Audit Report - Oig 24 037 Coronavirus Disease 2019 Pandemic Relief Programs Audit Of The Communi
Summary
Department of the Treasury Office of Inspector General Audit Report OIG-24-037, Audit of the Community Development Financial Institutions Fund's Award and Post-Award Administration of the CDFI Equitable Recovery Program, dated September 25, 2024, addressed to Pravina Raghavan, Director of the CDFI Fund. It states that the audit assessed the award process for ensuring the accuracy of CDFI ERP payments and the design of post-award administration, covering activities from June 24, 2022 through November 30, 2023, including a statistical sample of 27 payments totaling $58 million from 596 payments totaling approximately $1.4 billion. The Results in Brief states that the CDFI Fund accurately issued the sampled payments and designed the post-award process in compliance with applicable guidance, and that the OIG did not make any recommendations.
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Audit Report
OIG-24-037
CORONAVIRUS DISEASE 2019 PANDEMIC RELIEF
PROGRAMS
Audit of the Community Development
Financial Institutions Fund's Award and Post-
Award Administration of the CDFI Equitable
Recovery Program
September 25, 2024
Office of Inspector General
Department of the Treasury
This Page Intentionally Left Blank
Contents
Audit Report
Results in Brief .............................................................................................. 3
Background ................................................................................................... 4
Audit Results ............................................................................................... 12
Next Steps .................................................................................................. 23
Appendices
Appendix 1: Objective, Scope, and Methodology ............................................. 24
Appendix 2: Management Response ............................................................... 32
Appendix 3: Major Contributors to This Report ................................................ 33
Appendix 4: Report Distribution ..................................................................... 34
Abbreviations
ACR Annual Certification and Data Collection Report
AMIS Awards Management Information System
Assistance Agreement CDFI ERP Assistance Agreement
CAA, 2021 Consolidated Appropriations Act, 2021
CDFI Community Development Financial Institutions
CDFI ERP CDFI Equitable Recovery Program
CFR Code of Federal Regulations
COVID-19 Coronavirus Disease 2019
FSA Financial Statement Audit
FY Fiscal Year
GAO Government Accountability Office
Green Book Standards for Internal Control in the Federal Government
NOFA Notice of Funds Availability
OCME Office of Compliance Monitoring and Evaluation
OIG Office of Inspector General
OMB Office of Management and Budget
PG&Ms Performance Goals and Measures
SF Standard Form
SOPs standard operating procedures
TLR Transaction Level Report
i
Treasury Department of the Treasury
Uniform Guidance Uniform Administrative Requirements, Cost Principles, and
Audit Requirements for Federal Awards, 2 CFR Part 200
ii
This Page Intentionally Left Blank
September 25, 2024
Pravina Raghavan
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 award and
post-award administration of the CDFI Equitable Recovery
Program (CDFI ERP). Title V, Subtitle B in Division N of the
Consolidated Appropriations Act, 2021 (CAA, 2021) 1
authorized the CDFI Fund to provide emergency support to
CDFIs 2 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 no less
than twice a year to Congress 3 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 this audit was to assess the CDFI Fund’s
award process for ensuring the accuracy of the CDFI ERP
payments and the design of the post-award administration over
recipient monitoring, in compliance with applicable laws,
regulations, and policies and procedures. The scope of our audit
included, but was not limited to, the: (1) assessment of the
CDFI Fund’s allocation methodologies; (2) determination of ERP-
1
Public Law 116-260, Consolidated Appropriations Act, 2021 (December 27, 2020).
2
A CDFI must have a 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 Award and
Post-Award Administration of the CDFI Equitable Recovery Program (OIG-24-
037) 1
Eligible Geographies; (3) accuracy of award amounts and
payments; and (4) adequacy of the CDFI ERP post-award
reporting process. Our audit scope included the CDFI Fund’s
activities related to CDFI ERP applications, awards, and
payments from June 24, 2022, through November 30, 2023.
To accomplish our audit objective, we:
• reviewed applicable laws and regulations, including the
CDFI ERP Notice of Funds Availability (NOFA); 4
• reviewed CDFI ERP policies and procedures, major
decisions, award terms and conditions, and other
supporting documentation related to the CDFI Fund’s
administration of the program;
• assessed the accuracy of award payments by selecting a
statistical sample of 27 CDFI ERP payments, totaling
$58 million, from the population of 596 payments 5 issued
as of November 30, 2023, totaling approximately $1.4
billion;
• assessed whether the CDFI Fund correctly determined
applicant ineligibility for all 92 CDFI ERP applicants who
did not receive an award;
• performed walkthroughs of the CDFI Fund’s Awards
Management Information System (AMIS); 6
• interviewed CDFI Fund officials and personnel responsible
for implementing, performing, and monitoring the CDFI
ERP; and
4
The NOFA is a federal agency’s formal announcement of the availability of federal funding for a
financial assistance program.
5
On April 10, 2023, Treasury announced that the CDFI Fund awarded CDFI ERP grants to
604 CDFIs. As of November 30, 2023, there were 596 initial award payments issued. The
remaining award payments had yet to be issued and were not part of our testing.
