FAC Explorer

Audit 366124

FY End
2025-03-31
Total Expended
$921,104
Findings
2
Programs
2
Organization: Freedom First Federal Credit Union (VA)
Year: 2025 Accepted: 2025-09-12
Auditor: Doeren Mayhew Assurance

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
576208 2025-001 Material Weakness - L
1152650 2025-001 Material Weakness - L

Programs

ALN Program Spent Major Findings
21.020 Community Development Financial Institutions Program $677,588 Yes 1
21.025 Small Dollar Loan Program $243,516 - 0

Contacts

Name Title Type
LFLRFTHVYHW6 Linda Johnson Auditee
5403798960 Alex Brennan Auditor
No contacts on file

Notes to SEFA

Title: Note 1 – Basis of Presentation Accounting Policies: Expenditure Recognition Expenditures reported on the Schedule of Expenditures of Federal Awards are reported on the accrual basis of accounting. 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, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Indirect Cost Rate The Credit Union has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The Credit Union has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. The accompanying Schedule of Expenditures of Federal Awards (the Schedule) includes the federal grant activity of Freedom First Federal Credit Union and its subsidiary (the Credit Union) and has been prepared in accordance with the requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. Because the Schedule presents only a selected portion of operations of the Credit Union, is not intended to and does not present the financial position, net income, change in members’ equity, or cash flows of the Credit Union.
Title: Note 2 – Summary of Significant Accounting Policies Accounting Policies: Expenditure Recognition Expenditures reported on the Schedule of Expenditures of Federal Awards are reported on the accrual basis of accounting. 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, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Indirect Cost Rate The Credit Union has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The Credit Union has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. Expenditure Recognition Expenditures reported on the Schedule of Expenditures of Federal Awards are reported on the accrual basis of accounting. 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, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Indirect Cost Rate The Credit Union has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance.
Title: Note 3 – Major Programs Accounting Policies: Expenditure Recognition Expenditures reported on the Schedule of Expenditures of Federal Awards are reported on the accrual basis of accounting. 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, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Indirect Cost Rate The Credit Union has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. De Minimis Rate Used: N Rate Explanation: The Credit Union has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. Major programs are identified in the Summary of Auditor’s Results section of the Schedule of Findings and Questioned Costs.

Finding Details

Finding 2025-001
Finding 2025-001: Material Weakness: Reporting Criteria: Section A of the CDFI FA grant agreement (#221FA059865) outlines the annual reports required to be provided by Freedom First Federal Credit Union (the Credit Union) to the CDFI which includes Performance Progress Reports (PPR). Section B of the grant agreement provides the due dates when the reports are due. The PPR allows the Credit Union to report whether it has met the benchmarks specified in the CDFI grant agreement. Condition and Context: For the year ended March 31, 2025, we noted that the amounts reported on the PPR for the various goals and measures outlined in the grant agreement did not agree with the underlying loan data provided to us during the audit. Specifically: 1. The amount of qualified lending reported on the PPR for Performance Goals 1-1, 1-3 and 2-1 were not in agreement with the underlying loan reports. 2. The Credit Union reported on the PPR that they did not meet Performance Goal 1-1 for year 1 of the performance period. The Credit Union placed a work order with the CDFI prior to the commencement of the audit to amend the grant performance goal requirements to a more achievable level. Effect or potential effect: Performance goals as stipulated in the grant agreement may not be met or reported accurately. Recommendation: Establish control procedures to identify and track eligible loans deployed to meet the various goals and measures stipulated in the grant agreement. The underlying loan reports should be reconciled to the amount reported in the PPR prior to submission to the CDFI. We would also recommend the following to further enhance controls: 1. A person independent of the loan report generation and submission to the CDFI should review the reports and submission data for accuracy prior to submitting the PPR. 2. The underlying loan reports used to meet the performance goals should be memorialized and saved in a manner that they cannot be further edited or manipulated. Saving documents in a non-editable format ensures that the version used to support the PPR is final. It also avoids potential confusion form multiple versions or accidental overwrites. Questioned costs: None. Views of responsible o􀇆cials: Management agrees with the finding and will establish the internal control recommendations outlined above. Additionally, management will work with the CDFI to amend (reduce) the goal 1-1 performance goal requirements. A determination will also be made if performance goal 1-1 would have been met had the loans reported under goal 1-3 been included with the goal 1-1 requirements, as permitted in the grant agreement.
Finding 2025-001
Finding 2025-001: Material Weakness: Reporting Criteria: Section A of the CDFI FA grant agreement (#221FA059865) outlines the annual reports required to be provided by Freedom First Federal Credit Union (the Credit Union) to the CDFI which includes Performance Progress Reports (PPR). Section B of the grant agreement provides the due dates when the reports are due. The PPR allows the Credit Union to report whether it has met the benchmarks specified in the CDFI grant agreement. Condition and Context: For the year ended March 31, 2025, we noted that the amounts reported on the PPR for the various goals and measures outlined in the grant agreement did not agree with the underlying loan data provided to us during the audit. Specifically: 1. The amount of qualified lending reported on the PPR for Performance Goals 1-1, 1-3 and 2-1 were not in agreement with the underlying loan reports. 2. The Credit Union reported on the PPR that they did not meet Performance Goal 1-1 for year 1 of the performance period. The Credit Union placed a work order with the CDFI prior to the commencement of the audit to amend the grant performance goal requirements to a more achievable level. Effect or potential effect: Performance goals as stipulated in the grant agreement may not be met or reported accurately. Recommendation: Establish control procedures to identify and track eligible loans deployed to meet the various goals and measures stipulated in the grant agreement. The underlying loan reports should be reconciled to the amount reported in the PPR prior to submission to the CDFI. We would also recommend the following to further enhance controls: 1. A person independent of the loan report generation and submission to the CDFI should review the reports and submission data for accuracy prior to submitting the PPR. 2. The underlying loan reports used to meet the performance goals should be memorialized and saved in a manner that they cannot be further edited or manipulated. Saving documents in a non-editable format ensures that the version used to support the PPR is final. It also avoids potential confusion form multiple versions or accidental overwrites. Questioned costs: None. Views of responsible o􀇆cials: Management agrees with the finding and will establish the internal control recommendations outlined above. Additionally, management will work with the CDFI to amend (reduce) the goal 1-1 performance goal requirements. A determination will also be made if performance goal 1-1 would have been met had the loans reported under goal 1-3 been included with the goal 1-1 requirements, as permitted in the grant agreement.