Finding Text
2022-006 AL# 66.468 – Capitalization Grants for Drinking Water State Revolving Funds
Environmental Protection Agency – Passed Through the Alabama State Department of
Environmental Management
C – Cash Management
Material Weakness and Noncompliance
Criteria:
The SRF Loan program is a reimbursable grant administered by ADEM. When non-Federal
entities are funded under the reimbursement method, the entity they request reimbursement
for expenses paid that are allowable to the grant under (2CFR section 200.305(b)(3)) and
Section 2.2(b) of the Special Conditions Loan Agreement.
Condition:
During test work, instances were noted where The Water Works and Gas Board of the City
of Red Bay did not pay the cost of the invoices prior to requesting reimbursement. The
expenditures were allowable and approved by Alabama State Department of Environmental
Management for reimbursement, but the invoices were not paid prior to requesting the
reimbursement from Alabama State Department of Environmental Management.
Context:
The Water Works and Gas Board of the City of Red Bay did not ensure that invoices were
paid prior to submitting them for reimbursement to Alabama State Department of
Environmental Management.
Effect:
The entity is not in compliance with 2 CFR section 200.305(b)(3) and Section 2.2(b) of the
Special Conditions Loan Agreement.
Cause:
The Water Works and Gas Board of the City of Red Bay did not ensure that invoices were
paid prior to requesting reimbursement.
Repeat Finding:
No Recommendation:
The Water Works and Gas Board of the City of Red Bay should ensure that invoices are
paid prior to requesting reimbursement from the pass-through entity.
Board’s Response:
The Water Works and Gas Board of the City of Red Bay will ensure payments under
reimbursable grants are made prior to reimbursement requests.