6
AMIS is an enterprise-wide business system that supports all CDFI Fund programs through each
phase of the programs’ life cycles, including processes related to certification, program awards
and allocations, pre-award requirements, compliance reporting, and data analysis. Additionally,
applicants use AMIS to create, complete, and submit applications.
Audit of the Community Development Financial Institutions Fund’s Award and Post-
Award Administration of the CDFI Equitable Recovery Program (OIG-24-037) 2
• assessed the design and implementation of processes and
internal controls over CDFI ERP post-award activities.
We conducted our fieldwork remotely from March 2024 to
July 2024. Appendix 1 contains a detailed description of our
audit objective, scope, and methodology.
Results in Brief
In brief, CDFI Fund management documented the CDFI ERP
award determination process across multiple standard operating
procedures (SOPs), consistent with the Government
Accountability Office’s (GAO) Standards for Internal Control in
the Federal Government (Green Book). 7 CDFI Fund management
also accurately calculated CDFI ERP awards and administered
them in accordance with the CAA, 2021 and the Office of
Management and Budget’s (OMB) Uniform Administrative
Requirements, Cost Principles, and Audit Requirements for
Federal Awards, 2 Code of Federal Regulations (CFR) Part 200
(Uniform Guidance). 8 Based on the 27 sampled CDFI ERP
recipients, we found that the CDFI Fund accurately issued CDFI
ERP payments in compliance with federal guidance and
regulations.
Additionally, the CDFI Fund designed and implemented the CDFI
ERP post-award administration process, to include recipient
monitoring, in compliance with the CAA, 2021, Uniform
Guidance, and GAO Green Book. CDFI Fund management
developed post-award and monitoring SOPs as well as the CDFI
ERP Assistance Agreement (Assistance Agreement), which
incorporated Uniform Guidance requirements to recipients.
Furthermore, CDFI Fund management established:
(1) procedures for evaluating CDFI ERP annual compliance
reports; (2) a noncompliance process; and (3) a process for
closing CDFI ERP awards. Accordingly, we did not make any
recommendations in this report.
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 Uniform Guidance is an authoritative set of rules and requirements for federal awards.
Audit of the Community Development Financial Institutions Fund’s Award and Post-
Award Administration of the CDFI Equitable Recovery Program (OIG-24-037) 3
As part of our reporting process, we provided the CDFI Fund
management an opportunity to comment on a draft of this
report. In a written response, the CDFI Fund management
acknowledged there was no recommendation and stated that
they appreciated the work of Treasury OIG staff, and the
opportunity to review and provide a response to the report. The
CDFI Fund’s management 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 Regulatory Improvement Act of 1994, 9 as a
bipartisan initiative created for the purpose of promoting
economic revitalization and community development through
investment in and assistance to CDFIs. Since its creation, the
CDFI Fund has awarded more than $7.4 billion to CDFIs,
community development organizations, and financial institutions
through the: Bank Enterprise Award Program; Capital Magnet
Fund; CDFI Rapid Response Program; CDFI Program, including
the Healthy Food Financing Initiative; Native American CDFI
Assistance Program; and Small Dollar Loan Program.
The CDFI Fund is led by the Director 10 who is supported by the
Chief of Staff, the Chief Financial Officer, 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 who
oversees the efforts of all the CDFI Fund’s award programs in
support of the CDFI Fund’s strategic visions; and (2) the Deputy
Director of Finance and Operations 11 who is responsible for
9
Public Law 103-325, The Riegle Community Development and Regulatory Improvement Act of
1994 (September 23, 1994).
10
On March 11, 2024, the CDFI Fund announced Pravina Raghavan as the new Director of the
CDFI Fund.
11
As of July 2024, the Operations Manager of the CDFI Fund currently serves as the Acting
Deputy Director of Finance and Operations.
Audit of the Community Development Financial Institutions Fund’s Award and Post-
Award Administration of the CDFI Equitable Recovery Program (OIG-24-037) 4
developing policies, operating procedures, internal controls, and
short- and long-term strategic plans for the CDFI Fund.
CDFI ERP
Title V, Subtitle B, Community Development Investment, within
Division N of the CAA, 2021, appropriated $3 billion to the
CDFI Fund, of which, up to $1.75 billion shall be made available
until expended to provide grants to CDFIs to respond to the
economic impact of the COVID-19 pandemic. 12 To award these
funds, the CDFI Fund established the CDFI ERP.
The CDFI ERP awards are provided to CDFIs to expand lending,
grant making, and investment activity in low- or moderate-
income communities and to borrowers, including minorities, that
have significant unmet capital or financial service needs and
were disproportionately impacted by the COVID-19 pandemic.
CDFI ERP awards also enable CDFIs to build organizational
capacity and acquire technology, staff, and other tools
necessary to accomplish the activities.
