Finding Text
Criteria or Specific Requirement – Cash Management (2 CFR 200.305 (b))
Condition – The Organization drew down funds and determined later on these were not allowable expenditures. A subsequent draw down was reduced by the same amount during the audit period.
Questioned Costs – None.
Context – Out of a population of ten cash draws, a sample of two draws were selected for testing. The sampling methodology used is not and is not intended to be statistically valid. Of the two draws tested, one draw included a request for invoices which were determined later to not be allowable expenses, and a subsequent draw was reduced to offset the difference.
Effect – The System's cash management system is not operating within the requirements determined by Department of Education (DOE).
Cause – Management of the Organization does not have sufficient controls in place to ensure funds drawn in advance are allowable expenditures.
Identification as a Repeat Finding – Not applicable.
Recommendation - Management should review cash management processes and establish
appropriate controls to ensure funds drawn are for allowable expenditures.
Views of Responsible Officials and Planned Corrective Actions – We have since developed an organization policy for cash management for federally sponsored grant programs. SEH has provided and will continue to provide staff education on this policy in the future.