Audit 341296

FY End
2024-09-30
Total Expended
$1.78M
Findings
2
Programs
5
Year: 2024 Accepted: 2025-02-05

Organization Exclusion Status:

Checking exclusion status...

Findings

ID Ref Severity Repeat Requirement
522084 2024-001 - - L
1098526 2024-001 - - L

Programs

ALN Program Spent Major Findings
59.046 Microloan Program $708,600 Yes 1
11.307 Economic Adjustment Assistance $543,017 - 0
23.011 Appalachian Research, Technical Assistance, and Demonstration Projects $391,621 - 0
10.767 Intermediary Relending Program $82,439 - 0
10.769 Rural Business Enterprise Grants $50,598 - 0

Contacts

Name Title Type
P21SFLLDCAS6 George Miner Auditee
6079623021 Ben Owens Auditor
No contacts on file

Notes to SEFA

Title: Basis of Presentation Accounting Policies: The basis of accounting varies by federal program consistent with the underlying regulations pertaining to each program. The information is presented in accordance with the requirements of Uniform Guidance and Circular A-122, Cost Principles for Non-Profit Organizations, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in, preparation of the financial statements. De Minimis Rate Used: N Rate Explanation: Indirect costs of administering loans are included in the reported, to the extent they are included in the federal financial reports used as the source for the data presented. The Corporations have chosen not to use the 10% de minimis cost rate. The accompanying Schedule of Expenditures of Federal Awards presents the activity of all federal awards programs administered by the Corporations, as defined in Note 1 to the financial statements. Federal awards received directly from federal agencies, as well as federal awards passed through from other government agencies, are included on the Schedule of Expenditures of Federal Awards.
Title: Allocation of Costs Accounting Policies: The basis of accounting varies by federal program consistent with the underlying regulations pertaining to each program. The information is presented in accordance with the requirements of Uniform Guidance and Circular A-122, Cost Principles for Non-Profit Organizations, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in, preparation of the financial statements. De Minimis Rate Used: N Rate Explanation: Indirect costs of administering loans are included in the reported, to the extent they are included in the federal financial reports used as the source for the data presented. The Corporations have chosen not to use the 10% de minimis cost rate. Costs have been allocated to programs based on a reasonable estimate of time spent on operating and loan administration. Loan administration expenses were allocated to the revolving loan funds based on the number of loans being serviced and the amount of work associated with the type of loan.
Title: Matching Costs Accounting Policies: The basis of accounting varies by federal program consistent with the underlying regulations pertaining to each program. The information is presented in accordance with the requirements of Uniform Guidance and Circular A-122, Cost Principles for Non-Profit Organizations, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in, preparation of the financial statements. De Minimis Rate Used: N Rate Explanation: Indirect costs of administering loans are included in the reported, to the extent they are included in the federal financial reports used as the source for the data presented. The Corporations have chosen not to use the 10% de minimis cost rate. Matching costs, such as, the Corporations’ share of certain program costs, are not included in the reported expenditures.
Title: Other Disclosures Accounting Policies: The basis of accounting varies by federal program consistent with the underlying regulations pertaining to each program. The information is presented in accordance with the requirements of Uniform Guidance and Circular A-122, Cost Principles for Non-Profit Organizations, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in, preparation of the financial statements. De Minimis Rate Used: N Rate Explanation: Indirect costs of administering loans are included in the reported, to the extent they are included in the federal financial reports used as the source for the data presented. The Corporations have chosen not to use the 10% de minimis cost rate. No insurance is carried specifically to cover equipment purchased with federal funds. Any equipment purchased with federal funds has only a nominal value and is covered by the Corporations’ casualty insurance policies. No noncash assistance was received during the year. No loan guarantees were outstanding at year end. For the applicable programs, the Schedule of Expenditures of Federal Awards includes the value of new loans made during the fiscal year, from both new loans received and the balance of loans received in previous years for which continuing compliance requirements are imposed. The value of loans outstanding at September 30, 2024 consists of:

Finding Details

Federal Award Findings and Questioned Costs Finding: 2024-001 Issue: U.S. Small Business Administration Microloan Program (ALN 59.046) Reporting Criteria: The U.S. SBA loan guide requires forms SF 270 and SF425 be submitted within 30 days from the ending date of each quarter. Condition: Forms SF 270 SF 425 were submitted on December 11, 2024. Cause: The filing was missed with this task being shifted to the Business Manager after the Presidents retirement in July 2024. Effect or Potential Effect: The Corporations' were not in compliance with U.S. SBA documentation requirement. Questioned Costs: None. Context: Forms SF 270 and SF 245 were not filed within 30 days. Repeat Finding: This finding is not a repeat finding. Recommendation: We recommend that management ensures all forms be submitted timely as required by the U.S. SBA. Management Response: Reports were submitted late due to staff turnover. Former president who submitted reports retired 8/1/2024, the new president failed to submit the reports before resigning in early November. Currently there is one staff person at REDEC, the Business Manager, and an Administrator (consultant part time). The Business Manager will be trained by the consultant to submit reports when due. New hires will be cross trained so more than one person will learn/ know how to submit reports on the U.S. SBA’s complex reporting software system based in Excel. All reports have been subsequently submitted and accepted.
Federal Award Findings and Questioned Costs Finding: 2024-001 Issue: U.S. Small Business Administration Microloan Program (ALN 59.046) Reporting Criteria: The U.S. SBA loan guide requires forms SF 270 and SF425 be submitted within 30 days from the ending date of each quarter. Condition: Forms SF 270 SF 425 were submitted on December 11, 2024. Cause: The filing was missed with this task being shifted to the Business Manager after the Presidents retirement in July 2024. Effect or Potential Effect: The Corporations' were not in compliance with U.S. SBA documentation requirement. Questioned Costs: None. Context: Forms SF 270 and SF 245 were not filed within 30 days. Repeat Finding: This finding is not a repeat finding. Recommendation: We recommend that management ensures all forms be submitted timely as required by the U.S. SBA. Management Response: Reports were submitted late due to staff turnover. Former president who submitted reports retired 8/1/2024, the new president failed to submit the reports before resigning in early November. Currently there is one staff person at REDEC, the Business Manager, and an Administrator (consultant part time). The Business Manager will be trained by the consultant to submit reports when due. New hires will be cross trained so more than one person will learn/ know how to submit reports on the U.S. SBA’s complex reporting software system based in Excel. All reports have been subsequently submitted and accepted.