FAC Explorer

Audit 335172

FY End
2024-06-30
Total Expended
$1.70M
Findings
4
Programs
1
Organization: Big Sky Economic Development Corporation (MT)
Year: 2024 Accepted: 2024-12-30
Auditor: Kcoe Isom LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
517197 2024-001 Significant Deficiency - L
517198 2024-002 Significant Deficiency Yes N
1093639 2024-001 Significant Deficiency - L
1093640 2024-002 Significant Deficiency Yes N

Programs

ALN Program Spent Major Findings
11.307 Economic Adjustment Assistance $1.70M Yes 2

Contacts

Name Title Type
NSLQZJAHYMM5 Tami Fleetwood Auditee
4068698402 Sarah Stanger Auditor
No contacts on file

Notes to SEFA

Title: N2. MATCHING COSTS Accounting Policies: The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of the Organization under programs of the federal government for the year ended June 30, 2024. 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 Big Sky Economic Development Corporation. Expenditures reported 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. De Minimis Rate Used: Y Rate Explanation: The Organization has elected to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. In accordance with the terms of the grant, the Organization has expended matching costs of $188,736.
Title: N4. FEDERALLY FNDED REVOLVING LOAN FUND Accounting Policies: The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of the Organization under programs of the federal government for the year ended June 30, 2024. 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 Big Sky Economic Development Corporation. Expenditures reported 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. De Minimis Rate Used: Y Rate Explanation: The Organization has elected to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. The Organization has a revolving loan fund program which was originally funded with federal assistance through U.S Department of Commerce - Economic Development Administration (EDA). EDA retains a federal interest in the RLF awards until the RLF award is terminated or EDA releases its federal interest in the RLF award funds. As such, required reporting and EDA oversight of the RLF continues until the award is terminated or EDA releases its federal interest in RLF award funds. The outstanding balance on these loans at June 30, 2024 was $1,764,991. The calculation for the federal awards expended is displayed in the tables below:

