Finding Text
Cash Management - Lack of Management Oversight over Drawdown
Requests – Material Weakness in Internal Control over Financial Reporting
Criteria
Drawdowns for Federal awards should be properly supported with relevant forms and reports to
substantiate the costs incurred and evidence management review and approval.
Condition and Context
In connection with our cash management testing, the Health Center’s management was able to
provide cost center reports generated from the accounting system which supported the $2,344,620
charged to the health center grants during the year. However, the Health Center was unable to
provide documentation to support individual draws made during the year. Thus, we were unable
to determine that individual draw requests were based on actual costs incurred on an interim basis
throughout the year.
Cause
Significant turnover in the Finance department and the records to support grant drawdowns were
not maintained.
Effect
While we were able to determine that the draws in total for the year were based on actual costs
incurred, the lack of retention of supporting documentation resulted in our inability to specifically
determine that individual draws were properly determined throughout the year. Noncompliance
with laws, rules and regulations could impact the Health Center’s ability to monitor grant
information timely.
Questioned Cost
None.
We recommend that management establish procedures to ensure that documents supporting all
drawdown requests are properly retained. Such requests should also be reviewed and approved
prior to the request being made, with this approval documented and retained.
Views of Responsible Officials and Planned Corrective Action
See corrective action plan.