Audit Report - Oig 22 023 Coronavirus Disease 2019 Pandemic Relief Programs Audit Of The Communi
Summary
Department of the Treasury Office of Inspector General Audit Report OIG-22-023, Audit of the Community Development Financial Institutions Fund's Implementation of the CDFI Rapid Response Program, dated December 21, 2021, addressed to Jodie L. Harris, Director of the CDFI Fund. It states that the objective was to assess the CDFI Fund's implementation activities, including making CDFI RRP funds available and establishing policies, procedures and program guidance, covering December 27, 2020 through June 15, 2021, and that the audit did not test operating effectiveness. The contents list the finding that the CDFI RRP Assistance Agreement template was missing the Award Term and Condition for Recipient Integrity and Performance Matters, with a recommendation, and a section stating the implementation generally complied with federal requirements.
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Audit Report
OIG-22-023
CORONAVIRUS DISEASE 2019 PANDEMIC RELIEF
PROGRAMS
Audit of the Community Development
Financial Institutions Fund's Implementation
of the CDFI Rapid Response Program
December 21, 2021
Office of Inspector General
Department of the Treasury
This Page Intentionally Left Blank
Contents
Audit Report
Results in Brief .................................................................................................. 2
Background ...................................................................................................... 4
The CDFI Fund ............................................................................. 4
CDFI Certification.......................................................................... 6
CDFI RRP ..................................................................................... 7
CDFI RRP General Requirements ..................................................... 7
CDFI RRP Eligible Activities ............................................................ 9
CDFI Fund's Leverage of CDFI Program .......................................... 10
Audit Results .................................................................................................. 11
CDFI Fund’s Implementation of CDFI RRP Generally Complied with Federal
Requirements ............................................................................................. 11
Finding 1 CDFI RRP Assistance Agreement Template Was Missing “Award Term
and Condition for Recipient Integrity and Performance Matters” ........................ 20
Recommendation ........................................................................ 20
Appendices
Appendix 1: Objective, Scope, and Methodology ................................................. 22
Appendix 2: Management Response .................................................................. 27
Appendix 3: Major Contributors to This Report .................................................... 28
Appendix 4: Report Distribution......................................................................... 29
Abbreviations
AAT Application Assessment Tool
AMIS Awards Management Information System
CAA, 2021 Consolidated Appropriations Act, 2021
CCME Office of Certification, Compliance Monitoring, and Evaluation
CDFI Community Development Financial Institutions
CDFI RRP CDFI Rapid Response Program
COVID-19 Coronavirus Disease 2019
DUNS Dun and Bradstreet Data Universal Numbering System
FA Financial Assistance
i
FY Fiscal Year
GAO Government Accountability Office
Green Book Standards for Internal Control in the Federal Government
NACA Native American CDFI Assistance Program
NMTC New Markets Tax Credits
NOFA Notice of Funding Availability
OIG Treasury Office of Inspector General
OMB Office of Management and Budget
PRA Paperwork Reduction Act
SAM System for Award Management
SOP Standard Operating Procedures
TA Technical Assistance
Treasury Department of the Treasury
UEI Unique Entity Identifier
Uniform Guidance Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards, 2 CFR Part 200
ii
December 21, 2021
Jodie L. Harris
Director of the Community Development Financial Institutions Fund
This report presents the results of our audit of the Community
Development Financial Institutions (CDFI) Fund’s implementation of
the CDFI Rapid Response Program (CDFI RRP). Title V, Subtitle B in
Division N of the Consolidated Appropriations Act, 20211 (CAA,
2021) authorized the CDFI Fund to provide emergency support to
CDFIs2 and communities responding to the economic impact of the
Coronavirus Disease 2019 (COVID-19) pandemic. Furthermore, the
Department of the Treasury’s (Treasury) Office of Inspector
General (OIG) is required to submit a report twice a year to
Congress3 and Treasury on the oversight provided for the programs
established under Subtitle B, including any recommendations for
improvement. In accordance with this mandate, we conducted this
audit.
The objective of our audit was to assess the CDFI Fund’s
implementation activities, including making CDFI RRP funds
available, and establishing policies, procedures, and other program
guidance and documentation. As it relates to our audit objective,
funds available indicates the announcement of a funding
opportunity advertising the CDFI RRP to the public. The scope of
our audit included, but was not limited to, reviewing (1) CDFI RRP
1
P.L. 116-260 (December 27, 2020).
2
A CDFI must have the primary mission of promoting community development. The CDFI Fund will
consider whether the activities of the entity are purposefully directed toward improving the social
and/or economic conditions of underserved people (which may include low-income persons or
persons who lack adequate access to capital and/or financial services) and/or residents of
economically distressed communities.
3
The committees of Congress named under Subtitle B include the Committee on Financial Services of
the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the
Senate.
Audit of the Community Development Financial Institutions Fund's
Implementation of the CDFI Rapid Response Program (OIG-22-023) 1
Application requirements; (2) the Notice of Funds Availability
(NOFA); 4 (3) CDFI RRP policies and procedures; (4) award terms
and conditions included in the CDFI RRP Assistance Agreement 5
(Assistance Agreement) template; and (5) other documentation
governing the CDFI Fund’s administration of the CDFI RRP. Our
audit scope included CDFI Fund’s activities related to the design
and implementation of the CDFI RRP, from December 27, 2020,
through June 15, 2021. Our audit scope did not include testing
operating effectiveness of the CDFI Fund’s CDFI RRP
implementation activities, and as such, we did not review CDFI
RRP Applications to determine whether the CDFI Fund approved
them in accordance with the CAA, 2021 and policies and
procedures it established for the program.
To accomplish our audit objective, we reviewed applicable Federal
laws, regulations, and guidance; reviewed CDFI Fund
documentation related to the establishment and implementation of
the CDFI RRP; interviewed CDFI Fund personnel; selected a non-
statistical sample of CDFI RRP Applications to review; and
conducted a walkthrough of the CDFI Fund’s process for evaluating
CDFI RRP Applications and making award determinations. We
conducted our audit fieldwork remotely, due to the COVID-19
pandemic, between April and June 2021. Appendix 1 contains a
more detailed description of our objective, scope, and
methodology.
Results in Brief
The CDFI Fund management took prompt actions to provide
emergency funding to CDFIs to respond to economic challenges
that resulted from the COVID-19 pandemic. The CDFI Fund made
appropriated funds available on February 25, 2021, meeting the
mandated deadline of no later than 60 days after enactment of the
CAA, 2021 on December 27, 2020. CDFI Fund management
4
The NOFA is a Federal agency’s formal announcement of the availability of Federal funding through a
financial assistance program.
5
The Assistance Agreement is a legally binding contract between the CDFI Fund and the recipient. It
contains the following key components: annual reporting requirements and associated deadlines;
performance goals and measures; authorized activities for award funds; general award terms and
conditions; and schedules for other forms of award, as applicable.
