Greater Eastern Oregon Development CorporationNon-Profit

Criteria or specific requirement (including statutory, regulatory, or other citation): GEODC is required to annually report to the Economic Development Administration on the EDA Cares RLF. Amounts reported should agree to underlying financial data and be reported within the correct financial categories as determined by the EDA. Condition: Multiple amounts reported on the June 30, 2024 ED-209 RLF Financial Report were either incorrect, or incorrectly reported. Cause: GEODC's reporting procedure is to have at least two employees involved in the reporting process. One employee prepares the report, while a second authorized employee reviews and submits the report. At some point in this process, errors were made in either the reporting process, the reviewing process, or both. Effect: This resulted in the June 30, 2024 EDA Cares RLF annual reporting being incorrect and out of compliance. Context: This condition has resulted in a significant deficiency reported in the audit reporting package. Recommendation: We recommend that employees involved in the reporting process review form ED-209 reporting rules and regulations. It is also recommended that any incorrect reports filed with the EDA be corrected prior to the submission of the June 30, 2025 report. Corrective Action Taken: As recommended, GEODC will review it's reporting process and correct any filings that are incorrect and out of compliance.

U. S. Department of Commerce, COVID-19 EDA CARES RLF and Planning Grant, Listing Number 11.307 2023-03 Material Weakness: Questioned costs were identified within the EDA CARES Planning grant and EDA CARES RLF, $131,986 and $30,865, respectively. $131,986 and $30,865 of federal funds remained unspent at the end of the grant periods and were transferred to the general fund under the assumption unspent funds could be spent in any manner. Criteria: Grant specialists at the Economic Development Administration confirmed all federal funds were to be spent in align with the original Scope of Work and fall within the project period dates. Condition: $162,851 of federal funds were not spent in align with the original Scope of Work and within the project period dates. Cause: GEODC staff did not have adequate knowledge of the EDA CARES Planning grant and EDA CARES RLF that would enable them to identify unallowable costs. Effect: The result is a questioned cost of $162,851 and a compliance violation of requirements pertaining to Activities Allowed/Allowable Costs being reported in the audit reporting package. Context: After the annual audit $131,986 of federal funding was returned to the US Department of Commerce and $30,865 was returned to the EDA CARES revolving loan fund cash balance. Recommendation: We recommend $131,986 of federal funding be returned to the US Department of Commerce and $30,865 returned to the EDA CARES revolving loan fund cash balance. Views of Responsible Officials and Planned Corrective Actions: GEODC staff agreed with the finding and completed the recommended steps after the issue was identified in the annual audit but before the date of our audit report.

U. S. Department of Commerce, COVID-19 EDA CARES RLF and Planning Grant, Listing Number 11.307 2023-04 Material Weakness: Unallowable costs for the EDA Cares Planning Grant and EDA Cares Revolving Loan Fund were not identified in a timely or accurate manner. Criteria: GEODC staff are required to have or obtain adequate knowledge of federal funding program requirements that will allow them to spend funding in accordance with all compliance requirements set forth in grant documents. Condition: Federal funds were not spent in align with the original Scope of Work and within the project period dates specified in the grant documents. Cause: GEODC staff did not have adequately comply with federal funding compliance requirements within their control. Effect: This has resulted in a material weakness in internal control over compliance pertaining to Activities Allowed/Allowable Costs being reported in the audit reporting package. Context: The grant period has ended for this particular funding but GEODC administers many contracts and grants for which adequate knowledge of funding requirements are needed. Recommendation: We recommend GEODC improve controls over compliance with Activities Allowed/Allowable Costs by accepting federal funding only when staff have or can obtain adequate knowledge of program requirements that will enable them to spend funding in accordance with all federal compliance requirements. Views of Responsible Officials and Planned Corrective Actions: GEODC staff are in agreement with the recommendation and will improve internal controls over compliance with Activities Allowed/Allowable Costs by accepting federal funding only when staff have or can obtain adequate knowledge of program requirements that will enable them to spend funding in accordance with all federal compliance requirements.

U. S. Department of Commerce, COVID-19 EDA CARES RLF, Listing Number 11.307 2023-05 Material Weakness: The final report submitted to EDA for the CARES Planning grant incorrectly reported that all funds had been spent when $131,986 remained unspent. Criteria: All grant reports are required to be submitted timely and agree with supporting financial records. Condition: The final report submitted to EDA for the CARES Planning grant incorrectly reported that all funds had been spent when $131,986 remained unspent. Cause: During our testing it was found that one member of the GEODC staff is preparing and reviewing federal grant reports and did not have adequate knowledge to complete the reports correctly. Effect: Incorrect reporting led EDA to close the grant without question and results in a questioned cost of $131,986 and a compliance violation of requirements pertaining to Reporting being reported in the audit reporting package. Context: After the annual audit $131,986 of federal funding was returned to the US Department of Commerce. Recommendation: We recommend unspent federal funds $131,986 be reported and be returned to the US Department of Commerce. Views of Responsible Officials and Planned Corrective Actions: GEODC staff agreed with the finding and completed the recommended step after the issue was identified in the annual audit but before the date of our audit report.

