Finding Text
Criteria: In accordance with 2 CFR Section 200.305, non-Federal entities must minimize the time elapsing between the transfer of funds from the Federal agency or pass-through entity and disbursement by the Corporation for program costs and proportionate share of allowable indirect costs. Additionally, 2 CFR Section 200.302(b)(c) requires non-Federal entities to establish written procedures to implement the requirements 2 CFR Section 200.305. The Federal Acquisition Regulation clause at 48 CFR section 52.216-7(b)(1) requires that the non-Federal entity request reimbursement for only allocable, allowable, and reasonable contract costs that have already been paid or incurred.
Condition: During our testing of reimbursement requests, we noted that 12 out of 34 sampled requests did not have adequate supporting documentation as to evidence of timely review and approval.
Cause: The Corporation did not maintain detailed listings of eligible costs incurred at the time of reimbursement request to support the amount of reimbursement requested in the Payment Management System. Additionally, the Corporation did not maintain documentation of such review or approval that such costs were incurred prior to request for reimbursement, or the amount requested was in accordance with 2 CFR Section 200.305. Eligible cost listings to support amounts drawn during the grant period in total were reconstructed to support annual activity.
Effect or Potential Effect: Requests for reimbursement per the Payment Management System may not have minimized the time elapsing between payment by the Federal agency or pass through and disbursement by the Corporation and the amounts requested for reimbursement may be inaccurate.
Questioned costs: Unknown
Context: We selected 34 reimbursement requests submitted through the Payment Management System and DC Portal during the year ended December 31, 2022. The Corporation was unable to provide evidence of timely review and approval of 12 requests out of 34. Additionally, cost listings were not maintained and were recreated to validate amount of the draw downs during the fiscal year. This is a condition identified per review of the Corporation’s compliance with specified requirements using a statistically valid sample.
Repeat finding: This is a repeat finding from prior year. This was reported as finding 2021-009 in the 2021 report.
Recommendation: We recommend the Corporation establish formal internal controls, and documentation of their performance, relating to the determination of cash drawn downs and review and approval of drawn downs by appropriate personnel who is knowledgeable of such requirements.
View of Responsible Officials: Due to turnover of several key financial executives and personnel and lack of formal documentation of current policies and procedures, the Corporation neither retained support eligible cost listings at the time of reimbursement request nor documented review or approval of such reimbursement request.