FAC Explorer

Audit 364205

FY End
2021-12-31
Total Expended
$5.86M
Findings
2
Programs
4
Organization: Development Bank of American Samoa (AS)
Year: 2021 Accepted: 2025-08-13
Auditor: Baker Tilly US LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
573470 2021-003 Significant Deficiency - E
1149912 2021-003 Significant Deficiency - E

Programs

ALN Program Spent Major Findings
14.239 Home Investment Partnerships Program $5.26M Yes 1
11.307 Economic Adjustment Assistance $566,086 - 0
14.225 Community Development Block Grants/special Purpose Grants/insular Areas $20,353 - 0
93.569 Community Services Block Grant $14,531 - 0

Contacts

Name Title Type
MMPZQ2W8E4C6 Jacqueline Laumoli Auditee
6846334031 Kory Hoggan Auditor
No contacts on file

Notes to SEFA

Title: Note 1 - Basis of Presentation Accounting Policies: The SEFA is presented using the accrual basis of acounting. Such expenditures are recognized following the cost principles contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) wherein certain types of expenses are not alloable or are limited as to reimbursement. Pass-through entity identifying numbers are presented where applicable. De Minimis Rate Used: N Rate Explanation: The auditee has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. Development Bank of American Samoa (DBAS) was established by the American Samoa Government (ASG) in 1969 and serves as a lending facility for the citizens of American Samoa through the following programs:  Direct Mortgage Loan Program  Home Investment Partnerships Program  Home Improvement Loan Program  Guaranteed Loan Program  Commercial Loan Program  Economic Development Revolving Loan Fund  American Samoa Government Special Project Loan Program  CDBG Decent Affordable Home Loan Program for the Most Needy  Community Service Block Grant  Community Development Block Grant  Line of Credit Program  Veteran’s Administration Home Improvement Loan Program  Student Loan Program  Grant in Lieu of Low-Income Housing Tax Credit
Title: Note 2 - Summary of Significant Accounting Policies Accounting Policies: The SEFA is presented using the accrual basis of acounting. Such expenditures are recognized following the cost principles contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) wherein certain types of expenses are not alloable or are limited as to reimbursement. Pass-through entity identifying numbers are presented where applicable. De Minimis Rate Used: N Rate Explanation: The auditee has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. The Schedule of Expenditures of Federal Awards (the Schedule) is presented using the accrual basis of accounting, which is described in Note 1 to the basic financial statements of Development Bank of American Samoa (DBAS). Such expenditures are recognized following the cost principles contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) wherein certain types of expenses are not allowable or are limited as to reimbursement. Pass-through entity identifying numbers are presented where applicable.
Title: Note 3 - Indirect Cost Rate Accounting Policies: The SEFA is presented using the accrual basis of acounting. Such expenditures are recognized following the cost principles contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) wherein certain types of expenses are not alloable or are limited as to reimbursement. Pass-through entity identifying numbers are presented where applicable. De Minimis Rate Used: N Rate Explanation: The auditee has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. DBAS has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance.
Title: Note 4 - Loan Programs Accounting Policies: The SEFA is presented using the accrual basis of acounting. Such expenditures are recognized following the cost principles contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) wherein certain types of expenses are not alloable or are limited as to reimbursement. Pass-through entity identifying numbers are presented where applicable. De Minimis Rate Used: N Rate Explanation: The auditee has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. DBAS, on behalf of the American Samoa Government, has been designated the responsibility of implementing and carrying out the objective of the HOME program. The purpose of the program is to provide no-cost or low-cost financing assistance to very low and low-income families. Under DBAS’s policies and procedures, HOME loan applicants that have been determined to be eligible for financial assistance are required to comply with the terms of the homeowner rehabilitation assistance including the DBAS affordability period and principal residency requirements. As of December 31, 2021, outstanding HOME loans with continuing compliance requirements amounted to $4,698,839. DBAS is the subrecipient of grants for Revolving Loan Funds (RLFs) under Federal Assistance Listing Number (ALN) Program 11.307 Economic Adjustment Assistance (EDA). For purposes of the Schedule of Expenditures of Federal Awards, the calculation of total expenditures as required in the OMB Compliance Supplement is as follows: Balance of RLF loans outstanding as of December 31, 2021 $ 706,483 Plus cash balances in the RLF as of December 31, 2021 937,114 Plus administrative expenses paid out of RLF income during 2021 51,743 Unpaid principal of all loans written off during the year ended December 31, 2021 20,072 Total RLF $ 1,715,412 Federal share of $600,000 1999 EDA RLF Grant $ 300,000 Federal share of $650,000 1995 EDA RLF Grant 300,000 Total federal share of EDA RLF Grants 600,000 Divided by total EDA RFL Grants Contributions 1,817,937 Total Share of RLF rate 33.00% Total Assistance Listing Number 11.307 EDA RLF Expenditures $ 566,086 There are no continuing compliance requirements from grantor agencies related to the Community Development Block Grants/Special Purpose Grants/Insular Area (ALN # 14.225) and the Community Services Block Grant (ALN # 93.569) loan portfolios. Federal award expenditures include loan disbursements of $547,297. As of December 31, 2021, loan disbursements for the HOME program amounted to $449,870 and consisted of $69,881 and $379,989 from grant drawdowns and program income, respectively.
Title: Note 5 - Reconciliation of Statement of Revenue, Expenses, and Changes in Net Position Accounting Policies: The SEFA is presented using the accrual basis of acounting. Such expenditures are recognized following the cost principles contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) wherein certain types of expenses are not alloable or are limited as to reimbursement. Pass-through entity identifying numbers are presented where applicable. De Minimis Rate Used: N Rate Explanation: The auditee has elected not to use the 10 percent de minimis indirect cost rate allowed under the Uniform Guidance. The following reconciles federal grant administrative expenses to the statement of revenues, expense and changes in net position during the year ended December 31, 2021. Reconciliation of Statement of Revenues, Expenses and Changes in Net Position to Administrative and Other Costs Charged During the Year Ended December 31, 2021 Operating expenses HOME Investment Partnerships Program $ 113,854 Economic Adjustment Assistance 51,743 Community Development Block Grants/Special Purpose Grants/Insular Area - Business 4,844 Community Service Block Grants/Special Purpose Grants/Insular Area-Business Loans 14,532 Federal grant administrative expenses 184,973 HOME Investment Partnerships Program entitlement drawdown 69,881 HOME loan disbursement using program income 379,989 Economic Adjustment Assistance loan disbursement using program income 81,917 Purpose Grants/Insular Area - Business Loans loan disbursement using program income 15,510 Total loan disbursements 547,297 Balance included in loans receivable with continuing compliance requirement 4,698,839 Economic Adjustment Assistance Revolving Loan Fund 432,426 Total Federal Awards per above $ 5,863,535

