FAC Explorer

Audit 41564

FY End
2022-06-30
Total Expended
$935,788
Findings
2
Programs
1
Organization: Johnson City Energy Authority Dba Brightridge (TN)
Year: 2022 Accepted: 2023-01-05
Auditor: Blackburn Childers & Steagall Plc

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
47389 2022-001 Significant Deficiency - M
623831 2022-001 Significant Deficiency - M

Programs

ALN Program Spent Major Findings
10.854 Rural Economic Development Loans and Grants $935,788 Yes 1

Contacts

Name Title Type
K9DBNZGE4D11 Brian Bolling Auditee
4239525124 Chad Kisner Auditor
No contacts on file

Notes to SEFA

Title: Basis of Presentation Accounting Policies: Expenditures reported on the schedule are reported on the accrual basis of accounting. Non-monetary assistance, when applicable, is reported in the schedule at the estimated fair market value of property received and used. De Minimis Rate Used: N Rate Explanation: BrightRidge has not elected to use the 10% de minimis indirect cost allocation option. The accompanying schedule of expenditures of federal awards (the schedule) includes the federal grant and loan activity of BrightRidge under programs of the federal government for the fiscal year ended June 30, 2022. The information in the 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 (Uniform Guidance). Since the schedule presents only a selected portion of the operations of BrightRidge, it is not intended to, and does not present, the financial position, changes in net position, or cash flows of BrightRidge.
Title: Federal Loan Programs Accounting Policies: Expenditures reported on the schedule are reported on the accrual basis of accounting. Non-monetary assistance, when applicable, is reported in the schedule at the estimated fair market value of property received and used. De Minimis Rate Used: N Rate Explanation: BrightRidge has not elected to use the 10% de minimis indirect cost allocation option. The federal loan programs listed subsequently are administered directly by BrightRidge, and balances and transactions relating to these programs are included in BrighRidges basic financial statements. Loans outstanding at the beginning of the year, loans made during the year, and other required components are included in the federal expenditures presented in the schedule. The balance of federal loans outstanding at June 30, 2022 and 2021 consists of $1,777,334 and $2,492,186, respectively.

Finding Details

Finding 2022-001
2022-001 Significant Deficiency: Subrecipient Monitoring of Matching Requirements (U.S. Department of Agriculture, Rural Economic Development Loans and Grants, ALN #10.854) Criteria: In accordance with Uniform Guidance, a recipient of federal funds must monitor the subrecipients? contract terms, including matching requirements. Condition and Cause: During the audit, it was noted that BrightRidge did not adequately monitor the subrecipient matching requirement according to the contract terms for its major program. This issue was caused by an lack of understanding regarding the required timing for the subrecipient?s matching of federal funds. Effect: Since BrightRidge did not have the understanding of the timing for the subrecipient?s match, no matching funds had been submitted during the fiscal year when substantial funds were released to the subrecipient. However, when brought to BrightRidge?s attention during the audit subsequent to fiscal year end, BrightRidge and the subrecipient determined that certain subrecipient expenditures qualified as matching funds during the fiscal year, leaving a remaining delayed required matching funding of approximately $54,000. Questioned Costs: As of June 30, 2022, approximately $54,000 should have been held by BrightRidge until matched by the subrecipient. Recommendation: BrightRidge should continue to monitor subrecipients, including the timing of the subrecipients? matching requirements. Management?s Response: After discussion of this matter with our auditors, BrightRidge understands that the timing of payments made to the ultimate recipient must not exceed 80% of the actual expenses. BrightRidge will continue to monitor the final payments to the ultimate recipient and will adhere to payout requirements on any future USDA Rural Development Loans.
Finding 2022-001
2022-001 Significant Deficiency: Subrecipient Monitoring of Matching Requirements (U.S. Department of Agriculture, Rural Economic Development Loans and Grants, ALN #10.854) Criteria: In accordance with Uniform Guidance, a recipient of federal funds must monitor the subrecipients? contract terms, including matching requirements. Condition and Cause: During the audit, it was noted that BrightRidge did not adequately monitor the subrecipient matching requirement according to the contract terms for its major program. This issue was caused by an lack of understanding regarding the required timing for the subrecipient?s matching of federal funds. Effect: Since BrightRidge did not have the understanding of the timing for the subrecipient?s match, no matching funds had been submitted during the fiscal year when substantial funds were released to the subrecipient. However, when brought to BrightRidge?s attention during the audit subsequent to fiscal year end, BrightRidge and the subrecipient determined that certain subrecipient expenditures qualified as matching funds during the fiscal year, leaving a remaining delayed required matching funding of approximately $54,000. Questioned Costs: As of June 30, 2022, approximately $54,000 should have been held by BrightRidge until matched by the subrecipient. Recommendation: BrightRidge should continue to monitor subrecipients, including the timing of the subrecipients? matching requirements. Management?s Response: After discussion of this matter with our auditors, BrightRidge understands that the timing of payments made to the ultimate recipient must not exceed 80% of the actual expenses. BrightRidge will continue to monitor the final payments to the ultimate recipient and will adhere to payout requirements on any future USDA Rural Development Loans.