Finding Text
Federal Agency: U.S. Department of Commerce
Assistance Listing Number and Title: 11.307 Economic Development Cluster
Award Number: #05-79-06032 EDA CARES Act – COVID-19
Condition/Context: During the review of the annual report, we identified a discrepancy between the reported figures and the actual amounts reflected in the general ledger. Specifically, SEDF reported an overstatement of $230,700 in outstanding loan principal in the ED-209 federal financial report for the period ending December 31, 2024.
Compliance Requirement: According to 13 CFR Section 307.14, recipients of revolving loan funds are required to certify that the information submitted is complete and accurate.
Management’s Response: Management acknowledges the discrepancy and agrees with the finding. A corrective action plan to address the issue will be implemented, as detailed on page 31 of the report.
Effect: The failure to accurately report financial data constitutes a violation of the requirements outlined in Title 2 U.S. Code of Federal Regulations Part 200. Inaccurate financial reporting, particularly regarding revolving loan fund balances, could have a significant impact on compliance with federal regulations and on the integrity of financial data submitted to federal agencies.
Repeat Finding: This is not a repeat finding.
Recommendation: It is recommended that procedures be put in place to ensure that all amounts reported are accurate and reconciled with the general ledger. Steps should be taken to implement stronger internal controls to prevent future discrepancies.