Audit of the Community Development Financial Institutions Fund's
Implementation of the CDFI Rapid Response Program (OIG-22-023) 2
followed the Office of Management and Budget’s (OMB) Uniform
Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards, 2 CFR Part 200 (Uniform
Guidance) 6 to make the funds available and design the framework
for a program that could comply with the CAA, 2021.
The CDFI Fund established internal controls over the CDFI RRP in
accordance with the Government Accountability Office’s (GAO)
Standards for Internal Control in the Federal Government (Green
Book) 7 to include (1) a process for CDFIs to apply for CDFI RRP
awards conforming to the CAA, 2021; and (2) a CDFI RRP
Application evaluation process (including award determinations) to
meet the legislative requirements. The CDFI RRP Application
evaluation process also complied with the Uniform Guidance.
Furthermore, the CDFI Fund established performance goals and
developed the Assistance Agreement template for the CDFI RRP
that included general terms and conditions in accordance with the
Uniform Guidance. However, we found the Assistance Agreement
template was missing the “Award Term and Condition for Recipient
Integrity and Performance Matters” 8 in the terms and conditions of
award as detailed in Finding 1. CDFI Fund officials noted the
discrepancy and revised the Assistance Agreement template to
include this award term and condition on June 11, 2021, before
awarding any CDFI RRP grants on June 15, 2021.
If the CDFI Fund had not revised its Assistance Agreement
template to include the “Award Term and Condition for Recipient
Integrity and Performance Matters,” CDFI RRP award recipients
would have been at risk of noncompliance with the Uniform
Guidance. As such, we recommend the Director of the CDFI Fund
ensures reviews of all other CDFI Fund Assistance Agreements are
performed to confirm that the “Award Term and Condition for
6
The Uniform Guidance is an authoritative set of rules and requirements for Federal awards.
7
The Green Book sets the standards for an effective internal control system for Federal agencies and
provides the overall framework for designing, implementing, and operating an effective internal
control system.
8
The award term requires Federal award recipients to semi-annually report information on civil,
criminal, or administrative proceedings in the Federal Awardee Performance Integrity Information
System if the total value of the recipient’s currently active Federal grants, cooperative agreements,
and contracts from all Federal awarding agencies exceed $10 million within the award performance
period. It is a statutory requirement under Section 872 of P. L. 110-417 (October 2008).
Audit of the Community Development Financial Institutions Fund's
Implementation of the CDFI Rapid Response Program (OIG-22-023) 3
Recipient Integrity and Performance Matters” has been
incorporated.
In a written response included as appendix 2, CDFI Fund
management concurred with our audit recommendation and stated
that the CDFI RRP Assistance Agreement template was revised on
June 10, 2021, to incorporate the "Award Term and Condition for
Recipient Integrity and Performance Matters" before awarding any
CDFI RRP grants on June 15, 2021; as such, all executed CDFI
RRP recipient Assistance Agreements contained this term.
Management also noted that, in August 2021, the CDFI Fund
Office of Legal Counsel conducted a review of all CDFI Fund
Assistance Agreements and confirmed that the “Award Term and
Condition for Recipient Integrity and Performance Matters” was
incorporated in all other Assistance Agreements. Management’s
corrective action, if implemented as stated, meets the intent of our
recommendation. We have summarized management’s response in
the recommendations section of this report. Management’s written
response, in its entirety, is included in appendix 2 of this report.
Background
The CDFI Fund
The CDFI Fund was established by the Riegle Community
Development Banking and Financial Institutions Act of 1994 9 with
the purpose of promoting economic revitalization and community
development through investment in and assistance to CDFIs. Since
its inception, the CDFI Fund has built a nationwide network of
CDFIs that aim to ensure underserved communities have access to
quality, affordable, and credible financial services.
The CDFI Fund administers various programs aimed at expanding
the availability of credit, investment capital, and financial services
in distressed urban, rural, and Native communities. 10 The CDFI
Program and Native American CDFI Assistance Program (NACA
9
P.L. 103-325, The Riegle Community Development and Regulatory Improvement Act of 1994
(September 23, 1994).
10
A Native Community is defined as Native American, Alaska Native, or Native Hawaiian populations or
Native American areas defined as Federally-designated reservations, Hawaiian homelands, Alaska
Native Villages, and U.S. Census Bureau-designated Tribal Statistical areas.
Audit of the Community Development Financial Institutions Fund's
Implementation of the CDFI Rapid Response Program (OIG-22-023) 4
Program) provide awards (e.g. grants and loans) to CDFIs and
organizations seeking to become CDFIs to sustain and expand their
services and to build their technical capacity. The CDFI Fund also
supports community development through the Bank Enterprise
Award Program, which provides grants to institutions insured by
the Federal Deposit Insurance Corporation. The CDFI Fund’s role in
promoting community and economic development expanded in
fiscal year (FY) 2001 when the Secretary of the Treasury delegated
authority to the CDFI Fund to award New Markets Tax Credits
(NMTC) to community development entities investing in
underserved communities. The CDFI Fund’s portfolio continued to
expand with the Capital Magnet Fund, which offers competitively
awarded grants to CDFIs for financing affordable housing solutions
for low-income people and low-income communities nationwide.
Through the CDFI Bond Guarantee Program, the CDFI Fund
guarantees the full amount of notes or bonds issued to support
CDFIs that make investments for eligible community or economic
development purposes. In September 2021, the CDFI Fund
launched the Small Dollar Loan Program to help unbanked and
underbanked populations build credit, access affordable credit, and
allow greater access to the mainstream financial system. 11
The CDFI Fund is led by a Director who is supported by a Senior
Advisor, the Office of Legal Counsel, and the Office of Legislative
and External Affairs. There are two Deputy Directors who oversee
programs and operations: (1) the Deputy Director of Policy and
Programs leads policy development, operating procedures, internal
controls, and strategic planning; and (2) the Deputy Director of
Finance and Operations leads financial strategies and research,
operations and resource management, information technology, and
the Office of Certification, Compliance Monitoring, and Evaluation
(CCME).
The CDFI Fund designated the Program Manager for the CDFI
Program and NACA Program to serve as the Program Manager for
the CDFI RRP. The Program Manager, who reports to the Deputy
Director of Policy and Programs, was responsible for establishing
and implementing the CDFI RRP as well as developing the program
structure and designing program policies. Furthermore, the Program
11
Authorized under Dodd-Frank Wall Street Reform and Consumer Protection Act (P. L. 111-203;
July 21, 2010).
