Finding Text
Compliance with Federal Regulations - Federal Awards Compliance - Cash Management
Criteria: Under the Code of Federal Regulations Title 2, Part 225, Subtitle A, Part 85.20. Procedures
for minimizing the time elapsing between the transfer of funds from the U.S. Treasury and
disbursement by grantees and subgrantees must be followed whenever advance payment
procedures are used. When advances are made by letter‐of‐credit or electronic transfer
of funds methods, the grantee must make drawdowns as close as possible to the time of
making disbursements.
Condition: During the current fiscal year, the Authority drew down more capital funds than it had
expended within a reasonable time.
Context: The Authority had excess capital funds that were not expended within 3 days of drawing
down.
Effect: The Authority is out of compliance in regards to cash management of federal awards.
Cause: The Authority drew down an excess of $16,501.12 and $146,465.60 of the Authority’s 2021
and 2022 capital funds during the year and had not expended the funds within 3 days.
Recommendation: The Authority should review 2 CFR Part 225, Subtitle A, Part 85.20 to familiarize themselves
with the regulations.
Auditee Response/Corrective Action Plan: See page 50.Material Weakness in Internal Control over Compliance – Cash Management
Federal Program: CFDA 14.872 – Public Housing Capital Fund
Pass-Through Entity: U.S. Department of Housing and Urban Development
Award Number: IA01P023501-21, IA01P023501-22
Compliance Requirements: Cash Management
Type of Finding: Material Weakness in Internal Control over Compliance
Criteria: See Part II, Finding 2023-001
Condition and Context: See Part II, Finding 2023-001
Questioned Costs: N/A
Cause: See Part II, Finding 2023-001
Effect or Potential Effect: See Part II, Finding 2023-001
Recommendation: See Part II, Finding 2023-001
Repeat Finding: N/A
Responsible Official’s Response and Corrective Action Plan: See Page 50, Finding 2023-001
Planned Implementation Date: See Page 50, Finding 2023-001
Person Responsible for Corrective Action: Executive Director