FAC Explorer

Finding 626393 (2022-004)

Significant Deficiency
Requirement
C
Questioned Costs
-
Year
2022
Accepted
2023-06-28
Audit: 46560
Organization: Population Services International (DC)
Auditor: Bdo

AI Summary

  • Core Issue: PSI did not minimize the time between receiving federal advance payments and making actual disbursements, leading to excess cash on hand and potential non-compliance.
  • Impacted Requirements: Compliance with federal cash management regulations, specifically regarding the timing of advance payments and the management of interest earned on those funds.
  • Recommended Follow-Up: Management should conduct monthly reviews of deferred revenue balances to ensure timely spending of advance funds and compliance with federal requirements.

Finding Text

2022-004 Internal Control over Compliance and Compliance with Cash Management Requirements See Schedule of Findings and Questioned Costs for chart/table. Criteria or Specific Requirement: In accordance with ?200.305, Federal Payment, for non-Federal entities other than states, payment 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 whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means. Specifically, ?200.305(b)(1), Federal Payment, indicates: 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. Also in accordance with ?200.305(b)(9), Federal Payment, interest earned on amounts up to $500 per year may be retained by the non-Federal entity for administrative purposes. Any additional interest earned on Federal advance payments deposited in interest-bearing accounts must be remitted annually to the Department of Health and Human Services Payment Management System (PMS). In accordance with the 2022 OMB Compliance Supplement, when the reimbursement payment method is used, program costs must be paid using non-federal entity funds before submitting a payment request to the federal awarding agency. Condition: During our testing of compliance, we identified the following matters: During our testing of advance payments received for major program AL# 93.067 - Award NU2GGH002005, management did not minimize the amount of time between the Federal advance payments and the actual disbursements for direct program expenditures and related indirect costs. In October 2022, PSI requested an advance payment of $168,477 even though $170,259 remained available from a previous cash advance. Additionally, in November 2022, PSI requested an additional advance payment of $59,000 when an outstanding advance of $276,230 still remained. As of December 31, 2022, PSI had $348,287 in cash available from advance payments with no disbursements for direct expenditures. We noted that PSI provided a refund to the U.S. Department of Health and Human Services in February totaling $250,600 and in May totaling $56,103 related to the amount of cash available without actual disbursements as of December 31, 2022. The cash balance remaining as of the date of this report is being reconciled as part of PSI?s close out process. During our cash management testing, we identified instances where expenses were paid after the invoice to the federal government was submitted for reimbursement: ?For major program AL# 93.067, two instances of 10 samples tested, expenses totaling $1,092 were paid after the invoice to the federal government was submitted ? award NU2GGH002170. Questioned Costs: For major program AL# 93.067, PSI earned interest on the available cash for the funds advanced for Award NU2GGH002005. We calculated an estimate of interest earned and determined the likely questioned costs are $2,133 as of December 31, 2022. Interest continued to accrue on the available fund balance subsequent to year end and is estimated to be an additional $2,448 of likely questioned costs. There are no questioned costs related to the findings identified whereby expenses were paid after the invoice to the federal government was submitted for reimbursement. Context: This is a condition based on testing of PSI?s compliance with specified requirements. The prevalence of these findings is detailed in the condition section above. The samples were selected using a non-statistical method. Cause: For the advance payments for Award NU2GGH002005, PSI?s programmatic and finance team did not adequately monitor remaining budget and projected expenditures at the end of the period of performance of the award resulting in PSI requesting and receiving funds that were not able to be liquidated. Furthermore, as of December 31, 2022, the PSI management team did not review open deferred revenue balances in sufficient detail to identify the need to reimburse the federal agency for overpayment of funds. In relation to both the findings identified whereby expenses were paid after the invoice to the federal government was submitted for reimbursement, PSI personnel did not comply with documented review and approval policies to ensure timely payment of local office expenditures incurred. Effect: Failure to perform cash management procedures in accordance with PSI?s documented policies could result in obtaining funds from the U.S. Government in advance of actual expenditures incurred thus resulting in non-compliance with contractual agreements. Repeat Finding: This finding is a repeat finding from 2020 and was reported as finding 2020-004 in the 2020 schedule of findings and questioned costs. Recommendation: We recommend management review all deferred revenue balances monthly for federal programs where advance funds are received in sufficient detail to determine whether expenses will be available in the immediate near term to spend down federal advances. We also recommend management ensure the compliance cash management policies that align to U.S. Government funding requirements. Views of Responsible Officials: PSI management agrees with the finding and recommendations set forth within and will refine its method for calculating drawdowns on federal awards. Refer to management?s corrective action plan for additional information.

