Finding 479722 (2023-001)

Significant Deficiency Repeat Finding
Requirement
B
Questioned Costs
-
Year
2023
Accepted
2024-07-30

AI Summary

  • Core Issue: The Council overstated federal expenditures by $150,000 in the 2023 SEFA due to misreporting loan disbursements.
  • Impacted Requirements: Compliance with 2 CFR Part 200, which mandates accurate reporting of federal expenditures based on actual disbursements.
  • Recommended Follow-Up: Ensure proper reconciliation of SEFA expenditures with loan disbursements and utilize accurate reports from NLF’s loan management software for future reporting.

Finding Text

Federal Agency: Department of Housing and Urban Development Federal Program Title: Community Development Block Grants Assistance Listing Number: 14.228 Federal Award Identification Number and Year: B-21-DC-08-0001 2021 Pass-Through Agency: Colorado Department of Local Affairs Pass-Through Number: F20CDBG20630 Award Period: April 1, 2020 – March 31, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matter Criteria or Specific Requirement: In accordance with the requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (Uniform Guidance), the Council should report all federal expenditures in the schedule of expenditures of federal awards (SEFA) each fiscal year. Additionally, per 2 CFR section 200.502(a)-(d), the determination of when a federal award is expended must be based on when the activity related to the federal award occurs, including the value of new loans made during the audit period. Condition: In reviewing the expenditure detail and supporting documentation for the 2023 SEFA, the Council included $150,000 of excess federal expenditures that were not disbursed in 2023. Questioned Costs: None Context: The inclusion of excess expenditures to be reported in 2024 was identified during completeness testing of the current year major program. Cause: SEFA expenditures for the CDBG program were not reconciled to loan disbursements in 2023. Management misinterpreted the loan amount report provided by NLF’s loan management software. One loan for $150,000 was disbursed during 2023 and another $150,000 loan was disbursed to the same borrower in 2024. However, all $300,000 was initially reported on the 2023 SEFA. Effect: The 2023 SEFA was initially overstated by $150,000, and was subsequently adjusted. Repeat Finding: The finding is a repeat of a finding in the immediately prior year. Prior year finding number was 2022-003. Recommendation: We recommend that the Council record federal expenditures on the SEFA under the program in the year upon which the loan disbursement occurs using the proper report from NLF’s loan management software. Views of Responsible Officials: There is no disagreement with the audit finding.

Corrective Action Plan

Community Development Block Grants – Assistance Listing No. 14.228 Recommendation: We recommend that the Council record federal expenditures on the SEFA under the program in the year upon which the loan disbursement occurs using the proper report from NLF’s loan management software. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The Fiscal Office will work with the Program Director to ensure the proper report is used to identify actual loan disbursements, rather than agreed upon loan amounts, if different, for future SEFA preparation. Name(s) of the contact person(s) responsible for corrective action: Anita Cameron, NLF Director and Becky Walter, Finance Director Planned completion date for corrective action plan: December 31, 2024

Categories

Reporting Allowable Costs / Cost Principles Significant Deficiency Matching / Level of Effort / Earmarking

Other Findings in this Audit

  • 479723 2023-002
    Significant Deficiency Repeat
  • 1056164 2023-001
    Significant Deficiency Repeat
  • 1056165 2023-002
    Significant Deficiency Repeat

Programs in Audit

ALN Program Name Expenditures
81.042 Weatherization Assistance for Low-Income Persons $1.48M
93.568 Low-Income Home Energy Assistance $658,023
14.228 Community Development Block Grants/state's Program and Non-Entitlement Grants in Hawaii $464,000
93.889 National Bioterrorism Hospital Preparedness Program $200,335
97.067 Homeland Security Grant Program $176,316
11.302 Economic Development_support for Planning Organizations $144,401
93.045 Special Programs for the Aging_title Iii, Part C_nutrition Services $80,982
20.513 Enhanced Mobility of Seniors and Individuals with Disabilities $34,047
66.454 Water Quality Management Planning $33,733
93.052 National Family Caregiver Support, Title Iii, Part E $33,503
93.043 Special Programs for the Aging_title Iii, Part D_disease Prevention and Health Promotion Services $21,495
93.324 State Health Insurance Assistance Program $15,604
66.458 Capitalization Grants for Clean Water State Revolving Funds $14,023
93.041 Special Programs for the Aging_title Vii, Chapter 3_programs for Prevention of Elder Abuse, Neglect, and Exploitation $2,562
93.044 Special Programs for the Aging_title Iii, Part B_grants for Supportive Services and Senior Centers $0