Finding 1165680 (2023-022)

Significant Deficiency and Noncompliance - Federal Awards Cash Management Criteria: Based on the award terms, federal awards (whether direct or passed through another entity) provide funds to a grantee on either a reimbursement basis for payments already made by the grantee or on an advance basis for payments to be made by the grantee within three days of receipt of the funds. Condition: The City received a federal award passed through the Mississippi Department of Health that was awarded on an advance basis, and we noted that several project cost invoices were paid more than three days after receiving the requested award advances for these costs. Cause: The City's controls over federal award cash management were not functioning as intended. Effect: The City held advances longer than the three days allowed. Recommendation: We recommend that the procedures for monitoring federal award advances and accounts payable processing be implemented to ensure that project costs are paid upon receipt of the related award advances. Response: The City's response is reflected in the accompanying corrective action plan.