Finding 1102747 (2024-001)

Federal Program reported incorrectly on the Schedule of Expenditures of Federal Awards (“SEFA”) and errors noted in written off loans Federal Program: Assistance Listing Number (“ALN”) 11.307 Economic Adjustment Assistance Name of Federal Agency: U.S. Department of Commerce Award Identification Number and Year: 04-79-07547 and Year 2020 Name of pass-through entity: N/A COVID Identification: Yes Amount of Questioned Costs: $1,571,578 Criteria: 2CFR 200.510 states the requirements for SEFA reporting. The Louisville Metropolitan Business Development Corporation Policy and Procedures Handbook provides the order of priority for loan proceeds to be applied. Condition: The federal expenditure amount for ALN 11.307 was reported incorrectly on the draft SEFA provided by Louisville Metro. Also, the information in the loan system was incorrect for two written off loans. Effect: SEFA was mis-stated for ALN 11.307. Semi-annual report had incorrect information on chart. Cause: Lack of communication between Metro grants personnel and Metro OMB grants division. Also error in loan system. Questioned Costs: Total questioned costs is $1,571,578 (SEFA error of $1,570,592, loan error of $864, and loan error of $122). Context: Total federal expenditures on the SEFA required an adjustment of $1,570,592. The total written off loan amounts for FY 2024 were $343,439. Recommendation: We recommend communication be improved and management periodically reconcile the loan system to detect errors. Management’s response: Management agrees with the finding and will develop a plan to insure such differences do not reoccur in the future.