Finding Text
U.S. Department of Justice
Crime Victim Assistance – Assistance #16.575
#2023-009 – Major Federal Award Finding – Cash Management
Nature of Finding: Compliance Finding Cash Management and Significant Deficiency in Internal Controls over Compliance
Criteria/Condition: 2 CFR 200.305 requires that non-federal entities must minimize the time elapsing between the transfer of federal funds to the non-federal entity and the subsequent disbursement of the funds by the non-federal entity for program costs. The Organization did not have proper controls in place to verify that specific vendor invoices were paid within a reasonable amount of time of requesting reimbursement for the expenditures.
Questioned Costs: $2,381
Identification of How Questioned Costs Were Computed: The issues of noncompliance related to cash management was limited to one vendor that was not paid within a reasonable amount of time of being reimbursed for the costs. This was determined to be an isolated incident. Questioned costs include the two invoices that were charged to the grant for this vendor during the year ended September 30, 2023 and were not paid to the vendor within a reasonable amount of time of being reimbursed for the expenditures.
Cause/Context: Controls were not in place to ensure expenditures were paid to the vendor prior to requesting reimbursements. This circumstance was determined to be an isolated incident due to the unique nature of the vendor invoices. The Organization was withholding payment to the vendor until it determined that both invoices were proper.
Effect: The lack of controls could result in requests for reimbursement being submitted for unpaid expenditures.
Recommendation: We recommend the Organization establish procedures and incorporate controls to review that expenditures are paid prior to submitting requests for reimbursement.
Views of Responsible Officials and Planned Corrective Actions:
The Organization will implement the following changes in its accounting procedures:
Each month, an aged open accounts payable report will be produced as part of the month end closing. Invoices that are past due will be paid in the following batch of payments (which are typically run weekly). If it is determined that the invoice is not being paid for a valid reason, it will be removed from accounts payable at that time.