must be limited to the minimum amounts needed and be timed to be in accordance with the actual, immediate cash requirements of the non-Federal entity in carrying out the purpose of the approved program or project. The timing and amount of advance payments must be as close as is administratively feasible to the actual disbursements by the non-Federal entity for direct program or project costs and the proportionate share of any allowable indirect costs. The non-Federal entity must make timely payment to contractors in accordance with the contract provisions.” 2 CFR 200.305(b)(3) requires “when the reimbursement method is used, the Federal agency or pass-through entity must make payment within 30 calendar days after receipt of the billing, unless the Federal awarding agency or pass-through entity reasonably believes the request to be improper.” Condition Texas Biomed Research Institute (Texas Biomed) did not provide evidence of effectively designed internal controls to ensure subrecipients are paid by Texas Biomed within 30 days of requests for reimbursement received by Texas Biomed. In 5 instances, Texas Biomed paid subrecipients after 30 days of receipt of the request for reimbursement from the subrecipient, resulting in noncompliance with 2 CFR 200.305(b)(3). Section III – Federal Award Findings and Questioned Costs (continued) Finding 2023-001 – Cash Management – Pass-Through Entities (continued) Cause Texas Biomed’s internal controls around payments to subrecipients were not precisely designed to ensure the issuance of payments to subrecipients occurs within 30 days of requests for reimbursement by the subrecipient. Effect or potential effect Texas Biomed did not comply with the cash management requirements of the Uniform Guidance to pay subrecipients within 30 days of their requests for reimbursement. Questioned costs None. Context For 5 of 30 subrecipient payments, Texas Biomed made payments to subrecipients at dates ranging from 40 to 132 days (40, 41, 71, 110 and 132 days) after receipt of the requests for reimbursement. These payments were not made in accordance with the 30-day requirement (2R01AI048071-21, P51OD011133-24, 5U34AG068482-03, 1P30AI168439-01 and 1R61AI169026-01). Texas Biomed’s subrecipient expenditures totaled $2.8 million during the period, which represented 6.3% of Texas Biomed’s total research and development expenditures of $44.6 million. Identification as a repeat finding, if applicable This is a repeat finding – Finding 2022-001. Recommendation We recommend Texas Biomed design and implement internal controls with the required precision to ensure subrecipients are paid within 30 days of the receipt of requests for reimbursement from the subrecipient and approved by the principal investigator prior to paying the subrecipient. Views of responsible officials Management agrees with the finding and will implement corrective action to implement controls to ensure payments to subrecipients are made timely.
Identification of the federal program U.S. Department of Health and Human Services Research and Development Cluster All Assistance Listing Numbers with amounts provided to subrecipients: 93.242 – Mental Health Research Grants 93.279 – Drug Abuse and Addiction Research Programs 93.351 – Research Infrastructure Programs 93.838 – Lung Diseases Research 93.855 – Allergy and Infectious Diseases Research 93.866 – Aging Research Federal Award Numbers Award Period R01MH116844-05 2/1/2022-1/31/2024 1R01MH130193-01 4/5/2022-2/28/2023 5R01MH130193-02 3/1/2023-2/29/2024 5R01DA052845-03 7/1/2022-6/30/2023 5R01DA052845-04 7/1/2023-6/30/2024 5P51OD011133-24 5/1/2022-4/30/2023 5P51OD011133-25 5/1/2023-4/30/2024 7R01HL145411-05 1/1/2023-12/31/2024 2R01AI048071-21 12/1/2022-11/30/2023 5R01AI133749-05 7/1/2021-6/30/2023 5R01AI138587-05 5/1/2022-4/30/2024 5R01AI136831-04 8/1/2022-7/31/2024 5R21AI150445-02 2/1/2021-1/31/2024 7R01AI134245-05 9/1/2021-4/30/2022 5R01AI134245-06 2/1/2022-4/30/2023 5R01AI134245-07 5/1/2023-4/30/2025 1P30AI168439-01 3/10/2022-2/28/2023 5P30AI168439-02 3/1/2023-2/29/2024 1R61AI169026-01 5/10/2022-4/30/2023 5R61AI169026-02 5/1/2023-4/30/2024 1R56AI174877-01 4/1/2023-3/31/2025 1R01AI176309-01 4/1/2023-3/31/2024 5U34AG068482-03 6/1/2022-5/31/2024 5R01AG065546-03 6/1/2022-5/31/2023 5R01AG065546-04 6/1/2023-5/31/2024 1R56AG073316-01 9/1/2021-8/31/2023 Criteria or specific requirement (including statutory, regulatory, or other citation) 2 CFR 200.303(a) requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Criteria or specific requirement (including statutory, regulatory, or other citation) (continued) 2 CFR 200.305(b)(1) requires “The non-Federal entity must be paid in advance, provided it maintains or demonstrates the willingness to maintain both written procedures that minimize the time elapsing between the transfer of funds and disbursement by the non-Federal entity, and financial management systems that meet the standards for fund control and accountability as established in this part. Advance payments to a non-Federal entity must be limited to the minimum amounts needed and be timed to be in accordance with the actual, immediate cash requirements of the non-Federal entity in carrying out the purpose of the approved program or project. The timing and amount of advance payments must be as close as is administratively feasible to the actual disbursements by the non-Federal entity for direct program or project costs and the proportionate share of any allowable indirect costs. The non-Federal entity must make timely payment to contractors in accordance with the contract provisions.” 2 CFR 200.305(b)(3) requires “when the reimbursement method is used, the Federal agency or pass-through entity must make payment within 30 calendar days after receipt of the billing, unless the Federal awarding agency or pass-through entity reasonably believes the request to be improper.” Condition Texas Biomed Research Institute (Texas Biomed) did not provide evidence of effectively designed internal controls to ensure subrecipients are paid by Texas Biomed within 30 days of requests for reimbursement received by Texas Biomed. In 5 instances, Texas Biomed paid subrecipients after 30 days of receipt of the request for reimbursement from the subrecipient, resulting in noncompliance with 2 CFR 200.305(b)(3). Section III – Federal Award Findings and Questioned Costs (continued) Finding 2023-001 – Cash Management – Pass-Through Entities (continued) Cause Texas Biomed’s internal controls around payments to subrecipients were not precisely designed to ensure the issuance of payments to subrecipients occurs within 30 days of requests for reimbursement by the subrecipient. Effect or potential effect Texas Biomed did not comply with the cash management requirements of the Uniform Guidance to pay subrecipients within 30 days of their requests for reimbursement. Questioned costs None. Context For 5 of 30 subrecipient payments, Texas Biomed made payments to subrecipients at dates ranging from 40 to 132 days (40, 41, 71, 110 and 132 days) after receipt of the requests for reimbursement. These payments were not made in accordance with the 30-day requirement (2R01AI048071-21, P51OD011133-24, 5U34AG068482-03, 1P30AI168439-01 and 1R61AI169026-01). Texas Biomed’s subrecipient expenditures totaled $2.8 million during the period, which represented 6.3% of Texas Biomed’s total research and development expenditures of $44.6 million. Identification as a repeat finding, if applicable This is a repeat finding – Finding 2022-001. Recommendation We recommend Texas Biomed design and implement internal controls with the required precision to ensure subrecipients are paid within 30 days of the receipt of requests for reimbursement from the subrecipient and approved by the principal investigator prior to paying the subrecipient. Views of responsible officials Management agrees with the finding and will implement corrective action to implement controls to ensure payments to subrecipients are made timely.
