Finding Text
Criteria: Non-federal agencies must minimize the time elapsing between the transfer of funds
from the US Treasury and disbursement by the non-federal entity for direct program and the
proportionate share of allowable indirect costs.
Condition: The organization was drawing funding every quarter based on the funding
percentage for the quarter without regard for the disbursement of funds.
Cause: Finance personnel were not aware of this requirement and drew down funding quarterly
on a pro-rata basis.
Effect: The funds were held in an account with a nominal amount of interest earned. Interest
earnings on the account were $16.
Questioned costs: There were no questioned costs.
Recommendation: The finance personnel become familiar with the federal compliance
supplement as it relates to cash management and only initiate a draw down when federal funds
are expended.