Finding Text
Federal Agency Program – U.S. Department of Education, Higher Education Emergency Relief Fund Strengthening Institutions Program, Assistance Listing Number 84.425M
Program Year - June 1, 2022 – May 31, 2023
Criteria or Specific Requirement – Cash Management – For non-Federal entities other than states, payments methods must 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 whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means. Advance payments to a non-Federal entity must be limited to the minimum amounts needed and be timed to be in accordance with the actual, immediate cash requirements of the non-Federal entity in carrying out the purpose of the approved program or project. The timing and amount of advance payments must be as close as is administratively feasible to the actual disbursements by the non-Federal entity for direct program or project costs. (2 CFR Section 200.305(b)).
Condition – During our testing, we noted the final draw of funds for the Strengthening Institutions Program was completed on November 8, 2022 while program costs funded by the draw were not incurred until December 2023.
Questioned Costs – N/A
Context – During our testing, it was noted that the University had one draw of funds under the program in the year ended May 31, 2023. The draw was completed in advance of disbursements for program costs, but was not as close as administratively feasible to the program disbursements.
Cause – The University's draw of program funding was not planned in a manner to minimize the time elapsing between the transfer of funds to the University and the disbursement by the University.
Effect – The University did not appropriately follow the requirements of 2 CFR 200.305(b) to time advance payments as close as is administratively feasible to the actual disbursement of program costs.
Identification as a Repeat Finding – N/A
Recommendation – We recommend that the University review it's process for drawing down federal grant funding to ensure processes are consistent with federal requirements and individuals involved in drawing down funds are aware of the applicable requirements.
Views of Responsible Officials and Planned Corrective Action – Due to a turnover in the office of Controller, the grant was drawn down prematurely. While invoice and proposals were attained before the draw, the money was not expensed in the typical three to five days.
The controller who drew the money is no longer at the University. The current administration will return to normal University practice of not drawing down money until is it ready to be dispersed to the appropriate entity. This is normal practice for the University, but the practice was not followed due to a lack of knowledge. This has been corrected.