Finding 405964 (2023-003)

Reporting Federal Agency: U.S. Department of CommerceFederal Program Title: Economic Development Administration – Revolving Loan Fund Assistance Listing Number: 11.307 Federal Award Identification Numbers: 06-49-02687, 06-79-06225 Pass-Through Agency: Not Applicable Pass-Through Number: Not Applicable Award Period: January 1, 2023 – December 31, 2023 Compliance Requirement: Reporting, Special Reporting Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matter Criteria or specific requirement: Line items on Form ED-209 Revolving Loan Fund Financial Report contain critical information and should reconcile with the RLF recipient's financial documents and account balances. Condition: During our testing of the ED-209 reports, we noted that some of the key line items for the reports did not tie to the Organization's supporting documentation. Questioned Costs: None Context: While performing audit procedures, it was noted that management does not have internal controls in place to document the review of the ED-209 reports to supporting documentation. Cause: The Organization had a lot of turnover in key employee positions during the audit work so some of the supporting information/original reports were not found. Repeat Finding: Repeat of Finding 2022-004 Effect: The ED-209 reports may be misstated. Recommendation: We recommend that Management create an internal monitoring system to document future review of the ED-209 reports and verify that supporting documentation is attached and retained for review during future audits. Views of responsible officials: There is no disagreement with the audit finding. Refer to the Organization’s Corrective Action Plan for more information.