Finding 1217220 (2025-001)

Material Weakness Finding 2025-001 Federal Program: AmeriCorps State and National Program Assistance Listing Number: 94.006 Federal Awarding Agency: AmeriCorps Compliance Requirement: Cash Management Criteria: The Uniform Guidance requires that for cost-reimbursable contracts, drawdowns must be limited to amounts needed for immediate cash requirements be supported by actual, allowable expenditures incurred at the time of the request. Condition: As communicated by the Federal awarding agency, Jumpstart made an advance drawdown of Federal funds totaling $2,699,790 under a cost-reimbursable contract prior to incurring qualifying expenditures. In accordance with the OMB Compliance Supplement, cash management is not subject to audit for this program; however, this matter was identified to us by management of Jumpstart. Subsequent to the drawdown, Jumpstart incurred sufficient allowable expenditures during the period of performance to support the amount drawn. Cause: The condition resulted from a lack of proper oversight to ensure that drawdown requests were based on actual, incurred, and allowable expenditures at the time of the request. Effect: The premature drawdown of Federal funds resulted in noncompliance with Uniform Guidance cash management requirements and increased the risk that Federal funds could be held in advance of immediate program needs. Questioned Costs: None. Although the timing of the drawdown was not in compliance with cash management requirements, the funds were ultimately expended for allowable purposes within the grant period. Repeated Finding: No Recommendation: We recommend that Jumpstart enhance its oversight and cash management procedures to ensure that drawdowns under cost-reimbursement awards are supported by incurred allowable costs and limited to immediate cash needs. This may include implementing a review and approval process to verify supporting expenditures prior to submitting drawdown requests. Management’s Response: Jumpstart for Young Children acknowledges this finding and concurs with the recommendation. Jumpstart will strengthen its oversight and cash management procedures for cost-reimbursable Federal awards; specifically, Jumpstart will implement a formal review and approval process requiring that drawdown requests be supported by documentation of incurred, allowable expenditures and limited to immediate cash needs prior to submission. This process will be incorporated into Jumpstart's internal controls documentation and communicated to relevant finance staff. Implementation will be completed by August 31, 2026.