Finding Text
Finding 2025-004: Significant Deficiency in Internal Control over Compliance - Cash Management Agency: National Aeronautics and Space Administration and Department of Energy ALN: 43.003, 43.008, and 81.108 Condition and Context: During our testing of the Cash Management compliance requirement for the Research and Development Cluster, we selected twelve reimbursement requests totaling $715,625. For four reimbursement requests, totaling $58,676, NCRP was unable to provide support, evidencing that the reimbursement request was reviewed and approved prior to submission to the federal awarding agency. As a result, we were unable to determine whether NCRP’s control requiring review and approval of reimbursement requests was performed as designed for the selected items. Criteria: For the Cash Management compliance requirement, when federal awards are funded on a reimbursement basis, program costs must be paid with the entity’s funds before the entity requests reimbursement from the federal awarding agency or pass-through entity. A relevant Cash Management risk for reimbursement-basis awards is that costs claimed were not incurred prior to requesting reimbursement. Cause: NCRP did not retain sufficient documentation to evidence the review and approval of reimbursement requests prior to submission. NCRP’s existing procedures did not ensure that evidence of review and approval was consistently documented and retained in a manner sufficient to demonstrate the operation of the control. Effect: Without documented review and approval of reimbursement requests, there is an increased risk that reimbursement requests may be submitted before costs are incurred and paid, may include costs that are inaccurate or unsupported, or may otherwise not comply with the Cash Management requirements. Questioned Costs: $-0-. Repeated Finding: No. Recommendation: We recommend that management strengthen internal controls over the reimbursement request process to ensure that all reimbursement requests are reviewed, approved, and supported prior to submission. We recommend that NCRP periodically monitor reimbursement request files to confirm that approval documentation is complete and retained. Management Response: NCRP agrees with the finding. Approval was given but was not consistently documented. Effective immediately, every reimbursement request will carry a written sign-off from the approving official before submission, retained in the grant file. Each quarter, an independent reviewer, such as the Senior Vice President or the accountant, will spot-check a sample of requests and document the results.