FAC Explorer

Finding 553612 (2024-003)

Material Weakness
Requirement
N
Questioned Costs
-
Year
2024
Accepted
2025-04-01
Audit: 352193
Organization: Seda Council of Governments (PA)
Auditor: Larson Kellett & Associates PC

AI Summary

  • Core Issue: A loan was found to be uncollectible, but no allowance was recorded, violating GAAP requirements.
  • Impacted Requirements: The failure to record an allowance led to an understatement of both the allowance for uncollectible loans and bad debt expense.
  • Recommended Follow-up: Ensure the fiscal department is promptly informed of loan evaluations to accurately record necessary allowances in the future.

Finding Text

COVID-19-Economic Development Administration- CARES RLF - Assistance Listing No. 11.307, Grant period - Year ended June 30, 2024. See finding 2024-002 - listed below. ALLOWANCE FOR UNCOLLECTIBLE LOANS Criteria: GAAP requires loan receivables be evaluated for collectability and record an allowance as required. Condition: A loan receivable was determined to be uncollectible but no allowance was recorded. Cause: Loan evaluations were completed by management and a loan was determined to be uncollectible. The fiscal department was not informed to record an allowance. Effect: Allowance for uncollectible loans was understated and bad debt expense was understated. Questioned Costs: None .Perspective Information: Not applicable. Identification of Repeat Findings: Not applicable.

Corrective Action Plan

U.S DEPARTMENT OF COMMMERCE COVID-19-Economic Development Administration- CARES RLF - Assistance Listing No. 11.307, Grant period - Year ended June 30, 2024. See finding 2024-002 – listed below. ALLOWANCE FOR UNCOLLECTIBLE LOANS Recommendation: When management determines a loan is uncollectible, they should ensure an allowance is recorded. Management Response: Management concurs with finding. Planned Corrective Action: The Finance Department will include the Fiscal Manager and Fiscal Controller in any communications regarding problematic loans to ensure proper reporting. Persons Responsible: Jamie Carnes, Fiscal Controller Anticipated Completion Date: March 31, 2025.

Categories

Matching / Level of Effort / Earmarking

Other Findings in this Audit

  • 1130054 2024-003
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
11.307 Economic Adjustment Assistance $5.44M
93.568 Low-Income Home Energy Assistance $1.54M
81.042 Weatherization Assistance for Low-Income Persons $644,938
23.011 Appalachian Research, Technical Assistance, and Demonstration Projects $633,878
10.767 Intermediary Relending Program $327,038
21.027 Coronavirus State and Local Fiscal Recovery Funds $167,350
23.002 Appalachian Area Development $80,944
23.009 Appalachian Local Development District Assistance $66,751
12.002 Procurement Technical Assistance for Business Firms $59,499
20.205 Highway Planning and Construction $34,996
66.818 Brownfields Multipurpose, Assessment, Revolving Loan Fund, and Cleanup Cooperative Agreements $6,790
23.001 Appalachian Regional Development (see Individual Appalachian Programs) $5,802
11.302 Economic Development Support for Planning Organizations $2,465