Finding Text
Criteria Under 2 CFR 200.305(b), the non-Federal entity must minimize the time between the receipt of federal funds and their disbursement, limiting advances to immediate cash needs. Additionally, 2 CFR 200.302(b) requires the non-Federal entity must maintain financial management systems that provide accurate, current, and complete disclosure of financial results and permit the tracing of federal funds to ensure they are used in accordance with applicable federal requirements. Condition Higher Education Institutional Aid From a sample of sixty-eight (68) disbursements selected for testing, the following were identified: Eight (8) instances in which the elapsed time between receipt of federal funds and the related disbursement exceeded three (3) business days. Six (6) instances in which vendor payments could not be traced to a corresponding federal funding request due to lack of supporting documentation. One (1) instance where the disbursement was requested twice within two separate federal funding requests. TRIO Cluster From a sample of ten (10) disbursements selected for testing, the following were identified: Three (3) instances in which disbursements could not be traced to a corresponding federal funding request due to lack of supporting documentation. One (1) instance where the disbursement was requested twice within two separate federal funding requests. This is a repeat finding. Refer to finding 2024-002. Cause The condition occurred because the existing cash management process does not contain the level of detail or structure needed to ensure federal cash activity is fully and consistently accounted for. Also, the University lacks clearly defined monitoring procedures to ensure federal cash transactions were timely processed. Effect The instances where disbursements occurred for more than three business days after receipt of federal funds, and the instance where the same disbursement was considered in two separate drawdowns, resulted in actual noncompliance with federal cash management requirements. In addition, for instances where vendor payments could not be traced to a specfic funds request, the University is unable to substantiate compliance with federal requirements, resulting in potential noncompliance. Continued noncompliance could result in additional administrative oversight by the U.S. Department of Education, including potential reconsideration of the University’s eligibility to operate under the advance payment method. Questioned Costs None. Recommendation We recommend that the University strengthen its reconciliation procedures, including enhancing the content and review of the Funds Request Form and consistently retaining appropriate documentation for each federal funding request. Additionally, the University should establish monitoring procedures, such as periodic reviews of federal cash balances and funding requests, to ensure that disbursements are issued within regulatory timeframes. Views of Responsible Officials Refer to Management's unaudited corrective action plan.