Finding Text
2024-004 Information on the Federal Program: Assistance Listing Number 93.224/93.527; Health Center Program Cluster; Department of Health and Human Services; Federal Award No. H80CS08221 and H8LCS50906 Criteria Or Specific Requirement: Cash Management: 45 CFR 75.305 applies to these awards under the reimbursement method. Paragraph (b)(1) of that clause requires that the non-federal entity request reimbursement for (a) only allocable, allowable, and reasonable contract costs that have already been paid, or (b) if the non-federal entity is not delinquent in paying costs of contract performance in the ordinary course of business, costs incurred, but not necessarily paid. Condition: The Organization had two drawdowns (one for each H80CS08221 and H8LCS50906) during the fiscal year where cash was received before the expenses were incurred. Cause: The Organization made the draws to confirm they would have sufficient cash to pay employees timely. Effect or Potential Effect: Drawing funds prior to incurring the expense results in noncompliance with program requirements. Questioned Costs: None Context: Out of 23 drawdowns during the fiscal year, two of the drawdowns were received and included expenses that had yet to be incurred. Identification as a Repeat Finding, if Applicable: Not a repeat finding. Recommendation: We recommend management revisit their drawdown review and approval processes and controls. Management should confirm before drawing down cash that requests do not include expenses that have not been incurred. Views of Responsible Officials and Planned Corrective Actions: See separate auditee document for planned corrective action.