Identification of the federal program U.S. Department of Health and Human Services Research and Development Cluster All Assistance Listing Numbers with amounts provided to subrecipients: 93.242 – Mental Health Research Grants 93.279 – Drug Abuse and Addiction Research Programs 93.351 – Research Infrastructure Programs 93.838 – Lung Diseases Research 93.855 – Allergy and Infectious Diseases Research 93.866 – Aging Research Federal Award Numbers Award Period R01MH116844-05 2/1/2022-1/31/2024 1R01MH130193-01 4/5/2022-2/28/2023 5R01MH130193-02 3/1/2023-2/29/2024 5R01DA052845-03 7/1/2022-6/30/2023 5R01DA052845-04 7/1/2023-6/30/2024 5P51OD011133-24 5/1/2022-4/30/2023 5P51OD011133-25 5/1/2023-4/30/2024 7R01HL145411-05 1/1/2023-12/31/2024 2R01AI048071-21 12/1/2022-11/30/2023 5R01AI133749-05 7/1/2021-6/30/2023 5R01AI138587-05 5/1/2022-4/30/2024 5R01AI136831-04 8/1/2022-7/31/2024 5R21AI150445-02 2/1/2021-1/31/2024 7R01AI134245-05 9/1/2021-4/30/2022 5R01AI134245-06 2/1/2022-4/30/2023 5R01AI134245-07 5/1/2023-4/30/2025 1P30AI168439-01 3/10/2022-2/28/2023 5P30AI168439-02 3/1/2023-2/29/2024 1R61AI169026-01 5/10/2022-4/30/2023 5R61AI169026-02 5/1/2023-4/30/2024 1R56AI174877-01 4/1/2023-3/31/2025 1R01AI176309-01 4/1/2023-3/31/2024 5U34AG068482-03 6/1/2022-5/31/2024 5R01AG065546-03 6/1/2022-5/31/2023 5R01AG065546-04 6/1/2023-5/31/2024 1R56AG073316-01 9/1/2021-8/31/2023 Criteria or specific requirement (including statutory, regulatory, or other citation) 2 CFR 200.303(a) requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Criteria or specific requirement (including statutory, regulatory, or other citation) (continued) 2 CFR 200.305(b)(1) requires “The non-Federal entity must be paid in advance, provided it maintains or demonstrates the willingness to maintain both written procedures that minimize the time elapsing between the transfer of funds and disbursement by the non-Federal entity, and financial management systems that meet the standards for fund control and accountability as established in this part. Advance payments to a non-Federal entity must be limited to the minimum amounts needed and be timed to be in accordance with the actual, immediate cash requirements of the non-Federal entity in carrying out the purpose of the approved program or project. The timing and amount of advance payments must be as close as is administratively feasible to the actual disbursements by the non-Federal entity for direct program or project costs and the proportionate share of any allowable indirect costs. The non-Federal entity must make timely payment to contractors in accordance with the contract provisions.” 2 CFR 200.305(b)(3) requires “when the reimbursement method is used, the Federal agency or pass-through entity must make payment within 30 calendar days after receipt of the billing, unless the Federal awarding agency or pass-through entity reasonably believes the request to be improper.” Condition Texas Biomed Research Institute (Texas Biomed) did not provide evidence of effectively designed internal controls to ensure subrecipients are paid by Texas Biomed within 30 days of requests for reimbursement received by Texas Biomed. In 5 instances, Texas Biomed paid subrecipients after 30 days of receipt of the request for reimbursement from the subrecipient, resulting in noncompliance with 2 CFR 200.305(b)(3). Section III – Federal Award Findings and Questioned Costs (continued) Finding 2023-001 – Cash Management – Pass-Through Entities (continued) Cause Texas Biomed’s internal controls around payments to subrecipients were not precisely designed to ensure the issuance of payments to subrecipients occurs within 30 days of requests for reimbursement by the subrecipient. Effect or potential effect Texas Biomed did not comply with the cash management requirements of the Uniform Guidance to pay subrecipients within 30 days of their requests for reimbursement. Questioned costs None. Context For 5 of 30 subrecipient payments, Texas Biomed made payments to subrecipients at dates ranging from 40 to 132 days (40, 41, 71, 110 and 132 days) after receipt of the requests for reimbursement. These payments were not made in accordance with the 30-day requirement (2R01AI048071-21, P51OD011133-24, 5U34AG068482-03, 1P30AI168439-01 and 1R61AI169026-01). Texas Biomed’s subrecipient expenditures totaled $2.8 million during the period, which represented 6.3% of Texas Biomed’s total research and development expenditures of $44.6 million. Identification as a repeat finding, if applicable This is a repeat finding – Finding 2022-001. Recommendation We recommend Texas Biomed design and implement internal controls with the required precision to ensure subrecipients are paid within 30 days of the receipt of requests for reimbursement from the subrecipient and approved by the principal investigator prior to paying the subrecipient. Views of responsible officials Management agrees with the finding and will implement corrective action to implement controls to ensure payments to subrecipients are made timely.
