Finding Text
Finding 2024-003 – Subrecipient Cash ManagementIdentification of the federal program:Federal Grantor: Department of Health and Human Services (HHS)Assistance Listing No.: 12.420, Military Medical Research and DevelopmentGrant Award: W81XWH2010210Federal Grantor: Department of Health and Human Services (HHS)Assistance Listing No.: 93.395, Cancer Treatment ResearchGrant Award: R01CA248574Federal Grantor: Department of Health and Human Services (HHS)Assistance Listing No.: 93.847, Diabetes, Digestive, and Kidney Diseases Extramural ResearchGrant Award: R01DK133328Criteria or specific requirement (including statutory, regulatory or other citation):Section 200.303 of the Uniform Guidance states the following regarding internal control: “The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).”2 CFR 200.305 (c) states, “…the Federal agency or pass-through entity must make payment within 30 calendar days after receipt of the payment request unless the Federal agency or pass-through entity reasonably believes the request to be improper.”Condition:Management did not have sufficiently designed internal controls to ensure all payments made to subrecipients were made within the required time frames.Cause:Management did not ensure that all subrecipient cash payments were made within the required time frame.Effect or potential effect:Subrecipients are not paid within the time frame established in the Uniform Guidance.Questioned costs:None.Context:We tested a sample of 10 subrecipient payments, and identified 4 payments that were not paid within 30 days of receipt. Total expenditures for the Research and Development Cluster were $13,427,764 at December 31, 2024. Total subrecipient expenditures for the year ended December 31, 2024, were $2,133,172.Identification as a repeat finding, if applicable:This finding is not a repeat finding from the prior year.Recommendation:Management should ensure subrecipient payments are made within the required time frames included in the Uniform Guidance.Views of responsible officials:Management concurs with the finding and will increase the priority around the 30-day processing deadline mandated by the Uniform Guidance 2 FR 200.305 (b)(3), including review of current processes, policies, and procedures to minimize the time between invoice receipt and the transfer of federal funds to the subrecipient.