Finding Text
Federal agency: U.S. Department of Commerce
Federal program title: Connecting Minority Communities Pilot Program
ALN: 11.028
Criteria or specific requirement:
2 CFR § 200.305 Federal payment stipulates a non-federal entity must be paid in advance, provided it maintains or demonstrates the willingness to maintain both written procedures that minimize the time elapsing between the transfer of funds and disbursement by the non-Federal entity, and financial management systems that meet the standards for fund control and accountability as established in this part. Advance payments to a non-Federal entity must be limited to the minimum amounts needed and be timed to be in accordance with the actual, immediate cash requirements of the non-Federal entity in carrying out the purpose of the approved program or project. The timing and amount of advance payments must be as close as is administratively feasible to the actual disbursements by the non-Federal entity for direct program or project costs and the proportionate share of any allowable indirect costs. Interest earned amounts up to $500 per year may be retained by the non-Federal entity for administrative expense. Any additional interest earned on Federal advance payments deposited in interest-bearing accounts must be remitted annually to the Department of Commerce.
Condition and Context:
The Connecting Minority Communities Pilot Program funds drawn in advance were not limited to immediate cash requirements.
Cause:
Improper projection of immediate cash needs
Effect:
Excess cash maintained may not be available for use in other programs.
Questioned costs: None
Recommendation
The College should implement a process to only drawdown funds for its immediate needs. Also, the College should compute interest earned on advance funds and refund the grantor when required.