Identification of the federal program U.S. Department of Health and Human Services Research and Development Cluster All Assistance Listing Numbers with amounts provided to subrecipients: 93.242 – Mental Health Research Grants 93.279 – Drug Abuse and Addiction Research Programs 93.351 – Research Infrastructure Programs 93.838 – Lung Diseases Research 93.855 – Allergy and Infectious Diseases Research 93.866 – Aging Research Federal Award Numbers Award Period R01MH116844-05 2/1/2022-1/31/2024 1R01MH130193-01 4/5/2022-2/28/2023 5R01MH130193-02 3/1/2023-2/29/2024 5R01DA052845-03 7/1/2022-6/30/2023 5R01DA052845-04 7/1/2023-6/30/2024 5P51OD011133-24 5/1/2022-4/30/2023 5P51OD011133-25 5/1/2023-4/30/2024 7R01HL145411-05 1/1/2023-12/31/2024 2R01AI048071-21 12/1/2022-11/30/2023 5R01AI133749-05 7/1/2021-6/30/2023 5R01AI138587-05 5/1/2022-4/30/2024 5R01AI136831-04 8/1/2022-7/31/2024 5R21AI150445-02 2/1/2021-1/31/2024 7R01AI134245-05 9/1/2021-4/30/2022 5R01AI134245-06 2/1/2022-4/30/2023 5R01AI134245-07 5/1/2023-4/30/2025 1P30AI168439-01 3/10/2022-2/28/2023 5P30AI168439-02 3/1/2023-2/29/2024 1R61AI169026-01 5/10/2022-4/30/2023 5R61AI169026-02 5/1/2023-4/30/2024 1R56AI174877-01 4/1/2023-3/31/2025 1R01AI176309-01 4/1/2023-3/31/2024 5U34AG068482-03 6/1/2022-5/31/2024 5R01AG065546-03 6/1/2022-5/31/2023 5R01AG065546-04 6/1/2023-5/31/2024 1R56AG073316-01 9/1/2021-8/31/2023 Criteria or specific requirement (including statutory, regulatory, or other citation) 2 CFR 200.303(a) requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Criteria or specific requirement (including statutory, regulatory, or other citation) (continued) 2 CFR 200.305(b)(1) requires “The non-Federal entity must be paid in advance, provided it maintains or demonstrates the willingness to maintain both written procedures that minimize the time elapsing between the transfer of funds and disbursement by the non-Federal entity, and financial management systems that meet the standards for fund control and accountability as established in this part. Advance payments to a non-Federal entity must be limited to the minimum amounts needed and be timed to be in accordance with the actual, immediate cash requirements of the non-Federal entity in carrying out the purpose of the approved program or project. The timing and amount of advance payments must be as close as is administratively feasible to the actual disbursements by the non-Federal entity for direct program or project costs and the proportionate share of any allowable indirect costs. The non-Federal entity must make timely payment to contractors in accordance with the contract provisions.” 2 CFR 200.305(b)(3) requires “when the reimbursement method is used, the Federal agency or pass-through entity must make payment within 30 calendar days after receipt of the billing, unless the Federal awarding agency or pass-through entity reasonably believes the request to be improper.” Condition Texas Biomed Research Institute (Texas Biomed) did not provide evidence of effectively designed internal controls to ensure subrecipients are paid by Texas Biomed within 30 days of requests for reimbursement received by Texas Biomed. In 5 instances, Texas Biomed paid subrecipients after 30 days of receipt of the request for reimbursement from the subrecipient, resulting in noncompliance with 2 CFR 200.305(b)(3). Section III – Federal Award Findings and Questioned Costs (continued) Finding 2023-001 – Cash Management – Pass-Through Entities (continued) Cause Texas Biomed’s internal controls around payments to subrecipients were not precisely designed to ensure the issuance of payments to subrecipients occurs within 30 days of requests for reimbursement by the subrecipient. Effect or potential effect Texas Biomed did not comply with the cash management requirements of the Uniform Guidance to pay subrecipients within 30 days of their requests for reimbursement. Questioned costs None. Context For 5 of 30 subrecipient payments, Texas Biomed made payments to subrecipients at dates ranging from 40 to 132 days (40, 41, 71, 110 and 132 days) after receipt of the requests for reimbursement. These payments were not made in accordance with the 30-day requirement (2R01AI048071-21, P51OD011133-24, 5U34AG068482-03, 1P30AI168439-01 and 1R61AI169026-01). Texas Biomed’s subrecipient expenditures totaled $2.8 million during the period, which represented 6.3% of Texas Biomed’s total research and development expenditures of $44.6 million. Identification as a repeat finding, if applicable This is a repeat finding – Finding 2022-001. Recommendation We recommend Texas Biomed design and implement internal controls with the required precision to ensure subrecipients are paid within 30 days of the receipt of requests for reimbursement from the subrecipient and approved by the principal investigator prior to paying the subrecipient. Views of responsible officials Management agrees with the finding and will implement corrective action to implement controls to ensure payments to subrecipients are made timely.
Identification of the federal program U.S. Department of Health and Human Services Research and Development Cluster All Assistance Listing Numbers with amounts provided to subrecipients: 93.242 – Mental Health Research Grants 93.279 – Drug Abuse and Addiction Research Programs 93.351 – Research Infrastructure Programs 93.838 – Lung Diseases Research 93.855 – Allergy and Infectious Diseases Research 93.866 – Aging Research Federal Award Numbers Award Period R01MH116844-05 2/1/2022-1/31/2024 1R01MH130193-01 4/5/2022-2/28/2023 5R01MH130193-02 3/1/2023-2/29/2024 5R01DA052845-03 7/1/2022-6/30/2023 5R01DA052845-04 7/1/2023-6/30/2024 5P51OD011133-24 5/1/2022-4/30/2023 5P51OD011133-25 5/1/2023-4/30/2024 7R01HL145411-05 1/1/2023-12/31/2024 2R01AI048071-21 12/1/2022-11/30/2023 5R01AI133749-05 7/1/2021-6/30/2023 5R01AI138587-05 5/1/2022-4/30/2024 5R01AI136831-04 8/1/2022-7/31/2024 5R21AI150445-02 2/1/2021-1/31/2024 7R01AI134245-05 9/1/2021-4/30/2022 5R01AI134245-06 2/1/2022-4/30/2023 5R01AI134245-07 5/1/2023-4/30/2025 1P30AI168439-01 3/10/2022-2/28/2023 5P30AI168439-02 3/1/2023-2/29/2024 1R61AI169026-01 5/10/2022-4/30/2023 5R61AI169026-02 5/1/2023-4/30/2024 1R56AI174877-01 4/1/2023-3/31/2025 1R01AI176309-01 4/1/2023-3/31/2024 5U34AG068482-03 6/1/2022-5/31/2024 5R01AG065546-03 6/1/2022-5/31/2023 5R01AG065546-04 6/1/2023-5/31/2024 1R56AG073316-01 9/1/2021-8/31/2023 Criteria or specific requirement (including statutory, regulatory, or other citation) 2 CFR 200.303(a) requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Criteria or specific requirement (including statutory, regulatory, or other citation) (continued) 2 CFR 200.305(b)(1) requires “The non-Federal entity must be paid in advance, provided it maintains or demonstrates the willingness to maintain both written procedures that minimize the time elapsing between the transfer of funds and disbursement by the non-Federal entity, and financial management systems that meet the standards for fund control and accountability as established in this part. Advance payments to a non-Federal entity must be limited to the minimum amounts needed and be timed to be in accordance with the actual, immediate cash requirements of the non-Federal entity in carrying out the purpose of the approved program or project. The timing and amount of advance payments must be as close as is administratively feasible to the actual disbursements by the non-Federal entity for direct program or project costs and the proportionate share of any allowable indirect costs. The non-Federal entity must make timely payment to contractors in accordance with the contract provisions.” 