In a bowl, combine the flour, sugar, baking powder and salt. Combine milk and butter; add to dry ingredients and mix well. Fold in cranberries. Spread into a greased 9-in. square baking pan. Bake at 350° for 30-35 minutes or until cake tests done.
For sauce, melt butter in a saucepan; gradually add sugar and cream. Simmer for 10 minutes. Remove from the heat; add vanilla. Serve over warm coffee cake.