Finding Text
Programs: Research and Development Cluster. The condition was identified on the following awards within the cluster: Basic and Applied Scientific Research (ALN 12.300, Awards N00014-24-1-2000, N00014-22-1-2706, and N00014-22-1-2833; U.S. Department of Defense, Office of Naval Research), Biological Sciences (ALN 47.074, Award 2316379; National Science Foundation), and Gulf Coast Ecosystem Restoration Science, Observation, Monitoring, and Technology (ALN 11.451, Award NA23NOS4510310; U.S. Department of Commerce, National Oceanic and Atmospheric Administration). Criteria: 2 CFR § 200.305 requires recipients to minimize the time between receipt and disbursement of federal funds. Advances must be limited to actual, immediate cash needs. Condition: NMMF requested advances for certain federal awards that exceeded actual or near-term program cash needs. We examined all 21 federal drawdown transactions during 2025, totaling $1,235,184 across five awards; no sampling was used. Advances exceeded costs incurred on five awards, and $471,412 of federal cash remained on hand at December 31, 2025 in excess of costs incurred to date. Cause: The year ended December 31, 2025 was the first year NMMF drew federal funds in advance of costs incurred; in prior years these awards operated on a cost-reimbursement basis. Effect: Federal funds may have been held longer than permitted, increasing the risk of noncompliance with federal cash management requirements and unremitted interest on excess cash. Questioned Costs: None reported. The issue relates to timing of cash draws, not the allowability of program costs. Recommendation: Management should document a cash needs calculation before each federal draw and monitor federal cash on hand, including any interest earned on advances. Repeat Finding Status: This is not a repeat of a finding reported in the immediately preceding audit.