Voorhees UniversityHigher Education

Condition and Criteria: According to 2 CFR section 200.305(b), non-federal entities must minimize the time elapsed between transfer of funds from the US Treasury or pass-through entity and disbursement by the non-federal entity for direct program project costs and the proportionate share of allowable indirect costs. Minimum elapsed time for funds transfer is dependent upon the payment system/method used by the non-federal entity. The US Department of Education (ED) uses the G6 grants management platform, which is a module of the Education Central Automated Processing System (EDCAPS). Generally, funds requested from G6 process overnight and the funds are available in the non-federal entity’s account the next business day. The University has procedures in place to ensure that funds are drawn down from G6 only after they have been expended. However, we noted in one (1) instance where an amount appears to have been drawn down in advance. Context: The University made twenty nine (29) drawdowns of federal program funds during the fiscal year. In comparing the dates of the drawdowns with the accumulated program expenditures to each drawdown date, one (1) drawdown on 12/20/2023 exceeded accumulated program expenditures as of that date by $44,538. By 1/12/2024, the University had expended the amount advanced. Effect: The University was not in compliance with federal cash management regulations for a portion of the current fiscal year. Cause: Administrative oversight. Auditor's Recommendation: The University should development a spreadsheet or other tool similar to the one the auditor used to test cash management compliance that compares cumulative program expenditures to drawdowns. This tool should be updated prior to drawing down funds in order to ensure that drawdowns are limited to amounts expended at any point in time.

Condition and criteria: According to 2 CFR section 200.305(b)(1), advance payments to a recipient or subrecipient must be limited to the minimum amounts needed and be timed with actual, immediate cash requirements of the recipient or subrecipient in carrying out the purpose of the approved program or project. The timing and amount of advance payments must be as close as is administratively feasible to the actual disbursements by the recipient or subrecipient for direct program or project costs and the proportionate share of any allowable indirect costs. 2 CFR section 200.305(b)(11) further states that the recipient or subrecipient must generally maintain advance payments of federal funds in interest-bearing accounts. It was noted during the audit that the University received an advance payment of $1,483,500 to be used for student scholarships in a future fiscal year and such advance payment was deposited into a noninterest-bearing account. Context: The funds were advanced to the University in April 2024 and had not been expended as of June 30, 2024. Such funds were still deposited in the noninterest-bearing account as of June 30, 2024. Effect: The University was not in compliance with federal cash management regulations for a portion of the current fiscal year. Cause: University personnel indicate that they were advised by ED that it was permissible to draw down the funds in advance and hold them in a noninterest-bearing account until needed. Auditor’s Recommendation: At a minimum, the University should transfer the advanced funds to an interest-bearing account. Interest earned on federal advance payments in excess of $500 should be remitted annually to the US Department of Health and Human Services using the instructions contained in the enclosures to the original grant award notification. The University should also contact appropriate ED officials to ensure that it is in compliance with 2 CFR section 200.305(b)(1).