Finding Text
Finding 2025-008 Cash Management: Internal Control and Compliance U.S. Department of Health and Human Services No. 93.276 Drug Free Community Grant Period Year Ended June 30, 2025 Criteria: The entity should maintain effective cash management procedures to minimize the time between receipt and disbursement of federal funds and ensure grant expenditures are supported and monitored. Condition and Context: The program did not have effective controls over cash management and was overdrawn by approximately $21,000, representing approximately 17% of the grant balance. Cause: Management had not implemented monitoring and reconciliation procedures to review grant expenditures and cash draw activity on a timely basis. Effect: Ineffective cash management may result in noncompliance with federal requirements, temporary use of non-federal funds to support grant activities, and inaccurate reimbursement requests. Recommendation: We recommend management implement formal cash management monitoring procedures, including periodic reconciliations of expenditures to reimbursement requests and supervisory review of those reconciliations, to ensure compliance with federal cash management requirements. Management Response: Policies are being implemented to ensure reconciliations of expenditures to reimbursement requests are being done and reviewed, see corrective action plan.