Finding Text
Condition: During our testing of cash management, we noted that the Organization received federal funds on an advance basis and maintained those funds in an interest-bearing account. During the fiscal year, the Organization earned interest in excess of $500 on these federal funds, but the Organization did not remit the interest earned in excess of $500. Criteria: In accordance with 2 CFR 200.305(b)(12), for entities that receive advance payments of federal funds, interest in excess of $500 per year earned on Federal funds must be returned annually to the Department of Health and Human Services Payment Management System (PMS). Cause: The Organization does not have formal written procedures in place to monitor interest earned on federal advances or to ensure compliance with cash management requirements under Uniform Guidance. Effect: Excess interest earned on federal advance payments was not returned in a timely manner. This could result in repayment obligations. Context: Interest earned on federal advance funds during the fiscal year was $109,662, resulting in excess interest of $109,162 that should have been remitted. No remittance was made during the audit period. Recommendation: We recommend the Organization review and update its policies and procedures addressing compliance with cash management requirements. The Organization should establish procedures to remit interest earned in excess of $500 on federal advance funds annually. Views of Responsible Officials:Management agrees with the finding.