CDFI ERP Eligibility Requirements
To be eligible to apply for a CDFI ERP grant, organizations must
have complied with all outstanding CDFI awards, allocations, or
bond guarantee requirements, as well as meeting benchmarks
for programmatic/financial safety and soundness. Furthermore,
to be eligible for the CDFI ERP, the CDFI must have been
certified as of the date the NOFA was published in the Federal
Register. 13
12
Of the $3 billion, $1.75 billion was allocated for the CDFI ERP. The remaining $1.25 billion was
allocated for the CDFI Rapid Response Program, which was not within the scope of this audit.
13
The NOFA was published in the Federal Register on June 24, 2022.
Audit of the Community Development Financial Institutions Fund’s Award and Post-
Award Administration of the CDFI Equitable Recovery Program (OIG-24-037) 5
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 CDFI Financial
Assistance Program awards, as well as training provided by the
CDFI Fund through the Capacity Building Initiative. 14
To become a certified CDFI, 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); 15
(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.
To qualify as a CDFI that served Native Communities,
50 percent or more of the applicant’s past activities must have
been directed to Native Communities and the applicant’s
certification target market must have met selected
characteristics.
14
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.
15
A target market refers to one or more investment area(s) 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 Award and Post-
Award Administration of the CDFI Equitable Recovery Program (OIG-24-037) 6
Once a CDFI has been certified, it must submit an Annual
Certification and Data Collection Report (ACR) to allow the CDFI
Fund to assess whether the organization remains in compliance
with their certification requirements and to monitor any changes
in the organization’s financial and/or other data. 16
CDFI ERP Eligible Activities
The CDFI Fund will provide CDFI ERP awards in the form of
grants to support eligible activities which may be expended as:
(1) financial products and services; and (2) operational support.
Financial products and services may serve commercial real
estate, small businesses, microenterprise, community facilities,
and affordable housing, and also includes consumer financial
products, consumer financial services, commercial financial
products, commercial financial services, intermediary lending to
non-profits and CDFIs, and other lines of business as deemed
appropriate by the CDFI Fund in the following six eligible
financial products and services categories: (i) financial products
(e.g. loans and equity investments); (ii) financial services (e.g.
providing checking and savings accounts); (iii) development
services (e.g. activities that promote community development);
(iv) grants (e.g. funds transferred without a repayment
requirement to a person, business, or other organization);
(v) loan loss reserves (e.g. award funds set aside in the form of
cash reserves to cover losses on loans); and (vi) capital reserves
(e.g. award funds set aside as reserves to support a CDFI’s
ability to leverage other capital for a specific purpose, such as
providing financing).
A portion of a CDFI ERP award may also be used for the
following seven eligible operational support categories:
(i) compensation – personal services; (ii) compensation – fringe
benefits; (iii) professional service costs; (iv) travel costs;
(v) training and education costs; (vi) equipment; and
(vii) supplies.
16
On December 7, 2023, the CDFI Fund announced the release of a revised CDFI certification
application and related tools. As a result, all certified CDFIs are required to reapply for
certification using the revised version of the certification application by December 20, 2024.
Audit of the Community Development Financial Institutions Fund’s Award and Post-
Award Administration of the CDFI Equitable Recovery Program (OIG-24-037) 7
For any award size, no more than 25 percent of the award
amount may be used for financial services and development
services combined. Also, recipients may use up to the greater of
$166,667 or 15 percent of their award amount, up to a
maximum of $400,000, for eligible operational support activities
combined. Recipients are required to expend all funds by the
end of the period of performance 17 on eligible activities.
ERP-Eligible Geographies
To achieve the statutory objective of directing CDFI ERP
activities to low- or moderate-income communities and to
borrowers, including minorities, that have significant unmet
capital or financial services needs, and were disproportionately
impacted by the COVID-19 pandemic, the CDFI Fund has
identified ERP-Eligible Geographies. These are defined as
geographies that meet one of the following two criteria: (a) are
census tracts 18 that (i) demonstrate ‘‘severe impact’’ of the
COVID-19 pandemic; and (ii) have a median income at or below
120 percent of the area median income, and (iii) are CDFI
Investment Areas; or (b) are Native Areas.
The list of ERP-Eligible Geographies is available on the CDFI
Fund’s website. Data on ERP-Eligible Geographies is available
through the CDFI Fund’s Community Impact Mapping System. 19
All CDFI ERP eligible activities must serve ERP-Eligible
Geographies, except 10 percent of an award amount, which
may be deployed outside of ERP-Eligible Geographies to serve
low- or moderate- income persons and businesses (including
non-profit organizations) disproportionately impacted by the
COVID-19 pandemic.
17
The period of performance for each CDFI ERP award begins with the date that the CDFI Fund
announces the recipients of the CDFI ERP awards and includes a recipient’s five full consecutive
fiscal years after the date of the CDFI ERP award announcement.
18
A census tract is considered to have experienced ‘‘severe impact’’ of the COVID–19 pandemic if
it meets one or more of the following criteria: (a) demonstrates severe mortality; or
(b) demonstrates severe change in unemployment; or (c) demonstrates low community resilience.
