FAC Explorer

Finding 7615 (2023-002)

Material Weakness
Requirement
L
Questioned Costs
-
Year
2023
Accepted
2024-01-05
Audit: 9985
Organization: Chicago Neighborhood Initiatives, INC (IL)
Auditor: Novogradac & Company LLP

AI Summary

  • Core Issue: GAC submitted the required report for the CDFI Program on time, but it contained incorrect expenditure data.
  • Impacted Requirements: This oversight means GAC is not compliant with the reporting requirements of the Federal program.
  • Recommended Follow-Up: GAC should implement better tracking procedures for Federal award expenditures to ensure accurate reporting in the future.

Finding Text

Section III - Federal Award Findings and Questioned Costs Finding 2023-2 Criteria The Federal program, AL 21.020 Community Development Financial Institutions Program (“CDFI Program”), requires a Uses of Award Report for the year ended June 30, 2023 to be submitted by September 30, 2023. Statement of Condition The reporting to the CDFI Fund was submitted timely but did not include the correct expenditures per the SEFA included in the audit. Questioned Costs None Effect or Potential Effect The Company is in non-compliance with specific requirements of the major Federal program. Context and Cause GAC did not have procedures in place to ensure Federal awards expended were tracked accurately throughout the year to report the correct expenditures to the CDFI Fund. Recommendation GAC must establish controls to properly monitor expenditures of Federal awards expended in compliance with the CDFI programs and accurately report to the CDFI Fund.

Corrective Action Plan

Management acknowledges that controls were not in place to properly monitor when Federal awards were expended in compliance with CDFI programs to accurately report to CDFI FUND, which will be addressed through comprehensive training with GAC’s CDFI award compliance consultants. The Vice President of Finance, GAC’s Executive Director, and the accounting/loan servicing team will participate in multiple rounds of Federal award compliance training. Further, a compliance specialist with an accounting background will be engaged to meet regularly with the Executive Director and Vice President of Finance to ensure proper monitoring of Federal awards and accurate CDFI FUND reporting. In addition, the GAC team will meet regularly to discuss new loan closings and whether the funds deployed should be sourced to Federal awards or other non-Federal tranches of funds.

Categories

Reporting

Other Findings in this Audit

  • 584057 2023-002
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
21.020 Community Development Financial Institutions Program $700,000
21.024 Community Development Financial Institutions Rapid Response Program (cdfi Rrp) $107,610
59.046 Microloan Program $94,981
21.027 Coronavirus State and Local Fiscal Recovery Funds $88,618