Finding Text
2025-003, 2024-003 – Material Weakness and Material Noncompliance – Cash Management – Cash Requests Program information: AL # 93.224 and 93.527, Health Center Program Cluster, Department of Health and Human Services. Criteria: According to the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance, 2 CFR Part 200), federal funds must be requested only for costs that have been incurred and are allowable under the grant agreement. Condition: During the fiscal year, the organization submitted requests for reimbursement of federal grant funds prior to incurring allowable expenses under the terms of the grant agreement. Questioned Costs: None Cause and Effect: The organization lacked adequate internal controls and oversight procedures to ensure that federal fund requests were based on actual, allowable expenditures. Requesting federal funds in advance of incurring expenses may result in noncompliance with federal regulations, potential repayment of funds, and reputational risk. It also exposes the organization to the risk of mismanagement or misuse of federal funds. Recommendation: We recommend that the organization implement and enforce policies and procedures to ensure that all federal fund requests are supported by documented, allowable expenditures. Staff responsible for grant management should receive training on federal compliance requirements, and all reimbursement requests should be reviewed and approved by a qualified financial officer prior to submission. Views of Responsible Officials: Management agrees with the finding. Corrective Action Plan: See attached correct plan.