Finding Text
Criteria: Under the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance, 2 CFR §200.305), non-federal entities must minimize the time between the receipt of federal funds and the disbursement of those funds for program purposes. Reimbursements must be used promptly to pay allowable costs incurred. Condition:Duringtheauditperiod,theCentersubmittedreimbursementrequestsfundsforallowableprogramexpenses andreceivedreimbursementinthesubsequentyear,butdidnotremitpaymenttovendorsinatimelymanner.3of the14 vendor invoices remained unpaid for extended periods despite the Center having received reimbursement for those costs. Cause: The delays in vendor payments were primarily due to weaknesses in internal cash management controls, including lack of reconciliation between reimbursement receipts and outstanding payables, and insufficient oversight of accounts payable processing. Effect: The Center was not in compliance with 2 CFR §200.305. Failure to promptly pay vendors after receiving reimbursement can also result in reputational risk, strained vendor relationships, and potential disallowance of costs by grantor agencies. Questioned Costs: None Recommendation: Management should establish procedures to ensure timely disbursement of funds upon receipt of reimbursements to vendors. Views of Responsible Officials: Management agrees with the finding; see corrective action plan.