19
The CDFI Fund‘s Community Impact Mapping System is a mapping tool created to provide
prospective applicants with the ability to search by address, census tract, and other geographic
areas of interest to determine program eligibility for the Bank Enterprise Awards, CDFI Program,
Capital Magnet Fund, CDFI ERP, Native American CDFI Assistance Program, and New Market
Tax Credit Program.
Audit of the Community Development Financial Institutions Fund’s Award and Post-
Award Administration of the CDFI Equitable Recovery Program (OIG-24-037) 8
CDFI ERP Reporting Requirements
Per the Assistance Agreement, throughout the period of
performance, the recipient must provide to the CDFI Fund
annual reports, which are comprised of two parts: (1) financial
condition reports; and (2) performance reports. The CDFI Fund
reviews these reports to monitor each recipient’s compliance
with the performance goals and measures (PG&Ms) set forth in
the Assistance Agreement and assess the impact of the
program.
The financial condition reports include:
1. A-133/Single Audit Report 20 (if applicable);
2. Financial Statement Audit (FSA) Report; 21 and
3. Transaction Level Report (TLR). 22
The performance reports include:
1. Performance Progress Report; 23
20
According to the Uniform Guidance, dated November 13, 2023, a non-Federal entity must
complete an annual A-133/Single Audit Report pursuant to 2 CFR Part 200.500 if it expends
$750,000 or more in federal awards in its FY, or such other dollar threshold established by OMB
pursuant to 2 CFR Part 200.501. If an A-133/Single Audit is required, the recipient must submit
the audit report to the Federal Audit Clearinghouse 270 days after the organization’s FY end
date. Per the OMB Final Rule dated April 22, 2024, Guidance for Federal Financial Assistance, as
of October 1, 2024, a non-Federal entity will be required to complete an annual A-133/Single
Audit Report if it expends $1 million or more in federal awards in its FY.
21
Non-profit recipients (including insured credit unions and state-insured credit unions), for-profit
recipients, depository institution holding companies, and insured depository institutions must
submit an FSA report in AMIS, along with the recipient’s statement of financial condition audited
or reviewed by an independent certified public accountant. The FSA Report is due 180 days after
the organization’s FY end date.
22
The TLR is comprised of different sections depending on the type and purpose of transactions
being reported on as well as financial entity type and CDFI Fund award type. A recipient is
expected to report on all their transactions in the TLR including grant activity regardless of
whether the transaction is directly tied to their CDFI Fund award. Recipients submit one TLR to
the CDFI Fund regardless of the number of awards they have. The TLR is due 180 days after the
organization’s FY end date.
23
The Performance Progress Report details the recipient’s progress towards meeting the specific
required PG&M benchmarks in their Assistance Agreement. The Performance Progress Report is
due 90 days after the organization’s FY end date.
Audit of the Community Development Financial Institutions Fund’s Award and Post-
Award Administration of the CDFI Equitable Recovery Program (OIG-24-037) 9
2. Uses of Award Report; 24 and
3. ACR. 25
On August 21, 2023, the CDFI Fund announced the addition of
the Standard Form (SF) 425 Federal Financial Report as a
reporting requirement for CDFI ERP recipients starting in fiscal
year (FY) 2024. Specifically, the recipient must submit the
SF-425 Federal Financial Report in AMIS to disclose how much
of their CDFI ERP award funds were expended during the
Federal Government's FY of October 1 through September 30.
This report is due annually, beginning on October 15, 2024, and
continuing through October 2028. 26
24
The Uses of Award Report is used to determine recipient compliance with their PG&Ms and to
demonstrate how CDFI ERP award funds are expended. The Uses of Award Report is due 90
days after the organization’s FY end date.
25
The ACR, which must be completed in the CDFI Fund’s AMIS, allows the CDFI Fund to annually
assess a CDFI’s compliance with certification guidelines and collect data that provides insights
into the CDFI industry. The ACR must be submitted by the due date indicated in AMIS.
26
In the first SF-425 Federal Financial Report, the CDFI ERP recipient must disclose how much of
the CDFI ERP award funds were expended from April 10, 2023, through September 30, 2024.
The four following reports cover the funds expended from October 1 through September 30 of
their respective years.
Audit of the Community Development Financial Institutions Fund’s Award and Post-
Award Administration of the CDFI Equitable Recovery Program (OIG-24-037) 10
CDFI ERP Award Allocations
On April 10, 2023, the CDFI Fund awarded over $1.73 billion in
CDFI ERP grants to 604 CDFIs across the country. 27 CDFI ERP
award amounts ranged from $500,000 to $6,197,097. See
information in figure 1 related to the award recipients’
commitments and allocation totals.
Figure 1. CDFI ERP Cumulative Award Allocations and Award
Recipients
Source: Generated by Treasury OIG based on the CDFI Fund’s CDFI
ERP Award Announcement on April 10, 2023.
The 604 CDFI ERP award recipients are headquartered in 44
states, the District of Columbia, Guam, and Puerto Rico.
Certified CDFIs can be one of a variety of financial institution
types, including banks, credit unions, loan funds, or venture
capital providers. Details described in figure 2.
