Finding Text
Finding 2023-001: Cash Management – Disbursement
U.S. Department of Education – Education Stabilization Fund
COVID-19 Institutional Portion – ALN 84.425F
Criteria: Non-federal entities must minimize the time elapsing between the transfer of funds from the US Treasury or pass-through entity and disbursement by the non-federal entity 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)).
Condition: Management implemented a financial management system that meets the specified standards for fund control and accountability, but the system failed to ensure disbursement of funds within the required timeframe.
Questioned Costs: None noted.
Repeat Finding: This is a repeat finding. Management was only made aware of this finding after it was repeated.
Cause: Management did not accurately identify the required timeframe of disbursement for funds received under the Institutional Portion subprogram. A mitigating factor is the uniqueness of the Institutional Portion subprogram.
Effect: Institutional Portion funds used to defray expenses associated with coronavirus were not disbursed within the required 3 calendar days of the drawdown from ED’s G5 grants system.
Recommendation: Before drawing down from ED’s G5 grants system, management should familiarize themselves with the applicable terms, conditions, and requirements governing the organization’s use of the grant funds, and then implement a system of controls that will ensure compliance with those terms.
Views of Responsible Parties and Corrective Action Plan: Management concurs with the finding. Since the program is not applicable to the organization after the issuance date of the financial statements, no corrective action is necessary.