Finding 2022-002: Allowable Costs/Cost Principles and Reporting U.S. Department of Commerce Economic Development Cluster Economic Adjustment Assistance ALN 11.307 Condition: There were not adequate internal controls in place to ensure that the following requirements of the submitted `Revolving Loan Fund Plan? (RLF Plan) were being complied with: 1) use of correct loan interest rates in accordance with the RLF Plan and 2) loan monitoring documentation is appropriately obtained and/or maintained. Additionally, we noted that there were not adequate internal controls in place to ensure cash balances are accurately tracked in the general ledger to provide for proper SEFA reporting and that required federal oversight reports are reviewed prior to submission or submitted timely. Criteria: Pursuant to 2 CFR section 200.303(a), the nonfederal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Revolving Loan Fund (RLF) recipients must administer RLFs in accordance with an RLF Plan approved by EDA. Cause: The current internal control system in place does not provide for formal procedures to review loan terms in accordance with the RLF Plan approved by the EDA, obtain/maintain loan monitoring documentation, accurately record cash balances in the general ledger for proper SEFA reporting, or review required federal oversight reports prior to submission by the established due date. Effect: Lack of formal internal control procedures resulted in 1) an incorrect interest rate being used on a loan issued in the current year, 2) loan monitoring documentation not being obtained/maintained, 3) cash balances being inaccurately reported in the general ledger resulting in inaccurate SEFA reporting, 4) required federal oversight report, form ED-209, not being reviewed prior to submission and being submitted after the due date. Question Costs: None Identification as a Repeat Finding: This is a repeat finding of 2021-002. Recommendation: We have the following recommendations: 1) the Authority should implement procedures to ensure that the RLF program is administered in accordance with the plan approved by the EDA, 2) the Authority should review the general ledger on a monthly basis to ensure cash balances are accurately stated for proper SEFA reporting, 3) the Authority should implement procedures to ensure that required reports are reviewed for accuracy prior to being submitted by the due date. View of Responsible Official: Management agrees with the finding. See separate corrective action plan.
Finding 2022-002: Allowable Costs/Cost Principles and Reporting U.S. Department of Commerce Economic Development Cluster Economic Adjustment Assistance ALN 11.307 Condition: There were not adequate internal controls in place to ensure that the following requirements of the submitted `Revolving Loan Fund Plan? (RLF Plan) were being complied with: 1) use of correct loan interest rates in accordance with the RLF Plan and 2) loan monitoring documentation is appropriately obtained and/or maintained. Additionally, we noted that there were not adequate internal controls in place to ensure cash balances are accurately tracked in the general ledger to provide for proper SEFA reporting and that required federal oversight reports are reviewed prior to submission or submitted timely. Criteria: Pursuant to 2 CFR section 200.303(a), the nonfederal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Revolving Loan Fund (RLF) recipients must administer RLFs in accordance with an RLF Plan approved by EDA. Cause: The current internal control system in place does not provide for formal procedures to review loan terms in accordance with the RLF Plan approved by the EDA, obtain/maintain loan monitoring documentation, accurately record cash balances in the general ledger for proper SEFA reporting, or review required federal oversight reports prior to submission by the established due date. Effect: Lack of formal internal control procedures resulted in 1) an incorrect interest rate being used on a loan issued in the current year, 2) loan monitoring documentation not being obtained/maintained, 3) cash balances being inaccurately reported in the general ledger resulting in inaccurate SEFA reporting, 4) required federal oversight report, form ED-209, not being reviewed prior to submission and being submitted after the due date. Question Costs: None Identification as a Repeat Finding: This is a repeat finding of 2021-002. Recommendation: We have the following recommendations: 1) the Authority should implement procedures to ensure that the RLF program is administered in accordance with the plan approved by the EDA, 2) the Authority should review the general ledger on a monthly basis to ensure cash balances are accurately stated for proper SEFA reporting, 3) the Authority should implement procedures to ensure that required reports are reviewed for accuracy prior to being submitted by the due date. View of Responsible Official: Management agrees with the finding. See separate corrective action plan.
