Finding Text
Finding 2023-001 - Cash Management
Information on the Federal Programs: 98.001
Criteria or Specific Requirement: In accordance with §200.305, Federal Payment, for non-
Federal entities other than states, payment methods must minimize the time elapsing between the
transfer of funds from the United States Treasury or the pass-through entity and the disbursement
by the non-Federal entity whether the payment is made by electronic funds transfer, or issuance or
redemption of checks, warrants, or payment by other means. Specifically, §200.305(b)(1), Federal
Payment, indicates: Advance payments to a non-Federal entity must be limited to the minimum
amounts needed and be timed to be in accordance with the actual, immediate cash requirements of
the non-Federal entity in carrying out the purpose of the approved program or project. The timing
and amount of advance payments must be as close as is administratively feasible to the actual
disbursements by the non-Federal entity for direct program or project costs and the proportionate
share of any allowable indirect costs.
In accordance with the 2023 OMB Compliance Supplement, when the reimbursement payment
method is used, program costs must be incurred before submitting a payment request to the
Federal awarding agency.
Condition: During our testing of advance payments received for major program AL# 98.001,
management did not minimize the amount of time between the Federal advance payments and the
actual disbursements for direct program expenditures and related indirect costs.
Cause: IJD's programmatic and finance teams did not comply with 200.305 in order to establish
funds necessary to establish programmatic activities in the first year of operations.
Effect or Potential Effect: Failure to perform timely cash management procedures could result in
obtaining funds from the U.S. Government in advance of actual expenditures incurred thus resulting
in non-compliance with contractual agreements.
Questioned Costs: None noted
Context: Federal funds were drawn down in excess of actual, immediate cash requirements of the
non-Federal entity.
Identification as a Repeat Finding, if Applicable: This is not a repeat finding.
Recommendation: We recommend that management be more mindful of the U.S. Government
regulations with respect to drawing down Federal funds. Procedures should be developed and
implemented to insure that adequate controls are in place around cash management.