Audit 359504

Department of Treasury Federal Financial Assistance Listing 21.033, Award 22ERP060843 Community Development Financial Institutions Equitable Recovery Program (CDFI ERP) Activities Allowed or Unallowed and Allowable Costs/Cost Principles Significant Deficiency in Internal Control over Compliance Criteria: Meda’s internal control structure should be designed to properly follow the allocation methodology for employees’ pay to each grant, in accordance with the policy established by the Organization. Condition: Meda has an internal control system designed to detect or prevent improper allocation of employees pay to grants in a timely manner in accordance with their established policy, but the controls did not operate as designed in certain instances. Sixteen of the forty-six payroll lines tested did not have the correct payroll amounts allocated to the program. Cause: Meda has a process for allocating employee wages based on hours worked, however controls in place did not operate prevent errors in the allocation of employees’ pay to the grants. Effect: Employees had some of their pay allocated improperly and not in accordance with the policy established. Questioned Costs: None reported. Context: A nonstatistical sample of forty-six payroll lines out of two hundred and five was selected for testing, which accounted for $126,707 of $796,502 of federal program expenditures. Repeat Finding from Prior Years: No Recommendation: We acknowledge the challenges Meda faced with allocating their payroll with the current payroll provider and recommend that management work with a new payroll provider to ensure payroll is accurately allocated to the grants. Views of Responsible Officials: Management is not in agreement with the finding.

Department of Treasury Federal Financial Assistance Listing 21.033, Award 22ERP060843 Community Development Financial Institutions Equitable Recovery Program (CDFI ERP) Suspension & Debarment Significant Deficiency in Internal Control over Compliance Criteria: CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: In our testing of suspension and debarment, it was identified that there was no observable documentation to directly indicate that a search for suspension and debarment was performed for loans disbursed prior to entering into loan agreements. Cause: Meda does not have a formal process to search for suspension and debarment of entities prior to entering into a loan agreement. Effect: Failure to document the search for suspension and debarment before entering into the loan agreement could result in possibly noncompliance. Questioned Costs: None reported. Context: Two loans out of two tested accounted for $1,177,250 of the total expenses $2,094,298 charged to the federal award. Repeat Finding from Prior Years: Yes, 2023-002 Recommendation: We recommend that management add a formal process to search for suspension and department before entering into loan agreements. Views of Responsible Officials: Management agrees with the finding.

Department of Treasury Federal Financial Assistance Listing 21.033, Award 22ERP060843 Community Development Financial Institutions Equitable Recovery Program (CDFI ERP) Activities Allowed or Unallowed and Allowable Costs/Cost Principles Significant Deficiency in Internal Control over Compliance Criteria: Meda’s internal control structure should be designed to properly follow the allocation methodology for employees’ pay to each grant, in accordance with the policy established by the Organization. Condition: Meda has an internal control system designed to detect or prevent improper allocation of employees pay to grants in a timely manner in accordance with their established policy, but the controls did not operate as designed in certain instances. Sixteen of the forty-six payroll lines tested did not have the correct payroll amounts allocated to the program. Cause: Meda has a process for allocating employee wages based on hours worked, however controls in place did not operate prevent errors in the allocation of employees’ pay to the grants. Effect: Employees had some of their pay allocated improperly and not in accordance with the policy established. Questioned Costs: None reported. Context: A nonstatistical sample of forty-six payroll lines out of two hundred and five was selected for testing, which accounted for $126,707 of $796,502 of federal program expenditures. Repeat Finding from Prior Years: No Recommendation: We acknowledge the challenges Meda faced with allocating their payroll with the current payroll provider and recommend that management work with a new payroll provider to ensure payroll is accurately allocated to the grants. Views of Responsible Officials: Management is not in agreement with the finding.

Department of Treasury Federal Financial Assistance Listing 21.033, Award 22ERP060843 Community Development Financial Institutions Equitable Recovery Program (CDFI ERP) Suspension & Debarment Significant Deficiency in Internal Control over Compliance Criteria: CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: In our testing of suspension and debarment, it was identified that there was no observable documentation to directly indicate that a search for suspension and debarment was performed for loans disbursed prior to entering into loan agreements. Cause: Meda does not have a formal process to search for suspension and debarment of entities prior to entering into a loan agreement. Effect: Failure to document the search for suspension and debarment before entering into the loan agreement could result in possibly noncompliance. Questioned Costs: None reported. Context: Two loans out of two tested accounted for $1,177,250 of the total expenses $2,094,298 charged to the federal award. Repeat Finding from Prior Years: Yes, 2023-002 Recommendation: We recommend that management add a formal process to search for suspension and department before entering into loan agreements. Views of Responsible Officials: Management agrees with the finding.