Finding 516970 (2023-003)

2023-003: Subrecipient Transfers – Internal Control and Compliance – Material Weakness – Noncompliance with Cash Management & Subrecipient Monitoring - U.S. Department of State – Assistance Listing # 19.800 - Weapons Removal and Abatement Program - Criteria: The Uniform Guidance requires that non-federal entities minimize the time between drawdowns of Federal funds and its expenditure for Federal program purposes. Condition: Since there is no reconciliation process in place regarding the amounts sent to and expended by subrecipients, we were unable to determine whether federal funds were being passed through faster than necessary. Questioned Costs: None noted. Whether Sampling was Statistically Valid: Sampling was not used. Repeat Finding from Prior Year: This is a repeat finding of a prior year. Cause: The Organization does not have policies and a process in place to reconcile amounts drawn down on various grants with the amounts being spent on the various grants. Effect: The Organization is not in compliance with cash management and subrecipient monitoring requirements. Recommendation: We recommend that the Organization develop and implement a system whereby they can reconcile their grant drawdowns with the amounts being expended and amounts passed through to subrecipients. We would further recommend that the monthly reports that foreign country managers submit be signed by the party submitting the report and then signed by the International Director once the report is reviewed. Views of Responsible Officials: Management agrees with the recommendation and will work to implement the necessary components of the recommendation. Accounting policies and procedures have been developed and will continue to be implemented in 2023.