Finding 578846 (2023-001)

2023 - 001 - CASH MANAGEMENT Federal Transit Administration Formula Grants Assistance Listing No. 20.507 U.S. Department of Transportation Criteria In testing the cash management compliance requirement for MTA’s major program, it was noted that MTA’s Grants and Special Projects Administrator requested federal drawdowns for allowable reimbursable subrecipient grant expenditures 4 business days in advance of MTA accounting making payments to the vendors; therefore, MTA did not commit itself for initiating cash drawdowns for immediate disbursement no later than 3 business days as required. Condition and Context MTA did not disburse the payments to the vendors within the 3-business day threshold. Questioned Cost The amounts of the federal drawdowns were $17,345 and $4,125 under grants TN-2020-001-00 and TN-2019-024-02, respectively. Cause MTA made drawdowns of funding and did not immediately disburse the funds to the vendors within the required timeframe. Effect MTA was not in compliance with the cash management requirement under the grants. Recommendation We recommend that MTA consistently adhere to the disbursement timing requirements of the grants. We recommend that MTA drawdown federal funding when vendors or subrecipients have allowable expenditures that have occurred or are going to occur within the 3-business day threshold. Views of Responsible Officials and Planned Corrective Actions See management’s corrective action plan.