FAC Explorer

Audit 8239

FY End
2023-06-30
Total Expended
$9.61M
Findings
6
Programs
26
Organization: Purchase Area Development District (KY)
Year: 2023 Accepted: 2023-12-22
Auditor: Mike Harmon Auditor of Public Accounts

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
6377 2023-004 Material Weakness - L
6378 2023-004 Material Weakness - L
6379 2023-004 Material Weakness - L
582819 2023-004 Material Weakness - L
582820 2023-004 Material Weakness - L
582821 2023-004 Material Weakness - L

Programs

ALN Program Spent Major Findings
10.569 Emergency Food Assistance Program (food Commodities) $1.91M - 0
21.027 Coronavirus State and Local Fiscal Recovery Funds $953,477 Yes 0
93.045 Special Programs for the Aging_title Iii, Part C_nutrition Services $775,230 - 0
17.278 Wia Dislocated Worker Formula Grants $513,974 - 0
93.044 Special Programs for the Aging_title Iii, Part B_grants for Supportive Services and Senior Centers $335,919 - 0
17.258 Wia Adult Program $278,642 - 0
93.052 National Family Caregiver Support, Title Iii, Part E $199,561 - 0
93.053 Nutrition Services Incentive Program $145,099 - 0
10.565 Commodity Supplemental Food Program $138,544 - 0
17.235 Senior Community Service Employment Program $137,117 - 0
11.302 Economic Development_support for Planning Organizations $66,667 - 0
20.505 Metropolitan Transportation Planning and State and Non-Metropolitan Planning and Research $64,855 - 0
17.245 Trade Adjustment Assistance $55,275 - 0
93.778 Medical Assistance Program $55,069 - 0
17.259 Wia Youth Activities $51,567 - 0
64.044 Vha Home Care $22,643 - 0
14.228 Community Development Block Grants/state's Program and Non-Entitlement Grants in Hawaii $20,167 - 0
93.071 Medicare Enrollment Assistance Program $18,406 - 0
11.307 Economic Adjustment Assistance $16,980 Yes 1
90.202 Delta Local Development District Assistance $16,332 - 0
93.324 State Health Insurance Assistance Program $15,681 - 0
93.043 Special Programs for the Aging_title Iii, Part D_disease Prevention and Health Promotion Services $12,902 - 0
93.042 Special Programs for the Aging_title Vii, Chapter 2_long Term Care Ombudsman Services for Older Individuals $11,408 - 0
93.048 Special Programs for the Aging_title Iv_and Title Ii_discretionary Projects $8,744 - 0
10.568 Emergency Food Assistance Program (administrative Costs) $4,000 - 0
93.041 Special Programs for the Aging_title Vii, Chapter 3_programs for Prevention of Elder Abuse, Neglect, and Exploitation $3,885 - 0

Contacts

Name Title Type
DES9WE9LLRM7 Jeremy Buchanan Auditee
2702477171 Farrah Petter Auditor
No contacts on file

Notes to SEFA

Title: Loan Balances Accounting Policies: Expenditures reported on the Schedule are reported on the modified accrual basis of the accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Pass-through entity identifying numbers are presented where available. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. Nonmonetary assistance is reported in the schedule at fair value of goods received. De Minimis Rate Used: N Rate Explanation: The District has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. The District uses a Cost Allocation Plan methodology as defined in Appendix VII, Part 200, Section F3. The balance of loans outstanding at June 30, 2023 was $2,175,554, Federal Assistance Listing No. 11.307, Revolving loan fund (RLF CARES). The balance of loans outstanding at June 30, 2023 was $523,152, Federal Assistance Listing No. 11.307, Revolving loan fund (RLF ARPA). The balance of loans outstanding at June 30, 2023 was $589,824, Federal Assistance Listing No. 10.767, Intermediary Relending Program.
Title: Contingencies Accounting Policies: Expenditures reported on the Schedule are reported on the modified accrual basis of the accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Pass-through entity identifying numbers are presented where available. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. Nonmonetary assistance is reported in the schedule at fair value of goods received. De Minimis Rate Used: N Rate Explanation: The District has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. The District uses a Cost Allocation Plan methodology as defined in Appendix VII, Part 200, Section F3. Grant monies received and disbursed by the District are for specific purposes and are subject to review by grantor agencies. Such audits may result in requests for reimbursement due to disallowed expenditures. Based upon experience, the District does not believe that such disallowance, if any, would have a material effect on the financial position of the District.
Title: Subrecipients Accounting Policies: Expenditures reported on the Schedule are reported on the modified accrual basis of the accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Pass-through entity identifying numbers are presented where available. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. Nonmonetary assistance is reported in the schedule at fair value of goods received. De Minimis Rate Used: N Rate Explanation: The District has elected not to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. The District uses a Cost Allocation Plan methodology as defined in Appendix VII, Part 200, Section F3. The District did provide federal funds to subrecipients for the fiscal year June 30, 2023 as noted in the accompanying Schedule of Expenditures of Federal Awards.

