Finding Text
Information on the Federal Program: Federal Agency: United States Department of Agriculture
Program Names: Farming Operating Loans; Business and Industry Loans
ALs: 10.406; 10.768
Federal Award Year: 2023
Criteria: In accordance with Title 2 U.S. Code of Federal Regulations Part 200, Subpart D, Section 200.303a, the Authority is required to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.
Condition Found: During our tests of controls relating to the review of loan file maintenance (i.e. Other Business items (OB's)), BerryDunn noted that there is no secondary review of maintenance changes made outside of the Authority's loan system.
Context: We noted these conditions while obtaining an understanding of internal control
for the respective transaction cycles listed in the findings.
Questioned Costs: None noted
Cause and Effect: There are no formal procedures documented for a secondary review of changes made to loan information outside the loan system. Maintenance changes are
currently tracked in a SharePoint document, but there is no review of changes once they are made.
Repeat Finding, if applicable: N/A
Recommendation: To reduce the risk of potential errors or fraud, we recommend that management implement a control to complete a secondary, independent review of all loan file
maintenance changes, including those made outside the loan system. This control should include documentation to provide evidence the review was completed by an individual that did not make the maintenance change.
Views of a Responsible Official and Corrective Action Plan: Management agrees with the finding and the recommendation. See Corrective Action Plan on Page 70.