Finding Text
Finding No. 2024-001 – Cash Management | Identification of the Program: | Program Name: Research and Development Cluster: Basic Scientific Research, Department of Defense Awarding Office, 12.431; NSF Technology, Innovation and Partnerships, National Science Foundation, 47.084 | Criteria or Specific Requirements (Including Statutory, Regulatory, or Other Citations): 2 CFR 200.303 requires that a 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 and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” According to page 3-C-5 of the 2024 OMB Compliance Supplement, expenses must be incurred before submitting a reimbursement request (2 CFR § 200.305(b)(3)). | Condition: During our testing of 2024 reimbursement requests (totaling $536,272), we noted that there was no evidence of review and approval of the requests to indicate whether the reviewer determined that expenditures submitted for reimbursement had been incurred prior to the request for reimbursement. Management has indicated this review does, in fact, take place, however, there is no evidence (i.e., sign off) on the request to indicate that the review had occurred. | Section III— Federal Award Findings and Questioned Costs (continued) | Cause: Internal controls over the review and approval of the reimbursement requests were not effective. | Effect or Potential Effect: This could result in reimbursement for expenditures that have not been incurred and paid prior to reimbursement being requested. | Questioned Costs: None. | Context: As the sample size is small, we selected 10 cash disbursements for testing. There was no evidence of approval for all 10 reimbursement requests. | Identification as a Repeat Finding: N/A – This is a first year Uniform Guidance audit. | Recommendation: Management should strengthen its internal controls over cash management related to reimbursement requests by having the reviewer sign off on the reimbursement request to support that the review had occurred. | View of Responsible Officials: Management concurs with the findings and has developed a corrective action plan to address this finding.