Finding Text
Agency: U.S. Department of Health and Human Services
Federal Program: ALN 93.623 National Communication System for Runaway and Homeless Youth and ALN 93.493 Congresional Directives Criteria: The Payment Management System (PMS) is a system used by the Organization to drawdown federal funds for reimbursement for allowable expenses and file the Federal Financial Report (FFR). Per PMS guidelines, organizations are required to drawdown funds for immediate disbursement (3 business days), unless otherwise specifed in the Notice of Award.
Condition: In 2024, the Organization drew down federal funds in advance of incurring allowable expenditures as a result of funding/cashflow constraints and to ensure the Organization's federal program would not be interrupted in the event that award funding was frozen given the potential for a government shutdown. Certain expenditures were identifed that were included in drawdowns in which the disbursement of funds did not occur within 3 business days.
Context: Out of a sample of 80, payroll and non payroll selections, we noted multiple 37 instances in which funds were drawn down in which the disbursement of funds did not occur within three business days. The sample was not statistically valid.
Questions Costs: None identified.
Views of Responsible Officials: Management does not dispute the findings regarding the Organization not consistently adhering to the PMS guidelines requiring an immediate disbursement (within 3 business days) of federal funds drawn for allowable expenses for reimbursement. Management is in the process of developing plans to enhance operating reserves and diversify funding sources in order to comply with PMS guidelines.
Cause: As a result of cashflow/funding constraints, as well as, the national election in 2024, management believed there was a risk the government would temporarily shut down and management would not be able to access award funds timely which would cause a possible disruption in executing under the federal award.
Recommendation: We recommend the Organization continue to monitor cashflow, build operating reserves and obtain additional funding resources to better manage temporary lapses in funding and comply with PMS guidelines.
Effect: The Organization drew down funds in which certain related expenditures were not disbursed within 3 days of drawdown.
Recommendation: We recommend the Organization continue to monitor cashflow, build operatingreserves and obtain additional funding resources to better manage temporary lapses in funding and comply with PMS guidelines. Views of Responsible Officials: Management does not dispute the findings regarding the Organization not consistently adhering to the PMS guidelines requiring an immediate disbursement (within 3
business days) of federal funds drawn for allowable expenses for reimbursement. Management is in the process of developing plans to enhance operating reserves and diversify funding sources in order to comply with PMS guidelines.