FAC Explorer

Audit 29700

FY End
2022-12-31
Total Expended
$4.98M
Findings
4
Programs
6
Organization: True Access Capital Corporation (DE)
Year: 2022 Accepted: 2023-08-28
Auditor: Belfint Lyons & Shuman P A

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
33025 2022-001 Significant Deficiency - N
33026 2022-002 - - L
609467 2022-001 Significant Deficiency - N
609468 2022-002 - - L

Programs

ALN Program Spent Major Findings
59.012 7(a) Loan Guarantees $1.34M - 0
11.307 Economic Adjustment Assistance $1.19M Yes 2
21.020 Community Development Financial Institutions Program $810,748 - 0
59.046 Microloan Program $749,970 - 0
59.043 Women's Business Ownership Assistance $170,351 - 0
10.870 Rural Microentrepreneur Assistance Program $16,616 - 0

Contacts

Name Title Type
S3CFQKAGL4K9 Vandell Hampton, Jr. Auditee
3026526774 Jonathan D. Moll, CPA Auditor
No contacts on file

Notes to SEFA

Title: Loan/loan guarantee outstanding balances Accounting Policies: The accompanying schedule of expenditures of federal awards (Schedule) includes the federal award activity of TrueAccess Capital Corporation (Organization) under programs of the federal government for the year endedDecember 31, 2022. The information in this Schedule is presented on the accrual basis of accounting in accordancewith 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 presentsonly a selected portion of the operations of the Organization, it is not intended to, and does not, present the financialposition, change in net assets, functional expenses, or cash flows of the Organization. De Minimis Rate Used: N Rate Explanation: The Organization has elected to use the 10% de minimis rate. 7(A) LOAN GUARANTEES (59.012) - Balances outstanding at the end of the audit period were 1217240. MICROLOAN PROGRAM (59.046) - Balances outstanding at the end of the audit period were 518215.
Title: COVID-19 Economic Adjustment Assistance Program Revolving Loan Fund Note 6 Accounting Policies: The accompanying schedule of expenditures of federal awards (Schedule) includes the federal award activity of TrueAccess Capital Corporation (Organization) under programs of the federal government for the year endedDecember 31, 2022. The information in this Schedule is presented on the accrual basis of accounting in accordancewith 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 presentsonly a selected portion of the operations of the Organization, it is not intended to, and does not, present the financialposition, change in net assets, functional expenses, or cash flows of the Organization. De Minimis Rate Used: N Rate Explanation: The Organization has elected to use the 10% de minimis rate. The Organization had the following loan revolving fund balance as of December 31, 2022, in the U.S. Departmentof Commerces Economic Adjustment Assistance Program that was created as part of the CARES Act. The CARESAct revolving loan fund has continuing compliance requirements and is included in the Schedule: See the Notes to the SEFA for chart/table
Title: Economic Adjustment Assistance Program Revolving Loan Fund Note 5 Accounting Policies: The accompanying schedule of expenditures of federal awards (Schedule) includes the federal award activity of TrueAccess Capital Corporation (Organization) under programs of the federal government for the year endedDecember 31, 2022. The information in this Schedule is presented on the accrual basis of accounting in accordancewith 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 presentsonly a selected portion of the operations of the Organization, it is not intended to, and does not, present the financialposition, change in net assets, functional expenses, or cash flows of the Organization. De Minimis Rate Used: N Rate Explanation: The Organization has elected to use the 10% de minimis rate. The Organization had the following loan revolving fund balance as of December 31, 2022, in the U.S. Departmentof Commerces Economic Adjustment Assistance Program. The Economic Adjustment Assistance revolving loanfund has continuing compliance requirements and is included in the Schedule: See the Notes to the SEFA for chart/table

