Finding 1095028 (2024-005)

2024-005: Federal Transit Cluster – AL# 20.507, Cash Management – Material Noncompliance/Material Weakness in Controls over Compliance Condition A lack of cash flow and grant management oversight resulted in contractors and vendors not being paid timely during FY2024. We noted 14 instances where contractors and vendors were not paid for over 30 days. We also noted four vendors were not paid for over 90 days. Criteria All grant activities should include management level oversight to ensure timeliness, accuracy, and compliance with specified grant requirements. Cause Lack of proactive cash flow and grant management occurred when invoices were received. Effect Multiple contractors and vendors were not paid for over 30 days after receipt of invoice. Four vendors were not paid for over 90 days. Recommendation A designated management level individual should have oversight to require timely drawdowns of capital grants and timely payment of invoices. View of Responsible Officials Issues with the implementation of new Federal and Commonwealth transportation grant portals hindered staff from being able to submit grant draw requests in a timely manner. Management is addressing these issues as they arise. The Interim Director of Finance and Accounting Supervisor are currently reviewing operating procedures and implementing methods to streamline work and eliminate duplicate activity. A Monthly Close Checklist is under development, which will create consistency in the timing and manner of recording financial activities. Additionally, detailed spreadsheets tracking grant activity have been developed, which will allow staff members to better monitor reimbursement requests and ensure vendors are paid timely moving forward.