Finding Text
Criteria The cash management compliance requirements in Part 3 of the OMB Compliance Supplement indicate recipients must follow procedures to minimize the time lapsing between the transfer of funds from the federal government and disbursement when awards are provided for in advance payments. Condition The Organization requests funds from their grantors in advance with no procedures in place to minimize the time between their drawdown and disbursement. Cause Historically, upon execution of annual grant agreements, the Organization was instructed by the grantor to request the full amount of the award at that time. These awards span anywhere from six months to a year in length. Effect The Organization is not in compliance with the cash management requirements. Questioned Costs None Context The Organization does not have procedures in place to minimize the time elapsing between the transfer of funds from the federal government and their disbursement. Recommendation The Organization should create a business plan for its grants which require cash advances and determine an appropriate length of time or interval of funding necessary for the Organization to operate at the appropriate level. The Organization should then establish policies and procedures over the development of this business plan to evidence their procedures over cash management. Lastly, the Organization should operate grants on a cost reimbursement basis, with minimal advances, when possible. Views of Responsible Officials See the accompanying Corrective Action Plan.