Finding 609901 (2022-001)

Significant Deficiency
Requirement
I
Questioned Costs
-
Year
2022
Accepted
2023-09-10
Audit: 29222
Organization: Altcap (MO)

AI Summary

  • Core Issue: AltCap failed to verify Suspension and Debarment checks for five loans before approval.
  • Impacted Requirements: Compliance with 2 CFR 180.300, which mandates verification of entities to ensure they are not excluded from federal transactions.
  • Recommended Follow-Up: Implement a verification process for loan recipients and ensure checks against SAM exclusions are completed before loan commitments.

Finding Text

Finding 2022-001 (Significant Deficiency) AL# 21.020: Community Development Financial Institutions Program (CDFI), U.S. Department of Treasury, all open grants and years Condition: AltCap had five instances where Suspension and Debarment verification checks were not being completed prior to loans being made. Criteria: 2 CFR 180.300 states that when an entity enters into a covered transaction with another entity at the next lower tier, they must verify that the entity with whom they intend to do business is not excluded or disqualified. This can be done by: a) Checking SAM exclusions (sam.gov); or b) Collecting a certification from that entity; or c) Adding a clause or condition to the covered transaction with that entity. Questioned Costs: None noted. Context: Out of five loans tested, all five did not have a verification completed before entering into a covered transaction that the recipient was not suspended or debarred. The sample size was determined based upon the guidelines provided by the AICPA which is not a statistically valid sample. Cause: No procedures were in place to check if vendors charged to federal grants were suspended or debarred. Effect: AltCap could have covered transactions with loan recipients that may be suspended or debarred. Recommendation: We recommend that AltCap implement a process to review potential loan recipients being charged to federal grants that are in covered transactions and complete a suspension and debarment verification prior to committing to loan amounts. Views of Responsible Officials (Unaudited): In August 2023, we retroactively checked all loan recipients during 2022 for suspension and debarment. No exceptions were found. We will implement a procedure, effective immediately, to check Sam.gov exclusions during the loan approval process and include a copy of our search results with the approved loan application. We will also require the loan applicant certify, by submission of a certificate, that neither it nor its principals are presently debarred, suspended, proposed for disbarment, declared ineligible, or voluntarily excluded from participation in this transaction by any Federal department or agency. Estimated completion date: September 2023.

Categories

Procurement, Suspension & Debarment

Other Findings in this Audit

  • 33459 2022-001
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
21.024 Community Development Financial Institutions Rapid Response Program (cdfi Rrp) $1.35M
21.020 Community Development Financial Institutions Program $1.33M
11.307 Economic Adjustment Assistance $501,018
59.046 Microloan Program $8,555