FAC Explorer

Audit 355994

FY End
2024-12-31
Total Expended
$10.79M
Findings
6
Programs
3
Organization: South Eastern Development Foundation (SD)
Year: 2024 Accepted: 2025-05-12
Auditor: Kinner & Company LTD

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
560058 2024-001 Significant Deficiency - L
560059 2024-001 Significant Deficiency - L
560060 2024-001 Significant Deficiency - L
1136500 2024-001 Significant Deficiency - L
1136501 2024-001 Significant Deficiency - L
1136502 2024-001 Significant Deficiency - L

Programs

ALN Program Spent Major Findings
11.307 Economic Adjustment Assistance $3.83M Yes 1
10.767 Intermediary Relending Program $2.70M - 0
59.062 Intermediary Loan Program $491,674 - 0

Contacts

Name Title Type
LD3PY59NNF21 Lynne Keller Forbes Auditee
6053675390 Nathan Kinner Auditor
No contacts on file

Notes to SEFA

Title: 3. LOANS AND LOAN GUARANTEES OUTSTANDING Accounting Policies: BASIS OF PRESENTATION This accompanying Schedule of Expenditures of Federal Awards includes the federal award activity of South Eastern Development Foundation (SEDF) under programs of the federal government for the year ended December 31, 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 SEDF, it is not intended to, and does not present the financial position, changes in net assets, or cash flows of SEDF. 2. SIGNIFICANT ACCOUNTING POLICIES 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, where in certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: SEDF has not elected to use the 10% de minimis cost rate, as allowed under Uniform Guidance. In accordance with the Uniform Guidance, § 200.502 Basis for determining Federal awards expended, since the Federal government is at risk for loans until the debt is repaid, the amount to be presented as expenditure of federal awards for loans awarded, included those awarded and expended in prior years that have continuing compliance requirements, is: (1) Value of new loans made or received during the audit period; plus (2) Beginning of the audit period balance of loans from previous years for which the Federal government imposes continuing compliance requirements; plus (3) Any interest subsidy, cash, or administrative cost allowance received. Accordingly, the Organization has reported loans awarded in accordance with the aforementioned criteria. Amounts presented as expenditures of federal awards for loan programs by federal CFDA are as follows: 10.767 59.062 Loan balance outstanding at December 31, 2023 $ 2,637,021 $ 523,891 Value of new loans issued during 2024 with current year advances 318,226 - Principal paid during 2024 (116,578) (57,679) Loan balance, end of year $ 2,838,669 $ 466,212
Title: 4. BASIS FOR DETERMINGING EXPENDITURES OF FEDERAL AWARDS FOR THE ECONOMIC ADJUSTMENT ASSISTANCE PROGRAM, FEDERAL ASSISTANCE LISTING NUMBER 11.307 Accounting Policies: BASIS OF PRESENTATION This accompanying Schedule of Expenditures of Federal Awards includes the federal award activity of South Eastern Development Foundation (SEDF) under programs of the federal government for the year ended December 31, 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 SEDF, it is not intended to, and does not present the financial position, changes in net assets, or cash flows of SEDF. 2. SIGNIFICANT ACCOUNTING POLICIES 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, where in certain types of expenditures are not allowable or are limited as to reimbursement. De Minimis Rate Used: N Rate Explanation: SEDF has not elected to use the 10% de minimis cost rate, as allowed under Uniform Guidance. The Office of Management and Budget (OMB) Compliance Supplement formula to determine the amount to be presented on the schedule of expenditures of federal awards for revolving loan fund (RLF) grants under federal assistance listing number 11.307. The formula to determine expenditures to be reported in the Schedule is as follows: (1) The balance of RLF loans outstanding at the end of the recipient’s fiscal year, plus; (2) The cash and investment balance in the RLF at the end of the fiscal year, plus; (3) Administrative expenses paid out of the RLF during the year, plus; (4) The unpaid principal of all loans written off during the year, and then multiply this sum by; (5) The federal share of the RLF based on the federal grant rate as specified in the grant award. According, SEDF has reported expenditures of federal awards for its Economic Adjustment Assistance funded RLF program as follows: 05-57-04742 05-79-05957 05-79-06032 Balance of RLF loans outstanding at December 31, 2024 $ 4,139,623 $ 655,285 $ 2,919,258 Cash balance in the RLF at December 31, 2024 851,984 425,496 788,092 Administrative expenses paid out of the RLF income during the year 128,128 39,969 126,261 Unpaid principal of all RLF loans written off during the year - - - Total RLF loan pool $ 5,119,735 $ 1,120,750 $ 3,833,611 The Federal share of the RLF loan pool 56.09% 80.00% 100% $ 2,871,784 $ 896,600 $ 3,833,611

