Finding Text
Condition: A sample of four (4) drawdowns were selected for testing cash management procedures. Our
test work found that the Foundation could not produce adequate documentation of the expenses supporting
each drawdown request and the drawdown requests did not have documented approvals. Additionally, we
found that there is no process in place to prevent entries from being recorded in the accounting ledger once
a period has been closed. In reviewing the federal drawdowns made during the year, we determined that
the Foundation rounded drawdowns to the nearest hundred dollar.
As a result of our review of the federal grants receivable general ledger, we also found that the Foundation
erroneously failed to drawdown $76,235 of federal funds related to FY23 expenditures incurred. We notified
management of this matter and the amount was subsequently drawn down.
Criteria: The Uniform Guidance requires organizations who receive funds on a cost reimbursement basis to
draw down funds based on allowable expenditures under the grant.
Cause: Overall lack of policies and procedures regarding retention of drawdown documentation and
approval of drawdowns.
Effect: Reports showing expenses for drawdowns were run real-time and were not maintained. Accounting
records are not closed at each period end, which allows for erroneous journal entries to be made. Based on
our tests performed over federal expenditures, we found no unallowable costs included in the drawdown
request. Additionally, there was an outstanding receivable at the end of FY23, which was drawn down
subsequent to year end. Recommendation: We recommend that the Foundation save all supporting schedules used to calculate
each drawdown. We also recommend that the Foundation drawdown federal funds in an amount equal to
the exact expenses incurred during the period and the drawdowns are approved. Furthermore, we
recommend that only the accounting team have ability to affect the accounting records. Lastly, we
recommend that the Foundation reconcile and review the grants receivable balance monthly to ensure all
drawdowns occur on a timely basis.
Views of Responsible Officials and Planned Corrective Actions: The Foundation is strictly enforcing a policy
that AMEX receipts from staff are due three days after the statement is posted. With this clear policy in
place, the period end is accurate with drawdowns reflecting the activity incurred in that period. All supporting
schedules are being saved.