Finding Text
Finding: 2023-002-Nonmaterial Noncompliance – Timing between the transfer of funds and disbursement of costs
Federal Program: 93.XXX U.S. Department of Health and Human Services
Condition: The Institute was not able to provide us detailed support showing that time elapsing between the receipt of funds from the federal agency or pass-through entity and disbursement of funds for direct program or project costs and the proportionate share of allowable indirect costs was minimized.
Criteria: In accordance with the Compliance Supplement, non-federal entities must minimize the time elapsing between the transfer of funds from the U.S. Treasury or pass-through entity and disbursement by the non-federal entity for direct program or project costs and the proportionate share of allowable indirect costs, whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means (2 CFR Section 200.305(b)). Under the advance payment method, federal awarding agency or pass-through entity payment is made to the non-federal entity before the non-federal entity disburses the funds for program purposes (2 CFR Section 200.1). A non-federal entity must be paid in advance provided that it maintains, or demonstrates the willingness to maintain, both written procedures that minimize the time elapsing between the transfer of funds from the U.S. Treasury and disbursement by the non-federal entity, as well as a financial management system that meets the specified standards for fund control and accountability (2 CFR Section 200.305(b)(1)).
Cause: The Institute received funds in accordance with fixed price payment schedules and did not maintain documentation of the time elapsing between the receipt and disbursement of such funds.
Effect: The Institute may have earned interest on federal funds during the time elapsed between receipt and disbursement of federal funds.
Questioned Costs: None noted.
Repeat Finding: No.
Recommendation: We recommend the Institute establish an internal control in which an individual review the time elapsing between receipt and disbursement of federal funds.
Corrective Action Plan: The Institute implemented the recommendations in the fourth quarter of fiscal year 2024.