Finding Details

Finding 2024-001
Federal Agency: U.S. Department of Commerce Assistance Listing Number and Title: 11.307 Economic Development Cluster Award Number: #05-79-06032 EDA CARES Act – COVID-19 Condition/Context: During the review of the annual report, we identified a discrepancy between the reported figures and the actual amounts reflected in the general ledger. Specifically, SEDF reported an overstatement of $230,700 in outstanding loan principal in the ED-209 federal financial report for the period ending December 31, 2024. Compliance Requirement: According to 13 CFR Section 307.14, recipients of revolving loan funds are required to certify that the information submitted is complete and accurate. Management’s Response: Management acknowledges the discrepancy and agrees with the finding. A corrective action plan to address the issue will be implemented, as detailed on page 31 of the report. Effect: The failure to accurately report financial data constitutes a violation of the requirements outlined in Title 2 U.S. Code of Federal Regulations Part 200. Inaccurate financial reporting, particularly regarding revolving loan fund balances, could have a significant impact on compliance with federal regulations and on the integrity of financial data submitted to federal agencies. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that procedures be put in place to ensure that all amounts reported are accurate and reconciled with the general ledger. Steps should be taken to implement stronger internal controls to prevent future discrepancies.
Finding 2024-001
Federal Agency: U.S. Department of Commerce Assistance Listing Number and Title: 11.307 Economic Development Cluster Award Number: #05-79-06032 EDA CARES Act – COVID-19 Condition/Context: During the review of the annual report, we identified a discrepancy between the reported figures and the actual amounts reflected in the general ledger. Specifically, SEDF reported an overstatement of $230,700 in outstanding loan principal in the ED-209 federal financial report for the period ending December 31, 2024. Compliance Requirement: According to 13 CFR Section 307.14, recipients of revolving loan funds are required to certify that the information submitted is complete and accurate. Management’s Response: Management acknowledges the discrepancy and agrees with the finding. A corrective action plan to address the issue will be implemented, as detailed on page 31 of the report. Effect: The failure to accurately report financial data constitutes a violation of the requirements outlined in Title 2 U.S. Code of Federal Regulations Part 200. Inaccurate financial reporting, particularly regarding revolving loan fund balances, could have a significant impact on compliance with federal regulations and on the integrity of financial data submitted to federal agencies. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that procedures be put in place to ensure that all amounts reported are accurate and reconciled with the general ledger. Steps should be taken to implement stronger internal controls to prevent future discrepancies.
Finding 2024-001
Federal Agency: U.S. Department of Commerce Assistance Listing Number and Title: 11.307 Economic Development Cluster Award Number: #05-79-06032 EDA CARES Act – COVID-19 Condition/Context: During the review of the annual report, we identified a discrepancy between the reported figures and the actual amounts reflected in the general ledger. Specifically, SEDF reported an overstatement of $230,700 in outstanding loan principal in the ED-209 federal financial report for the period ending December 31, 2024. Compliance Requirement: According to 13 CFR Section 307.14, recipients of revolving loan funds are required to certify that the information submitted is complete and accurate. Management’s Response: Management acknowledges the discrepancy and agrees with the finding. A corrective action plan to address the issue will be implemented, as detailed on page 31 of the report. Effect: The failure to accurately report financial data constitutes a violation of the requirements outlined in Title 2 U.S. Code of Federal Regulations Part 200. Inaccurate financial reporting, particularly regarding revolving loan fund balances, could have a significant impact on compliance with federal regulations and on the integrity of financial data submitted to federal agencies. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that procedures be put in place to ensure that all amounts reported are accurate and reconciled with the general ledger. Steps should be taken to implement stronger internal controls to prevent future discrepancies.
