Finding Text
Information on the federal program – Assistance Listing Number 93.224/93.527 Health Center Program Cluster from the U.S. Department of Health and Human Services, for the project period February 1, 2025 through January 31, 2026. Criteria – Cash Management – 2 CFR 200.305(b)(12). If interest in excess of $500 per year was earned on federal cash draws, determine if it was remitted annually to the Department of Health and Human Services, Payment Management System. Condition – We noted during our testing of compliance with federal awards that the Health Center earned approximately $27,000 in interest income due to not following the Center’s cash management policy and making advance draws for the year ended January 31, 2026. The interest income earned was not remitted to the Department of Health and Human Services, Payment Management System. Cause – Excess interest earned was due to the Center not following its cash management policy and making advance draws occurring in January and February 2025 which then entered the Health Center’s interest earning sweep account. During the period of February to August 2025 approximately $27,000 of interest was earned. The interest earned on the advance draws was not remitted to the Department of Health and Human Services. Effect or Potential Effect – Interest earned not remitted to the Department of Health and Human Services. Questioned Costs – Not applicable. Context – Due to uncertainty related to the federal government spending cuts and the pause on the disbursements of federal grants and loans in January and February 2025, the Health Center did an advance drawdown of approximately $3,243,000. The advance drawn funds, once received, entered the Health Center’s interest earning sweep account. The Center earned interest on advance drawn amounts until the amount had been exhausted and resumed the performing draw downs based on reimbursement method. During this period approximately $27,000 of interest was earned but the amount in excess of $500 was not remitted to the Department of Health and Human Services. Identification as a repeat finding, if applicable – Not a repeat finding. Recommendation – We recommend the Health Center track interest earned on any advance drawn grant funds and remit annually back to the Department of Health and Human Services, Payment Management System any interest earned in excess of $500 on advance draws. We also recommend management review the grant drawdown policies and consider including language to allow for more flexibility in times of uncertainty for advance drawdowns. Views of responsible officials and planned corrective actions – The Center corrected the advance draw by expending the draws during the year ended January 31, 2026 and did not complete an advance draw again in 2026. The Center will remit the excess interest earned to the Department of Health and Human Services.