Finding Text
Condition and Context: We selected for testing four months during which draw downs occurred for the grant program. For three of the four periods selected for testing, the amount drawn down exceeded the expenditures incurred for the same period of time, indicating that funds were not disbursed prior to the request.
Criteria: 2 CFR 200 requires that auditees not request payment for cost-reimbursement contracts under federal acquisition regulations until the funds have been disbursed or otherwise been obligated.
Effect: OICA was not in compliance with the cash management requirements of the federal award program.
Cause: OICA’s Financial Reporting Department was undergoing significant transition during the audited period. As a result, certain personnel lacked sufficient knowledge about the cash management requirements of federal award programs.
Questioned Costs: None.
Recommendation: OICA’s management should reinforce with personnel responsible for requesting reimbursement the requirement that funds be disbursed or obligated prior to the request.
Management’s Response: OICA concurs with the recommendation.