Finding Text
Condition: During our audit, we noted the Agency did not comply with the cash management requirements for federal awards. Specifically, the Agency drew down federal funds in advance of immediate cash needs, resulting in excess cash balances being held for extended periods. Criteria: Under 2 CFR Part 200.305, non-federal entities must minimize the time elapsing between the transfer of funds from the U.S. Treasury and the disbursement of those funds for program purposes. Funds should be drawn down only as needed to meet immediate cash requirements. Cause: The Agency made periodic draws of federal awards without ensuring such draws were for immediate cash needs. Effect: Holding excess federal funds for extended periods can result in non-compliance with federal regulations, and could potentially increase the risk of mismanagement or misuse of funds. Recommendation: We recommend the Agency revise federal award cash draw procedures to ensure compliance with cash management requirements. Such draws should be made solely for immediate cash needs. Management Response: Management agrees with this finding and has begun implementing corrective actions. Such actions include implementing a process whereby federal draws are based on upcoming cash needs rather than periodic draws.