Categories

Cash Management

Other Findings in this Audit

  • 39494 2022-005
    Significant Deficiency Repeat
  • 39495 2022-005
    Significant Deficiency Repeat
  • 39496 2022-005
    Significant Deficiency Repeat
  • 39497 2022-001
    Significant Deficiency Repeat
  • 39498 2022-005
    Significant Deficiency Repeat
  • 49946 2022-002
    Significant Deficiency Repeat
  • 49947 2022-005
    Significant Deficiency Repeat
  • 49948 2022-002
    Significant Deficiency Repeat
  • 49949 2022-005
    Significant Deficiency Repeat
  • 49950 2022-002
    Significant Deficiency Repeat
  • 49951 2022-004
    Significant Deficiency
  • 49952 2022-005
    Significant Deficiency Repeat
  • 49953 2022-006
    Significant Deficiency Repeat
  • 49954 2022-002
    Significant Deficiency Repeat
  • 49955 2022-001
    Significant Deficiency Repeat
  • 49956 2022-003
    Significant Deficiency
  • 49957 2022-001
    Significant Deficiency Repeat
  • 49958 2022-004
    Significant Deficiency
  • 615936 2022-005
    Significant Deficiency Repeat
  • 615937 2022-005
    Significant Deficiency Repeat
  • 615938 2022-005
    Significant Deficiency Repeat
  • 615939 2022-001
    Significant Deficiency Repeat
  • 615940 2022-005
    Significant Deficiency Repeat
  • 626388 2022-002
    Significant Deficiency Repeat
  • 626389 2022-005
    Significant Deficiency Repeat
  • 626390 2022-002
    Significant Deficiency Repeat
  • 626391 2022-005
    Significant Deficiency Repeat
  • 626392 2022-002
    Significant Deficiency Repeat
  • 626394 2022-005
    Significant Deficiency Repeat
  • 626395 2022-006
    Significant Deficiency Repeat
  • 626396 2022-002
    Significant Deficiency Repeat
  • 626397 2022-001
    Significant Deficiency Repeat
  • 626398 2022-003
    Significant Deficiency
  • 626399 2022-001
    Significant Deficiency Repeat
  • 626400 2022-004
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
98.U00 Advancing Progress in Malaria Service Delivery $41.67M
98.001 Going the Last Mile for Hiv Control $20.40M
98.001 Momentum Targeted Mnch/fp/rh Technical Assistance to Private Providers $19.95M
98.001 Angola Health for All $11.66M
98.001 Improving Market Partnerships and Access to Commodities Together (impact) $10.87M
98.001 Donated Commodities $8.26M
98.U00 Donated Commodities $6.73M
93.067 Provision of Voluntary Medical Male Circumcision (vmmc) for Hiv Prevention in the Republic of South Africa Under the President's Emergency Plan for Aids Relief (pepfar) $6.70M
98.U00 Global Health Supply Chain (gshc) - Procurement and Supply Management (psm) $6.09M
98.001 Ethiopia Transform: Water, Sanitation and Hygiene $5.73M
98.001 Stop Djekoidjo $4.34M
98.001 Hiv Services for Key and Priority Populations $4.33M
98.001 Covid-19 - Angola Health for All $3.94M
98.001 Expanding Malawi Hiv-Aids Prevention with Local Organizations Working for An Effective Epidemic Response (empower) $3.82M
98.U00 Vector Control Indefinite Delivery Indefinite Quantity Contract (vc Idiq", Project") $3.53M
98.001 Cambodia Promoting Healthy Behaviors Activity $3.50M
98.001 Samagra: A Total Market for Comprehensive Consumer-Empowered Primary Health $3.16M
93.067 Scaling Up Targeted Hiv Testing Services and Linkage to Treatment $2.94M
98.001 Covid -19 - Going the Last Mile for Hiv Control $2.83M
12.350 Cdi Dhapp Faci Partnership for Sustainable Hiv Epidemic Control $2.66M
93.067 Improving Hiv/sti/tb Prevention, Treatment and Care Services for Mobile Populations $2.36M
93.067 Strategic Scale Up of Community Based Hiv Testing and Counseling $2.33M
12.350 Burundi National Defense Force (bndf) Partnership for Sustainable Hiv Epidemic Control $2.13M
98.001 Tubiteho $1.93M
98.001 Tb/hiv Agency, Information and Services $1.65M
98.001 Covid -19 - Meeting Targets and Maintaining Epidemic Control (epic) $1.56M