2 CFR 200.305(b)(3) requires “when the reimbursement method is used, the Federal agency or pass-through entity must make payment within 30 calendar days after receipt of the billing, unless the Federal awarding agency or pass-through entity reasonably believes the request to be improper.” Condition Texas Biomed Research Institute (Texas Biomed) did not provide evidence of effectively designed internal controls to ensure subrecipients are paid by Texas Biomed within 30 days of requests for reimbursement received by Texas Biomed. In 5 instances, Texas Biomed paid subrecipients after 30 days of receipt of the request for reimbursement from the subrecipient, resulting in noncompliance with 2 CFR 200.305(b)(3). Section III – Federal Award Findings and Questioned Costs (continued) Finding 2023-001 – Cash Management – Pass-Through Entities (continued) Cause Texas Biomed’s internal controls around payments to subrecipients were not precisely designed to ensure the issuance of payments to subrecipients occurs within 30 days of requests for reimbursement by the subrecipient. Effect or potential effect Texas Biomed did not comply with the cash management requirements of the Uniform Guidance to pay subrecipients within 30 days of their requests for reimbursement. Questioned costs None. Context For 5 of 30 subrecipient payments, Texas Biomed made payments to subrecipients at dates ranging from 40 to 132 days (40, 41, 71, 110 and 132 days) after receipt of the requests for reimbursement. These payments were not made in accordance with the 30-day requirement (2R01AI048071-21, P51OD011133-24, 5U34AG068482-03, 1P30AI168439-01 and 1R61AI169026-01). Texas Biomed’s subrecipient expenditures totaled $2.8 million during the period, which represented 6.3% of Texas Biomed’s total research and development expenditures of $44.6 million. Identification as a repeat finding, if applicable This is a repeat finding – Finding 2022-001. Recommendation We recommend Texas Biomed design and implement internal controls with the required precision to ensure subrecipients are paid within 30 days of the receipt of requests for reimbursement from the subrecipient and approved by the principal investigator prior to paying the subrecipient. Views of responsible officials Management agrees with the finding and will implement corrective action to implement controls to ensure payments to subrecipients are made timely.
Identification of the federal program U.S. Department of Health and Human Services Research and Development Cluster All Assistance Listing Numbers with amounts provided to subrecipients: 93.242 – Mental Health Research Grants 93.279 – Drug Abuse and Addiction Research Programs 93.351 – Research Infrastructure Programs 93.838 – Lung Diseases Research 93.855 – Allergy and Infectious Diseases Research 93.866 – Aging Research Federal Award Numbers Award Period R01MH116844-05 2/1/2022-1/31/2024 1R01MH130193-01 4/5/2022-2/28/2023 5R01MH130193-02 3/1/2023-2/29/2024 5R01DA052845-03 7/1/2022-6/30/2023 5R01DA052845-04 7/1/2023-6/30/2024 5P51OD011133-24 5/1/2022-4/30/2023 5P51OD011133-25 5/1/2023-4/30/2024 7R01HL145411-05 1/1/2023-12/31/2024 2R01AI048071-21 12/1/2022-11/30/2023 5R01AI133749-05 7/1/2021-6/30/2023 5R01AI138587-05 5/1/2022-4/30/2024 5R01AI136831-04 8/1/2022-7/31/2024 5R21AI150445-02 2/1/2021-1/31/2024 7R01AI134245-05 9/1/2021-4/30/2022 5R01AI134245-06 2/1/2022-4/30/2023 5R01AI134245-07 5/1/2023-4/30/2025 1P30AI168439-01 3/10/2022-2/28/2023 5P30AI168439-02 3/1/2023-2/29/2024 1R61AI169026-01 5/10/2022-4/30/2023 5R61AI169026-02 5/1/2023-4/30/2024 1R56AI174877-01 4/1/2023-3/31/2025 1R01AI176309-01 4/1/2023-3/31/2024 5U34AG068482-03 6/1/2022-5/31/2024 5R01AG065546-03 6/1/2022-5/31/2023 5R01AG065546-04 6/1/2023-5/31/2024 1R56AG073316-01 9/1/2021-8/31/2023 Criteria or specific requirement (including statutory, regulatory, or other citation) 2 CFR 200.303(a) requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Criteria or specific requirement (including statutory, regulatory, or other citation) (continued) 2 CFR 200.305(b)(1) requires “The non-Federal entity must be paid in advance, provided it maintains or demonstrates the willingness to maintain both written procedures that minimize the time elapsing between the transfer of funds and disbursement by the non-Federal entity, and financial management systems that meet the standards for fund control and accountability as established in this part. Advance payments to a non-Federal entity must be limited to the minimum amounts needed and be timed to be in accordance with the actual, immediate cash requirements of the non-Federal entity in carrying out the purpose of the approved program or project. The timing and amount of advance payments must be as close as is administratively feasible to the actual disbursements by the non-Federal entity for direct program or project costs and the proportionate share of any allowable indirect costs. The non-Federal entity must make timely payment to contractors in accordance with the contract provisions.” 2 CFR 200.305(b)(3) requires “when the reimbursement method is used, the Federal agency or pass-through entity must make payment within 30 calendar days after receipt of the billing, unless the Federal awarding agency or pass-through entity reasonably believes the request to be improper.” Condition Texas Biomed Research Institute (Texas Biomed) did not provide evidence of effectively designed internal controls to ensure subrecipients are paid by Texas Biomed within 30 days of requests for reimbursement received by Texas Biomed. In 5 instances, Texas Biomed paid subrecipients after 30 days of receipt of the request for reimbursement from the subrecipient, resulting in noncompliance with 2 CFR 200.305(b)(3). Section III – Federal Award Findings and Questioned Costs (continued) Finding 2023-001 – Cash Management – Pass-Through Entities (continued) Cause Texas Biomed’s internal controls around payments to subrecipients were not precisely designed to ensure the issuance of payments to subrecipients occurs within 30 days of requests for reimbursement by the subrecipient. Effect or potential effect Texas Biomed did not comply with the cash management requirements of the Uniform Guidance to pay subrecipients within 30 days of their requests for reimbursement. Questioned costs None. Context For 5 of 30 subrecipient payments, Texas Biomed made payments to subrecipients at dates ranging from 40 to 132 days (40, 41, 71, 110 and 132 days) after receipt of the requests for reimbursement. These payments were not made in accordance with the 30-day requirement (2R01AI048071-21, P51OD011133-24, 5U34AG068482-03, 1P30AI168439-01 and 1R61AI169026-01). Texas Biomed’s subrecipient expenditures totaled $2.8 million during the period, which represented 6.3% of Texas Biomed’s total research and development expenditures of $44.6 million. Identification as a repeat finding, if applicable This is a repeat finding – Finding 2022-001. Recommendation We recommend Texas Biomed design and implement internal controls with the required precision to ensure subrecipients are paid within 30 days of the receipt of requests for reimbursement from the subrecipient and approved by the principal investigator prior to paying the subrecipient. Views of responsible officials Management agrees with the finding and will implement corrective action to implement controls to ensure payments to subrecipients are made timely.
