Finding 575730 (2024-003)

Material Weakness
Requirement
L
Questioned Costs
-
Year
2024
Accepted
2025-09-05
Audit: 365724
Organization: Parkview Services (WA)

AI Summary

  • Core Issue: The Organization failed to include the COVID-19 EIDL loan of $584,853 in the SEFA draft, leading to an 8% understatement of federal awards.
  • Impacted Requirements: This omission violates 2 CFR 200.502, which mandates reporting of federal loans and ongoing compliance requirements.
  • Recommended Follow-Up: Review loan agreements and specific guidance to ensure all federal loans are accurately reported in future SEFA submissions.

Finding Text

Identification as a Repeat Finding: No Finding: The Organization omitted the COVID-19 Economic Injury Disaster Assistance Loan (EIDL) from the initial draft of the SEFA presented to auditors. Criteria: 2 CFR 200.502 requires the auditee to report federal awards expended under loan programs including the balance of loans from previous years at the beginning of the audit period for which the Federal Government imposes continuing compliance requirements. The EIDL loan requires annual reporting to the Small Business Administration (SBA) as noted in prior year Finding 2023-002. Sample Size and Population: Not applicable Condition and Context: The EIDL loan totaling $584,853 was omitted from the draft SEFA provided to auditors on May 15, 2025. Effect: Exclusion understated total federal awards by 8%, changing the preliminary major-program determination and potentially reducing audit coverage below the required 40% threshold. Cause: The Organization did not identify ongoing compliance requirements associated with the EIDL loan. Management relied on SBA guidance that addresses PPP loans and other SBA programs but do not mention COVID-19 Relief EIDL programs, indicating a training gap in award-specific requirements. Recommendations: We recommend the Organization review loan agreements and program specific guidance for continuing compliance requirements before removing federal loans from the SEFA. Questioned Costs: None Management Response: Management response is reported in the “Corrective Action Plan” at the end of this report. Contact Person: Marc Cote, Executive Director 206-542-6644

Corrective Action Plan

Management agrees with this finding. Parkview Services will implement a formal SEFA preparation checklist by December 31st, 2025 that requires Finance Director to review federal loan agreements, program-specific compliance supplements, and prior year SEFAs to ensure all applicable programs are reported. The checklist will include a step to verify whether any federal loans with ongoing compliance requirements, including EIDL, must be included even if no new funds were expended during the audit period. The Finance Director will find and take trainings and seek out updates on federal reporting requirements, including any programspecific guidance for all federal awards held by the organization. Finance Director will monitor and idetntify of continuing compliance requirements for loans, as well as the treatment of federal loans in the SEFA. Before finalizing the SEFA each year, the Finance Director will perform a documented review of the draft against the checklist and supporting loan documentation. The Executive Director will provide a secondary review to confirm completeness before submission to the auditors. This dual review process will begin with the preparation of the 2025 SEFA.

Categories

Reporting Matching / Level of Effort / Earmarking

Other Findings in this Audit

  • 575726 2024-001
    Significant Deficiency
  • 575727 2024-002
    Material Weakness
  • 575728 2024-002
    Material Weakness
  • 575729 2024-002
    Material Weakness
  • 1152168 2024-001
    Significant Deficiency
  • 1152169 2024-002
    Material Weakness
  • 1152170 2024-002
    Material Weakness
  • 1152171 2024-002
    Material Weakness
  • 1152172 2024-003
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
59.008 Disaster Assistance Loans $584,853
14.218 Community Development Block Grants/entitlement Grants $306,528
14.239 Home Investment Partnerships Program $140,000
14.871 Section 8 Housing Choice Vouchers $119,953
21.026 Homeowner Assistance Fund $90,413
14.169 Housing Counseling Assistance Program $53,863
14.230 Rental Housing Rehabilitation $40,000