Finding Text
Finding No.: 2025-011 – Cash Management Identification of the federal program: Federal Agency: U.S. Department of Education AL No. and Title: 84.403 Consolidated Grants Federal Award No. S403A220002, S403A230002, S403A240002 Criteria or specific requirement (including statutory, regulatory or other citation): The FY25 U.S. Department of Education carried forward the FY24 Specific Conditions dated June 24, 2024 which states that “Now that GDOE is managing its Department funds independently without Third-Party Fiduciary Agent (TPFA) oversight, GDOE must continue to fulfill the responsibilities that were previously performed by the TPFA”. Responsibilities performed by the TPFA per the FY23 U.S. Department of Education Specific Conditions, Responsibilities and Requirements of the TPFA, states that “the Agent must pay vendors for the delivered goods or services and must, to the extent possible, disburse funds to the vendors on the same day the funds are deposited.” Condition: GDOE did not pay vendors for expenditures incurred under the federal program either on the same day or within 24 hours after federal funds had been received. Cause: The condition appears to have resulted from inadequate monitoring and controls over vendor payments and insufficient review to ensure that disbursements complied with established cash management requirements. The current Standard Operating Procedures (SOPs) do not clearly incorporate transitioned roles and responsibilities of the Third Party Fiduciary Agent (TPFA) for accountability to the specific conditions set by the US Department of Education. Furthermore, the FY25 U.S. Department of Education Specific Conditions that requires GDOE to fulfill the responsibilities that were previously performed by the TPFA is not yet updated to reflect the correct process. Effect or potential effect: GDOE is in noncompliance with applicable cash management requirements. Questioned Costs: $841,180 Context: We identified 122 drawdowns during the year totaling $35,101,644. We tested 60 expenditures totaling $1,886,121. The samples were statistically valid. For eight expenditures (or 13%) totaling $698,768, we determined the vendor was not paid on the same day or within 24 hours after funds were received. Additionally, we noted that one sample tested for allowable costs/ cost principles compliance requirements amounting $142,412, wherein, such did not comply with cash management compliance requirements. Identification as a repeat finding, if applicable: 2024-008 Recommendation: GDOE should update its current SOPs to clearly incorporate transitioned roles and responsibilities of the TPFA for accountability to the specific conditions set by the US Department of Education. Furthermore, GDOE should obtain an updated U.S. Department of Education Specific Conditions. View of Responsible Officials: GDOE agrees with the finding, however, does not agree with the criteria and the cause and provides details in its Corrective Action Plan. Conclusion: The FY25 U.S. Department of Education carried forward the FY24 Specific Conditions dated June 24, 2024 which states that “Now that GDOE is managing its Department funds independently without TPFA oversight, GDOE must continue to fulfill the responsibilities that were previously performed by the TPFA.” The criteria and the cause of the finding remains.