Finding Details

Finding 2023-004
The Purchase Area Development District Lacks Adequate Internal Controls Over Economic Adjustment Assistance Reporting Federal Program: ALN 11.307 Economic Adjustment Assistance Award Number and Year: ALN 11.307 Economic Adjustment Assistance 2021 Name of Federal Agency: U.S. Department of Commerce Compliance Requirements: Reporting Type of Finding: Material Weakness and Material Noncompliance Amount of Questioned Costs: None Opinion Modification: Qualified Opinion COVID Related: YesThe Purchase Area Development District (PADD) lacks adequate controls over federal Economic Assistance grant reporting. The following deficiencies were noted for the 2023 fiscal year: • PADD reported the incorrect amount of principal outstanding on loans on the EDA 209 Report submitted for the American Rescue Plan Act Revolving Loan Fund (RLF). The amount reported as principal outstanding was $963,797. This amount represents the total amount of principal outstanding as of July 14, 2023. The amount outstanding as of June 30, 2023 was $523,151. This resulted in the report being materially overstated by $440,646. The report included three RLF loans that were issued in July of 2023. For a total of $439,250. There were also minor differences on two other RLF loans were payments made at the end of the year totaling $1,396 were not accounted for in the principal balance. The report was also not submitted by July 31, 2023 as required • PADD overstated their notes to the SEFA by $107,010. The balance for the Intermediary Relending Program was listed as $696,834 which was the amount of the loan from IRP not the amount expended/granted to local business. The total outstanding as of June 30, 2023 was $589,824.The inaccurate EDA 209 report was primarily due to an oversight by the preparer, but it also appeared that the report was not reviewed by another employee prior to being submitted. The overstated SEFA notes were due to the PADD’s reliance on an external party to prepare the financial statements and notes to the financial statements. A lack of a review from the PADD of the external party’s work resulted in a misstatement. Due to the lack of controls over the reporting process for federal awards, the PADD has an increased risk of misappropriation of funds, and noncompliance with grant requirements. This could result in potential questioned costs and being denied grants in the future. 13 CFR 307.14 (b) provides the requirements for the EDA RLF reports and states: “RLF Recipients must certify as part of the RLF report to EDA that the RLF is operating in accordance with the applicable RLF Plan, and that the information provided is complete and accurate.” Additionally, strong internal controls over federal grant reporting are vital in ensuring that federal awards are accounted for properly. Strong internal controls are also important in safeguarding the area development district’s assets and those given the responsibility of accounting for them, as well as helping make certain PADD complied all requirements. We recommend PADD follow the guidance contained within 13 CFR Chapter 307 for completing the Form ED-209 RLF Report. We also recommend PADD strengthen controls over federal awards by implementing review processes to ensure grant details and amounts reported on financial reports agree to amounts reported on financial statements. Furthermore, we recommend controls be put in place to ensure deadlines are met for all reporting requirements.
Finding 2023-004
The Purchase Area Development District Lacks Adequate Internal Controls Over Economic Adjustment Assistance Reporting Federal Program: ALN 11.307 Economic Adjustment Assistance Award Number and Year: ALN 11.307 Economic Adjustment Assistance 2021 Name of Federal Agency: U.S. Department of Commerce Compliance Requirements: Reporting Type of Finding: Material Weakness and Material Noncompliance Amount of Questioned Costs: None Opinion Modification: Qualified Opinion COVID Related: YesThe Purchase Area Development District (PADD) lacks adequate controls over federal Economic Assistance grant reporting. The following deficiencies were noted for the 2023 fiscal year: • PADD reported the incorrect amount of principal outstanding on loans on the EDA 209 Report submitted for the American Rescue Plan Act Revolving Loan Fund (RLF). The amount reported as principal outstanding was $963,797. This amount represents the total amount of principal outstanding as of July 14, 2023. The amount outstanding as of June 30, 2023 was $523,151. This resulted in the report being materially overstated by $440,646. The report included three RLF loans that were issued in July of 2023. For a total of $439,250. There were also minor differences on two other RLF loans were payments made at the end of the year totaling $1,396 were not accounted for in the principal balance. The report was also not submitted by July 31, 2023 as required • PADD overstated their notes to the SEFA by $107,010. The balance for the Intermediary Relending Program was listed as $696,834 which was the amount of the loan from IRP not the amount expended/granted to local business. The total outstanding as of June 30, 2023 was $589,824.The inaccurate EDA 209 report was primarily due to an oversight by the preparer, but it also appeared that the report was not reviewed by another employee prior to being submitted. The overstated SEFA notes were due to the PADD’s reliance on an external party to prepare the financial statements and notes to the financial statements. A lack of a review from the PADD of the external party’s work resulted in a misstatement. Due to the lack of controls over the reporting process for federal awards, the PADD has an increased risk of misappropriation of funds, and noncompliance with grant requirements. This could result in potential questioned costs and being denied grants in the future. 