Finding Text
Finding 2022-003 Cash Management – Repeat Finding
2021-003
Federal Agency: U.S. Department of Commerce
Program Name: MBDA Business Center
Assistance Listing #: 11.805
Questioned Costs: None
Condition/Context
We tested a sample consisting of six cash drawdowns from a total of twenty-two amounting to $264,870. Our audit procedures indicated that $81,023 were not disbursed in a timely manner. In addition, our SEFA reconciliation procedures revealed that an additional $9,497 had not been disbursed timely by the end of the year. As of December 31, 2022, CMSDC had accumulated $206,746 in grant advances, of which $197,249 pertain to 2021.
Criteria
Uniform Guidance requires that non-federal entities minimize the time elapsing between the transfer of funds and disbursements by the non-federal entity. Per 2 CFR 200.344, unobligated funds must be promptly refunded to the Federal agency that paid those funds.
Cause
CMSDC did not reconcile expenditures to cash drawdowns.
Effect
CMSDC did not comply with Uniform Guidance and closed the year with a grant advance of $206,746.
Recommendation
We recommend that CMSDC updates it policies and procedures to include procedures for reconciling expenditures to cash drawdowns. In addition, we recommend that CMSDC reconciles expenditures and cash drawdowns on a monthly basis. Unobligated funds should also be refunded to the U.S. Department of Commerce.
Organization’s Management Response
See corrective action plan.