Finding Text
2021-008 – CASH MANAGEMENT
Federal Program Information:
Federal Agency
Federal Program Name Assistance Listing Number Grant Award(s) Unique Identifier(s)
Department of Defense Basic Scientific Research 12.431 W15QKN-14-1-0001
W15QKN-20-1-1000
Criteria:
2 CFR 200.303 requires that a non-federal entity must “(a) establish 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 the terms and conditions of the Federal award.” These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
2 CFR 200.305 requires that non-Federal entities other than states, payments methods must minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-Federal entity. The non-Federal entity must be paid in advance, provided it maintains or demonstrates the willingness to maintain both written procedures that minimize the time elapsing between the transfer of funds and disbursement by the non-Federal entity, and financial management systems that meet the standards for fund control and accountability as established in this part. Advance payments to a non-Federal entity must be limited to the minimum amounts needed and be timed to be in accordance with the actual, immediate cash requirements of the non-Federal entity in carrying out the purpose of the approved program or project. The timing and amount of advance payments must be as close as is administratively feasible to the actual disbursements by the non-Federal entity for direct program or project costs and the proportionate share of any allowable indirect costs. The non-Federal entity must make timely payment to contractors in accordance with the contract provisions.
Condition:
The National Center for the Advancement of STEM Education, Inc. drew down 49 payment advances totaling $5,870,068 from the basic scientific research grants for the fiscal year ended December 31, 2021. Of this amount, $1,031,698 was returned to the grantor. However, there was a lack of adequate documentation which demonstrated amounts advanced were expended and/or returned in a timely fashion.
Questioned Costs:
Not applicable.
SECTION III – FEDERAL AWARD FINDINGS AND QUESTIONED COSTS (Continued)
2021-008 – CASH MANAGEMENT (Continued)
Federal Program Information:
Federal Agency
Federal Program Name Assistance Listing Number Grant Award(s) Unique Identifier(s)
Department of Defense Basic Scientific Research 12.431 W15QKN-14-1-0001
W15QKN-20-1-1000
Context:
The total amount of advances received during the year were $5,870,068. Expenditures of the federal award were $6,477,348 for the fiscal year.
Cause:
Internal controls and procedures related to the cash management were not effectively designed or performed.
Effect:
The National Center for the Advancement of STEM Education, Inc. did not comply with the cash management compliance requirement.
Recommendation:
Management should establish proper policies and procedures which ensure compliance with federal guidelines.
Views of Responsible Officials:
Management concurs with the finding and has developed a plan to correct the finding.