Audit 392447

FY End
2025-06-30
Total Expended
$53.24M
Findings
1
Programs
12
Year: 2025 Accepted: 2026-03-18
Auditor: COHNREZNICK

Organization Exclusion Status:

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Findings

ID Ref Severity Repeat Requirement
1180762 2025-001 Material Weakness Yes L

Contacts

Name Title Type
VD76PVC2LM17 Jessie Hunt Auditee
8597566258 Christopher Griffin Auditor
No contacts on file

Notes to SEFA

The accompanying schedule of expenditures of federal awards (the "Schedule") includes the federal award activity of Federation of Appalachian Housing Enterprises, Inc. and Subsidiaries (the "Organization"), under programs of the federal government for the year ended June 30, 2025. 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 (the "Uniform Guidance"). Because the Schedule presents only a selected portion of the operations of Federation of Appalachian Housing Enterprises, Inc. and Subsidiaries, it is not intended to and does not present the financial position, changes in net assets or cash flows of Federation of Appalachian Housing Enterprises, Inc. and Subsidiaries.
The CDFI Bond Guarantee Program ("BGP" or "Bond Program") was enacted through the Small Business Jobs Act of 2010 (Public Law 111-240) on September 27, 2010. The legislation directs the U.S. Treasury to guarantee the full amount of bonds issued to support community development financial institutions ("CDFIs") that make investments in distressed communities as designated by the CDFI Fund. The Federal Financing Bank, a financing arm of the U.S. Treasury, will purchase all of the bonds issued under the BGP, including the Opportunity Finance Network ("OFN") bonds, (detailed below) and the U.S. Treasury will guarantee repayment. The OFN bonds will not be remarketed or sold to any other investors. In 2015, the CDFI Fund approved OFN to serve as a Qualified Issuer and issue a bond totaling $127,000,000 on behalf of the Organization and six other CDFIs. Fahe's portion of the issuance was $15,000,000. During the year ended June 30, 2025, no proceeds were drawn by Fahe from this issuance and $512,032 was repaid. The outstanding balance as of June 30, 2025 was $12,123,173. In 2019, the CDFI Fund approved OFN to serve as Qualified Issuer and issue a bond totaling $100,000,000 on behalf of Fahe and two other CDFIs. Fahe's portion of the issuance was $20,000,000. During the year ended June 30, 2025, proceeds of $3,400,000 were drawn by Fahe from this issuance and $497,452 was repaid. The outstanding balance as of June 30, 2025 was $19,502,548.
In 2016, Fahe was awarded an allocation of $50,000,000 through USDA's Community Facilities Relending Program. During the year ended June 30, 2025, proceeds of $11,500,000 were drawn by Fahe from its allocation and $185,541 was repaid. As of June 30, 2025, $14,814,748 was outstanding.

Finding Details

Finding No. 2025-001 Federal Agency: U.S. Department of Agriculture (USDA) Federal Program Title: Rural Development Cooperative Agreement Program Federal Assistance Listing Number: 10.890 Compliance Requirements: Reporting Criteria Under the requirements of the Federal Funding Accountability and Transparency Act (Pub. L. No. 109- 282), as amended by Section 6202 of Pub. L. No. 110-252, hereafter referred to as the "FFATA" that are codified in 2 CFR Part 170, recipients (i.e., direct recipients) of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System ("FSRS"). The subawards are required to be reported no later than the last day of the month following the month in which the subaward obligation was made or modified. Condition We were unable to determine if internal controls were in place during FY2025 to ensure FFATA reporting was performed, and subawards entered into by Federation of Appalachian Housing Enterprises, Inc. over $30,000 were not reported. Cause Federation of Appalachian Housing Enterprises, Inc.'s federal grant compliance controls did not address the general administrative controls over ensuring FFATA reporting is performed as required. Effect or Potential Effect FFATA reporting was not performed timely and accurately. Questioned Costs None Context For the year ended June 30, 2025, Federation of Appalachian Housing Enterprises, Inc. had five subawards totaling approximately $864,465 that met the FFATA reporting requirements but were not reported. The federal award identification numbers (FAINs) for these awards are pending from the USDA and are required to complete the FFATA reporting Identification as a Repeat Finding No Recommendation We recommend that the Organization establish policies, procedures, and controls to ensure that the required information is reported in the FFATA Subaward Reporting System on a timely basis.View of Responsible Officials Federation of Appalachian Housing Enterprises, Inc. acknowledges that we should have been filing information for all of our grantees over $30,000 on the FFATA Sub-award Reporting System website. We have a remediation plan in place to ensure that all past grantees over $30,000 are registered on the website, and we have included FFATA registration as a step in the creation of all future RDCA grantees.