Finding Text
2024-005 Delayed Requests for Reimbursement of Federal Funds Compliance Requirement Cash Management Category Material Weakness in Internal Control and Material Noncompliance ALN 12.607 Program Community Economic Adjustment of Establishment, Expansion, Realignment, or Closure of a Military Installation Federal Agency US Department of Defense Criteria Per 2 CFR §200.305(b) of the Uniform Guidance, when entities are funded on a reimbursement basis, they must submit payment requests in a timely manner after incurring eligible costs to ensure proper cash management and compliance with federal requirements. Condition During our review of the Authority’s grant management practices, we noted that requests for reimbursement of federal funds under the cost reimbursement method were delayed by approximately five to seven months after the incurrence of eligible expenditures. Cause The delay appears to be due to internal administrative inefficiencies and a lack of timely coordination between program and finance personnel responsible for grant reporting and fund drawdowns. Effect Delays in requesting reimbursement may result in cash flow constraints for the entity and could potentially impact program operations. Additionally, such delays may be viewed as noncompliance with federal grant management standards, which require timely and accurate reporting and drawdown of funds. Questioned Costs None. Recommendation We recommend that the Authority implement procedures to ensure reimbursement requests are submitted within a reasonable timeframe following the incurrence of costs, typically within 30 days, depending on the Authority's internal disbursement cycle and cash flow needs. Recommended actions include establishing internal deadlines, improving interdepartmental coordination, and conducting periodic reviews of outstanding expenditures eligible for reimbursement. Views of Responsible Official (Unaudited) Refer to Corrective Action Plan