FAC Explorer

Audit 13413

FY End
2023-09-30
Total Expended
$1.67M
Findings
2
Programs
1
Organization: Rockford Local Development Corporation (IL)
Year: 2023 Accepted: 2024-01-24
Auditor: Benning Group LLC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
9670 2023-003 - - N
586112 2023-003 - - N

Programs

ALN Program Spent Major Findings
11.307 Economic Adjustment Assistance $1.67M Yes 1

Contacts

Name Title Type
SMSECYR6M4Y5 Debbie Kimes Auditee
8159878675 Curt Kleckler Auditor
No contacts on file

Notes to SEFA

Title: Note A – Basis of Presentation Accounting Policies: Expenditures on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Rockford Local Development Corporation elected to include the 10% de minimis indirect cost rate allowed under the Uniform Guidance. De Minimis Rate Used: Y Rate Explanation: The auditee used the de minimis cost rate. The accompanying Schedule of Expenditures of Federal Awards (Schedule) includes the federal grant activity of Rockford Local Development Corporation. and is presented on the accrual basis of accounting. The information in this schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the Organization, it is not intended to and does not present the financial position, changes in net assets or cash flows of the Organization.
Title: Note B – Summary of Significant Accounting Policies Accounting Policies: Expenditures on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Rockford Local Development Corporation elected to include the 10% de minimis indirect cost rate allowed under the Uniform Guidance. De Minimis Rate Used: Y Rate Explanation: The auditee used the de minimis cost rate. Expenditures on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Rockford Local Development Corporation elected to include the 10% de minimis indirect cost rate allowed under the Uniform Guidance.
Title: Note C – Other Matters Accounting Policies: Expenditures on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Rockford Local Development Corporation elected to include the 10% de minimis indirect cost rate allowed under the Uniform Guidance. De Minimis Rate Used: Y Rate Explanation: The auditee used the de minimis cost rate. Rockford Local Development Corporation received no federal non-cash assistance during the year ended September 30, 2023. Rockford Local Development Corporation. had no sub-recipients during the year ended September 30, 2023.
Title: Note D – Loan Program Balances Accounting Policies: Expenditures on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Rockford Local Development Corporation elected to include the 10% de minimis indirect cost rate allowed under the Uniform Guidance. De Minimis Rate Used: Y Rate Explanation: The auditee used the de minimis cost rate. Outstanding loan balances under the EDA ARPA Revolving Loan Fund program were $1,857,840 at September 30, 2023.

Finding Details

Finding 2023-003
2023-03 – Require evidence demonstrating that credit is not otherwise available (13 CFR 307.11(a)) Criteria – Evidence should be obtained and retained in the loan file demonstrating credit to the borrower was not otherwise available on terms and conditions that permit the completion or successful operations of the activity to be financed as stated in the Economic Development Administration’s (EDA) Specific Award Conditions as one of the requirements prior to initial disbursement. Condition – During the audit it was noted, loan file documentation did not include evidence credit was not otherwise available to the borrower from a financial institution (i.e. denial letter) before submitting a loan application with Rockford Local Development Corporation. Cause – Management was not obtaining denial letters from borrowers indicating credit was not available elsewhere. Effects – The EDA may require repayment for loans not in compliance with the Specific Award Conditions; however, the EDA waived this specific requirement during the time period of May 5, 2020 through June 30, 2022 to provide revolving loan fund recipients with increased flexibility to respond to the impact of the coronavirus pandemic on small businesses in their communities; therefore, loans originated during this time period were exempt from this particular requirement. Recommendation – We recommend Management obtain denial letters from potential borrowers and retain the letter as evidence credit was not otherwise available to the borrower. Management Response – Management will implement the procedure of obtaining support of denial as part of the application process on all new loans going forward under this program.
Finding 2023-003
2023-03 – Require evidence demonstrating that credit is not otherwise available (13 CFR 307.11(a)) Criteria – Evidence should be obtained and retained in the loan file demonstrating credit to the borrower was not otherwise available on terms and conditions that permit the completion or successful operations of the activity to be financed as stated in the Economic Development Administration’s (EDA) Specific Award Conditions as one of the requirements prior to initial disbursement. Condition – During the audit it was noted, loan file documentation did not include evidence credit was not otherwise available to the borrower from a financial institution (i.e. denial letter) before submitting a loan application with Rockford Local Development Corporation. Cause – Management was not obtaining denial letters from borrowers indicating credit was not available elsewhere. Effects – The EDA may require repayment for loans not in compliance with the Specific Award Conditions; however, the EDA waived this specific requirement during the time period of May 5, 2020 through June 30, 2022 to provide revolving loan fund recipients with increased flexibility to respond to the impact of the coronavirus pandemic on small businesses in their communities; therefore, loans originated during this time period were exempt from this particular requirement. Recommendation – We recommend Management obtain denial letters from potential borrowers and retain the letter as evidence credit was not otherwise available to the borrower. Management Response – Management will implement the procedure of obtaining support of denial as part of the application process on all new loans going forward under this program.