Finding Text
2022-003—Excess Drawdown of Federal Funds
Type of Finding: (F) Instance of Noncompliance Related to Federal Awards
Funding Agency: U.S. Department of Health and Human Services
AL #: 93.137 – Community Programs to Improve Minority Health Grant Program
Award #: 5 AIAMP170017-05-00
Award Period: 07/01/2021 – 07/29/2022
Estimated Questioned Costs: $26,426
Compliance Requirement: Cash Management
Statement of Condition
During our analysis of total grant revenues and expenditures reported on the SEFA, we noted that the entity had drawn down $26,426 more in federal funds than it expended under the Community Programs to Improve Minority Health grant. The excess drawdown remained outstanding as of September 30, 2022, the end of the audit period, and as of the date of this report.
Criteria
In accordance with 2 CFR § 200.305(b), non-federal entities must minimize the time elapsing between the drawdown of federal funds and the disbursement for program purposes. Additionally, per 2 CFR § 200.302(b)(6), entities must maintain effective internal controls over cash management to ensure that drawdowns are based on actual, allowable expenditures.
Effect
The entity is not in compliance with federal cash management requirements. The federal award has an outstanding overdrawn balance of $26,426, which may be subject to repayment to the federal awarding agency.
Cause
The excess drawdown appears to have resulted from an error during the drawdown request process. The entity indicated it was likely due to administrative oversight but was unable to provide specific details due to the passage of time. The discrepancy was disclosed to the auditor during the audit.
Recommendation
We recommend that the entity remit the excess federal funds or consult with the awarding agency to determine the appropriate resolution. In addition, the entity should strengthen its procedures to reconcile cash drawdowns to actual expenditures on a timely basis to prevent similar overdraws in the future.