Finding 2022-002: Allowable Costs/Cost Principles and Reporting U.S. Department of Commerce Economic Development Cluster Economic Adjustment Assistance ALN 11.307 Condition: There were not adequate internal controls in place to ensure that the following requirements of the submitted `Revolving Loan Fund Plan? (RLF Plan) were being complied with: 1) use of correct loan interest rates in accordance with the RLF Plan and 2) loan monitoring documentation is appropriately obtained and/or maintained. Additionally, we noted that there were not adequate internal controls in place to ensure cash balances are accurately tracked in the general ledger to provide for proper SEFA reporting and that required federal oversight reports are reviewed prior to submission or submitted timely. Criteria: Pursuant to 2 CFR section 200.303(a), the nonfederal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Revolving Loan Fund (RLF) recipients must administer RLFs in accordance with an RLF Plan approved by EDA. Cause: The current internal control system in place does not provide for formal procedures to review loan terms in accordance with the RLF Plan approved by the EDA, obtain/maintain loan monitoring documentation, accurately record cash balances in the general ledger for proper SEFA reporting, or review required federal oversight reports prior to submission by the established due date. Effect: Lack of formal internal control procedures resulted in 1) an incorrect interest rate being used on a loan issued in the current year, 2) loan monitoring documentation not being obtained/maintained, 3) cash balances being inaccurately reported in the general ledger resulting in inaccurate SEFA reporting, 4) required federal oversight report, form ED-209, not being reviewed prior to submission and being submitted after the due date. Question Costs: None Identification as a Repeat Finding: This is a repeat finding of 2021-002. Recommendation: We have the following recommendations: 1) the Authority should implement procedures to ensure that the RLF program is administered in accordance with the plan approved by the EDA, 2) the Authority should review the general ledger on a monthly basis to ensure cash balances are accurately stated for proper SEFA reporting, 3) the Authority should implement procedures to ensure that required reports are reviewed for accuracy prior to being submitted by the due date. View of Responsible Official: Management agrees with the finding. See separate corrective action plan.
Finding 2022-002: Allowable Costs/Cost Principles and Reporting U.S. Department of Commerce Economic Development Cluster Economic Adjustment Assistance ALN 11.307 Condition: There were not adequate internal controls in place to ensure that the following requirements of the submitted `Revolving Loan Fund Plan? (RLF Plan) were being complied with: 1) use of correct loan interest rates in accordance with the RLF Plan and 2) loan monitoring documentation is appropriately obtained and/or maintained. Additionally, we noted that there were not adequate internal controls in place to ensure cash balances are accurately tracked in the general ledger to provide for proper SEFA reporting and that required federal oversight reports are reviewed prior to submission or submitted timely. Criteria: Pursuant to 2 CFR section 200.303(a), the nonfederal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Revolving Loan Fund (RLF) recipients must administer RLFs in accordance with an RLF Plan approved by EDA. Cause: The current internal control system in place does not provide for formal procedures to review loan terms in accordance with the RLF Plan approved by the EDA, obtain/maintain loan monitoring documentation, accurately record cash balances in the general ledger for proper SEFA reporting, or review required federal oversight reports prior to submission by the established due date. Effect: Lack of formal internal control procedures resulted in 1) an incorrect interest rate being used on a loan issued in the current year, 2) loan monitoring documentation not being obtained/maintained, 3) cash balances being inaccurately reported in the general ledger resulting in inaccurate SEFA reporting, 4) required federal oversight report, form ED-209, not being reviewed prior to submission and being submitted after the due date. Question Costs: None Identification as a Repeat Finding: This is a repeat finding of 2021-002. Recommendation: We have the following recommendations: 1) the Authority should implement procedures to ensure that the RLF program is administered in accordance with the plan approved by the EDA, 2) the Authority should review the general ledger on a monthly basis to ensure cash balances are accurately stated for proper SEFA reporting, 3) the Authority should implement procedures to ensure that required reports are reviewed for accuracy prior to being submitted by the due date. View of Responsible Official: Management agrees with the finding. See separate corrective action plan.