2025-001 Significant Deficiency in Internal Control and Compliance over Major Programs Funding Agency: Department of Defense ALN: 12.002 Recommendation: JSP recommends the Organization strengthen internal controls over cash management by establishing formal payment processing timelines, implementing monitoring procedures to track outstanding reimbursement requests, and conducting supervisory reviews to ensure subrecipient payments are made promptly. Contact person responsible for corrective action: Taylor McEachern, Accounting Manager The EDC agrees with the findings. Management acknowledges that reimbursement payments to subrecipients were not consistently made within 30 calendar days of receipt of the payment request as required by 2 CFR 200.305(b)(3) and agrees that internal controls over cash management should be strengthened. Management notes that during the audit period the EDC experienced delays in receiving payments from the federal awarding agencies associated with this and other grants, which contributed to the condition; management is taking action to ensure that the EDC’s cash-flow timing does not affect the timeliness of subrecipient reimbursements going forward. To correct the conditions, management will implement the following: • Establish formal, written payment processing timelines governing the review and disbursement of subrecipient reimbursement requests, with a defined internal deadline that ensures payment within the 30-calendar-day requirement. • Implement monitoring procedures to log and track all outstanding reimbursement requests from date of receipt through payment, so that requests approaching the deadline are flagged and prioritized. • Conduct periodic supervisory reviews of the payment log to confirm requests are being processed timely and to identify and resolve any delays. • Monitor the timing of drawdowns and reimbursements from the federal awarding agencies and, where recurring delays affect the EDC’s ability to pay subrecipients timely, have an action plan to process the payments within the 30-calendar-day requirement. The Accounting Manager will be overseeing the payment tracking process and report monthly to the C&I Director and Grant Manager to reinforce accountability for timely disbursement Anticipated completion date: September 2026