Finding Text
Finding No. 2023-001
U.S. Department of the Treasury, Community Development Financial Institutions Fund
Federal Assistance Listing Number #21.011 Capital Magnet Fund - Compliance Requirement: J – Program Income
Criteria
In accordance with 2 CFR, Part 200.305(9), interest earned on advance payments in excess of $500 per year must be remitted annually to the Department of Health and Human Services, Payment Management System.
Condition
During our testing, we noted that the Organization did not remit interest earned on advance payments.
Cause
Interest earned on advance payments was calculated, however the Organization did not have adequate procedures and controls in place to ensure the interest was remitted.
Effect or Potential Effect
Failure to remit interest earned on advance payments could result in misuse of funds.
Questioned Costs: Not applicable.
Context
For two program income samples out of a total two tested, management did not remit a total of $148,180 related to 2023 interest earned on advance payments.
Repeat Finding: No
Recommendation
Management should establish controls to ensure the annual remittance of interest earned on advance payments in excess of $500.
Views of Responsible Officials
In 2024, all required interest refunds were remitted. Additionally, management established a policy to remit annual calculated interest refunds by March 31st of the subsequent year.