Finding 957638 (2023-002)

HEERF INSTITUTIONAL AID SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUE) YEAR ENDED JUNE 30, 2023 CASH MANAGEMENT FINDING NO. 2023-002 – TIME ELAPSING BETWEEN THE TRANSFER OF FUNDS CRITERIA Schools must minimize the time elapsing between the transfer of funds from ED and disbursement by the school for direct program or project costs and the proportionate share of allowable indirect costs, whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means (2 CFR section 200.305(b)). What constitutes minimized elapsed time for funds transfer will depend on what payment system/method a school uses. Under the advance payment method, payment is made to the school before the school disburses the funds for program purposes (2 CFR section 200.3). Some schools’ grants may have been placed on Route Pay or Stop Pay Status, as indicated by a notification the grantee would have received from ED. This requires ED approval of a spending plan prior to the grantee drawing down funds or the submission of single requests with documentation. For CRRSAA HEERF II and ARP HEERF III, the Certification and Agreement and/or Supplemental Agreement indicate that Student Aid (ALN 84.425E) should be disbursed within 15 calendar days of the drawdown from ED’s grant management system (G5), while Institutional Aid Portion, (a)(2), and (a)(3) funds (all other ALNs) should be disbursed within 3 calendar days of the drawdown from G5. CONDITION During our field work in the cash management area, we noted funds that were requested to G-5 but not disbursed by UPM to minimize the time elapsing between the transfer of funds and disbursement as follows: Description Dates Amount Funds receceived from G-5 on June 8, 2022 6/8/2022 $610,710.35 Funds disbursed during 2022-2023 Fiscal year 2022-23 (525,362.27) Available balance from funds received in 6/8/2022 6/30/2023 $ 75,348.08 Funds receceived from G-5 on June 22, 2023 6/22/2023 $319,251.71 Funds disbursed at the end of fiscal year 2022-2023 6/30/2023 ( 45,000) Available balance from funds received in 6/22/2023 6/30/2023 $274,251.71 HEERF INSTITUTIONAL AID SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUE) YEAR ENDED JUNE 30, 2023 CASH MANAGEMENT (CONTINUE) FINDING NO. 2023-002 – TRANSFER OF FUNDS BEYOND THE REQUIRED TIME LIMITS EFFECT The drawdowns of Federal funds made by UPM not minimized the time elapsing between transfer of funds and the disbursement by the university according to regulations. QUESTIONED COSTS $0.00 CAUSE This situation occurred due to UPM did not make adequate follow up to the cash advances received from G-5 RECOMMENDATION The University should reinforce the procedures the drawdown of funds to comply with the regulation applicable for the transfer of funds through the G-5 system. VIEWS OF RESPONSIBLE OFFICIALS See the Corrective Action Plan for details of action required.