Finding Details

Finding 2021-003
2021-003 – Segregation of Duties (Significant Deficiency; Other Noncompliance) Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: HOME Investment Partnerships Program Assistance Listing Number: 14.239 Condition: During our testing of new loans charged to the HOME Investment Partnerships Program, we tested a sample of 13 loan disbursements out of the population of 185 new loan disbursements during 2021. For one loan out of our sample we identified that the same individual who approved the loan also signed the distribution check. Criteria: In accordance with Uniform Guidance Part 200.303, DBAS must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Context: Using the complete population of 185 new loan disbursements in 2021 charged to the HOME Investment Partnerships Program, we tested a sample of 13 loan disbursements. Effect: Proper segregation of duties was not followed presenting elevated risks of unauthorized or inaccurate issuance of loan proceeds. Questioned costs: None Repeat finding: No Cause: Management did not have adequate internal controls in place for proper segregation of duties. Recommendation: We recommend loan approval and check signer controls be reviewed and revised to ensure segregation of duties concerns are mitigated. Management Response: Due to the COVID-19 pandemic, DBAS worked a staggered schedule for the staff to include vulnerable employees who are 60+ year olds (management) to work remotely from home. Two of the signors fall under this category. DBAS will ensure and enforce proper segregation of duties will be followed. Loan approval and check signer controls will be reviewed and revised to ensure segregation of duties concerns are mitigated moving forward. This situation has since been addressed and corrected with the return of staff to the office.
Finding 2021-003
2021-003 – Segregation of Duties (Significant Deficiency; Other Noncompliance) Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: HOME Investment Partnerships Program Assistance Listing Number: 14.239 Condition: During our testing of new loans charged to the HOME Investment Partnerships Program, we tested a sample of 13 loan disbursements out of the population of 185 new loan disbursements during 2021. For one loan out of our sample we identified that the same individual who approved the loan also signed the distribution check. Criteria: In accordance with Uniform Guidance Part 200.303, DBAS must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Context: Using the complete population of 185 new loan disbursements in 2021 charged to the HOME Investment Partnerships Program, we tested a sample of 13 loan disbursements. Effect: Proper segregation of duties was not followed presenting elevated risks of unauthorized or inaccurate issuance of loan proceeds. Questioned costs: None Repeat finding: No Cause: Management did not have adequate internal controls in place for proper segregation of duties. Recommendation: We recommend loan approval and check signer controls be reviewed and revised to ensure segregation of duties concerns are mitigated. Management Response: Due to the COVID-19 pandemic, DBAS worked a staggered schedule for the staff to include vulnerable employees who are 60+ year olds (management) to work remotely from home. Two of the signors fall under this category. DBAS will ensure and enforce proper segregation of duties will be followed. Loan approval and check signer controls will be reviewed and revised to ensure segregation of duties concerns are mitigated moving forward. This situation has since been addressed and corrected with the return of staff to the office.