2023-002: U.S. Department of Environment Protection – Assistance Listing # 66.468 Capitalization Grants for Drinking Water State Revolving Fund (Drinking Water State Revolving Fund Cluster) Lack of Required Written Policies & Procedures – Compliance Condition & Criteria: The Authority does not currently have all the written policies and procedures in place as required by the Uniform Guidance as it relates to financial management and determining allowability of costs for the federal program (Title 2 U.S. Code of Federal Regulations (CFR) 200.302 & 200.305). In addition CFR sections 200.318, 200.319, and 200.320 require there to be written policies and procedures regarding procurement and conflicts of interest. Effect: Although not likely, the oversight agency could disallow all costs associated with this program. Cause: The Authority has not had any significant federal grant funding in many years. The current federal project is the first time that the Authority has been subject to the requirements of the Uniform Guidance. The Authority does have a set of informal policies and procedures that are followed as it relates to financial management, allowability of costs, procurement, and conflicts of interest, and have been very careful to carry out all federal program activities in accordance with established regulations; however, the Authority was not aware that the Uniform Guidance requires these policies and procedures be documented in writing. Recommendation: We recommend that the Authority work towards getting those policies and procedures documented in writing so that they are in compliance with the requirements of the Uniform Guidance. Views of Responsible Officials and Planned Corrective Actions: The Authority understands the potential effects of the condition described above and is currently consulting with their attorney to draft written policies and procedures as they relate to federal programs that are required by the Uniform Guidance.
Assistance Listing Number, Federal Agency, and Program Name 11.463, U.S. Department of Commerce, Habitat Conservation, Implementing Priority Fish Habitat Restoration Projects of GLFC Lake Committees and Great Lakes Commission Lake Erie Metropark NOAA Federal Award Identification Number and Year NA18NMF4630293 and NA22NMF4630144 Pass through Entity Great Lakes Commission and Great Lakes Fishieries Commission Finding Type Material weakness and material noncompliance with laws and regulations Repeat Finding No Criteria Non federal entities must establish written procedures to implement the requirements of 2 CFR 200.305 for cash management. Condition Controls in place were not adequate to ensure the Authority had written procedures around cash management. Questioned Costs None Identification of How Questioned Costs Were Computed N/A Context During cash management testing, we noted no formal written procedures were in place. Cause and Effect The Authority did not have written procedures around cash management established. As a result, formal cash management procedures are not established, which could result in a possible noncompliance. Recommendation We recommend the Authority put established written procedures in place that follow requirements in 2 CFR 200.305. Views of Responsible Officials and Corrective Action Plan The Authority will establish written procedures in place that follow requirements in 2 CFR 200.305.
Assistance Listing Number, Federal Agency, and Program Name 11.463, U.S. Department of Commerce, Habitat Conservation, Implementing Priority Fish Habitat Restoration Projects of GLFC Lake Committees and Great Lakes Commission Lake Erie Metropark NOAA Federal Award Identification Number and Year NA18NMF4630293 and NA22NMF4630144 Pass through Entity Great Lakes Commission and Great Lakes Fishieries Commission Finding Type Material weakness and material noncompliance with laws and regulations Repeat Finding No Criteria Non federal entities must establish written procedures to implement the requirements of 2 CFR 200.305 for cash management. Condition Controls in place were not adequate to ensure the Authority had written procedures around cash management. Questioned Costs None Identification of How Questioned Costs Were Computed N/A Context During cash management testing, we noted no formal written procedures were in place. Cause and Effect The Authority did not have written procedures around cash management established. As a result, formal cash management procedures are not established, which could result in a possible noncompliance. Recommendation We recommend the Authority put established written procedures in place that follow requirements in 2 CFR 200.305. Views of Responsible Officials and Corrective Action Plan The Authority will establish written procedures in place that follow requirements in 2 CFR 200.305.
Federal Program Information: Funding Agency: U.S Department of Health and Human Services FALN: 93.926 Federal Award Identification Number: H49MC00119‐19‐00 Pass Through Entity: State of Georgia Department of Human Services Award Year: 2018‐2020 Criteria: Under 2 CFR Section 200.303(a), non‐federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally regulations require the reimbursement payment method may be used on a Federal award for activities as specified in 2 CFR section 200.305(b)(3), program costs must be paid by non‐ Federal entity funds before submitting a payment request (2 CFR section 200.305(b)(3)), i.e., the non‐ Federal entity must disburse funds for program purposes before requesting payment from the Federal awarding agency or pass‐through entity. Condition: The Organization has a policy which in includes thee Fiscal/Grant Manager and/or the CEO review all drawdown requests to ensure costs are paid before reimbursement is requested. However of the seventeen (17) drawdown requests that we tested, there was no evidence of review and approval for payment. Effect: Management possibly did not expend funds in accordance with the federal award due to lack of evidence of oversight/review of drawdowns and after reimbursable expenses have been incurred. Cause: Management did not document evidence of review and approval of drawdown requests. This was due in part to lack of oversight. Also there were several changes in personnel within the accounting area and overall limited number of personnel for certain functions and lack of board oversight. Questioned costs: None Recommendation: We recommend that internal controls be strengthened and processes implemented to ensure all draw down requests are reviewed and approved to ensure costs were accurately reported and paid before requesting reimbursement.
