Finding 1055111 (2022-003)

Condition: Errors were identified during our testing of the Organization’s Form ED-209, Revolving Loan Fund Financial Report. In addition, supporting documentation was not available for review of some financial amounts reported. Criteria: 13 CFR 307.14 requires the Organization to submit a revolving loan fund financial report semi-annually. The report should reconcile with the Organization’s financial documents and account balances. Cause: The Organization’s management company experienced turnover in the accounting function. Some balances were not accurately reconciled and recorded until the errors were identified in 2023. The Organization revised and submitted amended ED-209’s to the Federal Agency. Effect: A material error existed in the original and amended semiannual Form ED-209’s and two key line items were not able to be agreed to supporting financial documents. Repeat of Prior Year Finding: No Auditor’s Recommendation: Management has improved their process for reconciling balances and tracking relevant information for proper reporting. We recommend that management continue to improve internal control systems and processes to ensure compliance with reporting requirements. View of Management: Management agrees with the finding. A response can be found in the Corrective Action Plan.