98.001 Enhancing Quality of Healthcare Activity $1.31M
98.001 Improved Family Planning Initiative $1.13M
98.001 Evaluation Innovative Technologies and Approaches to Addressing Cervical Cancer in the Republic of Mozambique $1.04M
98.001 Hiv Prevention for High Risk Individuals $1.04M
98.001 Madagascar's Accessible Continuum of Care and Essential Services Sustained (access) $902,728
98.001 Countywide Sanitation Activity (cwsa) $725,677
98.001 Myanmar Essential Health Services Program $706,979
98.001 Expanding Contraception $664,246
12.350 Lesotho-Military Specific Hiv/aids Prevention, Care, and Treatment Program for Pepfar Funded Countries $606,476
98.001 Tanzania Malaria Case Management Activity $578,095
98.001 Mozambique Small Town Sanitation Project $525,474
98.001 The Kampala Slum Maternal Newborn Project: Innovating for Better Systems Outcomes $441,658
12.350 Central America Regional Partnership for Sustainable Hiv Epidemic Control in the Guatemalan, Honduran and Salvadoran Militaries $423,396
98.U00 Usaid West Africa Municipal Wash (muniwash) $405,921
98.001 Research for Scalable Solutions (r4s) $381,148
93.067 Recent Infection Surveillance Consortium $341,069
98.001 Covid -19 - Path and the Digital Health Initiative - Accelerating the Cycle for Investment $332,189
98.U00 Usaid Western Kenya Sanitation Project (wksp) $310,541
98.001 Covid - 19 - Expanding Malawi Hiv-Aids Prevention with Local Organizations Working for An Effective Epidemic Response (empower) $290,891
98.001 Covid-19 - Samagra: A Total Market for Comprehensive Consumer-Empowered Primary Health $265,928
93.067 Donated Commodities $232,586
98.001 Covid - 19 - Hiv Services for Key and Priority Populations $228,607
98.U00 Covid -19 - Advancing Progress in Malaria Service Delivery $219,882
98.001 Unaids in Support of the Unified Budget and Workplace $198,671
98.001 Digital Health Initiative Accelerating the Cycle of Investment to Impact in Global Digital Health $197,669
98.001 Next Generation Products for Prevention of Hiv Infection in Women (nix Hiv) $148,796
98.001 Health and Hygiene Project $117,889
12.350 Advancing Multi-Country Hiv Support in Collaboration with Dhapp and Partner Militaries for Sustainable Hiv Epidemic Control (multi-Country) $114,693
98.001 Covid - 19 - American Rescue Plan Act (arpa) Covid-19 Support $71,062
93.318 Covid-19 Vaccination Program Support in Eswatini $70,386
98.001 Covid -19 - Ethiopia Transform: Water, Sanitation and Hygiene $52,331
98.001 Usaid Hiv Prevention, Testing and Treatment Services for Key Populations $48,592
98.001 Growth Through Nutrition $41,861
98.001 Bangladesh Marketing Innovations for Sustainable Health Development $41,091
93.067 Covid-19 - Improving Hiv/sti/tb Prevention, Treatment and Care Services for Mobile Populations $40,372
93.067 Covid - 19 - Strategic Scale Up of Community Based Hiv Testing and Counseling $32,282
98.001 Covid -19 - Research for Scalable Solutions (r4s) $7,738
98.001 High Impact Maternal, Newborn and Child Health (hi-Mnch) Activity $3,767
98.001 Family Planning Integrated Project $-5
12.350 Hiv/aids Prevention, Care and Treatment Support to the South African National Defense Force $-42
98.001 Meeting Targets and Maintaining Epidemic Control (epic) $-107
19.703 Costa Rica - Building Capacity to Prevent and Address Domestic Violence $-161
93.067 Covid -19 - Scaling Up Targeted Hiv Testing Services and Linkage to Treatment $-279
93.067 Programmatic Implementation and Technical Assistance (ta) for Hiv/aids $-702
98.001 Sustaining Health Outcomes Through the Private Sector Project Plus (shops Plus) $-874
93.067 Accelerating Epidemic Control in 7 Districts of Mubende Region in the Republic of Uganda Under the President's Emergency Plan for Aids Relief (pepfar) $-1,981
98.001 Zimbabwe Strengthening Private Sector Services Project $-962,286