Finding 333 (2022-003)

Material Weakness
Requirement
N
Questioned Costs
-
Year
2022
Accepted
2023-10-17

AI Summary

  • Core Issue: Two business applicants, totaling $66,308, did not provide necessary documentation for damages or losses, making them ineligible for grants.
  • Impacted Requirements: One case (4% of the sample) failed to obtain the required three quotes, affecting $39,433 of the total grants.
  • Recommended Follow-Up: Review grant application processes to ensure compliance with documentation and quote requirements to prevent future ineligibility.

Finding Text

We noted that in two (2) cases, representing 1.65% of the total sample, the Business Applicants did not support physical damages nor economic losses and consequently do not qualify for the grant award. Total awarded grants to these business applicants amounted in the aggregate to $66,308. From a total of 213 awarded grants for which closeout procedures were completed during the year ended June 30, 2022, in the amount of $9,522,108, we selected twenty-five (25) cases, in the total amount of $1,228,590, and noted in one (1) case, representing a 4% of the total sample, the required three (3) quotes were not obtained from the Business Applicant in the aggregate amount of $39,433. During our audit procedures, we got knowledge that one (1) Business Applicant obtained two grant awards in the aggregate amount of $96,630, under two different applications.

Corrective Action Plan

All resources that work the CDBG-DR Small Business Financing (SBF) project have been trained to perform their role according to the Program Guidelines, SOP's and regulations. The cases identified with deficiencies, as part of the Single Audit 2022 in the Intake, Underwriting and Expenditure Review & Closeout stages will be used as examples to prevent this situation from occurring in future cases and establish additional Team Lead quality control (QC). Additionally, recapture (repayment by the Grantee of any Grant amount received) of awarded and disbursed funds will apply when there's failure to comply with the SBF Program Guidelines.

Categories

Procurement, Suspension & Debarment

Other Findings in this Audit

  • 332 2022-002
    Material Weakness Repeat
  • 334 2022-004
    Material Weakness
  • 335 2022-005
    Material Weakness Repeat
  • 336 2022-006
    - Repeat
  • 337 2022-007
    Significant Deficiency Repeat
  • 576774 2022-002
    Material Weakness Repeat
  • 576775 2022-003
    Material Weakness
  • 576776 2022-004
    Material Weakness
  • 576777 2022-005
    Material Weakness Repeat
  • 576778 2022-006
    - Repeat
  • 576779 2022-007
    Significant Deficiency Repeat

Programs in Audit

ALN Program Name Expenditures
14.228 Community Development Block Grants/state's Program and Non-Entitlement Grants in Hawaii $67.49M