Finding Text
Criteria: The Uniform Guidance requires that a sponsoring organization must disburse advance and meal reimbursement payments to centers and day care homes under its sponsorship within five working days of receiving them from its State agency. Condition: During our testing of the cash management compliance requirement for the CACFP, we noted that the Organization did not consistently comply with applicable cash management requirements. The Organization remitted meal reimbursement payments to centers under its sponsorship beyond five working days of receiving them from its State agency. Cause: The Organization could not disburse meal reimbursement payments to the centers under its sponsorship within five working days of receiving them from the State agency. Effect: The Organization is in noncompliance with the terms and conditions of the CACFP award and may affect the reliability of financial and program reporting related to the federal award. Questioned Costs: None Recommendation: We recommend the Organization strengthen internal controls and procedures over cash management to ensure compliance with federal requirements. At a minimum, management should: • Develop or update written cash management procedures specific to CACFP, including requirements for reimbursement requests, advances, drawdowns, disbursements, reconciliations, documentation retention, and monitoring of federal cash balances. • Require documented supervisory review and approval of CACFP reimbursement claims, draw requests, and related supporting documentation before submission or recording. • Perform timely reconciliations between CACFP claims, reimbursement receipts, general ledger activity, bank records, and program expenditure reports. • Maintain adequate supporting documentation demonstrating that CACFP cash receipts and disbursements are allowable, properly authorized, accurately recorded, and used for program purposes. • Provide training to fiscal and program staff responsible for CACFP administration on federal cash management requirements and the Organization’s related policies and procedures. • Monitor and resolve exceptions promptly, including correcting claims or adjusting accounting records when necessary. Management Response: BBCF acknowledges the auditor’s finding that certain reimbursements to sponsored centers were distributed more than five working days after BBCF received the related State payments. Management recognizes that prompt disbursement must be supported by controls that operate consistently despite workload or staffing changes.