Finding Text
Information on Federal Program - Economic Development - Economic Adjustment Assistance, Assistance Listing Number 11.307 Criteria - A significant deficiency is a deficiency or a combination of deficiencies in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. In accordance with the reporting compliance requirement for 11.307, the ED-209 must be submitted to the EDA. While the Corporation successfully submitted the report on time, they failed to accurately report the principal balances of loans receivable outstanding as of December 31, 2024. The Corporation reported $6,048,775 as the principal balance of loans outstanding however, the Corporation should have reported $5,048,775 as the principal balance of loans outstanding. A variance of $1,000,000 was noted which represents a significant deficiency in internal control over financial reporting and an instance of noncompliance. Condition – We noted that the ED-209 report that was submitted to the EDA for the year ended December 31, 2024, was not accurately filled out and was not properly reviewed prior to submission. Cause – During 2024, PIDC initiated an EDA loan to a borrower in the amount of $1,000,000. While the loan was committed as of December 31, 2024, the loan was never disbursed. During preparation of the ED-209 report, management included this $1,000,000 commitment within the recorded amount of outstanding principal balance on loans receivable as of December 31, 2024. Effect and Potential Effect – A lack of a proper review over the ED-209 reporting could cause amounts to be erroneously reported which raises concern about the Corporation’s reliability in adhering to accounting and compliance requirements, potentially jeopardizing its ability to secure funding. Context – During 2024, PIDC initiated an EDA loan to a borrower in the amount of $1,000,000. While the loan was committed as of December 31, 2024, the loan was never disbursed and thus was erroneously included in the ED-209 report submitted to the EDA. Recommendation – We recommend that the Corporation maintain a competent workforce that has the time and resources needed to ensure compliance with its reporting requirements. Additionally, procedures and/or policies should be implemented to ensure proper review of amounts reported. Views of Responsible Officials –Management acknowledges that oversight is needed to monitor the reporting process and ensure reconciliation of their loan portfolio system.