Finding Text
Special Tests and Provisions: Federal Agency: United States Small Business Administration (U.S. SBA).Program Name: Economic Injury Disaster Loan (EIDL). Federal Assistance Listing Number - 59.008. Criteria: U.S. SBA EIDL loan agreement requires that Isuroon must submit financial statements to SBA in such form that SBA may require not later than three (3) months after Isuroon’s fiscal year-end. Condition: During our audit, we noted that internal controls were not sufficient to ensure that financial statements are submitted, as they were never submitted to SBA as outlined in the loan agreement. Cause: Isuroon did not have the proper internal controls in place around loan management to ensure timely filing of its financial reports as part of compliance with the SBA regulations. Effect or Potential Effect: Without proper management of the Isuroon's SBA loan financial reporting requirements, Isuroon risks missing filing reports in their entirety, thus risking its SBA loan and may not be in compliance with the loan agreement. Recommendation – We recommend that Isuroon develop internal controls to ensure that all lenders’ filing requirements are identified and filings made in a timely manner. Additionally, Isuroon should file the required documentation with SBA as soon as feasible. View of Responsible Officials and Corrective Action Plan – To rectify the audit finding concerning the untimely submission of financial statements to the SBA as mandated by the EIDL agreement, Isuroon will prioritize the immediate filing of the required documentation with the SBA to mitigate any potential risks associated with non-compliance. This proactive approach will include a comprehensive review of all SBA filing requirements, enabling Isuroon to develop standardized procedures for prompt and accurate submissions. Additionally, Isuroon will establish robust internal controls tailored to manage obligations with all lenders, banks, and financial institutions, ensuring timely filing of financial reports in accordance with their respective agreements. By addressing these deficiencies and bolstering internal controls, Isuroon aims to safeguard its financial standing and uphold regulatory compliance across all loan agreements.