Finding Text
Federal Assistance Listing Number 93.243 U.S. Department of Health and Human Services 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. Questioned Costs – None Context – Out of a population of twenty-four draws, a sample of six draws were selected for testing. The sampling methodology used was not, and was not intended to be, statistically valid. Of the six draws tested, four draws were considered advanced draws Effect – Grant funds were drawn down sooner than administratively necessary. The four draws were not earned as of the end of three days prior to disbursement of allowable expenditures. Cause – The Organization was struggling to maintain adequate cash reserves and therefore advance drew on the award, with the knowledge that allowable expenditures would be incurred and covered by the draws in future periods. Identification as a repeat finding, if applicable – Not a repeat finding Recommendation – The Organization should ensure procedures are followed to prevent cash draws from being drawn sooner than three days prior to disbursement of allowable expenditures.