13 CFR 307.14 (b) provides the requirements for the EDA RLF reports and states: “RLF Recipients must certify as part of the RLF report to EDA that the RLF is operating in accordance with the applicable RLF Plan, and that the information provided is complete and accurate.” Additionally, strong internal controls over federal grant reporting are vital in ensuring that federal awards are accounted for properly. Strong internal controls are also important in safeguarding the area development district’s assets and those given the responsibility of accounting for them, as well as helping make certain PADD complied all requirements. We recommend PADD follow the guidance contained within 13 CFR Chapter 307 for completing the Form ED-209 RLF Report. We also recommend PADD strengthen controls over federal awards by implementing review processes to ensure grant details and amounts reported on financial reports agree to amounts reported on financial statements. Furthermore, we recommend controls be put in place to ensure deadlines are met for all reporting requirements.
Finding 2023-004
The Purchase Area Development District Lacks Adequate Internal Controls Over Economic Adjustment Assistance Reporting Federal Program: ALN 11.307 Economic Adjustment Assistance Award Number and Year: ALN 11.307 Economic Adjustment Assistance 2021 Name of Federal Agency: U.S. Department of Commerce Compliance Requirements: Reporting Type of Finding: Material Weakness and Material Noncompliance Amount of Questioned Costs: None Opinion Modification: Qualified Opinion COVID Related: YesThe Purchase Area Development District (PADD) lacks adequate controls over federal Economic Assistance grant reporting. The following deficiencies were noted for the 2023 fiscal year: • PADD reported the incorrect amount of principal outstanding on loans on the EDA 209 Report submitted for the American Rescue Plan Act Revolving Loan Fund (RLF). The amount reported as principal outstanding was $963,797. This amount represents the total amount of principal outstanding as of July 14, 2023. The amount outstanding as of June 30, 2023 was $523,151. This resulted in the report being materially overstated by $440,646. The report included three RLF loans that were issued in July of 2023. For a total of $439,250. There were also minor differences on two other RLF loans were payments made at the end of the year totaling $1,396 were not accounted for in the principal balance. The report was also not submitted by July 31, 2023 as required • PADD overstated their notes to the SEFA by $107,010. The balance for the Intermediary Relending Program was listed as $696,834 which was the amount of the loan from IRP not the amount expended/granted to local business. The total outstanding as of June 30, 2023 was $589,824.The inaccurate EDA 209 report was primarily due to an oversight by the preparer, but it also appeared that the report was not reviewed by another employee prior to being submitted. The overstated SEFA notes were due to the PADD’s reliance on an external party to prepare the financial statements and notes to the financial statements. A lack of a review from the PADD of the external party’s work resulted in a misstatement. Due to the lack of controls over the reporting process for federal awards, the PADD has an increased risk of misappropriation of funds, and noncompliance with grant requirements. This could result in potential questioned costs and being denied grants in the future. 13 CFR 307.14 (b) provides the requirements for the EDA RLF reports and states: “RLF Recipients must certify as part of the RLF report to EDA that the RLF is operating in accordance with the applicable RLF Plan, and that the information provided is complete and accurate.” Additionally, strong internal controls over federal grant reporting are vital in ensuring that federal awards are accounted for properly. Strong internal controls are also important in safeguarding the area development district’s assets and those given the responsibility of accounting for them, as well as helping make certain PADD complied all requirements. We recommend PADD follow the guidance contained within 13 CFR Chapter 307 for completing the Form ED-209 RLF Report. We also recommend PADD strengthen controls over federal awards by implementing review processes to ensure grant details and amounts reported on financial reports agree to amounts reported on financial statements. Furthermore, we recommend controls be put in place to ensure deadlines are met for all reporting requirements.