Finding Details

Finding 2022-001
Condition: During the year ended December 31, 2022, True Access Capital issued a loan that was collateralized by real property. A mortgage on the collateral was executed during the loan closing process but was not recorded for over one year after the closing. Criteria: 13 CFR section 307.11 (a)(1)(ii) requires the following: (ii) The RLF Recipient's certification that standard RLF loan documents reasonably necessary or advisable for lending are in place and a certification from the RLF Recipient's legal counsel that the loan documents are adequate and comply with the terms and conditions of the RLF Grant, RLF Plan, and applicable State and local law. The standard loan documents must include, at a minimum, the following: (A) Loan application; (B) Loan agreement; (C) Board of directors' meeting minutes approving the RLF loan; (D) Promissory note; (E) Security agreement(s); (F) Deed of trust or mortgage (as applicable); (G) Agreement of prior lien holder (as applicable); and (H) Evidence demonstrating that credit is not otherwise available on terms and conditions that permit the completion or successful operation of the activity to be financed. Cause: The mortgage was executed by a power of attorney that was not properly completed and could not be recorded by the recorder of deeds. The Organization engaged an attorney to conduct the loan closing and execution of the relevant loan documents. The Organization?s attorney did not discover this error until the mortgage was returned by the recorder of deeds indicating the power of attorney was not properly executed. Effect: The loan issued did not comply with the requirements of 13 CFR Section 307.11. Additionally, the Loan Fund and the Organization experienced a temporarily increased risk of loss because the mortgage was not properly recorded. Context: Two loans totaling $225,000 issued during the year ended December 31, 2022, were selected for audit. We found one loan in the amount of $200,000 was not in compliance with the program requirements. Recommendation: The Organization should review each closing to confirm it is completed in a timely and accurately manner.
Finding 2022-002
Condition: The Organization's June 30, 2022 Form ED-209 Revolving Loan Fund Financial Report overstated expenses and understated cash available for lending as follows: Portion RLF Income Admin. Expense - Reported $ 88,363; Actual $ 4,388; Difference $ 83,975 RLF Cash Available for Lending - Reported $ 65,805; Actual $ 149,780; Difference $ (83,975) Criteria: Form ED-209 Revolving Loan Fund Financial Report requires, among others, the following representations from the Authorized Official signing the report: By signing the report, the Authorized Official certifies to EDA that the RLF is operating in accordance with its RLF Plan and that the information provided in the form is complete and accurate. Cause: The Organization's grant award included $83,975 of funding for the Revolving Loan Fund startup costs. Costs funded from the startup portion of the grant are included on the Organization's internal program reporting but should not have been reported on Form ED-209. Effect: The Organization's June 30, 2022 Form ED-209 overstated expenses and understated cash available for lending. Context: For the year ended December 31, 2022, the Organization submitted Form ED-209 three times. Two Forms ED-209 were selected for testing and one contained errors. Recommendation: The Organization should update its internal controls over reporting to require the review and approval of reports prior to submission.
Finding 2022-001
Condition: During the year ended December 31, 2022, True Access Capital issued a loan that was collateralized by real property. A mortgage on the collateral was executed during the loan closing process but was not recorded for over one year after the closing. Criteria: 13 CFR section 307.11 (a)(1)(ii) requires the following: (ii) The RLF Recipient's certification that standard RLF loan documents reasonably necessary or advisable for lending are in place and a certification from the RLF Recipient's legal counsel that the loan documents are adequate and comply with the terms and conditions of the RLF Grant, RLF Plan, and applicable State and local law. The standard loan documents must include, at a minimum, the following: (A) Loan application; (B) Loan agreement; (C) Board of directors' meeting minutes approving the RLF loan; (D) Promissory note; (E) Security agreement(s); (F) Deed of trust or mortgage (as applicable); (G) Agreement of prior lien holder (as applicable); and (H) Evidence demonstrating that credit is not otherwise available on terms and conditions that permit the completion or successful operation of the activity to be financed. Cause: The mortgage was executed by a power of attorney that was not properly completed and could not be recorded by the recorder of deeds. The Organization engaged an attorney to conduct the loan closing and execution of the relevant loan documents. The Organization?s attorney did not discover this error until the mortgage was returned by the recorder of deeds indicating the power of attorney was not properly executed. Effect: The loan issued did not comply with the requirements of 13 CFR Section 307.11. Additionally, the Loan Fund and the Organization experienced a temporarily increased risk of loss because the mortgage was not properly recorded. Context: Two loans totaling $225,000 issued during the year ended December 31, 2022, were selected for audit. We found one loan in the amount of $200,000 was not in compliance with the program requirements. Recommendation: The Organization should review each closing to confirm it is completed in a timely and accurately manner.
Finding 2022-002
Condition: The Organization's June 30, 2022 Form ED-209 Revolving Loan Fund Financial Report overstated expenses and understated cash available for lending as follows: Portion RLF Income Admin. Expense - Reported $ 88,363; Actual $ 4,388; Difference $ 83,975 RLF Cash Available for Lending - Reported $ 65,805; Actual $ 149,780; Difference $ (83,975) Criteria: Form ED-209 Revolving Loan Fund Financial Report requires, among others, the following representations from the Authorized Official signing the report: By signing the report, the Authorized Official certifies to EDA that the RLF is operating in accordance with its RLF Plan and that the information provided in the form is complete and accurate. Cause: The Organization's grant award included $83,975 of funding for the Revolving Loan Fund startup costs. Costs funded from the startup portion of the grant are included on the Organization's internal program reporting but should not have been reported on Form ED-209. Effect: The Organization's June 30, 2022 Form ED-209 overstated expenses and understated cash available for lending. Context: For the year ended December 31, 2022, the Organization submitted Form ED-209 three times. Two Forms ED-209 were selected for testing and one contained errors. Recommendation: The Organization should update its internal controls over reporting to require the review and approval of reports prior to submission.