Finding Text
Criteria – Uniform Guidance (2 CFR §200.305) requires that non-federal entities establish and maintain written procedures to minimize the time elapsing between the transfer of federal funds from the U.S. Treasury and the disbursement of those funds for allowable program expenditures. In addition, entities must maintain adequate documentation to support all drawdowns and ensure that amounts requested are based on actual, allowable costs incurred. Condition and Description – During our audit, we identified deficiencies in the Organization’s compliance with federal cash management requirements and internal controls over reporting of federal expenditures. Specifically, documentation supporting certain drawdowns of federal funds was not consistently maintained. However, the total drawdowns did not exceed eligible expenses. In addition, we noted timing differences between when expenses were recognized in the financial statements and when related drawdowns were requested and reported to the federal government. These conditions create the risk that federal funds may not be drawn down in alignment with actual expenditures, resulting in temporary over- or under-drawdowns, increasing the likelihood of noncompliance with Uniform Guidance requirements and misstatements of federal program expenditures. Questioned Costs – Unknown. Cause/Effect – Drawdowns were not consistently reconciled to underlying expenses, and supporting documentation was incomplete. Timing differences between expenditures and drawdowns were not addressed, creating the risk of temporary over- or under-drawdowns and noncompliance with federal cash management requirements.