Audit of the Community Development Financial Institutions Fund's
Implementation of the CDFI Rapid Response Program (OIG-22-023) 5
Manager led a team to develop the CDFI RRP procedures, the
NOFA, technology requirements, and CDFI RRP Application
requirements in the CDFI Fund’s Awards Management Information
System (AMIS). 12
CDFI Certification
CDFI certification is the CDFI Fund’s recognition of specialized
financial institutions serving low-income communities. Through
certification, CDFIs are qualified to apply for Financial Assistance
(FA) 13 awards from the CDFI Fund. Additionally, certified CDFIs, as
well as entities seeking to become certified CDFIs, are eligible to
apply for Technical Assistance (TA) 14 awards, and can access
training provided by the CDFI Fund through the Capacity Building
Initiative. 15
To become certified, an organization must: (1) be a legal entity;
(2) have a primary mission of promoting community development;
(3) be a financing entity; (4) provide development services along
with financing activities; (5) serve one or more target market(s); 16
(6) maintain accountability to its defined target market(s); and (7)
be a non-government entity and not under the control of any
government entity. An eligible organization must submit a CDFI
Certification Application to the CDFI Fund for approval. Certified
CDFIs are required to confirm adherence to the CDFI certification
12
AMIS is an enterprise-wide business system that supports all CDFI Fund programs through each
phase of the programs’ life cycle, including processes related to certification, program awards and
allocations, pre-award, compliance reporting, and data analysis. Additionally, applicants use AMIS to
create, complete, and submit applications.
13
FA awards allow CDFIs to sustain and expand their products and services as outlined in their funding
applications. The awards can be used for eligible activities including lending capital, loan loss
reserves, capital reserves, operations, and development services.
14
TA awards allow for capacity development that is integral to CDFIs’ organizational sustainability and
success.
15
The CDFI Fund created the Capacity Building Initiative to help CDFIs improve their ability to deliver
financial products and services to economically underserved communities. CDFIs can access free
training workshops, webinars, market research, customized technical assistance, and informational
resources to help them develop, diversify, and grow.
16
A target market refers to one or more Investment Area(s), as defined in footnote 20, and/or Targeted
Population(s). Targeted Population(s) may include Low-Income Targeted Population(s) or other
Targeted Population(s) in the organization’s service area for which there exists a strong basis in
evidence that the group lacks access to loans, equity investments, and/or financial services. A target
market is established when a certified CDFI selects an Investment Area as its target market.
Audit of the Community Development Financial Institutions Fund's
Implementation of the CDFI Rapid Response Program (OIG-22-023) 6
guidelines annually through the submission of an Annual
Certification and Data Collection Report. 17 As of February 26,
2021, there were 1,237 certified CDFIs, of which 70 were
designated as certified Native CDFIs. 18
CDFI RRP
The CAA, 2021 appropriated $3 billion to the CDFI Fund to
support, prepare for, and respond to the economic impact of
COVID-19. No later than 60 days after enactment on
December 27, 2020, the CDFI Fund was to make $1.25 billion 19
available as grants, of which $25 million must benefit Native
communities. Furthermore, the CDFI Fund must provide grants
using a formula that takes into account selected criteria, such as
certification status, financial and compliance performance, portfolio
and balance sheet strength, a diversity of CDFI business model
types, and program capacity. The $1.25 billion, which was
available through September 30, 2021, was awarded as of
June 15, 2021.
On December 30, 2020, the CDFI Fund announced the
establishment of the CDFI RRP. The CDFI Fund created the
program with the goal of quickly deploying capital to certified
CDFIs through a streamlined application and review process to
alleviate urgent community needs.
CDFI RRP General Requirements
To be eligible and apply for a CDFI RRP grant, the CDFI must
comply with all outstanding CDFI awards, NMTC allocations, or
bond guarantee requirements, as well as meet benchmarks for
CDFI Fund programs and financial safety and soundness.
Additionally, only a CDFI that received certification from the CDFI
17
CDFIs must submit an Annual Certification and Data Collection Report in AMIS within 90 days of the
end of their organization’s fiscal year. The CDFI Fund uses the information to assess the CDFIs’
compliance with the CDFI certification guidelines and to collect CDFI industry information.
18
Native CDFIs are those that serve primarily in Native communities.
19
The remaining $1.75 billion is to be available until expended for small business and minority lending
that is not within the scope of this audit.
Audit of the Community Development Financial Institutions Fund's
Implementation of the CDFI Rapid Response Program (OIG-22-023) 7
Fund as of the day the NOFA is published in the Federal Register is
eligible to apply for a CDFI RRP grant.
To apply for a CDFI RRP grant and qualify as a CDFI that serves
Native communities, 50 percent or more of the CDFI’s past
activities must be directed to Native communities and the CDFI’s
certified target market must meet selected characteristics. For
example, to qualify with an Investment Area 20 target market, CDFI
must demonstrate that the Investment Area approved for
certification is also a geographic area of Federally-designated
reservations, Hawaiian homelands, Alaska Native Villages, and U.S.
Census Bureau-designated Tribal Statistical Areas.
To submit a CDFI RRP Application successfully, the CDFI must
register in Grants.gov, 21 System for Award Management
(SAM.gov), 22 and AMIS. The CDFI must also obtain an Employer
Identification Number, 23 a Dun and Bradstreet Data Universal
Numbering System (DUNS) Number, 24 and ensure consistency of
information between SAM.gov and AMIS. Furthermore, the CDFI
must submit the OMB Standard Form 424, “Application for Federal
20
Per 12 CFR 1805.201, Certification as a Community Development Financial Institution, section
(b)(3)(ii), a geographic area will be considered eligible for designation as an Investment Area if it is
located within the United States; and either meets at least one of the objective criteria of economic
distress and has significant unmet needs for loans, equity investments, financial products, or
financial services; or is located within an Empowerment Zone or Enterprise Community designated
under section 1391 of the Internal Revenue Code of 1986. The distress criteria are the following: (1)
poverty rate of at least 20 percent; (2) median family income at 80 percent or below within a
metropolitan or non-metropolitan area; (3) unemployment rate is at least 1.5 times the national
average; (4) non-metropolitan area county population loss is at least 10 percent between the most
recent and previous census; and (5) non-metropolitan area county net migration loss during the 5-
year period preceding the most recent census is at least 5 percent.
21
Grants.gov is a system that provides a centralized location for grant seekers to find and apply for
Federal funding opportunities.
22
SAM.gov is a web-based, government-wide application that collects, validates, stores, and
disseminates business information about the Federal government's trading partners in support of the
contract awards, grants, and electronic payment processes.
23
An Employer Identification Number is also known as a Federal Tax Identification Number, and is used
to identify a business entity. This number is provided by the Internal Revenue Service.
24
The DUNS number is a nine-digit non-indicative numbering sequence and is assigned at the lowest
organizational level, i.e. business locations with a unique, separate, and distinct operation. It is
assigned to all types of business organizations, including partnerships and non-profits. In April 2022,
the General Services Administration will transition from DUNS to a new Unique Entity Identifier (UEI)
in SAM.gov. As of this audit, DUNS was still used for the CDFI RRP Application cycle.
Audit of the Community Development Financial Institutions Fund's
Implementation of the CDFI Rapid Response Program (OIG-22-023) 8
Assistance,” in Grants.gov before submitting the CDFI RRP
Application in AMIS.
