Finding Text
Finding 2024-006: Cash Management Program Title: Defense Nuclear Nonproliferation Research Assistance Listing Number: 81.113 Federal Agency: U.S. Department of Energy Direct Award Identifying Numbers: DE-NA003862, DE-NA004179, DE-NA0004177 Federal Award Year: Year ended September 30, 2024 Program Title: Export Control and Related Border Security Assistance Listing Number: 19.901 Federal Agency: U.S. Department of State Direct Award Identifying Number: SAQMIP23CA0153 Pass-Through Entity Name, Pass-Through Identifying Number: The Research Foundation for SUNY, University at Albany, 3-98939 Federal Award Year: Year ended September 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matter Compliance Finding Criteria: Under 2 CFR § 200.303, organizations that receive Federal funding are required to “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 or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Under 2 CFR § 200.305(b)(3), when using the reimbursement method, entities should request payment as soon as possible after the costs are incurred to minimize the time between expenditure and Federal reimbursement. Condition: PFI does not have documentation of the review and approval of Federal cash drawdown requests prior to submission. During testing, we noted that drawdowns totaling $219,376 for ALN 81.113 and $188,631 for ALN 19.901 were processed without evidence of supervisory review. Additionally, we noted that PFI submitted a late cash drawdown request for Federal expenditures of $74,111 under ALN 81.113 that occurred during prior years but were newly identified and reimbursed during the year under audit. Cause: PFI has not implemented a formal review process for cash drawdowns. Furthermore, PFI lacks written procedures to ensure timely submission of reimbursement requests. Effect or Potential Effect: Lack of review increases the risk of drawing excessive funds, noncompliance with cash management requirements, and potential misuse of Federal funds. Delayed drawdowns resulted in PFI using non-Federal funds for an extended period of time, which may have impacted cash flow and program operations. Questioned Costs: None. Context: 4 out of 4 drawdown requests selected for testing under ALN 81.113 and 3 out of 3 drawdown requests selected for testing under ALN 19.901 did not have documented supervisory review and approval. 1 of 4 drawdown requests tested for ALN 81.113 was submitted late for expenditures that had occurred in prior fiscal years. The samples are representative of the population. Repeat Finding: Not applicable Recommendation: It is recommended that PFI establish and document a formal review and approval process for all cash drawdown requests, including maintaining evidence of supervisory approval. Furthermore, we recommend that PFI implement procedures to ensure reimbursement requests are submitted promptly after costs are incurred, ideally within 30 days.