International Journalism Defense, Inc.

Finding 2024-001 - Cash Management Federal Agency: United States Agency for International Development Federal Program: Strengthening Transparency and Accountability through Investigative Reporting in Europe and Eurasia Assistance Listing Numbers: 98.001 Award Identification Number and Year: N/A Criteria or Specific Requirement: In accordance with §200.305, Federal Payment, for non- Federal entities other than States, payment methods must minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-Federal entity whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means. Specifically, §200.305(b)(1), Federal Payment, indicates: Advance payments to a non-Federal entity must be limited to the minimum amounts needed and be timed to be in accordance with the actual, immediate cash requirements of the non-Federal entity 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 non-Federal entity for direct program or project costs and the proportionate share of any allowable indirect costs. In accordance with the 2024 OMB Compliance Supplement, when the reimbursement payment method is used, program costs must be incurred before submitting a payment request to the Federal awarding agency. Condition: During our testing of advance payments received for major program AL# 98.001, management did not minimize the amount of time between the Federal advance payments and the actual disbursements for direct program expenditures and related indirect costs. Cause: IJD's programmatic and finance teams did not comply with 2 CFR 200.305 in order to establish funds necessary to establish programmatic activities in the first year of operations. Effect or Potential Effect: Failure to perform timely cash management procedures could result in obtaining funds from the U.S. Government in advance of actual expenditures incurred thus resulting in non-compliance with contractual agreements. Questioned Costs: None noted Context: Federal funds were drawn down in excess of actual, immediate cash requirements of the non-Federal entity. Identification as a Repeat Finding, if Applicable: This finding is a repeat of prior year finding 2023-001. Recommendation: We recommend that management be more mindful of the U.S. Government regulations with respect to drawing down Federal funds. Procedures should be developed and implemented to ensure that adequate controls are in place around cash management.

Views of Responsible Officials: IJD acknowledges that at the Statement of Financial Position date it was holding Federal funds in excess of immediate operational need. This situation was rectified shortly after, in February 2025, when the funds were used to finance IJD’s risk pool to protect investigative journalists. This use of funds was exactly in line with the proposal originally submitted to the Federal funder (USAID), and with the risk pool in place and fully financed IJD is able to continue recruiting new members and credibly offer them the protection envisioned in the original grant proposal. Name and Title of Responsible Official: Oliver Rivers, Chief Operating Officer Anticipated Completion Date: Not applicable

2023-001

Finding 2023-001 - Cash Management Information on the Federal Programs: 98.001 Criteria or Specific Requirement: In accordance with §200.305, Federal Payment, for non- Federal entities other than states, payment methods must minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-Federal entity whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means. Specifically, §200.305(b)(1), Federal Payment, indicates: Advance payments to a non-Federal entity must be limited to the minimum amounts needed and be timed to be in accordance with the actual, immediate cash requirements of the non-Federal entity 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 non-Federal entity for direct program or project costs and the proportionate share of any allowable indirect costs. In accordance with the 2023 OMB Compliance Supplement, when the reimbursement payment method is used, program costs must be incurred before submitting a payment request to the Federal awarding agency. Condition: During our testing of advance payments received for major program AL# 98.001, management did not minimize the amount of time between the Federal advance payments and the actual disbursements for direct program expenditures and related indirect costs. Cause: IJD's programmatic and finance teams did not comply with 200.305 in order to establish funds necessary to establish programmatic activities in the first year of operations. Effect or Potential Effect: Failure to perform timely cash management procedures could result in obtaining funds from the U.S. Government in advance of actual expenditures incurred thus resulting in non-compliance with contractual agreements. Questioned Costs: None noted Context: Federal funds were drawn down in excess of actual, immediate cash requirements of the non-Federal entity. Identification as a Repeat Finding, if Applicable: This is not a repeat finding. Recommendation: We recommend that management be more mindful of the U.S. Government regulations with respect to drawing down Federal funds. Procedures should be developed and implemented to insure that adequate controls are in place around cash management.

Views of Responsible Officials: IJD acknowledges that it is holding federal funds in excess of immediate operational need. The funds were drawn down to finance IJD’s Reporters Shield initiative, so that IJD could establish the risk pool to provide legal protection to investigative journalism organizations; without the cash in place to finance the risk pool, IJD cannot credibly offer to protect investigative journalism organizations from legal threat. The drawdown of federal funds was exactly in line with the proposal originally submitted to the federal funder (USAID), and the funds were drawn down with the agreement and understanding of the USAID program officer responsible for the grant. We note that IJD is in a chicken-and-egg situation, since without the funds first being in place, it will not be possible to recruit new members to join the risk pool. The corrective plan is to grow the membership pool as quickly as possible, so that the funds are used for their intended purpose, i.e. protecting journalists. Name and Title of Responsible Official: Clothilde Redfern, Executive Director International Journalism Defense Anticipated Completion Date: Not applicable