EIN: 954210629
UEI: HLSTVFWGXHF9
Audited by: LSL CPAs
Oversight agency: 14 [Department of Housing and Urban Development]
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Data as of September 2, 2026
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on February 26, 2026. Under 2 CFR 200.521(d), a pass-through entity that provided federal funds to this organization for this audit period must issue a management decision on these findings by August 26, 2026 (9 days ago).
What is a management decision? →FAC accepted this audit on April 30, 2025 — management decision was due October 30, 2025.
The City is not adhering to their established policy to oversee loan compliance requirements and has not retained adequate documentation to demonstrate ongoing adherence to these requirements. Cause: The noncompliance is attributed to the City being unfamiliar with the continuing loan compliance requirements specified within the CDBG grant program and LACDA grant agreement. Effect or potential effect: The failure to comply with the continuing loan compliance requirements poses significant risks, including: • Potential mismanagement or misuse of funds by loan recipients. • Increased likelihood of default or financial instability among borrowers. • Inaccurate financial reporting and lack of accountability. • Overall diminished effectiveness and credibility of the CDBG program. Questioned costs: No questioned identified. Context: We tested 8 out of 37 loans that existed prior to the fiscal year ended June 30, 2024, noting the City did not have sufficient documentation to support continuing loan compliance requirements were met. Through discussions with the City, the City was unaware of the continuing loan compliance requirements per the grant agreement with LACDA. Recommendation: To address and rectify this noncompliance issue, it is recommended that the following actions be implemented: • Provide comprehensive training on monitoring procedures and compliance requirements. • Review grant policies checklists to ensure thorough and consistent treatment. • Establish a regular schedule for loan evaluations, document inspections, and follow-up actions. By taking these corrective measures, the City can ensure it meets the continuing loan monitoring requirements and supports the success and integrity of the Community Block Development program.
Show full finding ▾Hide full finding ▴2024-001 – Noncompliance with Continuing Loan Monitoring Requirements Material Weakness/Noncompliance Criteria: The City is a subrecipient of Community Development Block Grant (CDBG) funds from the Los Angeles County Development Authority (LACDA) for the Home Improvement Program. Per the grant agreement with LACDA, the City must regularly monitor loan recipients’ compliance with the loan agreement and program guidelines. Condition: The City is not adhering to their established policy to oversee loan compliance requirements and has not retained adequate documentation to demonstrate ongoing adherence to these requirements. Cause: The noncompliance is attributed to the City being unfamiliar with the continuing loan compliance requirements specified within the CDBG grant program and LACDA grant agreement. Effect or potential effect: The failure to comply with the continuing loan compliance requirements poses significant risks, including: • Potential mismanagement or misuse of funds by loan recipients. • Increased likelihood of default or financial instability among borrowers. • Inaccurate financial reporting and lack of accountability. • Overall diminished effectiveness and credibility of the CDBG program. Questioned costs: No questioned identified. Context: We tested 8 out of 37 loans that existed prior to the fiscal year ended June 30, 2024, noting the City did not have sufficient documentation to support continuing loan compliance requirements were met. Through discussions with the City, the City was unaware of the continuing loan compliance requirements per the grant agreement with LACDA. Recommendation: To address and rectify this noncompliance issue, it is recommended that the following actions be implemented: • Provide comprehensive training on monitoring procedures and compliance requirements. • Review grant policies checklists to ensure thorough and consistent treatment. • Establish a regular schedule for loan evaluations, document inspections, and follow-up actions. By taking these corrective measures, the City can ensure it meets the continuing loan monitoring requirements and supports the success and integrity of the Community Block Development program.
Corrective Action: The City acknowledges the finding regarding noncompliance with the continuing loan monitoring requirements for the Community Development Block Grant (CDBG) Home Improvement Program. We recognize the importance of ensuring full compliance with all grant requirements to maintain the integrity and effectiveness of the program. Training and Awareness: The City will provide comprehensive training to all relevant staff/consultants on the continuing loan monitoring requirements outlined in the LACDA grant agreement and CDBG program guidelines. Training sessions will be completed by June 30, 2026. Policy and Procedure Updates: The City will review and update its internal policies and procedures to clearly document the continuing loan monitoring process. A standardized compliance checklist and loan monitoring schedule will be developed to ensure consistent implementation across all loans. Loan Monitoring and Documentation: By June 30, 2026 the City will implement a regular schedule for evaluating outstanding loans, including, borrower compliance reviews, and follow-up actions where necessary. All monitoring activities will be fully documented and retained in each loan file. Ongoing Oversight: Management will assign a designated staff member/consultant responsible for overseeing the continuing loan compliance process, ensuring ongoing adherence to program requirements and addressing any issues promptly. The City is committed to strengthening internal controls, ensuring compliance with grant requirements, and maintaining the credibility of the Home Improvement Program. Proposed Completion Date: The corrective actions outlined above will be fully implemented by June 30, 2026.
FAC accepted this audit on February 28, 2024 — management decision was due August 28, 2024.
FAC accepted this audit on March 28, 2023 — management decision was due September 28, 2023.
FAC accepted this audit on May 30, 2022 — management decision was due November 30, 2022.
FAC accepted this audit on February 2, 2017 — management decision was due August 2, 2017.
Data source: This information comes from the Federal Audit Clearinghouse, the official repository of Single Audit data. All data is public domain. Verify this organization's audit history at fac.gov.
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