Finding Text
Identifying Number: 2024-005 Information on the Federal Program: ALN#21.033, U.S. Department of Treasury: COVID-19 Community Development Financial Institutions Fund Equitable Recovery Program (CDFI ERP) Criteria or Specific Requirement: The grant agreement specifies in Section C Performance Goals, Performance Goals and Measures Number 2a Authorized CDFI ERP Eligible Activities: “CDFI ERP Award funds must be expended on one or more of the two types of Eligible Activities below and as further set forth in PG&M 1A above and in Section 3.9 of Schedule 2.” Per 2A(4) “Total expenditure on Operational Support Activities cannot exceed $317,291.” Condition: The grant agreement stipulated a limited amount of expenditures could be incurred in specific subcategories of allowable costs. For Operational Support Activities, the expenditures could not exceed $317,291, however, the Credit Union’s operational support activities expenditures were $412,728. The Credit Union did not maintain documentation of approval for the additional expenditures. Subsequent to the expenditures, the Credit Union obtained written approval for an increase in the operational support activities limit to cover the total amount expended above. Cause: Management did not have effective controls in place to maintain documentation over approvals of spending over limits outlined in the grant agreement. Effect: Approximately $95,000 was identified in Operational Support Activities overspending without documentation of approval. Questioned Costs: Not applicable. Context: The allowable costs limitation is applicable only to this grant and therefore isolated. The population was tested 100%, therefore statistically valid. Repeat finding: Not applicable. Recommendation: Procedures should be implemented and placed in service to ensure complete and accurate documentation is maintained of approvals. Views of responsible individuals: Management agrees with the Finding and recommendation. See corrective action plan for further information.