Finding Text
Finding 2025-011 – C. Cash Management Information on Federal Program(s) – Research and Development Cluster (ALN 43.009, ALN 93.859) Criteria or Specific Requirement - 2 CFR §200.305(b)(1) indicates that advance payments to a non-Federal entity must be limited to the minimum amounts needed and be timed to be in accordance with actual, immediate cash requirements of the non-Federal entity in carrying out the purpose of the approved program or project. The timing and amount of advance payments must be as close as administratively feasible to the actual disbursements by the non-Federal entity for direct program or project costs and the proportionate share of any allowable indirect costs. Condition – The University was not able to provide reconciliations of funds drawn to expenditures incurred for certain funds drawn down during the current year that reconciled the amounts properly. Additionally, as formal draw down to expenditure reconciliations were not properly performed for certain draw dawns, instances were identified in which the University drew down funds twice for the same expenditure. The combination of the above also resulted in the University not minimizing the time between the date of drawdowns and the date the funds were used. Cause - Administrative oversight and insufficient internal controls. Effect or Potential Effect – The University was not in compliance with cash management requirements. Questioned Costs – None. Context – For 9 of 28 cash draws, the University did not properly perform formal reconciliations of funds drawn to expenditures. Additionally, 3 of 28 cash draws included certain expenditures for which funds were previously drawn, resulting in duplicative cash draws for the same expenditures. The above resulted in excess cash being drawn during the year ended June 30, 2025. Indication of Repeat Finding – No similar finding identified in the prior year. Recommendation – We recommend that the University enhance its procedures and internal controls over compliance to ensure that cash draws are properly reconciled to expenditures, that cash draws are only made once for each expenditure, and that time is minimized between cash draws and payment of expenditures incurred. Views of Responsible Officials – The University acknowledges that the internal controls surrounding the cash draws during fiscal year 2025 were lacking and needed to be reinforced for future fiscal years. With the hire of the new CFO and Senior Accountant post June 30, 2025 – these enhanced controls and processes have been put in place.