Finding Text
Reference Number: 2022-004
Prior Year Finding: No
Federal Agency: U.S. Department of Homeland Security/FEMA
Pass-through Agency: Various
Federal Program: Emergency Food and Shelter National Board Program
ALN Number: 97.024
Compliance Requirement: Cash Management Type of Finding: Material Weakness, Non-compliance
Criteria or specific requirement:
Non-Federal Entities Other Than States
Non-federal entities must minimize the time elapsing between the transfer of funds from the US Treasury or pass-through entity and disbursement by the non-federal entity for direct program or project costs and the proportionate share of allowable indirect costs, whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means (2 CFR section 200.305(b)). What constitutes minimized elapsed time for funds transfer will depend on what payment system/method a non-federal entity uses.
Under the advance payment method, federal awarding agency or pass-through entity payment is made to the non-federal entity before the non-federal entity disburses the funds for program purposes (2 CFR section 200.3). A non-federal entity must be paid in advance provided that it maintains, or demonstrates the willingness to maintain, both written procedures that minimize the time elapsing between the transfer of funds from the US Treasury and disbursement by the non-federal entity, as well as a financial management system that meets the specified standards for fund control and accountability (2 CFR section 200.305(b)(1)).
Condition:
Division receive Emergency Food and Shelter National Board Program funds from the U.S. Department Homeland security/FEMA and various pass-through entities. Division receives advance funds from the pass-through agency and incurred program expenditures. Of the Sixty (60) files selected for testing We noted that the Division:
(1) Does not have written procedures that minimize the time elapsing between the transfer of funds from the Pass-through entity and disbursement by the Division.
Cause:
Division did not minimize the time elapsing between the transfer of funds from the Pass-through entity and disbursement by the Division.
Effect:
Division’s will be in noncompliance with its cash management compliance.
Questioned costs:
Cannot be determined.
Recommendation:
We recommend Division minimize the time elapsing between the transfer of funds from the Pass-through entity and disbursement by the Division.
Views of responsible officials:
The Division will strive to minimize the time elapsing between the transfer of funds from the Pass-through entity and disbursement by the Division
See corrective action plan.