CORRECTIVE ACTION PLAN
San Diego Biomedical Research Institute respectfully submits the following corrective action plan for the year ended June 30, 2024.
Name and address of independent public accounting firm: Leaf & Cole, LLP
2810 Camino Del Rio South, Suite 200
San Diego, California 92108
Audit period: June 30, 2024
The findings from the June 30, 2024 comments are discussed below. The findings are numbered consistently with the numbers assigned in the Schedule of Findings and Questions Cost (“Schedule”). Section II of the Schedule does not include findings and is not addressed.
Section III - Federal Award Findings and Questioned Costs:
Finding 2024-001: Cash Management - Research and Development Cluster
Condition
Funds were drawn down by the Institute in excess of the three-day period recommended by its funding agency and did not minimize the time elapsing between the transfers of funds from the grantor to the issue of payment by the recipient during the year ended June 30, 2024.
Criteria
Cash management under 2 CFR 215.22 states that payment methods shall minimize the time elapsing between the transfers of funds from the grantor to the issue of payment by the recipient
Cause
The Institute’s preparation and review procedures over the draw down of funds were insufficient to minimize the time elapsing between the transfers of funds from the grantor to the issue of payments by the Institute.
Effect
The Institute was not in compliance with the cash management compliance requirements stated in 2 CFR 215.22 during the year and the Institute had an overdrawn balance of $481,959 at June 30, 2024.
Recommendation
The Institute should improve its procedures over advances of federal funds.
Management Response
Establish a reserve amount to avoid drawing down all available funds, ensuring that there is always sufficient cash flow to meet operational needs. This reserve is intended to cover unexpected expenses, emergencies, or fluctuations in cash flow.
Actions Taken
The institute has subsequently obtained a $900,000 loan, to support its daily cash flow needs, and to eliminate the conditions leading to the FY’24 audit findings.