Finding Text
Health Center Program Cluster – Assistance Listing No. 93.224
U.S. Department of Health and Human Services
Award No. 4 H8FCS40544-01-03, April 1, 2021 – March 31, 2024
Criteria or specific requirement – Cash Management (45 CFR 75.305)
Condition – The Organization’s internal controls over compliance were not able to prevent an advance drawdown.
Cause – The Organization obtained a drawdown for a deposit for a project that was ultimately suspended beyond the period of performance. When the project was paused, the Organization was unable to identify sufficient eligible expenditures incurred within the audit period and disbursed before the drawdown date.
Effect or potential effect – Due to reallocation of grant expenditures, the Organization may earn interest on the advance drawdown.
Questioned costs – None
Context – Because of a change in the timeline for estimated completion of a project included in the HRSA-approved grant budget to outside the period of performance, other grant expenditures were identified. The Organization was not able to identify sufficient eligible expenditures incurred within the audit period and disbursed before the drawdown date. Management identified the need to contact the grantor for guidance and alert auditors to noncompliance resulting from the resulting advance drawdown. Management also calculated the amount of interest earned on advance draws to ensure none needed to be returned. The entire population of drawdowns was tested to quantify the impact of the advance drawdown and calculate interest earned on advance drawdowns. Interest earned on the advance drawdown was less than $500.
Identification as a repeat finding, if applicable – Not a repeat finding
Recommendation – The Organization should continue monitoring projects funded by grants in an attempt to prevent advance drawdowns.
Views of responsible officials and planned corrective actions – Management agrees that we did end up having a pause in a project that we had previously drawn grant funds on to cover. However, when this was realized, we did have additional allowable expenditures available to reallocate that draw down over to that had incurred within the audit period, it was just after the date of the original drawdown and caused the timing issue. The pause on the project was unknown at the time of the original draw, so this would have been very difficult to know ahead of time.