Finding Text
Condition and Criteria: According to 2 CFR section 200.305(b), non-federal entities must minimize the time elapsed between transfer of funds from the US Treasury or pass-through entity and disbursement by the non-federal entity for direct program project costs and the proportionate share of allowable indirect costs. Minimum elapsed time for funds transfer is dependent upon the payment system/method used by the non-federal entity. The US Department of Education (ED) uses the G6 grants management platform, which is a module of the Education Central Automated Processing System (EDCAPS). Generally, funds requested from G6 process overnight and the funds are available in the non-federal entity’s account the next business day. The University has procedures in place to ensure that funds are drawn down from G6 only after they have been expended. However, we noted in one (1) instance where an amount appears to have been drawn down in advance. Context: The University made twenty nine (29) drawdowns of federal program funds during the fiscal year. In comparing the dates of the drawdowns with the accumulated program expenditures to each drawdown date, one (1) drawdown on 12/20/2023 exceeded accumulated program expenditures as of that date by $44,538. By 1/12/2024, the University had expended the amount advanced. Effect: The University was not in compliance with federal cash management regulations for a portion of the current fiscal year. Cause: Administrative oversight. Auditor's Recommendation: The University should development a spreadsheet or other tool similar to the one the auditor used to test cash management compliance that compares cumulative program expenditures to drawdowns. This tool should be updated prior to drawing down funds in order to ensure that drawdowns are limited to amounts expended at any point in time.