Finding Text
Microloan Program Assistance Listing Number 59.046 Grant Numbers SBAOCAML220293/230448; Grant period – Year(s) ended June 30, 2023 and June 30, 2024. Criteria: Per the OMB Compliance Supplement, the 2 CFR section 200.204 requires that non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statues, regulations, and the terms and conditions of the federal award. Condition: Improper or lack of completion of the Organization’s internal loan checklist within microloan files tested, which was identified as an internal control over the completeness of loan file documentation. Cause: Loan checklists were not completed by responsible officials. Effect: Loan files subjected to testing did not include the required documents. Repeat Finding: N/A Recommendation: Policies and procedures should be put in place to eliminate the risk of loan documents not being included in the files, this includes the use of pre-approved checklists that ensure personnel reviewing the loan files notate that all required documentation is retained in the loan file, prior to final issuance of the loan. The checklists should be tailored to specific requirements for each relevant loan program, should required documentation among loan programs vary. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the recommendation to utilize a checklist specific to each loan program to ensure all required documents are entered into files. The Organization has implemented a loan filing system for each loan program dividing out the necessary documents required to be inserted into each loan file. The Production and Servicing Departments will be responsible for completing and reviewing the files to ensure all sections have been completed and updated as needed.