Finding Text
Finding No. 2022-002 - Cash Management - Material Weakness/Non-Compliance - Assistance Listing #84.425 Education Stabilization Funds Criteria: The tracking and matching of grant revenues and expenditures and the related grant receivable and unearned revenue amounts is necessary to assist in making management decisions and for the proper reporting and use of such funds in accordance with each of the individual grant requirements and this information is essential for grant administration and for preparing the Center's Schedule of Expenditures of Federal Awards (SEFA).Condition/Context: The Center's system of tracking its grants and matching revenues with expenditures lacks the necessary level of sophistication, given the number and complexities of the Center's grant activities, which hampers the Center's ability to properly administer its grants and prepare a complete and accurate SEFA. In addition, one of the grants was funded under the reimbursement method where costs for which reimbursement was requested are to be paid for prior to the date of the reimbursement request. During the year, the Center drew down $207,610 it had not yet incurred eligible costs for, and then continued to spend this amount after the grant period had ended. One of the two draws tested did not comply with requirements. Effect: The Center should work with the U.S. Department of Education for purposes of determining whether the $207,610 should be returned. The Center also did not prepare a complete and accurate SEFA in a timely manner to comply with its financial reporting requirements. Cause: The Center has not prioritized a formal system for tracking its grant activities and also lacked a complete and accurate understanding of grant funding under the reimbursement method. Questioned Costs: $207,610 Recommendation: We recommend that the Center develop and implement a formal system for tracking its grant related activities including the review and approval of grant reports and draw down requests reconcile to the general ledger grant activity prior to submitting a reimbursement request or grant report. Views of Responsible Officials and Planned Corrective Actions: Management agrees, and is working to realign the grant process from formalizing the administration and determining the involvement of staff members. A timeline will be initiated between all involved staff to oversee, track, report and manage all of the Center?s grant awards. Timeline will ensure that budgets, reporting requirements and purchases are handled in a timely manner. Management is also working with the U.S. Department of Education regarding the resolution of this matter. See Corrective Action Plan.