Finding Text
Condition and Context: As noted in finding 2021-002, ITCN had cash balances in the amount of $470,318, while also reporting a total deferred revenue of $1,377,071 and a due to grantor agency of $269,375. At September 30, 2021, the WIC program is reporting deferred revenues of $292,379 while reflecting an amount loaned to other funds relating to these restricted sources totaling $227,217. Also, at September 30, 2021, the Child Care and Development Block Grant program is reporting deferred revenues of $416,668 while reflecting an amount loaned to other funds relating to these restricted sources totaling $889,729. As a result, ITCN is not in compliance with their contracts governing the use of these restricted funds.
Criteria: 2 CFR §200.305, Federal Payment, requires that non-federal entities establish written policies so that advance payments are as close as administratively feasible to the actual disbursements for direct program or project costs.
Cause and Effect: The cause is a lack of resources and oversight of the accounting and financial reporting process. The effect is the use of restricted cash to fund other expenses not related to the restricted purpose.
Recommendation: We recommend that ITCN implement the recommendations noted in finding 2021-002.
Management’s Response: ITCN’s responsible officials’ views and planned corrective action are in its corrective action plan at the end of the report.