Finding Text
Condition: CRMHS’ internal controls were not functioning as designed to ensure that federal draw requests were reviewed and reconciled to underlying allowable expenditures for the above program, resulting in CRMHS drawing down federal funds in advance of immediate cash needs. This finding is a repeat of finding 2024-002. Criteria: Under 2 CFR Part 200.305, non-federal entities must minimize the time elapsing between the transfer of funds from the U.S. Treasury and the disbursement of those funds for program purposes. Funds should only be drawn down as needed for immediate cash requirements. Cause: CRMHS made a draw prior to the year ended June 30, 2025 in excess of what was needed for immediate cash needs. Effect: Holding excess federal funds for extended periods can result in non-compliance with federal regulations and could potentially increase the risk of mismanagement or misuse of funds. Questioned Costs: During testing of cash draws under Assistance Listing 93.696, we noted CRMHS requested reimbursement of $193,046 in advance of incurring allowable costs. At June 30, 2025, this amount remained unspent and was properly recorded as part of refundable advances in the consolidated financial statements. This excess draw was subsequently expended for allowable program expenses. Accordingly, no questioned costs were identified. Recommendation: We recommend management review the current controls over cash management procedures and ensure a proper reconciliation of all federal draw requests to supporting expenditure records prior to submission of the draw request.