Finding 7614 (2022-003)

Description: Cash Management for Subrecipient Expenditures Repeat Finding: No Type of Finding: Material weakness in internal controls and material non-compliance with the cash management compliance requirement Questioned Costs: None Major Program: AL # 64.033, VA Supportive Services for Veteran Families Program, #20-OR-430 and #20-OR-430-C3. Condition: During the year ended June 30, 2022, the Organization regularly drew down cash from the Payment Management System (PMS) for subrecipient expenditures but did not remit the related payments to the subrecipients in a timely manner. Review of supporting documentation submitted by subrecipients for their expenditures did not occur prior to drawing down the cash from PMS for the related expenditures. Criteria: Non-federal entities must minimize the time elapsing between the transfer of funds from the US Treasury or pass-through entity and disbursement by the non-federal entity (2 CFR section 200.305(b)). Cause: The Organization did not ensure its service provider was properly managing subrecipient cash requests and disbursements throughout the year and was not consistently reviewing subrecipient expenditure requests in a timely manner. Effect: As a result of the matter identified in the condition paragraph, a material weakness in the Organization’s internal controls over compliance and a material non-compliance exist for the cash management compliance requirement. Recommendation: We recommend the Organization implements procedures to ensure it is properly managing the timing of subrecipient cash requests and disbursements to comply with the cash management requirement. View of responsible officials: Management agrees with the assessment and has committed to a corrective action plan.