Finding Text
Finding: Title 2 of the Code of Federal Regulations Section 200.305(b) states, " For non-Federal entities other than states, payments 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." During a review of the general ledger, it was noted that Assistance Listing Number (ALN) 93.103, Food and Drug Administration Research, which is part of the Research and Development Cluster, had an unearned revenue balance at year-end. Upon inquiry and investigation, it was discovered that the Consortium drew more funds than had been expended during the year. The error was made due to the Consortium using the wrong report when determining the amount of funds to draw. The improper draw resulted in the Consortium having excess cash for most of the year. The amount of excess cash varied throughout the year due to subsequent expenses and drawdowns, and at September 30, 2022, the Consortium had $127,110.16 remaining in excess cash from the overdraw. As a result, the Consortium did not minimize the time elapsing between the transfer of funds and the disbursement of those funds and, as a result, did not comply with cash management requirements. Recommendation: The Consortium should ensure that draw downs of Federal funds are properly supported and should comply with Title 2 of the Code of Federal Regulations Section 200.305(b) by minimizing the time elapsing between the transfer of funds from the grantor and the expense of those funds.