Finding Details

Finding 2024-001
Late Submission of Form ED-209 Assistance Title: COVID-19 - Economic Adjustment Assistance - Coronavirus Aid, Relief, and Economic Security (CARES) Act Revolving Loan Fund Assistance Listing Number: 11.307 Federal Agency: U.S. Department of Commerce Type of Finding: Significant Deficiency and Noncompliance Category of Finding: Audit Requirements Known Questioned Costs: $0 Likely Questioned Costs: $0 Criteria Per the CARES Act Revolving Loan Fund Standard Terms and Conditions, the Form ED-209 must be submitted within 30 days after the reporting period ending June 30, 2024. Condition The Organization did not submit Form ED-209 within the required timeframe. The initial submission occurred on September 25, 2024, which was after the 30-day deadline. Furthermore, errors identified at the federal level necessitated a resubmission of the form. The final submission was completed on October 18, 2024, resulting in a delayed submission beyond the allowable period. Cause The oversight occurred due to inadequate internal controls in reviewing the Form ED-209. Subsequent errors identified by federal reviewers required corrections, further extending the submission timeline. Effect Late submission of required federal reports constitutes noncompliance with federal reporting requirements. This may result in increased scrutiny from federal agencies, potential penalties, or impacts on future funding and grant opportunities. Repeat Finding This is not a repeat finding. Recommendation We recommend that the Organization implement stricter internal controls and monitoring procedures to ensure all federal reports, including Form ED-209, are prepared accurately and submitted within the required deadlines. Additionally, a review process should be established to promptly address and correct any errors identified by federal agencies to prevent further delays. Management’s Response Management concurs with this finding. See Management’s Response and Corrective Action plan section.
Finding 2024-002
Noncompliance with Davis-Bacon Wage Requirements Assistance Title: COVID-19 - Economic Adjustment Assistance - Coronavirus Aid, Relief, and Economic Security (CARES) Act Revolving Loan Fund Assistance Listing Number: 11.307 Federal Agency: U.S. Department of Commerce Type of Finding: Significant Deficiency Category of Finding: Special Tests and Provisions – Davis-Bacon Act Known Questioned Costs: $0 Likely Questioned Costs: $0 Criteria In accordance with section 602 of PWEDA (42 U.S.C. § 3212), all laborers and mechanics employed by contractors or subcontractors on construction-related projects receiving investment assistance under PWEDA shall be paid wages not less than those prevailing on similar construction in the locality, as determined by the U.S. Secretary of Labor in accordance with subchapter IV of chapter 31 of title 40, United States Code. See 13 CFR § 302.13. Condition During the fiscal year ended June 30, 2024, the Organization did not disburse any loans that were subject to Davis-Bacon wage requirements. However, we noted there are no internal controls in place to verify compliance with prevailing wage rates in the event that such loans are disbursed in the future. Cause There are no controls in place to verify compliance with prevailing wage rates for federally funded projects, risking legal and financial penalties due to potential noncompliance with federal wage laws. Effect Without proper controls, the Organization risks noncompliance with federal wage laws if loans subject to Davis-Bacon requirements are disbursed. This could lead to legal and financial penalties, including potential repayment of federal funds or jeopardizing future funding opportunities. Repeat Finding This is a repeat finding from the prior year. Recommendation We recommend that the Organization implement procedures to ensure compliance with Davis-Bacon wage requirements. This includes training staff on federal wage laws, incorporating compliance checks into the loan disbursement process, and regularly monitoring contractor adherence to prevailing wage rates. Management’s Response Management concurs with this finding. See Management’s Response and Corrective Action plan section.
Finding 2024-001
Late Submission of Form ED-209 Assistance Title: COVID-19 - Economic Adjustment Assistance - Coronavirus Aid, Relief, and Economic Security (CARES) Act Revolving Loan Fund Assistance Listing Number: 11.307 Federal Agency: U.S. Department of Commerce Type of Finding: Significant Deficiency and Noncompliance Category of Finding: Audit Requirements Known Questioned Costs: $0 Likely Questioned Costs: $0 Criteria Per the CARES Act Revolving Loan Fund Standard Terms and Conditions, the Form ED-209 must be submitted within 30 days after the reporting period ending June 30, 2024. Condition The Organization did not submit Form ED-209 within the required timeframe. The initial submission occurred on September 25, 2024, which was after the 30-day deadline. Furthermore, errors identified at the federal level necessitated a resubmission of the form. The final submission was completed on October 18, 2024, resulting in a delayed submission beyond the allowable period. Cause The oversight occurred due to inadequate internal controls in reviewing the Form ED-209. Subsequent errors identified by federal reviewers required corrections, further extending the submission timeline. Effect Late submission of required federal reports constitutes noncompliance with federal reporting requirements. This may result in increased scrutiny from federal agencies, potential penalties, or impacts on future funding and grant opportunities. Repeat Finding This is not a repeat finding. Recommendation We recommend that the Organization implement stricter internal controls and monitoring procedures to ensure all federal reports, including Form ED-209, are prepared accurately and submitted within the required deadlines. Additionally, a review process should be established to promptly address and correct any errors identified by federal agencies to prevent further delays. Management’s Response Management concurs with this finding. See Management’s Response and Corrective Action plan section.
Finding 2024-002
Noncompliance with Davis-Bacon Wage Requirements Assistance Title: COVID-19 - Economic Adjustment Assistance - Coronavirus Aid, Relief, and Economic Security (CARES) Act Revolving Loan Fund Assistance Listing Number: 11.307 Federal Agency: U.S. Department of Commerce Type of Finding: Significant Deficiency Category of Finding: Special Tests and Provisions – Davis-Bacon Act Known Questioned Costs: $0 Likely Questioned Costs: $0 Criteria In accordance with section 602 of PWEDA (42 U.S.C. § 3212), all laborers and mechanics employed by contractors or subcontractors on construction-related projects receiving investment assistance under PWEDA shall be paid wages not less than those prevailing on similar construction in the locality, as determined by the U.S. Secretary of Labor in accordance with subchapter IV of chapter 31 of title 40, United States Code. See 13 CFR § 302.13. Condition During the fiscal year ended June 30, 2024, the Organization did not disburse any loans that were subject to Davis-Bacon wage requirements. However, we noted there are no internal controls in place to verify compliance with prevailing wage rates in the event that such loans are disbursed in the future. Cause There are no controls in place to verify compliance with prevailing wage rates for federally funded projects, risking legal and financial penalties due to potential noncompliance with federal wage laws. Effect Without proper controls, the Organization risks noncompliance with federal wage laws if loans subject to Davis-Bacon requirements are disbursed. This could lead to legal and financial penalties, including potential repayment of federal funds or jeopardizing future funding opportunities. Repeat Finding This is a repeat finding from the prior year. Recommendation We recommend that the Organization implement procedures to ensure compliance with Davis-Bacon wage requirements. This includes training staff on federal wage laws, incorporating compliance checks into the loan disbursement process, and regularly monitoring contractor adherence to prevailing wage rates. Management’s Response Management concurs with this finding. See Management’s Response and Corrective Action plan section.