27
The CDFI Fund awarded $1.73 billion across all eligible applicants in a single program round. The
CDFI Fund determined that the remainder of the $1.75 billion would cover administrative
expenses related to the program.
Audit of the Community Development Financial Institutions Fund’s Award and Post-
Award Administration of the CDFI Equitable Recovery Program (OIG-24-037) 11
Figure 2. CDFI ERP Cumulative Award Allocations by Type of
Institution
Source: Generated by Treasury OIG based on the CDFI Fund’s CDFI ERP
Award Announcement on April 10, 2023.
Audit Results
The CDFI Fund Administered CDFI ERP Award
Payments and Designed and Implemented Post-Award
Procedures in Compliance With Federal Requirements
The CDFI Fund documented the CDFI ERP application review
and award payment processes across multiple SOPs in
compliance with requirements in the GAO Green Book. We
tested 27 CDFI ERP award payments out of a population of 596
initial payments as of November 30, 2023. Based on our testing
results, we determined that the CDFI Fund followed the award
application review process and documented the four-step
evaluation of each application for the sample we evaluated.
Furthermore, the CDFI Fund adhered to the applicable Uniform
Guidance and policies and procedures when processing
payments. The CDFI Fund accurately made initial CDFI ERP
award payments for the program, and we noted no issues or
exceptions with the payments we tested.
The CDFI Fund also designed and implemented the CDFI ERP
post-award administration and monitoring policies, procedures,
and processes in compliance with the Uniform Guidance and the
Audit of the Community Development Financial Institutions Fund’s Award and Post-
Award Administration of the CDFI Equitable Recovery Program (OIG-24-037) 12
GAO Green Book. Accordingly, we did not make any
recommendations.
Summary described in figure 3.
Figure 3. CDFI ERP Award and Post-Award Audit Results
Source: Generated by Treasury OIG.
The CDFI Fund Documented Policies and Procedures
for Determining and Processing CDFI ERP Awards in
Accordance With the GAO Green Book
Consistent with GAO Green Book Principle 10, which
states that “management should design control
activities to achieve objectives and respond to risks,”
and GAO Green Book Principle 12, which states that
“management should implement control activities through
policies,” the CDFI Fund created an application review process
and documented it across multiple SOPs. For example, the CDFI
Fund implemented the NOFA’s four-step evaluation process for
each CDFI ERP application in the “CDFI ERP SOPs FY
2022 Steps A Thru E” and created separate, detailed job aids
Audit of the Community Development Financial Institutions Fund’s Award and Post-
Award Administration of the CDFI Equitable Recovery Program (OIG-24-037) 13
for each step of the application review process. Summary
described in figure 4.
Figure 4. CDFI ERP Award Determination’s Four-Step Evaluation
Process
Source: Generated by Treasury OIG based on the FY 2022 CDFI ERP
Application Evaluation Process.
As part of the first step of the application review process, the
CDFI Fund evaluated each application to determine whether the
applicant was eligible to qualify for an award. Consistent with
GAO Green Book Principle 11, which states that “management
should design the entity’s information system and related
control activities to achieve objectives and respond to risks,”
the CDFI Fund built validations into AMIS to automate the initial
eligibility review checks. These review checks included checking
whether the applicant attached the required documentation to
their application; verifying whether the applicant attested and
provided data to substantiate that 30 percent of the average
annual financial products closed and grants made over the
applicant’s five most recent historic FYs were in ERP-Eligible
Geographies; and confirming that the applicant had attested
that no affiliates were separately applying for a CDFI ERP
award.
Audit of the Community Development Financial Institutions Fund’s Award and Post-
Award Administration of the CDFI Equitable Recovery Program (OIG-24-037) 14
Additionally, for each application, the CDFI Fund verified CDFI
certification as of the date of the NOFA publication; ensured the
applicant submitted the correct Unique Entity Identifier 28 and
Employer Identification Number in their SF-424 29 and AMIS
account; and conducted Do Not Pay 30 checks. Furthermore, the
CDFI Fund sampled 350 CDFI ERP applicants to ensure that the
attestations regarding their track records in ERP-Eligible
Geographies were calculated accurately and found no issues.
Additionally, the CDFI Fund conducted quality assurance
reviews to ensure accuracy of all eligibility findings and
documented the reason(s) for any ineligibility determinations.
Applicants deemed eligible to qualify for a CDFI ERP award
based on the initial eligibility checks proceeded to the second
step of the application review process. The second step
involved the CDFI Fund conducting a basic financial soundness
and compliance risk analysis of each applicant. For applicants
deemed to have a high financial risk or a high compliance risk,
the CDFI Fund conducted quality assurance desk reviews.
Applicants that met the applicable scores on the financial and
compliance metrics established in the NOFA proceeded to the
third step of the application review process.
For the third step of the application review process, the CDFI
Fund conducted application evaluations and initial funding
recommendations. The CDFI Fund utilized External Reviewers 31
to evaluate and score applications based on the applicant’s
business strategy; community impact track record; policy
priorities, projected performance and outcomes; and
organizational capacity as part of the application review
process. Each application received a score up to 100 points
28
The Unique Entity Identifier is a unique number assigned to all entities who register to do
business with the federal government to streamline the entity identification and validation
process.
