2025-004 Habitat Conservation – Assistance Lising #11.463 - Material Weakness in Internal Control over Compliance – Cash Management Recommendation: We recommend the Organization implement formal internal controls over the cash management process, including documented supervisory review and approval of all cash draw requests prior to submission. Cash draw requests should be prepared and supported using information maintained within the accounting system and reconciled to the general ledger to ensure that only allowable, properly recorded Federal expenditures are included in reimbursement requests. Additionally, management should develop and implement a written cash management policy that establishes procedures for preparing, reviewing, approving, reconciling, documenting, and retaining cash draw records in accordance with the Uniform Guidance. Explanation of disagreement with audit findings: there is no disagreement with the audit findings. Action taken in response to finding: JCWC is in the process of implementing updated financial policies and procedures to strengthen internal controls over cash management and Federal reimbursement requests. The new Fiscal Policy Manual establishes a specific process for preparing, verifying, reconciling, reviewing, approving, submitting, and retaining Federal reimbursement and cash draw requests. For example, Section 7.2.1, Reimbursement Request Process, requires: 1. Prepare and Verify The Finance & Grants Manager works with Program Staff and Jitasa to identify eligible expenditures and prepares the reimbursement request, ensuring costs are allowable, appropriately allocated, within the approved budget, and supported by documentation. The request shall be prepared using financial information maintained in QuickBooks. 2. Review and Reconcile The appropriate Director reviews the request and supporting documentation for accuracy, allowability, and budget compliance. Jitasa reconciles the requested amount to the applicable QuickBooks general ledger accounts and supporting documentation. Any discrepancy shall be resolved and documented before submission. 3. Approve and Submit The appropriate Director provides documented approval through an approved electronic signature platform. By approving the request, the Director confirms that the request has been reviewed for accuracy, allowable costs, appropriate grant allocation, and compliance with the applicable grant budget and funding requirements. Once approved, the Finance & Grants Manager submits the request to the funder or partner with all required supporting documentation. 4. Retain Records The reimbursement request, supporting documentation, electronic approval, and submitted request are retained in the designated grant records in accordance with Section 10 and applicable funder requirements. The policy therefore establishes a documented supervisory approval and reconciliation process before Federal reimbursement or cash draw requests are submitted. Action Plan: JCWC will finalize and present the Fiscal Policy Manual to the Board for formal adoption and will continue implementing the procedures in the interim. The Finance & Grants Manager will work with program staff and Jitasa to prepare and verify Federal reimbursement and cash draw requests. Requests will be reconciled to the QuickBooks general ledger and supporting documentation, with any discrepancies resolved and documented before submission. The appropriate Director will review and approve each Federal reimbursement or cash draw request prior to submission. JCWC will retain the request, supporting documentation, reconciliation, and approval in accordance with its records retention requirements and applicable Federal requirements. Following Board The appropriate Director will review and approve each Federal reimbursement or cash draw request prior to submission. JCWC will retain the request, supporting documentation, reconciliation, and approval in accordance with its records retention requirements and applicable Federal requirements. Following Board