Federal Program Information: Funding Agency: U.S Department of Health and Human Services FALN: 93.926 Federal Award Identification Number: H49MC00119‐19‐00 Pass Through Entity: State of Georgia Department of Human Services Award Year: 2018‐2020 Criteria: Under 2 CFR Section 200.303(a), non‐federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally regulations require the reimbursement payment method may be used on a Federal award for activities as specified in 2 CFR section 200.305(b)(3), program costs must be paid by non‐ Federal entity funds before submitting a payment request (2 CFR section 200.305(b)(3)), i.e., the non‐ Federal entity must disburse funds for program purposes before requesting payment from the Federal awarding agency or pass‐through entity. Condition: The Organization has a policy which in includes thee Fiscal/Grant Manager and/or the CEO review all drawdown requests to ensure costs are paid before reimbursement is requested. However of the seventeen (17) drawdown requests that we tested, there was no evidence of review and approval for payment. Effect: Management possibly did not expend funds in accordance with the federal award due to lack of evidence of oversight/review of drawdowns and after reimbursable expenses have been incurred. Cause: Management did not document evidence of review and approval of drawdown requests. This was due in part to lack of oversight. Also there were several changes in personnel within the accounting area and overall limited number of personnel for certain functions and lack of board oversight. Questioned costs: None Recommendation: We recommend that internal controls be strengthened and processes implemented to ensure all draw down requests are reviewed and approved to ensure costs were accurately reported and paid before requesting reimbursement.
Condition: In May 2023, the Corporation received a $1,425,000 advance of federal funds. The grant agreement and federal regulations require the funds to be held in a separate interest-bearing account until expended. In December 2023, the Corporation made an endowment draw receipt of which was delayed by the investment manager. As a result, the total unrestricted cash was less than the unspent grant funds. This was cured on January 2, 2024, when the endowment draw of approximately $300,000 was received. Criteria: Uniform Guidance, 2 CFR § 200.305(b) - Cash Management, requires a recipient that receives an advance of federal funds to maintain the funds in a separate interest-bearing account. Furthermore, recipients must limit the use of the advanced federal funds to only those purposes outlined in the award agreement, and the funds must not be used for general operations or other non-compliant purposes. Cause: The Corporation’s endowment draw was delayed by the investment manager resulting in a period of time where grant funds were used for non-grant expenditures. Effect: The delay in receipt of the requested endowment draw resulted in the Corporation’s total unrestricted cash balance falling below unspent grant funds for a period of time from mid-December 2023 through January 2, 2024. This indicates that grants funds were temporarily used for general operations. Questioned Costs: As of December 31, 2023, $119,984 was utilized to fund general operations. Those grant funds were reimbursed on January 2, 2024. Recommendation: We recommend the Corporation rely upon other funding sources for operations if this situation occurs in the future.
Criteria In accordance with 2 CFR 200.305(b), entities receiving federal funds are responsible for ensuring payment methods minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-Federal entity. Condition and Context The Organization engaged the services of an information technology firm for the initial development work (Phase 1) to create a tool to assist in outreach to employers in Ohio that are in the broadband sector. This initial development work was completed in September 2023 at a cost of $100,000. The Organization requested reimbursement of this expense in November 2023 as part of the award’s final close-out procedures. Given that the Organization was negotiating terms with this vendor for Phase 2 of this effort, the Organization did not issue a payment to the vendor for the $100,000 that had been received. Rather, the Organization determined it would be appropriate to withhold payment to the vendor until the Phase 2 negotiations were completed or terminated. Cause The ongoing work related to this project was to be completed under a different federal contract. Thus, the Organization determined that it would be in the best interest of the overall project to hold payment for the completed Phase 1 work until a comprehensive agreement for Phase 2 could be reached. The vendor was amenable to this arrangement. The contract negotiations have taken longer than anticipated. As a result, payment has been delayed. Effect The Organization’s treatment of this $100,000 reimbursement was not in compliance with the requirements of the cash management provisions of 2 CFR 200.305(b). Repeat Finding No. Recommendation We recommend that the Organization review its processes to ensure all reimbursements of federal funds are remitted in a timely manner to vendors. Views of Responsible Officials and Planned Corrective Actions See attached corrective action plan. Questioned Costs None.
Finding 2023-001; Lack of Written Policies and Procedures Condition: The Organization does not have written policies and procedures in place for the administration and management of federal awards, as required by the Uniform Guidance (2 CFR Part 200). Specifically, the organization lacks documented procedures for financial management, internal controls, allowable costs, procurement, and other key operational areas. Criteria: According to 2 CFR § 200.302(b)(7), non-federal entities must have written procedures to implement the requirements of § 200.305 (Payment) and must maintain written procedures for determining the allowability of costs in accordance with Subpart E—Cost Principles of this part and the terms and conditions of the federal award. Additionally, 2 CFR § 200.303 requires non-federal entities to establish and maintain effective internal controls, including written policies and procedures, to ensure compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Cause: The absence of written policies and procedures appears to be due to a lack of awareness of the specific requirements under the Uniform Guidance, coupled with insufficient resources allocated to the development of these necessary internal controls. Effect: Without written policies and procedures, the Organization is at risk of non-compliance with federal regulations, which could lead to unallowable costs being charged to federal awards, inefficient or improper use of federal funds, and potential disallowance of costs during audits. This deficiency could also reduce the Organization's ability to ensure consistency and accountability in the management of federal funds. Recommendation: The Organization should develop and implement comprehensive written policies and procedures in accordance with the requirements of the Uniform Guidance. These should include, but not be limited to, the following areas: 1. Financial management, including procedures for payments and cash management. 2. Internal controls to ensure compliance with federal requirements. 3. Determination of allowable costs in accordance with federal regulations and the terms and conditions of the award. 4. Procurement standards and conflict of interest policies. 5. Time and effort reporting and compensation. The Organization should also ensure that staff are adequately trained in these policies and procedures to enhance compliance and operational efficiency. Views of Responsible Officials of Auditee: In response to the finding, management and will take action to develop and implement the necessary written policies and procedures by December 31, 2024. Comprehensive training will be provided to all relevant staff to ensure compliance with federal requirements.
