FAC Explorer

Audit 303152

FY End
2023-12-31
Total Expended
$828,061
Findings
2
Programs
2
Organization: Community Development Resources (NE)
Year: 2023 Accepted: 2024-04-10
Auditor: Hayes & Associates LLC

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
392816 2023-001 Significant Deficiency - N
969258 2023-001 Significant Deficiency - N

Programs

ALN Program Spent Major Findings
59.046 Microloan Program $761,552 Yes 1
21.024 Community Development Financial Institutions Rapid Response Program (cdfi Rrp) $33,838 - 0

Contacts

Name Title Type
M7JXC14L9JF3 Farshad Maltes Auditee
5312495926 Bryan Broekemier Auditor
No contacts on file

Notes to SEFA

Title: Loans Accounting Policies: The accompanying schedule includes federal grant activity of Community Development Resources and is presented on the accrual basis of accounting. Grant awards are considered expended when the expense transactions associated with the grant occur. The outstanding loan balances are considered expended as long as the Federal government imposes continuing compliance requirements. The information in this schedule is presented in accordance with the requirements of the Uniform Guidance. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the financial statements. De Minimis Rate Used: Y Rate Explanation: The Organization has elected to charge the 10% de minimis indirect cost rate to its federal award programs. The federal loan programs listed subsequently are administered directly by the Organization and balances and transactions relating to these programs are included in the Organization’s basic financial statements. Loans outstanding at the beginning of the year and loans made during the year are included in the federal expenditures represented in the Schedule. As of the year ended December 31, 2023, the outstanding balance for the following loan program is; Microloan Program – $621,321.

Finding Details

Finding 2023-001
2023-001 – MISSING REQUIRED LANGUAGE IN LOAN AGREEMENT Condition: The Organization provided loans to microborrowers while excluding language required by the SBA in the loan agreement. This was noted on 5 of 19 tested microloan agreements. Criteria: The SBA requires the loan agreements to include language that protects the SBA’s interests. The SBA requires the following statement in each microloan agreement, “This note has been pledged to the U.S. Small Business Administration (SBA) as collateral. Further assignment cannot be made without prior written consent of the SBA.” Cause: The Organization had a breakdown in internal controls and did not use the appropriate document that includes the required statement. This was noted on 5 microloan agreements. Effect: As a result of excluding the required statement in the loan agreements the Organization was non-compliant with one of the required SBA Standard Operating Procedures. Recommendation: We recommend the Organization ensures that processes are in place to review loan agreements prior to issuing the loans to ensure all compliance requirements are met. Response: The Loan Officer, along with the preparer of the loan documents, if different, will verify the document has appropriate SBA verbiage and is compliant before issuing closing documents. Both should be knowledgeable about the rules and regulations associated with the process and double check one another.
Finding 2023-001
2023-001 – MISSING REQUIRED LANGUAGE IN LOAN AGREEMENT Condition: The Organization provided loans to microborrowers while excluding language required by the SBA in the loan agreement. This was noted on 5 of 19 tested microloan agreements. Criteria: The SBA requires the loan agreements to include language that protects the SBA’s interests. The SBA requires the following statement in each microloan agreement, “This note has been pledged to the U.S. Small Business Administration (SBA) as collateral. Further assignment cannot be made without prior written consent of the SBA.” Cause: The Organization had a breakdown in internal controls and did not use the appropriate document that includes the required statement. This was noted on 5 microloan agreements. Effect: As a result of excluding the required statement in the loan agreements the Organization was non-compliant with one of the required SBA Standard Operating Procedures. Recommendation: We recommend the Organization ensures that processes are in place to review loan agreements prior to issuing the loans to ensure all compliance requirements are met. Response: The Loan Officer, along with the preparer of the loan documents, if different, will verify the document has appropriate SBA verbiage and is compliant before issuing closing documents. Both should be knowledgeable about the rules and regulations associated with the process and double check one another.