Finding 2024-001
Federal Agency: U.S. Department of Commerce Assistance Listing Number and Title: 11.307 Economic Development Cluster Award Number: #05-79-06032 EDA CARES Act – COVID-19 Condition/Context: During the review of the annual report, we identified a discrepancy between the reported figures and the actual amounts reflected in the general ledger. Specifically, SEDF reported an overstatement of $230,700 in outstanding loan principal in the ED-209 federal financial report for the period ending December 31, 2024. Compliance Requirement: According to 13 CFR Section 307.14, recipients of revolving loan funds are required to certify that the information submitted is complete and accurate. Management’s Response: Management acknowledges the discrepancy and agrees with the finding. A corrective action plan to address the issue will be implemented, as detailed on page 31 of the report. Effect: The failure to accurately report financial data constitutes a violation of the requirements outlined in Title 2 U.S. Code of Federal Regulations Part 200. Inaccurate financial reporting, particularly regarding revolving loan fund balances, could have a significant impact on compliance with federal regulations and on the integrity of financial data submitted to federal agencies. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that procedures be put in place to ensure that all amounts reported are accurate and reconciled with the general ledger. Steps should be taken to implement stronger internal controls to prevent future discrepancies.
Finding 2024-001
Federal Agency: U.S. Department of Commerce Assistance Listing Number and Title: 11.307 Economic Development Cluster Award Number: #05-79-06032 EDA CARES Act – COVID-19 Condition/Context: During the review of the annual report, we identified a discrepancy between the reported figures and the actual amounts reflected in the general ledger. Specifically, SEDF reported an overstatement of $230,700 in outstanding loan principal in the ED-209 federal financial report for the period ending December 31, 2024. Compliance Requirement: According to 13 CFR Section 307.14, recipients of revolving loan funds are required to certify that the information submitted is complete and accurate. Management’s Response: Management acknowledges the discrepancy and agrees with the finding. A corrective action plan to address the issue will be implemented, as detailed on page 31 of the report. Effect: The failure to accurately report financial data constitutes a violation of the requirements outlined in Title 2 U.S. Code of Federal Regulations Part 200. Inaccurate financial reporting, particularly regarding revolving loan fund balances, could have a significant impact on compliance with federal regulations and on the integrity of financial data submitted to federal agencies. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that procedures be put in place to ensure that all amounts reported are accurate and reconciled with the general ledger. Steps should be taken to implement stronger internal controls to prevent future discrepancies.
Finding 2024-001
Federal Agency: U.S. Department of Commerce Assistance Listing Number and Title: 11.307 Economic Development Cluster Award Number: #05-79-06032 EDA CARES Act – COVID-19 Condition/Context: During the review of the annual report, we identified a discrepancy between the reported figures and the actual amounts reflected in the general ledger. Specifically, SEDF reported an overstatement of $230,700 in outstanding loan principal in the ED-209 federal financial report for the period ending December 31, 2024. Compliance Requirement: According to 13 CFR Section 307.14, recipients of revolving loan funds are required to certify that the information submitted is complete and accurate. Management’s Response: Management acknowledges the discrepancy and agrees with the finding. A corrective action plan to address the issue will be implemented, as detailed on page 31 of the report. Effect: The failure to accurately report financial data constitutes a violation of the requirements outlined in Title 2 U.S. Code of Federal Regulations Part 200. Inaccurate financial reporting, particularly regarding revolving loan fund balances, could have a significant impact on compliance with federal regulations and on the integrity of financial data submitted to federal agencies. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that procedures be put in place to ensure that all amounts reported are accurate and reconciled with the general ledger. Steps should be taken to implement stronger internal controls to prevent future discrepancies.