Finding Text
Finding 2022-001: Cash Management ? Disbursement U.S. Department of Education ? Education Stabilization Fund COVID-19 Supplemental Assistance to Institutions of Higher Education Program ? ALN 84.425S Criteria: Non-federal entities must minimize the time elapsing between the transfer of funds from the US Treasury or pass-through entity and disbursement by the non-federal entity for direct program or project costs and the proportionate share of allowable indirect costs, whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means (2 CFR section 200.305(b)). Condition: Management implemented a financial management system that meets the specified standards for fund control and accountability, but the system failed to ensure disbursement of funds within the required timeframe. Management self-identified the issue, and self-corrected as they became aware of the requirement. Questioned Costs: None noted. Repeat Finding: This is not a repeat finding. Cause: Management did not accurately identify the required timeframe of disbursement for funds received under the SAIHE subprogram. A mitigating factor is the uniqueness of the SAIHE subprogram. Effect: The portion of the SAIHE funds allocated to provide financial aid grants to students was not disbursed within the required 15 calendar days of the drawdown from ED?s G5 grants system. Recommendation: Before drawing down from ED?s G5 grants system, management should familiarize themselves with the applicable terms, conditions, and requirements governing the organization?s use of the grant funds, and then implement a system of controls that will ensure compliance with those terms. Views of Responsible Parties and Corrective Action Plan: Management concurs with the finding and has implemented a system to minimize the time elapsing between the transfer of funds from ED?s G5 grants system and disbursement by the organization for both institutional aid and student financial aid purposes. In addition, management has designated a responsible and capable employee to monitor the new system and to review the terms, conditions, and requirements governing any future grants to ensure the system?s compatibility. Implementation of the corrective action is further evidenced by timely disbursement of subsequent drawdowns from ED?s G5 grants system in FY22.