Finding Text
Agency: U.S. Department of Health and Human Services Federal Program: ALN 93.623 National Communication System for Runaway and Homeless Youth and ALN 93.493 Congresional Directives Criteria: The Payment Management System (PMS) is a system used by the Organization to drawdown federal funds for reimbursement for allowable expenses and file the Federal Financial Report (FFR). Per PMS guidelines, organizations are required to drawdown funds for immediate disbursement (3 business days), unless otherwise specified in the Notice of Award. Condition: In 2025, the Organization drew down federal funds in advance of incurring allowable expenditures as a result of funding/cashflow constraints and to ensure the Organization's federal program would not be interrupted in the event that award funding was frozen given the potential for a government shutdown. Certain expenditures were identified that were included in drawdowns in which the disbursement of funds did not occur within 3 business days. Context: Out of a sample of 40 for ALN 93.623, non payroll selections, we noted 19 instances in which funds were drawn down and disbursement of funds did not occur within three business days. In addition, we noted $98,233 of ALN 93.493 funds drawn down before expenses were incurred in fiscal year 2025. The sample was not statistically valid. Cause: : As a result of cashflow/funding constraints and the risk the government would temporarily shut down and management would not be able to access award funds timely which would cause a possible disruption in executing under the federal award. Questions Costs: None identified. Effect: The Organization drew down funds in which certain related expenditures were not disbursed within 3 days of drawdown. Recommendation: We recommend the Organization continue to monitor cashflow, build operating reserves and obtain additional funding resources to better manage temporary lapses in funding and comply with PMS guidelines. Views of Responsible Officials: Management does not dispute the findings regarding the Organization not consistently adhering to the PMS guidelines requiring an immediate disbursement (within 3 business days) of federal funds drawn for allowable expenses for reimbursement. Management is in the process of developing plans to enhance operating reserves and diversify funding sources in order to comply with PMS guidelines.