FAC Explorer

Audit 356165

FY End
2023-12-31
Total Expended
$3.03M
Findings
2
Programs
5
Organization: Appalachian Community Capital Corporation (VA)
Year: 2023 Accepted: 2025-05-13
Auditor: Brown Edwards & Company LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
560261 2023-001 Material Weakness - P
1136703 2023-001 Material Weakness - P

Programs

ALN Program Spent Major Findings
23.002 Appalachian Area Development $1.12M Yes 0
21.024 Community Development Financial Institutions Rapid Response Program (cdfi Rrp) $1.01M Yes 1
21.020 Community Development Financial Institutions Program $510,000 - 0
21.033 Community Development Financial Institutions Fund Equitable Recovery Program (cdfi Erp) $300,000 - 0
10.446 Rural Community Development Initiative $96,540 - 0

Contacts

Name Title Type
PH2LMVJXK7K6 Donna Gambrell Auditee
2025475155 Susan Chapman Auditor
No contacts on file

Notes to SEFA

Title: AWARDS EXPENDED IN THE FORM OF LOANS Accounting Policies: The accompanying schedule of expenditures of federal awards (the "Schedule") includes the federal grant activity of Appalachian Community Capital Corporation and its subsidiaries (the "Company") under programs of the federal government for the year ended December 31, 2023. The information presented in this Schedule is presented in accordance with the requirement 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 Company, it is not intended to and does not present the financial position, changes in net assets or cash flows of the Company. Expenditures reported on the Schedule are report 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 Company has elected to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. Federal awards from the U.S. Department of Treasury were used to originate $810,000 in loans for 2023.
Title: RESTATEMENT Accounting Policies: The accompanying schedule of expenditures of federal awards (the "Schedule") includes the federal grant activity of Appalachian Community Capital Corporation and its subsidiaries (the "Company") under programs of the federal government for the year ended December 31, 2023. The information presented in this Schedule is presented in accordance with the requirement 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 Company, it is not intended to and does not present the financial position, changes in net assets or cash flows of the Company. Expenditures reported on the Schedule are report 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 Company has elected to use the 10-percent de minimis indirect cost rate as allowed under the Uniform Guidance. The accompanying Schedule of Expenditures of Federal Awards has been restated as of April 30, 2025 to include additional federal funding, as follows, that was not included in the original 2023 Financial Report.

Finding Details

Finding 2023-001
2023-001: Community Development Financial Institutions Fund – Assistance Listing No. 21.024, Rapid Response Program, Restatement of Schedule of Expenditures of Federal Awards, Material Weakness Criteria and Condition: Recipients of federal funds are required to prepare a complete and accurate Schedule of Expenditures of Federal Awards. Additionally, recipients must establish and maintain effective internal controls over federal awards to provide reasonable assurance of accurate financial reporting Context: The Company restated the 2023 Schedule of Expenditures of Federal Awards by a material amount, a result of misinterpretation of reporting requirements for loan loss reserves and allocations of other allowable purposes. Cause: The omission occurred due to a misinterpretation of reporting requirements involving the treatment of grant expenditures for the purpose of loan loss reserve funds, which differs in nature from general program expenditures. Management identified the issue and determined a change in reporting was needed to simplify tracking and reporting of federal grants, and to ensure compliance with the technical definition of expenditures in the guidance. Effect: Loan loss reserves allocated in the wrong period resulted in an understatement of total federal expenditures on the Schedule of Expenditures of Federal Awards. Recommendation: We recommend that the Company implement a formalized review process to ensure all applicable expenditures, including loan loss reserves, are properly recorded in the period in which assigned. Views of Responsible Officials and Planned Corrective Actions: We agree with the finding and have established a process to ensure all expenditures are properly included in the SEFA.
Finding 2023-001
2023-001: Community Development Financial Institutions Fund – Assistance Listing No. 21.024, Rapid Response Program, Restatement of Schedule of Expenditures of Federal Awards, Material Weakness Criteria and Condition: Recipients of federal funds are required to prepare a complete and accurate Schedule of Expenditures of Federal Awards. Additionally, recipients must establish and maintain effective internal controls over federal awards to provide reasonable assurance of accurate financial reporting Context: The Company restated the 2023 Schedule of Expenditures of Federal Awards by a material amount, a result of misinterpretation of reporting requirements for loan loss reserves and allocations of other allowable purposes. Cause: The omission occurred due to a misinterpretation of reporting requirements involving the treatment of grant expenditures for the purpose of loan loss reserve funds, which differs in nature from general program expenditures. Management identified the issue and determined a change in reporting was needed to simplify tracking and reporting of federal grants, and to ensure compliance with the technical definition of expenditures in the guidance. Effect: Loan loss reserves allocated in the wrong period resulted in an understatement of total federal expenditures on the Schedule of Expenditures of Federal Awards. Recommendation: We recommend that the Company implement a formalized review process to ensure all applicable expenditures, including loan loss reserves, are properly recorded in the period in which assigned. Views of Responsible Officials and Planned Corrective Actions: We agree with the finding and have established a process to ensure all expenditures are properly included in the SEFA.