CDFI RRP Eligible Activities
CDFI RRP grants may be used for selected lines of business,
including commercial real estate, small businesses, consumer
financial products, consumer financial services, and affordable
housing. Additionally, the CDFI RRP grants may be used on five
eligible activity categories that support the delivery of financial
products and services that include: (1) financial products (e.g.
loans and equity investments); (2) financial services (e.g. providing
checking and savings accounts); (3) loan loss reserves (e.g. grant
funds set aside in the form of cash reserves to cover losses on
loans); (4) development services (e.g. activities that promote
community development); and (5) capital reserves (e.g. grant funds
set-aside as reserves to support a CDFI’s ability to leverage other
capital for a specific purpose, such as providing financing). The
CDFI Fund noted that only regulated CDFIs 25 may expend a CDFI
RRP grant for financial services and capital reserves.
CDFI RRP grants may also be used in seven categories that support
a CDFI’s operations: (1) compensation–personal services (i.e.
compensation for services CDFIs’ employees delivered during CDFI
RRP’s period of performance); (2) compensation–fringe benefits
(i.e. funds paid to cover allowances and services a CDFI provides
to its employees in the form of compensation in addition to its
employees’ salaries and wages); (3) professional service costs (e.g.
costs for consultant and professional services); (4) travel costs
(e.g. transportation and lodging costs); (5) training and education
costs (e.g. training a CDFI conducts for its employees); (6)
equipment (e.g. information technology systems); and (7) supplies
(i.e. tangible personal property costing less than $5,000). Per the
CDFI Fund, “the greater of $200,000” or 15 percent of the CDFI
RRP grant may be used on these seven categories.
The period of performance for CDFI RRP grants begins on the date
of the award announcement and covers the CDFI’s two full
consecutive fiscal years after that date. The CDFI Fund will not
25
Regulated CDFIs include insured credit unions, insured depository institutions, state-insured credit
unions, and depository institution holding companies.
Audit of the Community Development Financial Institutions Fund's
Implementation of the CDFI Rapid Response Program (OIG-22-023) 9
amend an Assistance Agreement solely to extend the period of
performance to allow a recipient additional time to expend the CDFI
RRP grant.
CDFI Fund's Leverage of CDFI Program
The CDFI Fund leveraged the CDFI Program to establish the CDFI
RRP. Although the CDFI RRP is a new grant program, it is not a
new concept to the CDFI Fund as it has awarded CDFI Program
grants since 1994. The CDFI Fund used established documents and
processes to include: standard operating procedures (SOPs) and
guidance for FA and TA, Paperwork Reduction Act (PRA) 26
compliant information collection procedures, existing infrastructure
(i.e. staff, AMIS), and guidance materials when creating the CDFI
RRP.
The CDFI Fund created the CDFI RRP Application to focus on
targeted financial data and applicant information similar to FA and
TA applications. To develop the application evaluation process, the
CDFI Fund streamlined the “Community Development Financial
Institutions Program and Native American CDFI Assistance Program
Standard Operating Procedures FY 2021” to meet the intent of the
CAA, 2021. Specifically, the CDFI Fund eliminated unnecessary
evaluation steps due to the differences between the CDFI RRP and
CDFI Program (e.g. matching funds eligibility review is only needed
for specific FA applications). CDFI Program evaluations include
conducting eligibility reviews, financial safety and soundness
analyses, compliance risk evaluations, and award determinations
based on the analyses conducted and rules outlined in the NOFA.
26
The PRA is a law governing how Federal agencies collect information from the American public.
Agency information collection requests generally must go through a PRA clearance process
conducted by OMB.
Audit of the Community Development Financial Institutions Fund's
Implementation of the CDFI Rapid Response Program (OIG-22-023) 10
Audit Results
CDFI Fund’s Implementation of CDFI RRP Generally
Complied with Federal Requirements
CDFI Fund management took prompt actions to deploy emergency
funding to eligible CDFIs to respond to economic challenges
resulting from the COVID-19 pandemic. That is, management made
$1.25 billion of the $3 billion appropriated funds available on
February 25, 2021, meeting the mandated deadline for funds
availability of no later than 60 days from the enactment of the
CAA, 2021 on December 27, 2020. Furthermore, management
complied with the Uniform Guidance by making CDFI RRP funds
available and designing the framework for a program that could
comply with the CAA, 2021.
As described below, the CDFI Fund established internal controls
over the CDFI RRP in accordance with the GAO Green Book to
include (1) a process for CDFIs to apply for CDFI RRP awards
conforming to the CAA, 2021; and (2) a CDFI RRP Application
evaluation process (including award determinations) to meet the
legislative requirements. The CDFI RRP Application evaluation
process also complied with the Uniform Guidance. Furthermore, the
CDFI Fund established performance goals and developed the
Assistance Agreement template for the CDFI RRP that included
general terms and conditions in accordance with the Uniform
Guidance §200.211. However, we found the Assistance
Agreement template was missing the “Award Term and Condition
for Recipient Integrity and Performance Matters” in the terms and
conditions of award as detailed in Finding 1.
Funds Were Available by the Mandated Deadline
Per the CAA, 2021, the CDFI Fund was required to make funds
available no later than 60 days after enactment on December 27,
2020. On February 25, 2021, the CDFI Fund made the CDFI RRP
Application available to certified CDFIs in anticipation of the NOFA,
which was published in the Federal Register on February 26, 2021.
A CDFI Fund official stated that after enactment, the CDFI Fund
reviewed the language in the CAA, 2021 to consider criteria for
Audit of the Community Development Financial Institutions Fund's
Implementation of the CDFI Rapid Response Program (OIG-22-023) 11
designing the CDFI RRP. Furthermore, the CDFI Fund developed an
implementation timeline outlining the steps needed to ensure the
NOFA was completed and cleared timely by CDFI Fund
management, OMB, Treasury’s Office of the Executive Secretary,
and Treasury’s Office of General Counsel.
Overall, the CDFI Fund designed the CDFI RRP framework that
complies with the CAA, 2021 and the Uniform Guidance. Per the
Uniform Guidance §200.202, the Federal awarding agency must
design a program with clear goals and objectives that facilitate the
delivery of results consistent with the Federal authorizing
legislation and create an Assistance Listing 27 before announcing the
NOFA. Per Uniform Guidance §200.203, the Federal awarding
agency must create the Assistance Listing based on the authorizing
legislation. Furthermore, per Uniform Guidance §200.204, the
Federal awarding agency must announce specific funding
opportunities by providing key information in a public notice.
In accordance with the Uniform Guidance §200.202 and
§200.203, the CDFI Fund developed and published an Assistance
Listing (21.024) on SAM.gov on January 22, 2021, which was
before the NOFA was published in the Federal Register. The
Assistance Listing included the program description, purpose,
goals, information on the source of funds available, and program
eligibility requirements (see Background section of this report for
details). Additionally, the Assistance Listing included performance
measurement details, such as recipient reporting requirements on
the use of awards.
As required by Uniform Guidance §200.204, the CDFI Fund
announced the CDFI RRP funding opportunity on Grants.gov. The
NOFA specified information on the program, including applicant
eligibility information, CDFI RRP Application evaluation information,
and applicable terms and conditions.
Internal Controls Were Established Over the CDFI RRP
The CDFI Fund utilized its existing organizational structure to
establish the CDFI RRP, assign responsibility, and delegate
authority to existing employees to work on the program consistent
27
Assistance Listing refers to the publicly available listing, managed and administered by the General
Services Administration, of Federal assistance programs.
