Finding Text
Federal agency name: U.S. National Science Foundation
Federal program title: Geosciences, Computer and Information Science and Engineering, Office of Cyber Infrastructure & Integrative Activities
AL No.: 47.050, 47.070, 47.079, 47.080 & 47.083
Federal Award Identification No. & Award Period: EAR-1849458 (06/01/2019-05/31/2024), EAR-2012893 (10/01/2020 – 08/31/2025), EAR-2028793 (05/15/2020 – 04/30/2021), OAC-1931278 (10/1/2019 – 09/30/2022), OAC-1829744 (09/01/2018 – 08/31/2023), OAC-1835592 (01/01/2009 – 12/31/2022), OAC-1835818 (10/01/2018 – 09/30/2022), OISE-1855654 (05/15/2019 – 12/31/2023), OAC-1664061 (10/01/17 – 09/30/2022) & OIA-1937099 (09/01/2020 – 08/31/2021)
Pass Through Entity: Utah State University & University of Cincinnati
MW2020-008 CASH MANAGEMENT - FEDERAL DRAWDOWNS IN ADVANCE OF EXPENDITURES
Criteria
CFR § 200.305 Cash management: This section of the CFR outlines the requirements for the management of cash drawdowns and disbursements of federal funds. Federal funds should be disbursed in a timely manner for allowable costs that have been incurred. Cash advances must meet the conditions specified in Chapter VIII.C.3 of the grant agreement with the National Science Foundation.
Condition
CUAHSI did not meet the conditions specified in Chapter VIII.C.3 of the grant agreement with the National Science Foundation which details the requirements for advance fundings. During 2020, CUAHSI had advance drawdowns totaling $3,610,240 from the NSF. Of this amount, CUAHSI incurred $2,521,926 in eligible expenses for the year ended December 31, 2020. This resulted in $1,088,314 in excess federal advances as of year-end. The draw downs in excess of revenue recognized during the year ended December 31, 2020 are reported as part of deferred revenue in the accompanying Statement of Financial Position.
Cause & Context
In anticipation of a government shut down due to COVID-19, CUAHSI initiated advance drawdowns without following the guidelines set forth by Chapter VIII.C.3 of the grant agreement.
Effect
Drawing down funds in advance of incurring eligible expenses could lead to non-compliance with federal regulations, such as those outlined in 2 CFR § 200.305. This may result in the need to repay the funds, potential financial penalties, or disqualification from future federal funding.
Questioned Costs
None
Prior Year Audit Finding
Yes, previously reported as MW2019-009.
Recommendation
The auditor recommends that CUAHSI develops and implements controls over policies consistent with 2 CFR 200.35.
View of Responsible Official and Planned Corrective Action
See accompanying Corrective Action Plan.