Finding 2023-004
The Purchase Area Development District Lacks Adequate Internal Controls Over Economic Adjustment Assistance Reporting Federal Program: ALN 11.307 Economic Adjustment Assistance Award Number and Year: ALN 11.307 Economic Adjustment Assistance 2021 Name of Federal Agency: U.S. Department of Commerce Compliance Requirements: Reporting Type of Finding: Material Weakness and Material Noncompliance Amount of Questioned Costs: None Opinion Modification: Qualified Opinion COVID Related: YesThe Purchase Area Development District (PADD) lacks adequate controls over federal Economic Assistance grant reporting. The following deficiencies were noted for the 2023 fiscal year: • PADD reported the incorrect amount of principal outstanding on loans on the EDA 209 Report submitted for the American Rescue Plan Act Revolving Loan Fund (RLF). The amount reported as principal outstanding was $963,797. This amount represents the total amount of principal outstanding as of July 14, 2023. The amount outstanding as of June 30, 2023 was $523,151. This resulted in the report being materially overstated by $440,646. The report included three RLF loans that were issued in July of 2023. For a total of $439,250. There were also minor differences on two other RLF loans were payments made at the end of the year totaling $1,396 were not accounted for in the principal balance. The report was also not submitted by July 31, 2023 as required • PADD overstated their notes to the SEFA by $107,010. The balance for the Intermediary Relending Program was listed as $696,834 which was the amount of the loan from IRP not the amount expended/granted to local business. The total outstanding as of June 30, 2023 was $589,824.The inaccurate EDA 209 report was primarily due to an oversight by the preparer, but it also appeared that the report was not reviewed by another employee prior to being submitted. The overstated SEFA notes were due to the PADD’s reliance on an external party to prepare the financial statements and notes to the financial statements. A lack of a review from the PADD of the external party’s work resulted in a misstatement. Due to the lack of controls over the reporting process for federal awards, the PADD has an increased risk of misappropriation of funds, and noncompliance with grant requirements. This could result in potential questioned costs and being denied grants in the future. 13 CFR 307.14 (b) provides the requirements for the EDA RLF reports and states: “RLF Recipients must certify as part of the RLF report to EDA that the RLF is operating in accordance with the applicable RLF Plan, and that the information provided is complete and accurate.” Additionally, strong internal controls over federal grant reporting are vital in ensuring that federal awards are accounted for properly. Strong internal controls are also important in safeguarding the area development district’s assets and those given the responsibility of accounting for them, as well as helping make certain PADD complied all requirements. We recommend PADD follow the guidance contained within 13 CFR Chapter 307 for completing the Form ED-209 RLF Report. We also recommend PADD strengthen controls over federal awards by implementing review processes to ensure grant details and amounts reported on financial reports agree to amounts reported on financial statements. Furthermore, we recommend controls be put in place to ensure deadlines are met for all reporting requirements.
Finding 2023-004
The Purchase Area Development District Lacks Adequate Internal Controls Over Economic Adjustment Assistance Reporting Federal Program: ALN 11.307 Economic Adjustment Assistance Award Number and Year: ALN 11.307 Economic Adjustment Assistance 2021 Name of Federal Agency: U.S. Department of Commerce Compliance Requirements: Reporting Type of Finding: Material Weakness and Material Noncompliance Amount of Questioned Costs: None Opinion Modification: Qualified Opinion COVID Related: YesThe Purchase Area Development District (PADD) lacks adequate controls over federal Economic Assistance grant reporting. The following deficiencies were noted for the 2023 fiscal year: • PADD reported the incorrect amount of principal outstanding on loans on the EDA 209 Report submitted for the American Rescue Plan Act Revolving Loan Fund (RLF). The amount reported as principal outstanding was $963,797. This amount represents the total amount of principal outstanding as of July 14, 2023. The amount outstanding as of June 30, 2023 was $523,151. This resulted in the report being materially overstated by $440,646. The report included three RLF loans that were issued in July of 2023. For a total of $439,250. There were also minor differences on two other RLF loans were payments made at the end of the year totaling $1,396 were not accounted for in the principal balance. The report was also not submitted by July 31, 2023 as required • PADD overstated their notes to the SEFA by $107,010. The balance for the Intermediary Relending Program was listed as $696,834 which was the amount of the loan from IRP not the amount expended/granted to local business. The total outstanding as of June 30, 2023 was $589,824.The inaccurate EDA 209 report was primarily due to an oversight by the preparer, but it also appeared that the report was not reviewed by another employee prior to being submitted. The overstated SEFA notes were due to the PADD’s reliance on an external party to prepare the financial statements and notes to the financial statements. A lack of a review from the PADD of the external party’s work resulted in a misstatement. Due to the lack of controls over the reporting process for federal awards, the PADD has an increased risk of misappropriation of funds, and noncompliance with grant requirements. This could result in potential questioned costs and being denied grants in the future. 