Finding Text
Criteria: Based on the award terms, federal awards (whether direct or passed through another entity) provide funds to a grantee on either a reimbursement basis for payments already made by the grantee or on an advance basis for payments to be made by the grantee immediately after receipt of the funds. Condition: The City received a federal award passed through the Mississippi Department of Transportation (MDOT) that was awarded on a reimbursement basis, but we noted that some grant project costs were not paid prior to requesting and receiving the reimbursements from MDOT. Of the ten MDOT reimbursement requests, nine of the reimbursements were received prior to the City’s payment of the project costs. Cause: The City’s controls over federal award cash management were not functioning as intended. Effect: The City received reimbursements prior to paying some costs. Recommendation: Procedures should be implemented to ensure that reimbursement-type project costs are paid prior to submitting grant reimbursement requests.