Audit of the Community Development Financial Institutions Fund's
Implementation of the CDFI Rapid Response Program (OIG-22-023) 12
with the GAO Green Book Principle 3 that states management
should establish an organizational structure, assign responsibility,
and delegate authority to achieve the entity’s objectives. 28 CDFI
Fund management did not hire new staff to work specifically on
the CDFI RRP. Instead, management created a staffing work plan
and assigned employees from the CDFI Program and NACA
Program to work on the CDFI RRP. Also, the CDFI Fund assigned
support personnel from various business units to include, but not
limited to, staff from the Office of Legal Counsel and CCME.
Among various responsibilities related to implementing the CDFI
RRP, the Office of Legal Counsel provided guidance on matters that
required legal interpretation such as regulator findings or potential
enforcement actions. CCME was responsible for conducting
eligibility checks of program applicants relative to NOFA
requirements and verifying applicants’ CDFI certifications. A CDFI
Fund official stated the organization was well suited to launch the
CDFI RRP because management leveraged CDFI Program staff
familiar with running a grants program. As of March 2021, there
were approximately 32 employees assigned to assist in the
implementation of the CDFI RRP. 29
The CDFI Fund also documented staff responsibilities in multiple
SOPs that outlined the steps that CDFI Fund staff followed when
soliciting CDFI RRP Applications, evaluating eligible applicants, and
issuing awards. SOPs established for the program include (a) “Step
1: Program Eligibility, Compliance and Regulator Checks–Internal
Review Process and Logistics Guidance,” (b) “Step 2: Internal
Process and Logistics Guidance,” (c) “Step 3: (i) CDFI Rapid
Response Program Follow-Up Reviewer Due Diligence Review
Guidance” and (ii) CDFI Rapid Response Selecting Official and
Reviewing Official Due Diligence Review Guidance,” and (d) “Step
4: CDFI RRP Award Amount Determination Process.” Furthermore,
the CDFI Fund created the CDFI RRP “Community Development
Financial Institutions Rapid Response Program (CDFI RRP) Standard
Operating Procedures,” which describes how staff roles and
responsibilities are segregated and outlines who is responsible,
accountable, consulted, and informed for each process step.
28
GAO, “Standards for Internal Control in the Federal Government,” GAO-14-704G (September 2014).
29
The CDFI organizational chart, dated April 27, 2021, reflected 79 total employees.
Audit of the Community Development Financial Institutions Fund's
Implementation of the CDFI Rapid Response Program (OIG-22-023) 13
The CDFI Fund augmented CDFI RRP SOPs with additional
guidance materials and job aids. For example, the CDFI Fund
developed the “FY 2021 Job Aid, Compliance Analysis Desk
Review” and the “FY 2021 Job Aid, Financial Analysis Desk
Reviews,” which outline examples and include templates for staff
to use when conducting financial and compliance reviews.
The CDFI Fund also designed control activities for AMIS in
accordance with the GAO Green Book Principle 11 that states
management should design the entity’s information system and
related control activities to achieve objectives and respond to
risks. 30 The CDFI Fund developed CDFI RRP Application evaluation
sections in AMIS that included automated validity checks to
prevent errors in the review of CDFI RRP Applications and included
specific fields that were limited to completion by selected staff
(e.g. a higher-level CDFI Fund official). Furthermore, the CDFI Fund
created the “CDFI Rapid Response Program (CDFI RRP) Internal
Review AMIS Guidance,” which provides illustrations for staff to
reference when reviewing CDFI RRP Applications.
By establishing the CDFI RRP with experienced staff and modifying
AMIS in a timely manner, the CDFI Fund ensured that proper
controls were in place to evaluate and award grants under the CDFI
RRP.
CDFI RRP Application Process Complies With CAA, 2021
The CDFI RRP Application complies with requirements of the CAA,
2021. Specifically, the CDFI Fund established an application
process that considers an applicant’s certification status, financial
and performance compliance related to awards under other CDFI
Fund programs, portfolio and balance sheet strength, and program
capacity. Furthermore, the CDFI Fund took into account Native
designations as required by the legislation.
As part of the CDFI RRP Application process, the CDFI Fund
required the applicant to provide historical, current, and projected
financial data. For example, the applicant had to provide balance
sheet and other financial statement information, which included
30
GAO-14-704G, September 2014, p. 51.
Audit of the Community Development Financial Institutions Fund's
Implementation of the CDFI Rapid Response Program (OIG-22-023) 14
assets, liabilities, and expenses. Furthermore, the CDFI Fund
required unregulated financial institution applicants to submit
financial statements and any related management letters. 31 For a
regulated financial institution applicant, the CDFI Fund solicited
financial safety and soundness information from Federal regulators
(e.g. National Credit Union Administration, Federal Reserve Board
of Governors, and the Federal Deposit Insurance Corporation).
The CDFI Fund also required applicants to respond to numerous
compliance questions in the CDFI RRP Application, which the CDFI
Fund used to evaluate compliance risk and program capacity. For
example, applicants had to provide information on whether they
had externally reviewed or audited financial statements completed
annually within 180 days of the applicant’s fiscal year end.
Furthermore, applicants had to describe historical audit findings and
how they addressed them, as well as report the kind of accounting
system (e.g. paper-based, Excel-based, or enterprise accounting
software) they use to manage their portfolio.
In accordance with CAA, 2021, the CDFI Fund was required to
award at least $25 million of the $1.25 billion to Native
communities. The CDFI Fund required applicants to certify whether
they serve Native communities in the CDFI RRP Application. The
CDFI Fund then validated these responses utilizing target market
data.
CDFI RRP Application Evaluation Process Complies With
Federal Requirements
The CDFI Fund’s process to evaluate the CDFI RRP Application
complies with the Uniform Guidance. Specifically, the CDFI Fund
designed a process aimed to select applicants that were most likely
to succeed in delivering results based on program objectives. Per
Uniform Guidance §200.205, the Federal awarding agency must
design and execute a merit review process for applications. As part
of its evaluation process, the CDFI Fund assesses each applicant’s
ability to comply successfully with the terms outlined in the
Assistance Agreement. Per Uniform Guidance §200.206, the
31
The Management Letter is prepared by the applicant’s auditor and is a communication on internal
controls over financial reporting, compliance, and other matters.
Audit of the Community Development Financial Institutions Fund's
Implementation of the CDFI Rapid Response Program (OIG-22-023) 15
Federal awarding agency must review risk posed by applicants. To
assess risk, the CDFI Fund evaluates the applicant’s financial
safety and soundness and compliance risk, conducts debarment 32
checks, and does not consider an applicant that is delinquent on
any Federal debt.
In addition, the CDFI RRP Application evaluation process complies
with the CAA, 2021. Specifically, the CDFI Fund designed a
process that takes into account an applicant’s certification status,
financial performance and prior award compliance, portfolio and
balance sheet strength, diversity of CDFI business model types,
and program capacity. The CDFI RRP Application evaluation
process is comprised of four steps (including award
determinations):
• First, the CDFI Fund determines eligibility by ensuring the
applicant meets requirements outlined in the NOFA. For
example, the applicant is deemed ineligible if the CDFI Fund
made a final determination that the applicant was in default
or noncompliant with a previously executed Assistance
Agreement under another CDFI Fund program.