Hazard Mitigation Grant Program (HMGP) – Assistance Listing No. 97.039; Grant No. 2057-4506-HMGP; Grant Period Year Ended December 31, 2023 – Cash Management Condition: Perkiomen Township has no written policy regarding cash management of funds received under Federal grants that are subject to the Cash Management compliance requirement. Criteria: Non-federal entities must minimize the time elapsing between the transfer of funds from the US Treasury or pass-through entity and disbursement by the non-federal entity for direct program or project costs and the proportionate share of allowable indirect costs, whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means (2 CFR section 200.305(b)). Cause: Management was not aware of specific compliance requirements to minimize the time elapsing between the transfer of funds from Pennsylvania Emergency Management Agency (PEMA) and the disbursement by the Township for project costs. Effect: Although Perkiomen Township has no written policy regarding cash management of funds received under Federal grants that are subject to the Cash Management compliance requirement, of the funds received on November 13, 2023, totaling $1,154,359.30, the Township had disbursed most of these funds, totaling $1,118,102.77, by December 31, 2023. Context: The results of audit procedures revealed that funds totaling $1,154,359.30 were received on November 13, 2023, and that the Township had disbursed most of these funds, totaling $1,118,102.77, by December 31, 2023. Recommendation: Perkiomen Township should adopt a written policy regarding cash management of funds received under Federal grants that is designed to minimize the time elapsing between the transfer of funds from the US Treasury or pass-through entity and disbursement by the Township.
FINDING 2023-002 Program Information: Substance Abuse and Mental Health Services Projects (ALN #93.243) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): C. Cash Management – When the reimbursement method is used, the Federal awarding agency or pass-through entity must make payment within 30 calendar days after receipt of the billing, unless the Federal awarding agency or pass-through entity reasonably believes the request to be improper (2 CFR 200.305(b)(3). M. Subrecipient Monitoring - Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved (2 CFR 200.332(d). Condition: The Organization mistakenly disbursed grant funds to an incorrect local club in fiscal year 2022, resulting in untimely payment of pass-through funds to the correct local club and insufficient subrecipient monitoring over subawards. Cause: Administrative oversight with respect to subrecipient monitoring and cash management. Effect or Potential Effect: The Organization did not ensure the incorrect local club used the subaward for authorized purposes. The Organization did not make timely payment of pass-through funds within 30 days to the correct club. Questioned Costs: Below reportable threshold. Context: The Organization mistakenly disbursed grant funds to an incorrect local club in fiscal year 2022. This club did not incur expenditures in the period of reimbursement, indicating insufficient subrecipient monitoring over subawards. As the Organization did not disburse the funds to the correct club until February 2024, they did not make appropriate payment within 30 calendar days after receipt of the billing as required at 2 CFR 300.305(b)(3). Identification as a Repeat Finding: No similar findings noted in the prior year. Recommendation: We recommend that the Organization enhance its procedures and internal controls with respect to monitoring over subrecipient activities and reimbursement payments. Views of Responsible Officials and Planned Corrective Actions: The Organization will enhance its procedures and internal controls with respect to monitoring subrecipient activities, and reimbursement payments, by working with the State of Montana grantor to ensure local clubs are using subawards for authorized purposes.
Assistance Listing Number, Federal Agency, and Program Name – 59.059, U.S. Small Business Administration, Congressional Grants Federal Award Identification Number and Year SBAHQ23I0070, 2023 Pass through Entity – Not applicable Finding Type Material weakness and material noncompliance with laws and regulation Repeat Finding – No Criteria – Per CFR 200.302, the Organization must maintain written procedures to implement the requirements of CFR 200.305. Under these Federal payment requirements, the Organization must maintain advance payments of Federal awards in interest-bearing accounts. Any interest earned on Federal advance payments above $500 must be remitted annually to the Department of Health and Human Services Payment Management System (PMS). Condition – The Organization does not have written procedures to implement the requirements of CFR 200.305. The advance payment of the Federal award was not maintained in an interest-bearing account and no interest was remitted back to the Federal government. Questioned Costs Not applicable Identification of How Questioned Costs Were Computed Not applicable. Context – There was only one advance payment of Federal awards received during 2023 which amounted to $921,000. Cause and Effect – Policies and procedures and related internal controls did not ensure compliance with Federal payment requirements under Uniform Guidance. Recommendation - We recommend establishing and maintaining written procedures to ensure 1) advance payments of Federal Awards are maintained in interest-bearing accounts; 2) interest earned is monitored; 3) interest earned above $500 is remitted at least annually. Views of Responsible Officials and Corrective Action Plan – The Organization acknowledges receipt of the finding. The following corrective actions have been taken: Management is in the process of updating written procedures for Federal award compliance. Management will calculate and remit interest for 2023 to the Department of Health and Human Services Payment Management System (PMS).
Federal Agency: U.S. Department of Health and Human Services Federal Program Name: The Department of Health and Human Services/Centers for Disease Control and Prevention Assistance Listing Number: 93.323 Federal Award Identification Number and Year: NU50CK000515 - 2021 Pass-Through Agency: State of Washington Department of Health Pass-Through Number: CBO28488-0 Award Period: July 1, 2023 through July 31, 2024 Type of Finding: • Material Weakness in Internal Control over Compliance – Cash Management – Subrecipient Payments • Other Matters Criteria or specific requirement: 2 CFR section 200.305(b)(1) requires that an entity implement procedures to ensure that the time elapsing between the transfer of federal funds to the subrecipient and the disbursement of such funds for program purposes by the subrecipient be minimized. 2 CFR section 200.305 (b)(3) states the pass-through entity must make payment within 30 calendar days after receipt of the billing, unless the request is believed to be improper. Condition: 2 out of 8 total billings sampled were not paid timely. Questioned costs: None. Context: During our testing of subrecipient payments, 2 out of the 8 billings sampled were not paid within 30 calendar days to the subrecipient after the billing was submitted for payment. Cause: Policies and procedures were not in place to ensure timely payments of subrecipient billings. Effect: Subrecipients received payments a significant amount of time after expenditures have been incurred. Recommendation: We recommend that the Organization implement policies and procedures to ensure subrecipients are paid within 30 days of when the billing is received. If the request is believed to be improper, support for the delay in payment should be maintained. Views of responsible officials: There is no disagreement with the audit finding.
