Finding 601588 (2022-001)

Federal Award Information: Assistance Listing Number: 14.228 Program Title: Community Development Block Grant Federal Award Year(s): FY 2021-22 Name of Federal Agency: U.S. Department of Housing and Urban Development Passed through: State of California Department of Housing and Community Development Criteria or Specific Requirement: The County was unable to provide compliance supporting documentation for the Community Development Block Grant loan compliance requirements for the year ended June 30, 2022. Condition: We noted that of the 19 loan balances that we sampled over the course of our audit, the County was unable to provide supporting documentation relating to proof of insurance for 13 of the selected loans. Cause of the Condition: Per our inquiries with the County, due to the significant age of the selected loans, County personnel was unable to obtain the supporting documentation as a significant number of the selected loans had inception dates of ten years or more. Effect or Possible Effect: Adequate supporting documentation of outstanding loans are not being effectively maintained and archived by County personnel. Context: We selected a sample of 19 outstanding loan balances, of which County personnel were unable to provide supporting documentation for. Repeat Finding: This is a new finding for the fiscal year ended June 30, 2022. Recommendation: We recommend that management monitors each loan to ensure that the County maintains the most up-to-date information. Management?s Response and Corrective Action: The County agrees with the finding. The Development Services Department will submit copies of new loan documents to the Auditor-Controller?s Office where they will be maintained for the life of the loan.