Finding Text
Finding 2023-003: Cash Management
Federal Department: U.S. Department of Education
Pass-through Agencies: State of South Carolina Department of Education, Minnesota Department of Education, and DC Office of the State Superintendent of Education
Federal Program Name: Twenty-First Century Community Learning Centers
Assistance Listing Number: 84.287
Type of Finding:
Material Weakness in Internal Control over Compliance
Material Noncompliance (Modified Opinion)
Criteria
2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post-Federal Award Requirements Standards Section 200.303, Internal controls states “The non-Federal” entity must: (1) establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and terms and conditions of the Federal award.
2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post-Federal Award Requirements Standards Section 200.305, Federal Payments states “when the reimbursement method is used, the Federal agency or pass-through entity must make payment within 30 calendar days after receipt of the payment request unless the Federal agency or pass-through entity reasonably believes the request to be improper.” 2 CFR section 200.305(b)(3) requires that expenditures be incurred prior to the date of the reimbursement request.
Condition/Context
During the current audit period, CDF is not in accordance with federal regulations regarding the cash management requirements.
Exceptions were noted in five of five tested reimbursement requests:
For all five requests, we were not provided with the evidence to support the reimbursement requests were internally reviewed and approved prior to submission.
For all five requests, we were not provided with adequate documentation to determine that expenditures were incurred prior to the date of the reimbursement request. We were only provided with system-generated expenditures reports, instead of actual invoices, payroll registers, and payment support.
Cause
Based on our discussions with management, this finding occurred due to staff turnover. As a result, consistent documentation was not maintained to trace the reimbursement submissions to pass-through entities.
Effect
The failure to maintain adequate documentation to verify the reimbursement request submissions to pass-through entities could result in duplicate submissions of reimbursement requests and delayed reimbursements.
Questioned Costs
Unable to determine.
Identification of Repeat Findings
Repeated (Prior Finding No. 2022-002).
Recommendation
We recommend that CDF implement procedures to ensure all reimbursement requests are properly reviewed and approved and submission documentation is maintained in accordance with federal regulations.
Views of Responsible Officials and Corrective Action Plan
CDF agrees with the finding and recommendation. See CDF’s Corrective Action Plan on pages 18-20.