Finding Text
Program AL# 93.224/93.527 Health Center Cluster Program - Cash Management - Significant Deficiency in Internal Control over Compliance
Criteria - Health centers are required to maintain written procedures that minimize the time elapsing between the transfer of funds from the U.S. Treasury and disbursement of funds by the non-Federal entity (2 CFR section 200.305).
Condition - During audit procedures of federal draw downs we noted several significant delays in performing the draw down request.
Context - During audit procedures, we tested payments received by the center to verify procedures were followed to minimize the time elapsed between the date payroll is processed and funds are requested. We noted 25 payments that were request greater than one week after the pay date that doesn’t appear to follow the Center’s written procedures.
Effect - Delay in drawing down funds could lead to incorrect Federal Financial Report (SF-425) and compliance requirements with reporting. Incorrect financial reports could result in lost funding.
Questioned Costs - There were no questioned cost regarding this finding.
Cause - The delay in processing federal draw downs is due to lack of adequate review procedures.
Recommendation - We recommend the Center’s management to monitor and evaluate the performance of their accounting staff and to make improvements to prevent and/or detect noncompliance when necessary. Additionally, the Center should provide training to all personnel involved in accounting for federal awards.
Views of Responsible Officials - We concur with the audit finding. The Center hired and filled a key financial position subsequent to the year end. Management believes a lack of permanent staff a significant factor in causing this finding. The Center has established proper accounting procedures and controls, and with the key postion being filled, federal draw downs will be perfomed according the Center's policy.