Finding 33456 (2022-002)

Material weakness in internal controls over compliance and instances of noncompliance related to cash management. Federal Agency: Department of Health and Human Services Program Title: National Organizations of State and Local Officials CFDA Number: 93.011 Award Numbers: 1 G32HS42592-01-00 Award Period: July 31, 2021 - July 31, 2023 Criteria 2 U.S. Code of Federal Regulations (CFR) 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards Subpart D (as codified by the Department of Health and Human Services [DHHS] in 45 CFR 75) requires the non-Federal entity to utilize a payment method to minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-Federal entity. Condition/Context for Evaluation During testing, we noted that there was only one cash draw that occurred during the year. For the cash draw selected, there was no documentation of approval for the cash draw. The Organization drew down from a federal award without incurring sufficient expenditures towards the related award. Advance draws were not approved for under the award. Questioned Costs Not applicable. Cause The Organization?s internal controls did not ensure that the cash draws were appropriately approved, and the time elapsing between the transfer of funds from the United States Treasury and disbursement was minimized. Effect or Potential Effect The Organization did not minimize the time elapsing between the drawdown of the federal funds and disbursement, resulting in cash received in excess of expenses incurred totaling $63,591 as of February 28, 2022. Allowable expenses were incurred in the following months to cover the overdraw. Repeat Finding Not applicable. Recommendation We recommend that the Organization implement the necessary internal controls to ensure payment methods are approved and minimize the time elapsing between the transfer of funds from the United States Treasury and disbursement. Views of Responsible Officials of Auditee Management concurs with the finding and has provided the accompanying corrective action plan.