Finding Text
Criteria – Pursuant to 2 CFR 200.302 and 2 CFR 200.303, recipients of federal awards are required to establish and maintain effective internal controls over federal funds. Appropriate internal controls over cash management include independent review and approval of cash draw requests to ensure drawdowns are accurate, supported, and limited to immediate cash needs. Condition – During our testing of cash draw requests, we noted the Organization did not maintain documented evidence of an independent review and approval of cash draw requests. Cash draw requests were prepared and submitted by the accounting employee responsible for recording the related accounting transactions, with no documented review by another authorized individual. Context and Cause – The Organization has not established procedures requiring documented independent review and approval of cash draw requests before submission. Effect of Condition – The lack of independent review increases the risk that cash draw requests may contain errors, unsupported amounts, or drawdowns that do not comply with federal cash management requirements. Such errors may not be detected in a timely manner. Questioned Cost – None. Recommendation – Management should implement procedures requiring all cash draw requests to be reviewed and approved by an individual independent of the employee preparing and recording the transaction. Evidence of the review and approval should be documented and retained with the draw request documentation. Views of Responsible Officials and Planned Corrective Actions – Management agrees with the finding and will implement procedures requiring documented supervisory review and approval of all cash draw requests prior to submission. Supporting documentation and evidence of approval will be retained to demonstrate compliance with established internal control procedures.