Finding Text
Finding 2023-002 – Cash Management – Subrecipient Payments
Repeat Finding: No
Federal Program Title – U.S. Department of Defense
Cybersecurity Core Curriculum 12.905
Condition
For one out of two subrecipient payments tested (50%), the College did not submit payment within 30 days after receipt of the billing from the subrecipient.
Criteria
Under Uniform Guidance (2 CFR 200.305(b)(3)), when the reimbursement method is used, the Federal awarding agency or pass-through entity must make payment within 30 calendar days after receipt of the billing, unless the Federal awarding agency or pass-through entity reasonably believes the request to be improper. The College made payment to the subrecipient 105 days after receipt of the billing from the subrecipient.
Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls deigned to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure subrecipient payments are made timely.
Questioned Costs
There were no questioned costs related to testing of subrecipient payments.
Cause
To ensure the College is fully monitoring both programmatic activities and financial compliance with Uniform Guidance cost principles of its subrecipients, the College’s internal control procedure requires signatures from the Principal Investigator (PI), Director of Resource Development, and the Manager of Grants Accounting and Compliance. Delays in the internal approval process caused the delay in payment of the sampled invoice.
Prevalence
Frequent. One out of two payments selected for testing.
Effect
Without proper program cash management policies and procedures, late subrecipient payments could result in the loss of future funding.
Recommendation
We recommend the College review current processes, policies and procedures to ensure that payments to subrecipients minimize the time elapsing between transfer of federal funds from the pass-through entity to the subrecipient.
Views of responsible officials
We agree with this finding. See corrective action plan.