U. S. Department of Commerce, COVID-19 EDA CARES RLF, Listing Number 11.307 2023-06 Material Weakness: During our testing it was found that one member of the GEODC staff is preparing and reviewing federal grant reports. The reports did not accruately relfect the grant activity. Criteria: GEODC staff are required to have controls in place to assure grant reports are submitted timely and agree with supporting financial records. Condition: Final reporting of the EDA CARES Planning grant did not agree to supporting financial records. Cause: During our testing it was found that one member of the GEODC staff is preparing and reviewing federal grant reports and did not have adequate knowledge to complete the reports correctly. Effect: Incorrect reporting led EDA to close the grant without question and results in a questioned cost of $131,986 and a material weakness in internal control over compliance pertaining to Reporting being reported in the audit reporting package. Context: After the annual audit $131,986 of unspent federal funding was reported and returned to the US Department of Commerce. Recommendation: We recommend GEODC improve controls over compliance for reporting by designating grant reporting to one member of the GEODC staff and review of the reports to a deferent staff member. The staff member directly involved in the financial accounting function of GEODC should perform one of these duties. Views of Responsible Officials and Planned Corrective Actions: GEODC staff are in agreement with the recommendation and will improve controls over compliance for reporting by designating grant reporting to one member of the GEODC staff and review of the reports to a different staff member, making sure the staff member directly involved in the financial accounting function of GEODC performs one of these duties.

2021-003 Coronavirus Relief Funds, CFDA Number 21.019, U.S. Department of the Treasury Significant Deficiency: During compliance testing it was noted that there was a grant recipient of the Coronavirus Relief Fund Business Oregon Program who was found to be ineligible, however they were listed on the report to Business Oregon as a grant recipient. The entity was forgiven the loan amount even though it was not paid to the recipient. Criteria: The entity received funds from Business Oregon for a recipient that was ineligible and was not paid. Condition: The entity was overpaid in the federal program. Cause: The entity did not have the procedures in place to verify payments received from Business Oregon were for payments paid to recipients. Effect: The entity received federal funds that they were not eligible to receive. Context: The entity handled a large volume of loans and after additional testing, this was the only such exception noted. Recommendation: We recommend the entity set up a review of funds received from Business Oregon and verify all funds are for eligible participants. View of Responsible Officials and Planned Corrective Actions: As recommended above, GEODC will implement a review process for all funds reimbursed through the program.

2021-004 Coronavirus Relief Funds, CFDA Number 21.019, U.S. Department of the Treasury Significant Deficiency: During our test of internal controls over compliance it was noted that 2 payments for grant recipients were made to individuals instead of the entity which applied for the grant. Criteria: The entity did not have internal controls in place to verify payment for the grant was to the grant applicant. Condition: The entity paid individuals for grant funds that were applied for by a business entity. Cause: The entity did not have the procedures in place to verify payments received were made to the grant applicant. Effect: The entity risks paying out funds to an ineligible individual instead of a business applicant. Context: The entity handled a large volume of loans and after additional testing, there were 2 exceptions noted. Recommendation: We recommend the entity set up internal controls over grant disbursements to verify payment is to the correct applicant. View of Responsible Officials and Planned Corrective Actions: As recommended above, GEODC will implement a review process for all funds paid out for the program.

Significant Deficiency: The corporation did not comply with grant reporting requirements. It does not appear Greater Eastern Oregon Development District had sufficient internal controls over reporting in place and functioning to ensure compliance with reporting requirements. Criteria: The entity did not comply with reporting requirements in the Economic Development Assistance Revolving Loan Fund program. GEODC is required to submit ED-209 report annually to EDA. Reports are due within 90 days following the end of period month. Condition: The June 30, 2020 report, which was due September 30, 2020 and was not filed by audit date. Cause: The entity had key person turnover in the financial area. This led to significant changes in duties among the staff. Effect: The entity could jeopardize their loan program by not complying with reporting requirements. Recommendation: We recommend the entity set up an internal control system to track reporting requirements. In addition, we recommend they complete and submit the report within 30 days. View of Responsible Officials and Planned Corrective Actions: As recommended above, GEODC will submit the report within 30 days. In addition, they have implemented a tickler system to track reporting requirements and deadlines.

Significant Deficiency: The corporation did not comply with loan requirements relating to signatures on loan documents in the Economic Development Assistance-Revolving Loan Fund Program. It does not appear internal controls were in place and functioning to ensure proper loan documentation was obtained. Criteria: Term business loan agreements are required to be signed by the borrower and an authorized representative from the entity. Condition: A term business loan agreement on a new loan was not signed by the entity. Cause: Due to the COVID-19 crisis, loan document signings were being conducted remotely. This led to a breakdown in the review process of new loan documents. Effect: The entity could jeopardize their legal standing on the loan by not complying with signature requirements. Context: Although the condition results in a finding, the reader should be aware that the entity has now obtained all required signatures. Recommendation: We recommend the entity set up an internal control system to review completed loan files. View of Responsible Officials and Planned Corrective Actions: As recommended above, GEODC will implement a review process for all new loans effective immediately. In addition, all required signatures have been obtained.

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