Finding Text
MATERIAL WEAKNESS – ADMINISTRATIVE REQUIREMENTS AND INTERNAL CONTROLS Information on the Federal Programs: Department of the Treasury - CDFI Fund; ALN 21.033, CDFI Equitable Recovery Program; Award No. 22ERP061695; Award Year 2023; Award Amount $2,478,839; Pass-through: not applicable Department of the Treasury - CDFI Fund; ALN 21.020, CDFI Financial Assistance; Award No. 241FA064970; Award Year 2024; Award Amount $1,110,000; Pass-through: not applicable. Criteria: Uniform Guidance requires recipients to maintain effective internal control over federal awards, accurate and complete financial records, and support for the source and application of federal funds. The CDFI ERP Assistance Agreement requires award funds to be used for eligible activities and supported by adequate records. Condition and Context: The Credit Union did not have a formal grant management policy or sufficiently documented controls to track award funds and support required reporting. Cause: Grant tracking, documentation, review, approval, and monitoring responsibilities were not formally established. Effect or Potential Effect: The Credit Union may be unable to fully demonstrate the use of award funds or support the accuracy and completeness of required reporting, increasing the risk that noncompliance could occur and not be detected timely. Questioned Costs: None noted ($0). The issue is control- and documentation-related; no direct unallowable cost was identified. Repeat Finding: Yes – ERP Award. No - FA Award. Recommendation: Management should establish a formal grant management policy defining roles, documentation standards, tracking procedures, report reconciliations, record retention, review and approval requirements, and periodic monitoring. The policy and associated procedures should consider all relevant requirements of Uniform Guidance, as well as specific requirements set forth in grant agreements and contracts. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding. The Credit Union will implement a formal grant management policy, maintain grant tracking records, reconcile grant activity to the general ledger and award reports, and document periodic management review.