Finding 1142248 (2024-003)

Department of Treasury Federal Financial Assistance Listing 21.033, Award 22ERP060843 Community Development Financial Institutions Equitable Recovery Program (CDFI ERP) Suspension & Debarment Significant Deficiency in Internal Control over Compliance Criteria: CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: In our testing of suspension and debarment, it was identified that there was no observable documentation to directly indicate that a search for suspension and debarment was performed for loans disbursed prior to entering into loan agreements. Cause: Meda does not have a formal process to search for suspension and debarment of entities prior to entering into a loan agreement. Effect: Failure to document the search for suspension and debarment before entering into the loan agreement could result in possibly noncompliance. Questioned Costs: None reported. Context: Two loans out of two tested accounted for $1,177,250 of the total expenses $2,094,298 charged to the federal award. Repeat Finding from Prior Years: Yes, 2023-002 Recommendation: We recommend that management add a formal process to search for suspension and department before entering into loan agreements. Views of Responsible Officials: Management agrees with the finding.