29
The OMB SF-424 is an application for federal assistance and must be submitted via Grants.gov.
30
The Do Not Pay Portal, run by Treasury’s Bureau of the Fiscal Service, allows federal agencies to
check multiple data sources to verify initial and ongoing eligibility of a vendor, grantee, loan
recipient, or other beneficiary to receive federal payments. Recipients may be ineligible because
of previous default on federal debt, fraud, or other disqualifying factors.
31
The External Reviewers were contracted, non-federal personnel selected based on criteria that
included a professional background in affordable housing finance or in community and economic
development finance. The External Reviewers were required to complete the CDFI Fund’s conflict
of interest process and be approved by the CDFI Fund.
Audit of the Community Development Financial Institutions Fund’s Award and Post-
Award Administration of the CDFI Equitable Recovery Program (OIG-24-037) 15
based on the evaluation. At the end of the evaluation, the
External Reviewer was required to provide an award
recommendation. As part of the award evaluation, the CDFI
Fund also used Federal Reviewers 32 who: (1) conducted quality
control reviews for the External Reviewer’s evaluation and
scoring of each application; (2) provided recommendations as to
whether the application should be forwarded to next step for an
award determination; and (3) recommended an initial award
amount. The Federal Reviewer determined the initial award
amount based on the numeric score calculated by the External
Reviewer. However, if an applicant had an overall due diligence
score 33 of “somewhat concerned,” the Federal Reviewer
reduced the award amount by 30 percent. Applicants that
received a funding recommendation from both the External
Reviewer and the Federal Reviewer advanced to the fourth step
for award determination.
For the fourth step in the application review process, the CDFI
Fund made award amount determinations for CDFI ERP
recipients. The award determination step was consistent with
GAO Green Book Principle 13, which states that “management
should use quality information to achieve the entity’s
objectives.” The Reviewing Official 34 ensured that applications
that received a recommendation for award met all five of the
minimal criteria. This criteria included: (1) the applicant’s
business strategy was minimally understandable and consistent
throughout the application; (2) the applicant’s business strategy
32
Federal Reviewers are internal reviewers, made up of CDFI Fund staff and other federal agency
staff, as needed, who serve as team leaders for External Reviewers.
33
The purpose of the due diligence review is to assess any potential compliance concerns for each
CDFI ERP applicant. All CDFI ERP applicants that advanced to the third step of the evaluation
process received a due diligence review by a Federal Reviewer. The level of concern will be either
“not concerned,” “somewhat concerned,” or “very concerned.” Applicants that receive a level of
concern score of “not concerned” will not see a reduction in their initial award amount
recommendation. Applicants that receive a level of concern score of “somewhat concerned” may
be recommended for an award, but their recommended initial award size will be reduced by 30
percent. Applicants that receive a level of concern score of “very concerned” will not be
recommended for an award.
34
The Reviewing Official is responsible for: (1) reviewing applications in cases where either the
External Reviewer or the Federal Reviewer does not recommend that the application be funded;
(2) providing a recommendation to fund or not to fund an application; and (3) providing an initial
award amount recommendation if the Federal Reviewer does not recommend funding the
application and the Reviewing Official overturns this decision.
Audit of the Community Development Financial Institutions Fund’s Award and Post-
Award Administration of the CDFI Equitable Recovery Program (OIG-24-037) 16
was related to addressing the economic impact(s) of the
COVID-19 pandemic on the communities, businesses and
people the applicant proposed to serve; (3) the applicant
proposed to use the award for eligible activities; (4) the
applicant had the organizational capacity or a plan to grow
organizational capacity to deploy at least a minimum award
amount of $500,000 during the five year period of
performance; and (5) the applicant had an overall due diligence
score of “not concerned” or “somewhat concerned.” If the
applicant met the minimum criteria, they were recommended for
a CDFI ERP award. Lastly, the Selecting Official 35 ensured that
evaluations were conducted in accordance with the review
guidance and made the preliminary award determination.
After all preliminary award determinations were made, the CDFI
Fund imported the award data into the CDFI ERP Award Model
and proportionally reduced the award amounts based on the
award recommendation and the funding availability. To meet
GAO Green Book Principle 10, which states that “management
should design control activities to achieve objectives and
respond to risks,” the CDFI Fund developed multiple validation
checks to ensure award amounts were allocated properly. For
example, the CDFI Fund designed the CDFI ERP Award Model to
not allow any award amount to be: (1) less than the minimum
award amount; and (2) less than the minimum award amount
that the applicant requested.
Once award determinations were made, the initial award
payment process began. The first step of the process required
the recipient’s signature of the Assistance Agreement in AMIS.
