Finding Text
Finding 2022-005: Material Weakness over Cash Management and Allowable Costs - Review of Cash Drawdowns Information on the Federal Program: Department of Human and Health - Center for Disease Control: Improving Epilepsy Programs, Services and Outcomes Through Partnerships, CFDA 93.850 Criteria: The Uniform Guidance requires organizations to establish internal controls to detect potential noncompliance. The Uniform Guidance also requires organizations who receive funds on a cost reimbursement basis to only draw down funds for allowable expenditures under the grant. Condition: Management has an established control in place, in that the VP of Finance reviews the calculation of expenditures not drawn down prior to the submission of the drawdown request. However, the control was ineffective to prevent and detect an erroneous expense journal entry, considered an unallowable expense and is an instance of noncompliance, from being included in the drawdown. Cause: Due to a lack of policies and procedures regarding retention of review documentation and lack of awareness of the requirement. Effect: Non-compliance with adequate review over cash management and allowable costs. Questioned Costs: $72,514 in known questioned costs were identified, as determined by management as a part of an inspection performed. Context: For one cash drawdown chosen for testing of two (50%), there were expenses that had no supporting documentation and were unallowable under the grant. Repeat Finding: No. Recommendation: We recommend that management establish procedures review cash drawdowns in detail prior to submission and that all expenditures recorded to the grant have appropriate supporting documentation.