Finding Text
Finding 2024-004: Material Weakness: Reporting
Criteria: Section B of the grant agreement, Annual Report Submission Deadlines, requires OMB Standard Form 425 (SF 425) be filed by October 15, 2024. The form is utilized to report federal cash disbursements.
Condition: First Financial Credit Union filed the report on October 25, 2024, 10 days after the due date. In addition, the Credit Union reported provision for credit loss (PCL) expense of $2,778,000 in the federal cash disbursements section of the form. Although PCL is an allowable use of award funds, there were no federal cash disbursements of grant funds during the current fiscal year. These were inadvertent errors that occurred. Federal grant administration is a relatively new activity undertaken by the Credit Union.
Effect or potential effect: Reporting inaccurate information and late submission of the required reports may increase scrutiny by the CDFI over the Credit Union’s grant administration. This may result in losing future funding or potential repayment grant funds.
Recommendation: We recommend the Credit Union establish a procedure to track reporting due dates and ensure only federal cash disbursements are reported on Form SF 425.
Questioned costs: None.
Views of responsible officials: Management agrees with the finding. A process as described above will be established and implemented during the current year. Only federal cash disbursements, if any, will be reported on Form 425 going forward.