Finding Text
Criteria: 2 CFR Part 200 Uniform Administration Requirements, Cost Principles, and Audit Requirements for Federal Awards requires compliance with the provisions of cash management. The Organization should have procedures in place to ensure the draw down of federal funds in a timely manner and proper documentation of approval should be maintained to support the draw of the funds.
Condition: During our testing, we noted the Organization’s draw downs were more than the expenditures on the schedule of federal awards as well as the support provided from the general ledger.
Questioned costs: $339,667
Context: During our testing, it was noted there was a lack of review or approval on the calculation to actual costs incurred.
Cause: The Organization had significant turnover within the finance department and was operating with insufficient resources to manage the cash management process.
Recommendation: We recommend the Organization implement a clear approval process and review for the drawing of federal funding. In addition, it is important to establish a clear process and timeline for performing draws. This should involve regular monitoring of expenditures, timely submission of draw requests, and efficient processing of those requests. By implementing an approval and a timely draw process, the Organization enhance internal controls, reduce the risk of fraud, and ensure the accuracy and integrity of the fund draw process, and can better manage its cash flow, and meet its financial obligations.
Grantee Comment: Refer to the Correction Action Plan