The CDFI Fund followed a process that included a series of
reviews by the Program Staff, the Office of Compliance
Monitoring and Evaluation (OCME) Portfolio Manager, the CDFI
ERP Closing Manager, and the Financial Manager before sending
the payment batches to the Bureau of the Fiscal Service for
processing. As part of the payment review process, CDFI Fund
staff conducted a series of quality assurance reviews to ensure
that payments were processed accurately. If there were
35
The Selecting Official is responsible for conducting reviews based on the guidance to determine
preliminary award amounts in accordance with the CDFI ERP Internal Review Guidance.
Audit of the Community Development Financial Institutions Fund’s Award and Post-
Award Administration of the CDFI Equitable Recovery Program (OIG-24-037) 17
discrepancies, the CDFI Fund staff worked with the recipient to
remediate any payment issues.
Lastly, the audit team tested the design, implementation, and
operational effectiveness of the internal controls deemed
significant to the audit objective for the CDFI ERP award
administration and noted no deficiencies. The CDFI Fund
complied with the requirements in the GAO Green Book and
OMB A-123 36 when administering the CDFI ERP.
The CDFI Fund Evaluated CDFI ERP Applicants and
Processed Award Payments Accurately
We tested 27 award payments out of a population
of 596 initial CDFI ERP award payments as of
November 30, 2023. We determined that the CDFI
Fund ensured that: (1) the award determinations and
evaluations were made in accordance with the CDFI Fund’s
policies and procedures; and (2) the CDFI ERP initial award
payments were made accurately and in compliance with internal
and external requirements. As part of our testing of the
27 sampled payments, we reviewed each CDFI ERP recipient’s
application and compared the review actions by the CDFI Fund
with the four-step application review process documented in the
policies and procedures. We noted no issues or exceptions with
the accuracy or completeness of records for the initial award
payments of the sample we tested.
Additionally, we reviewed the entire universe of 92 CDFI ERP
applicants who did not receive a CDFI ERP award, to assess
whether the CDFI Fund correctly determined the applicants’
ineligibility in accordance with the applicable requirements in the
CDFI ERP NOFA. We reviewed the CDFI Fund’s written
explanations, as well as the applicants’ CDFI ERP applications
and Internal Review Records from AMIS, to determine whether
36
On July 15, 2016, OMB published an update to Circular No. A-123, Management’s Responsibility
for Enterprise Risk Management and Internal Control. The Circular defined management’s
responsibilities for enterprise risk management and internal control. Additionally, the Circular
provided updated implementation guidance to federal managers to improve accountability and
effectiveness of federal programs as well as mission support operations through implementation
of enterprise risk management practices and by establishing, maintaining, and assessing internal
control effectiveness.
Audit of the Community Development Financial Institutions Fund’s Award and Post-
Award Administration of the CDFI Equitable Recovery Program (OIG-24-037) 18
the applicants were properly excluded from receiving CDFI ERP
awards. We noted that all 92 applicants that did not receive an
award were properly excluded, and that the CDFI Fund
documented these reviews and justifications in accordance with
the NOFA and internal policies and procedures.
The CDFI Fund Administered CDFI ERP Awards in
Accordance With Federal Guidance
The CDFI Fund administered CDFI ERP awards in compliance
with applicable federal requirements, specifically 2 CFR
Part 200, Subpart C, Pre-Federal Award Requirements and
Contents of Federal Awards, and 12 CFR Part 1805, Subpart G,
Evaluation and Selection of Applications.
The CDFI Fund established recipients’ PG&Ms in each
Assistance Agreement to achieve the statutory goals of the
program and in compliance with 2 CFR Part 200.211(a), which
states the following: “performance goals, indicators, targets,
and baseline data must be included in the federal award, where
applicable. The federal awarding agency must also specify how
performance will be assessed in the terms and conditions of the
federal award, including the timing and scope of expected
performance.” The PG&Ms ensure that recipients: (1) expend
awards by a certain timeframe; (2) expend awards by a certain
period to achieve applicable policy priorities; (3) expend funds in
authorized eligible activities; and (4) expend a specific
percentage of the award in program activities in ERP-Eligible
Geographies. Recipients must also meet reporting requirements,
maintain CDFI certification, and have no pending resolutions of
noncompliance that would preclude them from receiving an
award, prior to executing their Assistance Agreement. To
ensure that recipients are meeting and will continue to meet
these requirements, the CDFI Fund incorporated post-award
monitoring steps within the OCME SOPs and conducted
compliance checks prior to award funds being disbursed.
Furthermore, per 12 CFR Part 1805.803(a), “a recipient shall
maintain such records as may be prescribed by the CDFI Fund
that are necessary to: (1) disclose the manner in which CDFI
Fund assistance is used; (2) demonstrate compliance with the
requirements of this part and an Assistance Agreement; and
Audit of the Community Development Financial Institutions Fund’s Award and Post-
Award Administration of the CDFI Equitable Recovery Program (OIG-24-037) 19
(3) evaluate the impact of the CDFI Fund program.” The CDFI
Fund incorporated these requirements into the award terms and
conditions in the Assistance Agreement.
