Finding Text
Rural Healthcare Services Programs Assistance Listing Number 93.912 U.S. Department of Health and Human Services Award No. 6D0RH49283-02-01, August 1, 2024 – July 31, 2025 Award No. 6 G28RH46259-03-01, September 1, 2024 – August 31, 2025 Award No. 4 HBIRH47071-03-02, September 1, 2024 – August 31, 2026 Criteria or specific requirement – Cash Management (45 CFR 75.305) Condition – Grant funds were intentionally drawn down in advance of disbursements for eligible expenditures. Cause – On January 27, 2025, the Office of Management and Budget (OMB) ordered a pause to the disbursement of federal grants to take effect the following day. Due to uncertainty around how long the pause would last and the Organization’s anticipated cash flow needs, management advance drew on the Organization’s federal awards on January 28, 2025. Effect or potential effect – The Organization may earn interest on the advance drawdowns. Questioned costs – None. Context – On January 28, 2025, drawdowns were requested based on estimated salaries and wages to be charged to the grants through May 31, 2025. Once the pause ended, the Organization resumed requesting drawdowns for expenses other than salaries and wages, resulting in an extended advance draw position. By May 31, 2025, all funds previously drawn down had been obligated. The January 28, 2025, drawdowns resulted in an advance draw of $282,753. Interest earned on the advance drawdowns was less than $500. Identification as a repeat finding, if applicable – Not a repeat finding. Recommendation – The Organization should review its cash management policy to ensure it combines flexibility while requiring compliance. Views of responsible officials and planned corrective actions – This is a once in a lifetime occurrence based on uncertainty and the Organization’s cash position at the time. The Organization has reviewed the cash management policy to ensure it is compliant. Additionally, the Organization has taken steps to improve its cash position and do not view this as an ongoing issue.