Finding Text
Federal Agency: U.S. Department of Treasury
Federal Program: CDFI Equitable Recovery Program (ERP)
Assistance Listing Numbers: 21.033
Federal Award Identification Number and Year: 22ERP061482 – 2023
Award Period: January 1, 2023 – December 31, 2023
Type of Finding:
Significant Deficiency in Internal Control over Compliance
Compliance - Other Matter
Criteria or Specific Requirement: Under 2 CFR Part-200, Subpart-D-200.305(b)(11), the non-Federal entity must maintain advance payments of Federal awards in interest-bearing accounts, unless the following apply:
(i) The non-Federal entity receives less than $250,000 in Federal awards per year.
(ii) The best reasonably available interest-bearing account would not be expected to earn interest in excess of $500 per year on Federal cash balances.
(iii) The depository would require an average or minimum balance so high that it would not be feasible within the expected Federal and non-Federal cash resources.
(iv) A foreign government or banking system prohibits or precludes interest-bearing accounts.
Condition: Management did not maintain its advanced payment in an interest-bearing account nor met the exceptions criteria outlined above.
Questioned Costs: None
Context: The Organization received $3 million of advanced funds in 2023 and utilized approximately $1.8 million in the same year. As a result, the Organization should have placed the remaining portion of the advanced payment into an interest-bearing account and track the interest earned on the account. Additionally, any interest earned in excess of $500 should then be reported and remitted back to the federal agency in accordance with program requirements.
Cause: Management was not aware of the uniform guidance requirements around cash management, specifically related to maintaining advanced federal funds in interest-bearing accounts.
Effect: Cash management procedures were not properly followed in accordance with the uniform guidance and program requirements.
Repeat Finding: No
Recommendation: Management should develop a procedure to track its federal award advances to ensure those funds are placed in interest-bearing accounts, when applicable, and any interest earnings on those funds are separately tracked, reported and remitted in accordance with the program requirements. A documented review of this activity should be performed by a knowledge individual who is aware of the program requirements prior to reporting or remitting payment back to the federal agency.
Views of Responsible Officials: There is no disagreement with the audit finding.