• Second, the CDFI Fund conducts an applicant financial
safety and soundness analysis. For an unregulated financial
institution applicant, the Application Assessment Tool
(AAT) 33 model within AMIS calculates the financial
composite scores using financial information from the CDFI
RRP Application. The financial composite scores range from
1 (lowest risk) to 5 (highest risk). An applicant that scores 1,
2, 3, or 4 advances to the next step. For a regulated
financial institution applicant, the CDFI Fund reviews
applicable regulator reports and CAMELS 34 composite
scores. An applicant that receives a failing CAMELS
32
A debarment is an exclusion from government-wide Federal contracting and financial assistance for a
set period of time (usually 3 years) that is effective on the date the debarment decision is finalized. A
debarment may be based on convictions, civil judgements, or the agency’s independent evidence
proving by a preponderance of evidence that a company or individual was involved in fraudulent
conduct on public contracts, such as contract and financial assistance fraud.
33
The AAT is an automated tool developed by the CDFI Fund.
34
The CAMELS composite rating represents a financial institution's adequacy of capital, quality of
assets, capability of management, quality and level of earnings, adequacy of liquidity, and sensitivity
to market risk, and ranges from 1 (strongest) to 5 (weakest).
Audit of the Community Development Financial Institutions Fund's
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composite score (i.e. a score of 5) does not advance to the
next step in the process.
The CDFI Fund also conducts compliance risk evaluations for
both regulated and unregulated applicants as part of this
step, taking into account each applicant’s program capacity.
The AAT compliance model calculates compliance composite
scores based on information the applicant provides as part of
its CDFI RRP Application (e.g. audit findings and internal
controls), reporting history, and performance risk.
Compliance composite scores range from 1 (low compliance
risk) to 5 (high compliance risk).
The applicant advances to the next step in the CDFI RRP
Application evaluation process when it receives a passing
AAT score (i.e. risk score of 4 or lower) or CAMELS score
(i.e. CAMELS rating of 4 or lower), as applicable, and a
passing AAT compliance composite score (i.e. score of 3 or
lower).
• Third, the CDFI Fund conducts due diligence reviews to
assess potential compliance concerns for each applicant and
assigns “level-of-concern” ratings. Due diligence reviews are
performed in three stages. In the first stage, a follow-up
reviewer, at the staff level, reviews and provides an initial
“level of concern” rating with written justification. In the
second stage, a selecting official, at the Associate Program
Manager level, performs a secondary review of the follow-up
reviewer’s analysis and “level of concern” rating. In the third
stage, a reviewing official (CDFI RRP Program Manager),
performs a final review. An applicant receives a due
diligence review rating of either “not concerned,”
“somewhat concerned,” or “very concerned.” An applicant
with a “somewhat concerned” rating is recommended for
awards with a 30 percent reduction in award amount and an
applicant with a “very concerned” rating is not
recommended for awards.
• Fourth, the CDFI Fund determines award amounts using a
formula-based approach and extracts applicant data from
AMIS and the CDFI RRP Application information to input into
Audit of the Community Development Financial Institutions Fund's
Implementation of the CDFI Rapid Response Program (OIG-22-023) 17
an award sizing Excel workbook 35 created for the CDFI RRP.
The award formula takes into account an applicant’s
requested amount, submitted financial statements, and its
financing activities. Additionally, the formula takes into
account the minimum award size set forth in the NOFA, the
amount targeted to Native communities, and the due
diligence review rating. The CDFI Fund then runs a
calculation to confirm that total CDFI RRP awards directed to
benefit Native communities is at least $25 million.
Thereafter, the CDFI RRP Program Manager validates the
total of all awards and the accuracy of the allocations to
ensure it was equal to the $1.25 billion appropriated for
CDFI RRP including funds allocated for administrative
expenses.
In all, the CDFI Fund received 877 CDFI RRP Applications of which
60 were for CDFIs that served Native communities. On June 15,
2021, the CDFI Fund announced that 863 CDFIs were approved for
awards totaling $1.25 billion, including $54.6 million awarded to
58 CDFIs that served Native communities. CDFI RRP award
recipients are headquartered in 48 states, the District of Columbia,
Guam, and Puerto Rico. The primary geographic
markets/Investment Areas served by award recipients include major
and small urban areas as well as rural areas.
CDFI Fund Established Performance Goals for CDFI RRP
The CDFI Fund established two performance goals for the CDFI
RRP in accordance with the Uniform Guidance §200.301 that
requires Federal awarding agencies to measure recipient’s
performance to demonstrate achievement of program goals and
objectives. First, all CDFI RRP award recipients must expend 90
percent of the initial 36 award amount in the first year of the
performance period and 100 percent by the end of the second year
of the performance period on eligible activities. Second, CDFI RRP
award recipients that receive an award greater than $200,000
35
The CDFI Fund created the workbook to ensure appropriated funds are awarded based on the criteria
set forth in the NOFA and based on the information the applicant provides.
36
The initial award amount is the estimated amount that the CDFI RRP award recipient states in its
CDFI RRP Application that it will use for eligible CDFI RRP activities in the first 12 months after
award announcement.
Audit of the Community Development Financial Institutions Fund's
Implementation of the CDFI Rapid Response Program (OIG-22-023) 18
must offer financial products in an eligible market 37 or approved
target market in an amount equal or greater than 50 percent of the
total award amount by the end of the first year of the performance
period and 70 percent of the total award amount by the end of the
second year of the performance period. CDFI RRP award recipients
that serve Native communities must offer financial products in
Native communities.
The CDFI Fund developed the Assistance Agreement for the CDFI
RRP to include the two performance goals as well as annual
reporting requirements, among other terms and conditions. CDFI
RRP award recipients are required to submit (1) an interim
Performance Progress Report, which details the recipient’s progress
towards meeting the required benchmarks in its Assistance
Agreement; (2) an interim Uses of Award Report, which details
how award funds are being used; and (3) an interim Transaction
Level Report, which provides transaction level information
regarding loans closed. In addition to the interim reports, CDFI RRP
award recipients are also required to submit a Performance
Progress Report, Uses of Award Report, Transaction Level Report,
Financial Statement Audit Report (if applicable), and Single Audit 38
Report (if applicable) for each period of performance. The report
due dates vary depending on the recipient’s fiscal year end.
While the CDFI Fund established performance goals and compliance
requirements for the CDFI RRP, we noted that the Assistance
Agreement template did not include all terms and conditions
required by the Uniform Guidance as described in Finding 1.
37
Eligible Market is defined as (1) a geographic area meeting the requirements set forth in 12 CFR
1805.201 (see footnote 20), or (2) individuals that are low-income, African American, Hispanic,
Native American, Native Hawaiians residing in Hawaii, Alaska Natives residing in Alaska, or other
Pacific Islanders residing in American Samoa, Guam, or the Northern Mariana Islands.
