MATERIAL WEAKNESS – ADMINISTRATIVE REQUIREMENTS AND INTERNAL CONTROLS Information on the Federal Programs: Department of the Treasury - CDFI Fund; ALN 21.033, CDFI Equitable Recovery Program; Award No. 22ERP061695; Award Year 2023; Award Amount $2,478,839; Pass-through: not applicable Department of the Treasury - CDFI Fund; ALN 21.020, CDFI Financial Assistance; Award No. 241FA064970; Award Year 2024; Award Amount $1,110,000; Pass-through: not applicable. Criteria: Uniform Guidance requires recipients to maintain effective internal control over federal awards, accurate and complete financial records, and support for the source and application of federal funds. The CDFI ERP Assistance Agreement requires award funds to be used for eligible activities and supported by adequate records. Condition and Context: The Credit Union did not have a formal grant management policy or sufficiently documented controls to track award funds and support required reporting. Cause: Grant tracking, documentation, review, approval, and monitoring responsibilities were not formally established. Effect or Potential Effect: The Credit Union may be unable to fully demonstrate the use of award funds or support the accuracy and completeness of required reporting, increasing the risk that noncompliance could occur and not be detected timely. Questioned Costs: None noted ($0). The issue is control- and documentation-related; no direct unallowable cost was identified. Repeat Finding: Yes – ERP Award. No - FA Award. Recommendation: Management should establish a formal grant management policy defining roles, documentation standards, tracking procedures, report reconciliations, record retention, review and approval requirements, and periodic monitoring. The policy and associated procedures should consider all relevant requirements of Uniform Guidance, as well as specific requirements set forth in grant agreements and contracts. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding. The Credit Union will implement a formal grant management policy, maintain grant tracking records, reconcile grant activity to the general ledger and award reports, and document periodic management review.
MATERIAL WEAKNESS AND NONCOMPLIANCE - REPORTING Information on the Federal Programs: Department of the Treasury - CDFI Fund; ALN 21.033, CDFI Equitable Recovery Program; Award No. 22ERP061695; Award Year 2023; Award Amount $2,478,839; Pass-through: not applicable. Department of the Treasury - CDFI Fund; ALN 21.020, CDFI Financial Assistance; Award No. 241FA064970; Award Year 2024; Award Amount $1,110,000; Pass-through: not applicable. Criteria: The CDFI ERP and FA Agreements require mandatory reports to be submitted in accordance with established reporting periods and due dates, and require award funds to be used for eligible activities. Uniform Guidance requires accurate reporting and effective internal control over federal awards. Condition and Context: The award reporting profile reflected a December 31 year-end rather than the Credit Union's September 30 year-end, resulting in reporting deadlines that were not aligned with the applicable fiscal year. Uniform Guidance engagement and reports were not filed on time. This is a repeat finding and included in the Summary Schedule of Prior Findings. In addition, the reported use-of-award category did not fully align with management's description of how the funds were treated. Cause: The Credit Union did not have a documented review process to verify award profile data, report due dates, and use-of-award classifications before submission. Also, The Credit Union did not have a process to ensure timely submission of grant reporting. Effect or Potential Effect: Required reports may be untimely or inaccurate, which may impair CDFI Fund monitoring and expose the Credit Union to corrective action or additional oversight. Questioned Costs: None noted ($0). The issue is reporting- and control-related; no direct unallowable cost was identified. Repeat Finding: Yes – ERP Award. No - FA Award. Recommendation: Management should implement a grant review and approval acceptance process, grant reporting calendar and review process that reconciles reporting periods to the Credit Union's fiscal year, assigns preparer and reviewer responsibilities, documents review, and reconciles reported categories to the general ledger and supporting records before submission. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding. The Credit Union will implement a grant review and approval acceptance process, grant reporting calendar, assign preparer and reviewer responsibilities, document management review before submission, reconcile reported categories to the general ledger and supporting records, and evaluate whether corrected submissions or an award profile update are needed.
2025-004 MATERIAL WEAKNESS AND NONCOMPLIANCE - REPORTING Information on the Federal Programs: Department of the Treasury - CDFI Fund; ALN 21.033, CDFI Equitable Recovery Program; Award No. 22ERP061695; Award Year 2023; Award Amount $2,478,839; Pass-through: not applicable. Criteria: The CDFI ERP Agreements requires recipients to submit applicable reports within established reporting periods and deadlines. Uniform Guidance requires recipients to maintain effective internal control over federal awards and submit accurate and complete financial and performance reports. Condition and Context: The Credit Union did not submit the required ERP Federal Financial Report (SF-425) to the CDFI Fund for the applicable reporting period. Cause: The Credit Union lacked formal procedures to monitor reporting deadlines and verify the completion, review, and submission of required grant reports. Effect or Potential Effect: Failure to submit required reports may result in noncompliance with award agreements, limit CDFI Fund oversight, and subject the Credit Union to corrective action or additional monitoring. Questioned Costs: None noted ($0). The issue is reporting- and control-related; no direct unallowable cost was identified. Repeat Finding: Yes – ERP Award Recommendation: Management should establish formal grant acceptance and reporting procedures, including a reporting calendar, assigned preparer and reviewer responsibilities, documented supervisory review, reconciliation of reported amounts to supporting records, and verification of timely submission. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding. The Credit Union will implement formal grant acceptance and reporting procedures, maintain a reporting calendar, assign preparation and review responsibilities, and document approval and submission of required reports. Management will also evaluate and address outstanding reporting requirements with the CDFI Fund.