Finding Text
Section III - Federal Award Findings and Questioned Costs:
2024-001: Cash Management
U.S. Department of Health and Human Services
Research and Development Cluster – 93.RD
Condition
Funds were drawn down by the Institute in excess of the three day period recommended by its funding agency and did not minimize the time elapsing between the transfers of funds from the grantor to the issue of payment by the recipient during the year ended June 30, 2024.
Criteria
Cash management under 2 CFR 215.22 states that payment methods shall minimize the time elapsing between the transfers of funds from the grantor to the issue of payment by the recipient.
Cause
The Institute’s preparation and review procedures over the drawdown of funds were insufficient to minimize the time elapsing between the transfers of funds from the grantor to the issue of payments by the Institute.
Effect
The Institute was not in compliance with the cash management compliance requirements stated in 2 CFR 215.22 during the year and the Institute had an overdrawn balance of $481,959 at June 30, 2024.
Recommendation
The Institute should improve its procedures over advances of federal funds.
Management Response
Establish a reserve amount to avoid drawing down all available funds, ensuring that there is always sufficient cash flow to meet operational needs. This reserve is intended to cover unexpected expenses, emergencies, or fluctuations in cash flow.