38
A non-Federal entity that expends $750,000 or more during the non-Federal entity’s fiscal year in
Federal awards must have a Single Audit conducted in accordance with provisions outlined in the
Uniform Guidance.
Audit of the Community Development Financial Institutions Fund's
Implementation of the CDFI Rapid Response Program (OIG-22-023) 19
Finding 1 CDFI RRP Assistance Agreement Template Was Missing
“Award Term and Condition for Recipient Integrity and
Performance Matters”
We found that the Assistance Agreement template generally
adhered to the Uniform Guidance §200.211, which requires the
Federal awarding agency to include general terms and conditions
for awardees including administrative requirements, national policy
requirements, and termination provisions. Furthermore, it requires
the Federal awarding agency to include the award term for
recipient integrity and performance matters for awards expected to
exceed $500,000 over the performance period. The CDFI Fund
included general terms and conditions for administrative
requirements, national policy requirements, termination provisions,
as well as CDFI Fund-specific program requirements. However, as
of June 10, 2021, the Assistance Agreement template was
missing “Award Term and Condition for Recipient Integrity and
Performance Matters.”
When we inquired of CDFI Fund officials on why the Assistance
Agreement template was missing “Award Term and Condition for
Recipient Integrity and Performance Matters,” they stated the
exclusion was an oversight. Consequently, officials noted the
discrepancy and revised the Assistance Agreement template to
include this award term and condition on June 11, 2021, before
awarding any CDFI RRP grants on June 15, 2021.
If the CDFI Fund had not revised the Assistance Agreement
template to include the “Award Term and Condition for Recipient
Integrity and Performance Matters," award recipients would have
been at risk of noncompliance with the Uniform Guidance.
Additionally, because the Assistance Agreement template created
for the CDFI RRP was modeled after an existing assistance
agreement, we believe the required award term may not be
included in other CDFI grant program recipient agreements.
Recommendation
We recommend the Director of the CDFI Fund ensures reviews of
all other CDFI Fund Assistance Agreements are performed to
Audit of the Community Development Financial Institutions Fund's
Implementation of the CDFI Rapid Response Program (OIG-22-023) 20
confirm that the “Award Term and Condition for Recipient Integrity
and Performance Matters” has been incorporated.
Management Response
In a written response, management concurred with our audit
recommendation and stated that the CDFI RRP Assistance
Agreement template was revised on June 10, 2021, to incorporate
the "Award Term and Condition for Recipient Integrity and
Performance Matters" before awarding any CDFI RRP grants on
June 15, 2021; as such, all executed CDFI RRP recipient
Assistance Agreements contained this term. Management also
noted that, in August 2021, the CDFI Fund Office of Legal Counsel
conducted a review of all CDFI Fund Assistance Agreements and
confirmed that the "Award Term and Condition for Recipient
Integrity and Performance Matters" was incorporated in all other
Assistance Agreements. Management’s written response, in its
entirety, is included in appendix 2 of this report.
OIG Comment
Management’s corrective action, if implemented as stated, meets
the intent of our recommendation.
******
We appreciate the courtesies and cooperation provided to our staff
during the audit. If you wish to discuss the report, you may
contact me at (202) 577-6609 or Sheila Arguello, Audit Manager,
at (202) 439-2522. Major contributors to this report are listed in
appendix 3. A distribution list for this report is provided as
appendix 4.
/s/
Cecilia K. Howland
Audit Director, State and Local Fiscal Recovery, RESTORE, and
CDFI Programs
Appendices
Audit of the Community Development Financial Institutions Fund's
Implementation of the CDFI Rapid Response Program (OIG-22-023) 21
Appendix 1: Objective, Scope, and Methodology
Our audit objective was to assess the Community Development
Financial Institutions (CDFI) Fund’s implementation activities
including making CDFI Rapid Response Program (RRP) funds
available, and establishing policies, procedures, and other program
guidance and documentation. As it relates to our audit objective,
funds available indicates the announcement of a funding
opportunity that advertised the CDFI RRP to the public.
The scope of our audit included, but was not limited to, reviewing
(1) CDFI RRP Application requirements; (2) Notice of Funds
Availability (NOFA); (3) CDFI RRP policies and procedures; (4)
award terms and conditions included in the CDFI RRP Assistance
Agreement (Assistance Agreement); and (5) other documentation
governing the CDFI Fund’s administration of CDFI RRP. Our audit
scope included the CDFI Fund’s activities related to the design and
implementation of the CDFI RRP, from December 27, 2020,
through June 15, 2021. Our audit scope did not include testing
operating effectiveness of the CDFI Fund’s CDFI RRP
implementation activities, and as such, we did not review CDFI
RRP Applications to determine whether the CDFI Fund approved
them in accordance with the CAA, 2021 and policies and
procedures it established for the program.
To accomplish this audit objective, we performed the following
procedures during audit fieldwork conducted remotely, due to
Coronavirus Disease 2019 (COVID-19) pandemic, between April
and June 2021.
• Reviewed applicable Federal laws, regulations, and guidance,
including:
o P.L. 116-260, Title V, Subtitle B in Division N of
Consolidated Appropriations Act, 2021 (CAA, 2021),
December 27, 2020;
o P.L. 103-325, Riegle Community Development and
Regulatory Improvement Act of 1994, September 23,
1994;
o Office of Management and Budget (OMB), Uniform
Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards, 2 Code of Federal
Audit of the Community Development Financial Institutions Fund's
Implementation of the CDFI Rapid Response Program (OIG-22-023) 22
Appendix 1: Objective, Scope, and Methodology
Regulations (CFR) 200 (Uniform Guidance), updated
August 13, 2020 (effective November 12, 2020);
o 12 CFR Part 1805, “Community Development Financial
Institutions Program,” August 31, 2015;
o OMB Circular No. A-123, “Management’s Responsibility
for Enterprise Risk Management and Internal Control,”
July 15, 2016;
o U.S. Government Accountability Office’s (GAO)
Standards for Internal Control in the Federal Government
(Green Book), September 2014; and
o GAO, Assessing Data Reliability, December 2019.
• Reviewed the GAO Green Book to identify the components of
internal control and principles that are significant within the
context of the audit objective. Specifically, we evaluated the
control environment and control activities components; and
assessed policies, procedures, and guidance (outlined below)
against the following principles: 1) management should
establish an organizational structure, assign responsibility, and
delegate authority to achieve the entity’s objectives; 2)
management should design control activities to achieve
objectives and respond to risks; 3) management should design
the information system and related control activities to achieve
objectives and respond to risks; and 4) management should
implement control activities through policies.
