Finding Text
Criteria or Specific Requirement According to §200.303 Internal Controls of 2 CFR Part 200, the non-federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition and Context During our testing, we noted the Organization was unable to provide documentation to support management review and approval of the eight drawdown requests selected for testing prior to the drawdowns occurring. Effect The incorrect amount of federal funds may be requested to be drawn down. Questioned Costs None identified. Cause Management Oversight. Drawdowns were prepared and submitted without secondary review. Recommendation We recommend the Organization to review internal controls in regards to the approval of federal fund drawdown requests. Views of Responsible Officials The Organization is in agreement with finding. The control issue was due to turnover in finance staff during fiscal year 2025. Under the direction of the Organization’s new CFO, the following revised procedures for cash management have been implemented for fiscal year 2026: • Payroll Documentation: A staff accountant or the controller will compile payroll expense details along with supporting documentation for each drawdown. • Review and Approval: This documentation is submitted to the CFO for review prior to any fund transfer. • Drawdown Execution: Upon approval, the CFO will initiate the drawdown from PMS. • Frequency: Drawdowns are processed on a biweekly basis and reflect expenses from the preceding payroll cycle. Upon completion of the drawdown, the CFO will save a copy of the drawdown request to the internal drive. • This drawdown receipt is reviewed by a second staff member, either the controller or senior accountant. • Drawdowns are also reviewed during monthly bank reconciliations.