13 CFR 307.14 (b) provides the requirements for the EDA RLF reports and states: “RLF Recipients must certify as part of the RLF report to EDA that the RLF is operating in accordance with the applicable RLF Plan, and that the information provided is complete and accurate.” Additionally, strong internal controls over federal grant reporting are vital in ensuring that federal awards are accounted for properly. Strong internal controls are also important in safeguarding the area development district’s assets and those given the responsibility of accounting for them, as well as helping make certain PADD complied all requirements. We recommend PADD follow the guidance contained within 13 CFR Chapter 307 for completing the Form ED-209 RLF Report. We also recommend PADD strengthen controls over federal awards by implementing review processes to ensure grant details and amounts reported on financial reports agree to amounts reported on financial statements. Furthermore, we recommend controls be put in place to ensure deadlines are met for all reporting requirements.
Finding 2023-004
The Purchase Area Development District Lacks Adequate Internal Controls Over Economic Adjustment Assistance Reporting Federal Program: ALN 11.307 Economic Adjustment Assistance Award Number and Year: ALN 11.307 Economic Adjustment Assistance 2021 Name of Federal Agency: U.S. Department of Commerce Compliance Requirements: Reporting Type of Finding: Material Weakness and Material Noncompliance Amount of Questioned Costs: None Opinion Modification: Qualified Opinion COVID Related: YesThe Purchase Area Development District (PADD) lacks adequate controls over federal Economic Assistance grant reporting. The following deficiencies were noted for the 2023 fiscal year: • PADD reported the incorrect amount of principal outstanding on loans on the EDA 209 Report submitted for the American Rescue Plan Act Revolving Loan Fund (RLF). The amount reported as principal outstanding was $963,797. This amount represents the total amount of principal outstanding as of July 14, 2023. The amount outstanding as of June 30, 2023 was $523,151. This resulted in the report being materially overstated by $440,646. The report included three RLF loans that were issued in July of 2023. For a total of $439,250. There were also minor differences on two other RLF loans were payments made at the end of the year totaling $1,396 were not accounted for in the principal balance. The report was also not submitted by July 31, 2023 as required • PADD overstated their notes to the SEFA by $107,010. The balance for the Intermediary Relending Program was listed as $696,834 which was the amount of the loan from IRP not the amount expended/granted to local business. The total outstanding as of June 30, 2023 was $589,824.The inaccurate EDA 209 report was primarily due to an oversight by the preparer, but it also appeared that the report was not reviewed by another employee prior to being submitted. The overstated SEFA notes were due to the PADD’s reliance on an external party to prepare the financial statements and notes to the financial statements. A lack of a review from the PADD of the external party’s work resulted in a misstatement. Due to the lack of controls over the reporting process for federal awards, the PADD has an increased risk of misappropriation of funds, and noncompliance with grant requirements. This could result in potential questioned costs and being denied grants in the future. 13 CFR 307.14 (b) provides the requirements for the EDA RLF reports and states: “RLF Recipients must certify as part of the RLF report to EDA that the RLF is operating in accordance with the applicable RLF Plan, and that the information provided is complete and accurate.” Additionally, strong internal controls over federal grant reporting are vital in ensuring that federal awards are accounted for properly. Strong internal controls are also important in safeguarding the area development district’s assets and those given the responsibility of accounting for them, as well as helping make certain PADD complied all requirements. We recommend PADD follow the guidance contained within 13 CFR Chapter 307 for completing the Form ED-209 RLF Report. We also recommend PADD strengthen controls over federal awards by implementing review processes to ensure grant details and amounts reported on financial reports agree to amounts reported on financial statements. Furthermore, we recommend controls be put in place to ensure deadlines are met for all reporting requirements.