• Reviewed CDFI Fund documentation related to the planning and
design of the CDFI RRP, including:
o CDFI RRP NOFA, February 26, 2021;
o CDFI RRP pre-award documentation, such as the
Assistance Listing (21.024) and Grants.gov
announcement;
o “CDFI RRP Frequently Asked Questions (FAQs),”
March 10, 2021;
o Assistance Agreement Presentation, “Getting Acquainted
With Your FY 2021 CDFI Rapid Response Program Award
Assistance Agreement,” not dated;
o CDFI RRP Assistance Agreement template (draft versions
from March and June 2021);
Audit of the Community Development Financial Institutions Fund's
Implementation of the CDFI Rapid Response Program (OIG-22-023) 23
Appendix 1: Objective, Scope, and Methodology
o CDFI RRP “SF-424 & Assistance Application Guidance,”
February 25, 2021;
o CDFI Fund meeting minutes related to CDFI RRP planning;
o CDFI RRP staffing plans and work plan;
o CDFI RRP Administrative Budget Projections FY 2021;
o CDFI RRP “Pre-Application Overview Presentation;”
o CDFI RRP Implementation Tentative Timeline, as of
February 25, 2021; and
o CDFI RRP Implementation Updated Timeline, as of
June 4, 2021.
• Reviewed CDFI Fund’s policies, procedures, and guidance
related to the CDFI RRP Application evaluation process
(including award determinations):
o “Community Development Financial Institutions Rapid
Response Program (CDFI RRP) Standard Operating
Procedures,” March 24, 2021;
o “CDFI Rapid Response Program Policy on Do Not Pay and
Debarment Findings,” April 4, 2021;
o “Step 1: Program Eligibility, Compliance and Regulator
Checks–Internal Review Process and Logistics Guidance,”
April 16, 2021;
o “Step 2: Internal Process and Logistics Guidance,”
April 13, 2021;
o “FY 2021 Job Aid, Compliance Analysis Desk Review,
based on Step 2 Application Assessment Tool (AAT)
Total Compliance Composite Score,” April 13, 2021;
o “FY 2021 Job Aid, Financial Analysis Desk Reviews,
based on Step 2 Application Assessment Tool (AAT)
Total Financial Composite Score,” April 13, 2021;
o “Step 3 CDFI Rapid Response Program Follow-Up
Reviewer Due Diligence Review Guidance,” April 7,
2021;
o “Step 3 CDFI Rapid Response Selecting Official and
Reviewing Official Due Diligence Review Guidance,”
April 12, 2021;
Audit of the Community Development Financial Institutions Fund's
Implementation of the CDFI Rapid Response Program (OIG-22-023) 24
Appendix 1: Objective, Scope, and Methodology
o “Step 4: CDFI RRP Award Amount Determination
Process,” April 19, 2021; and
o “CDFI Rapid Response Program (CDFI RRP) Internal
Review AMIS Guidance,” March 25, 2021.
• Reviewed selected CDFI Fund guidance related to the CDFI
Program:
o FY 2021 CDFI & Native American CDFI Assistance
(NACA) Program Technical Assistance (TA) Application
Guidance, February 18, 2021;
o FY 2021 CDFI & NACA Program TA Evaluation Process,
February 18, 2021;
o FY 2021 CDFI & NACA Program Financial Assistance
(FA) Application Guidance, February 18, 2021;
o FY 2021 CDFI & NACA Program Base-FA Evaluation
Process, February 18, 2021;
o “FY 2021 CDFI & NACA Program Application” FAQ – v3,
March 12, 2021;
o “Form, Assurances, & Certifications,” February 18, 2021;
o CDFI Program NOFA, February 19, 2021; and
o “FY 2021 CDFI & NACA Program Application Overview
Presentation,” February 18, 2021.
• Reviewed GAO’s Assessing Data Reliability, which states that a
data reliability determination does not involve attesting to the
overall reliability of the data or database. The audit team is only
determining the reliability of the specific data needed to support
the findings, conclusions, or recommendations in the context of
the audit objectives. For this audit, we assessed the reliability of
CDFI RRP Application data retrieved from the Awards
Management Information System (AMIS), which is the CDFI
Fund’s enterprise-wide business system that supports all CDFI
Fund programs. Specifically, we (1) reviewed existing
information about the system and conducted a walkthrough to
validate what was documented in policies and procedures; and
(2) obtained information from officials knowledgeable about the
data. We determined that the data was sufficiently reliable for
the purposes of answering our audit objective.
Audit of the Community Development Financial Institutions Fund's
Implementation of the CDFI Rapid Response Program (OIG-22-023) 25
Appendix 1: Objective, Scope, and Methodology
• Selected a non-statistical sample of three grant applications
from a universe of 877 applications to capture the following
application types: 1) application approved for award to a non-
Native CDFI; 2) application approved for award to a Native
CDFI; and 3) application not approved for award. Our sample
was selected for testing the CDFI RRP Application and
evaluation design and not for the purpose of projecting results
to the universe of specific awards or the overall effectiveness of
the program.
• Performed walkthrough of the three sampled CDFI RRP
Applications to assess the CDFI RRP Application and evaluation
(including award determinations) design.
• Interviewed CDFI Fund personnel:
o CDFI Fund Deputy Director of Finance and Operations;
o CDFI Fund Legal Counsel;
o CDFI & NACA & CDFI RRP Program Manager;
o CDFI RRP Associate Program Manager; and
o Acting Program Manager for the Office of Certification,
Compliance Monitoring, and Evaluation.
We conducted this performance audit in accordance with generally
accepted government auditing standards. Those standards require
that we plan and perform the audit to obtain sufficient, appropriate
evidence to provide a reasonable basis for our findings and
conclusions based on our audit objective. We believe that the
evidence obtained provides a reasonable basis for our findings and
conclusions based on our audit objective.
Audit of the Community Development Financial Institutions Fund's
Implementation of the CDFI Rapid Response Program (OIG-22-023) 26
Appendix 2: Management Response
Audit of the Community Development Financial Institutions Fund's
Implementation of the CDFI Rapid Response Program (OIG-22-023) 27
Appendix 3: Major Contributors to This Report
Sheila Argüello, Audit Manager
Lawrence Gonzalez, Auditor
Lynette Feliciano Del Valle, Auditor
Clint Hoellrigl, Auditor
Justin Summers, Referencer
Audit of the Community Development Financial Institutions Fund's
Implementation of the CDFI Rapid Response Program (OIG-22-023) 28
Appendix 4: Report Distribution
Department of the Treasury
Secretary
Deputy Secretary
Under Secretary for Domestic Finance
Assistant Secretary for Financial Institutions
Deputy Assistant Secretary for Community and Economic
Development
Chief Recovery Officer
Office of Strategic Planning and Performance Management
Office of the Deputy Chief Financial Officer, Risk and Control
Group
Community Development Financial Institutions Fund
Director
Deputy Director of Policy and Programs
Deputy Director of Finance and Operations
Legal Counsel
Office of Management and Budget
OIG Budget Examiner
U.S. Senate
Chairman and Ranking Member
Committee on Banking, Housing, and Urban Affairs
Chairman and Ranking Member
Committee on Homeland Security and Governmental Affairs
U.S. House of Representatives
Chairman and Ranking Member
Committee on Financial Services
Chairman and Ranking Member
Committee on Oversight and Reform
Audit of the Community Development Financial Institutions Fund's
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