Finding Text
2022-005 - Internal Control Over Compliance and Compliance – Cash Management
Program- U.S. Department of Energy, Environmental Monitoring/Cleanup, Cultural and Resource Management Emergency Response Research, Outreach, Technical Analysis
ALN: 81.214, Award #: DE-EM0005173, Award Year: 04/23/2018 – 06/30/2023
Program- U.S. Department of Health and Human Services, Strengthening Public Health Systems and Services through National Partnerships to Improve and Protect the Nation’s Health
ALN: 93.421, Award #: Various, Award Year: 08/01/2018 – 07/31/2023
Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award.
In accordance with 2 CFR Section 200.305(b)(3), for non-Federal entities funded under the reimbursement method, reimbursement requests should be supported by documentation to verify that the entity paid for the costs for which reimbursement was requested prior to the date of the reimbursement request.
Condition – During our cash management testing for major program ALN 81.214, we noted the following:
• For three (3) out of four (4) samples selected for testing, NGA Center was unable to provide documentation showing review and approval of the cash drawdown requests.
• For one (1) out of four (4) sample selected for testing, NGA Center was unable to provide the supporting calculation of the cash drawdown request.
• In addition, expenditures reflected in the cash drawdown requests were not reconciled with the general ledger. For the first three quarters of fiscal year 2022, the compensated absences and fringe benefits were included in the cash drawdown requests, however, NGA Center did not record the transactions in the general ledger during those quarters. Also, certain contractual services recorded in the general ledger during the last quarter of fiscal year 2022 were excluded on the cash drawdown request.
During our cash management testing for major program ALN 93.421, we noted the following:
• For two (2) out of two (2) samples selected for testing, NGA Center was unable to provide documentation showing review and approval of the cash drawdown requests.
• For one (1) out of two (2) samples selected for testing, NGA Center was unable to provide the supporting calculation of the cash drawdown request.
• In addition, expenditures reflected in the cash drawdown requests are not reconciled with the general ledger. During the first half of fiscal year 2022, compensated absences and fringe benefits were included in the cash drawdown request, however, NGA Center did not record the transactions in the general ledger during that period. Also, certain contractual services recorded in the general ledger during the last three quarters were excluded on the cash drawdown requests.
Questioned Costs – Not determinable.
Context – This is a condition identified per review of NGA Center’s compliance with the provisions of the grant agreements and general compliance principles.
Cause – NGA Center did not appear to exercise due diligence in requesting Federal funds consistent with the grant agreements and its actual cash needs.
Effect – NGA Center is not in compliance with the stated provisions. The opportunity to use the money for other immediate cash needs is unnecessarily delayed when funds are not requested timely.
Repeat Finding – This is not a repeat finding.
Recommendation - We recommend that NGA Center comply with the provisions of the grant agreements and request Federal funds consistent with the grant agreement funding techniques and clearance patterns for these programs.
Views of Responsible Officials – NGA Center agrees with the finding and recommendations of this finding set forth within and has developed a corrective action plan to address the lapse in the prescribed internal controls.