Criteria: 2 CFR 200.303 requires nonfederal entities to establish and maintain effective internal control over federal awards to provide reasonable assurance that organizations who manage the federal award: • Understand and comply with the federal statutes, regulations, and terms and conditions of the award; • Evaluate and monitor compliance; • Take prompt action when instances of noncompliance is identified. These internal controls should be in compliance with guidance in Standards for Internal Control in the Federal Government, issued by the Comptroller General of the United States, or the Internal Control Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Additionally, the Uniform Guidance requires non-federal entities to develop written procedures related to the following areas: 1. Cash Management 2 CFR 200.302(b)(6) states that the financial management system of each non-Federal entity must provide for the written procedures to implement the requirements of 2 CFR 200.305 Federal Payment. 2. Allowability of Costs 2 CFR 200.302(b)(7) states that the financial management system of each non-Federal entity must provide for the Written procedures for determining the allowability of costs in accordance with Subpart E (Cost Principles) of this part and the terms and conditions of the Federal award. 3. Conflict of Interest 2 CFR 200.318(c)(1) states that the non-Federal entity must maintain written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts. No employee, officer, or agent may participate in the selection, award, or administration of a contract supported by a Federal award if he or she has a real or apparent conflict of interest. Such a conflict of interest would arise when the employee, officer, or agent, any member of his or her immediate family, his or her partner, or an organization which employs or is about to employ any of the parties indicated herein, has a financial or other interest in or a tangible personal benefit from a firm considered for a contract. The officers, employees, and agents of the non-Federal entity may neither solicit nor accept gratuities, favors, or anything of monetary value from contractors or parties to subcontracts. However, non-Federal entities may set standards for situations in which the financial interest is not substantial, or the gift is an unsolicited item of nominal value. The standards of conduct must provide for disciplinary actions to be applied for violations of such standards by officers, employees, or agents of the non-Federal entity. In addition, the organizations should ensure that existing written procedures are in compliance with: a. Equipment Management Requirements 2 CFR 200.313(b) states that “A state must use, manage and dispose of equipment acquired under a Federal award by the state in accordance with state laws and procedures b. General Procurement Standards 2 CFR 200.317 to 200.326 discusses that contracts must be established and managed in accordance with the procurement requirements in 2 CFR Part 200. Grantees must have written procurement policies and procedures that demonstrate a fair and reliable process, with standards of conduct addressing conflicts of interest, for obtaining grant-funded goods and services. Condition The Foundation does not have documented policies and procedures concerning the following key compliances areas which are required by the Uniform Guidance: • Cash Management • Allowability of Cost • Conflict of Interest • Equipment and Real Property Management • Procurement, Suspension & Debarment Cause This is attributed to the insufficient resources or staffing to develop and formalize the policies and procedures. Effect The absence of formal policies and procedures in the key compliance areas could result in non-compliance with federal regulations, which may lead to unnecessary sanctions. Additionally, without formal written policies and procedures, it is difficult to ensure consistent practices across the organization. Questioned Costs None Recommendation The Foundation should develop and implement formal written policies and procedures for the specific areas required by the Uniform Guidance. These policies and procedures must clearly delineate the requirements of the Uniform Guidance. Personnel responsible for these areas should receive adequate training and apply the policies effectively. Regular reviews should be conducted to update the policies and procedures as needed. Views of Responsible Officials and Planned Corrective Action We understand how crucial it is to have strong policies and procedures in place. Here’s how we plan to move forward: 1. Review of Existing Policies and Procedures: We’re currently taking a close look at our existing policies and procedures to ensure they align with the Uniform Guidance. This will help us identify any gaps and make necessary updates so that we’re fully compliant. 2. Development of New Policies: Alongside this review, we will create clear and comprehensive written policies in key areas, such as: • Cash Management: Setting up procedures that comply with 2 CFR 200.305 to ensure timely payments. eCFR :: 2 CFR 200.305 -- Federal payment. • Allowability of Costs: Crafting guidelines that follow Subpart E—Cost Principles, so we can confidently determine which expenses are allowable. https://www.ecfr.gov/current/title-48/chapter-7/subchapter-E/part-731/subpart-731.7/section-731.770. • Conflict of Interest: Establishing standards of conduct that address potential conflicts and promote transparency. • Equipment and Real Property Management: Developing policies for managing equipment acquired under federal awards in line with 2 CFR 200.313(b). eCFR :: 2 CFR 200.313 -- Equipment. • Procurement Procedures: Creating clear procurement guidelines that align with 2 CFR 200.318 through 200.326 to ensure fairness and oversight. eCFR :: 2 CFR 200.318 -- General procurement standards. 3. Training and Communication: The Finance Department will be responsible for training all staff involved in managing federal awards. Training sessions will ensure that everyone understands the requirements and their roles in maintaining compliance. This training will be completed by December 31, 2024. Personnel responsible: Eduardo Cedeno, Director of Finance Anticipated completion date: December 31, 2024
Federal Program Information: Sexual Risk Avoidance Education (ALN 93.235) Criteria or Specific Requirement: C. Cash Management - In accordance with 2 CFR 200.305(b)(1), non-Federal entities must utilize payment methods that minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-Federal entity; the non-Federal entity must make timely payment to contractors in accordance with the contract provisions. Condition: For 3 of 11 transfers of Federal funds for selected testing, the subsequent pass through disbursement to the subrecipients exceeded 30 days. Cause: The Organization does not have sufficient controls in place to ensure that pass through disbursements are made within 30 days of receipt of federal funds. Effect or Potential Effect: The Organization was not in compliance with cash management requirements. Questioned Costs: None. Context: The Organization received federal funds to pass-through to subrecipients, however the pass through occurred more than 30 days after the Organization’s receipt of the federal funds. The Organization did ultimately pass the funds through to the subrecipients. Identification as a Repeat Finding: No. Recommendation: We recommend the Organization enhance its procedures and internal controls to ensure that time between receipt of federal funds and payment to its local clubs is minimized. Views of Responsible Officials: The Alliance will enhance its procedures and internal controls around cash management to ensure that time between receipt of federal funds and payment to its local clubs is minimized.
Program Information: COVID-19 Elementary and Secondary School Emergency Relief Fund (84.425U) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): C. Cash Management - In accordance with 2 CFR 200.305(b)(1), non-Federal entities must utilize payment methods that minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-Federal entity; the non-Federal entity must make timely payment to contractors in accordance with the contract provisions. Condition: For 12 of 38 transfers of Federal funds for selected testing, the subsequent pass through disbursement to the subrecipients exceeded 30 days. Cause: The Organization does not have sufficient controls in place to ensure that pass through disbursements are made within 30 days of receipt of federal funds. Effect or Potential Effect: The Organization was not in compliance with cash management requirements. Questioned Costs: None. Context: The Organization received federal funds to pass through to subrecipients, however the pass throughs occurred greater than 30 days after the Organization’s receipt of the federal funds. The Organization did ultimately pass the funds through to the subrecipients. Identification as a Repeat Finding: No similar findings were identified in the prior year. Recommendation: We recommend the Organization enhance its procedures and internal controls to ensure that time between receipt of federal funds and payment to its local clubs is minimized. Views of Responsible Officials and Planned Corrective Actions: The Alliance will enhance its procedures and internal controls around cash management to ensure that time between receipt of federal funds and payment to its local clubs is minimized. The Alliance will also request notification of funding from the agency.