Finding Text
Finding 2025-001 Earmarking of Intermediary Relending Funds Condition and Criteria: During the current year audit, we discovered deficiencies in internal controls over compliance related to earmarking of Intermediary Relending Program (IRP) loan funds. One IRP loan funded 100% of an ultimate recipient project. IRP loans are limited to 75% of an ultimate recipient project. A second ultimate recipient had IRP loans in excess of the maximum of $400,000 during the year ended December 31, 2025 (the loans were paid off before December 31, 2025). Cause: There was inadequate review of loan packages prior to approval. Effect: The effect of these deficiencies in internal controls was one loan that exceeded the 75% funding guidance by $30,000. Additionally, one ultimate recipient received IRP loans that exceeded the $400,000 maximum by $81,779. Recommendation: We recommend the Organization use compliance checklists to conduct a review of each loan package prior to approval and separately itemize each funding source included in a loan package.