Finding 386933 (2023-005)

Federal Agencies: U.S. Department of Energy; U.S. Health and Human Services; and U.S. Department of State Program Names: Research and Development Cluster; Professional and Cultural Exchange Program ALN #s: 81.086, 81.049, 93.859, 19.415 Award Numbers: DE-EE0009418, DE-SC0021123, RGM129216B, SECAGD21CA3070; Federal Award Year 2022 - 2023 Questioned Costs: None 2023-005. Finding: Cash Management – Timeliness of Subrecipient Payments Northern Illinois University (the University) did not make certain subrecipient payments timely under the Research and Development Cluster and the Professional and Cultural Exchange Program. Out of 31 subrecipient payments tested which were made by the University under the Research and Development Cluster, 11 payments (35%) were not made within 30 days after receipt of the billing from the subrecipient. Payments to the subrecipients were made 35-166 days after receipt of the billing. The sample was not intended to be, and was not, a statistically valid sample. Out of two subrecipient payments tested which were made by the University under the Professional and Cultural Exchange Program, one payment (50%) was not made within 30 days after receipt of the billing from the subrecipient. Payment to the subrecipient was made 31 days after receipt of the billing. The sample was not intended to be, and was not, a statistically valid sample. Under Uniform Guidance (2 CFR 200.305(b)(3)), when the reimbursement method is used, the Federal awarding agency or pass-through entity must make payment within 30 calendar days after receipt of the billing, unless the Federal awarding agency or pass-through entity reasonably believes the request to be improper. Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls deigned to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure subrecipient payments are made timely. The University officials stated the payment delays were due to the additional steps required to obtain the Principal Investigator review and approval to ensure payments are proper. Additionally, payments due at the end of the calendar year were further delayed due to University closure, holidays, and regular business schedules. Without proper program cash management policies and procedures, late subrecipient payments could result in the loss of future funding. (Finding Code No. 2023-005) Recommendation: We recommend the University review current processes, policies and procedures to minimize the time elapsing between the transfer of federal funds to the subrecipient. University Response: Accepted. The University will review its current processes, policies and procedures to minimize the time between the transfer of federal funds to the subrecipient.