In accordance with 12 CFR Part 1805.802, which states that
“assistance provided pursuant to this part may be provided in a
lump sum or over a period of time, as determined appropriate by
the CDFI Fund,” payment of an initial award amount was made
at the initial closing when the Assistance Agreement and related
documents were properly executed and delivered. The first
payment was the estimated amount that the recipient stated
they would use for eligible CDFI ERP activities in the
first 12 months after the award. Following the initial closing,
there may be subsequent closings involving additional award
payments, up to a maximum of four subsequent award
payments. Recipients may request subsequent payments once
they expend at least 90 percent of the previous payment in a
CDFI ERP eligible activity.
The CDFI Fund Designed and Implemented the CDFI
ERP Post-Award Administration and Monitoring
Policies, Procedures, and Processes in Accordance
With Federal Guidance, the CDFI ERP NOFA, and the
GAO Green Book
Federal Guidance
The CDFI Fund designed and implemented CDFI ERP
post-award administration and monitoring policies
and procedures in compliance with applicable
requirements outlined in 2 CFR Part 200, Subpart D, Post
Federal Award Requirements, sections 200.300 through
200.346, and 12 CFR Part 1805, Subpart H, Terms and
Conditions of Assistance, sections 1805.800 through
1805.811. Specifically, the CDFI Fund designed the CDFI ERP
NOFA, Assistance Agreement, and the OCME SOPs to include
the Uniform Guidance post-award monitoring requirements.
Furthermore, the CDFI Fund required CDFI ERP recipients to
attest to adhering to the terms and conditions in their
Assistance Agreement prior to disbursing award funds. The
CDFI Fund also established protocols for data collection,
Audit of the Community Development Financial Institutions Fund’s Award and Post-
Award Administration of the CDFI Equitable Recovery Program (OIG-24-037) 20
reporting, and compliance with government requirements,
consistent with 12 CFR Part 1805.
CDFI ERP NOFA
The CDFI Fund designed and implemented the CDFI ERP post-
award administration and monitoring policies and procedures, as
set forth in the Assistance Agreement and the OCME SOPs, in
compliance with the CDFI ERP NOFA. According to the NOFA,
CDFI ERP recipients must submit compliance reports annually
during the period of performance based on the reporting
schedules in their Assistance Agreements. The CDFI Fund uses
these reports to monitor recipients’ compliance with their
PG&Ms and the requirements in the Assistance Agreement and
the NOFA, and to assess the program’s impact. Additionally,
the Assistance Agreement includes the requirement that
recipients must collect and report data on the race and ethnicity
of borrowers and/or beneficiaries of the program, which the
NOFA noted as an intention of the program.
GAO Green Book
The CDFI Fund designed report review processes for each of the
required CDFI ERP compliance reports and a noncompliance
process in AMIS consistent with GAO Green Book Principle 10,
which states that “management should design control activities
to achieve objectives and respond to risks,” and GAO Green
Book Principle 11, which states that “management should
design the entity’s information system and related control
activities to achieve objectives and respond to risks.” For each
type of report, the review process starts with AMIS completing
an automated compliance review to ensure validity,
completeness, and accuracy. If a recipient’s report does not
pass the automated compliance review, the assigned OCME
Portfolio Manager manually reviews the report to determine
whether the recipient is compliant. If a recipient is found to be
noncompliant, they are provided the opportunity to remedy the
issue before sanctions are imposed by the CDFI Fund.
Also consistent with GAO Green Book Principle 10, the CDFI
Fund designed processes for performing site visits and desk
reviews. Site visits and desk reviews are conducted for
Audit of the Community Development Financial Institutions Fund’s Award and Post-
Award Administration of the CDFI Equitable Recovery Program (OIG-24-037) 21
recipients who received a high noncompliance severity level
based on OCME’s risk-rating tool and were deemed
noncompliant in previous periods of performance, or for those
recipients with other indicators that show they would benefit
from technical assistance. The CDFI Fund designed the site
visits and desk reviews to detect mismanagement and abuse,
assess performance, check compliance, and test the integrity of
the data the recipients submit to document their PG&Ms.
Additionally, the CDFI Fund established CDFI ERP post-award
administration and monitoring policies and procedures
consistent with GAO Green Book Principle 12, which states that
“management should implement control activities through
policies.” Specifically, the CDFI Fund established the OCME
SOPs and the OCME Site Visit and Desk Review SOPs 37 which
outline the CDFI ERP compliance report review, noncompliance,
and site visits and desk reviews processes, including staff
responsibilities.
Furthermore, the CDFI Fund designed and implemented
monitoring policies and procedures consistent with GAO Green
Book Principle 16, which states that “management should
establish and operate monitoring activities to monitor the
internal control system and evaluate the results,” and GAO
Green Book Principle 17, which states that “management
should remediate identified internal control deficiencies on a
timely basis.” Specifically, the OCME Internal Controls
Framework Manual outlines the policies and procedures for
maintaining and monitoring relevant internal controls throughout
OCME’s processes, as internal controls are built into the OCME
SOPs and the OCME Site Visit and Desk Review SOPs, along
with possible corrective actions when internal control issues
arise. The CDFI Fund completes an annual Internal Control
Framework Assessment Workbook in which they evaluate the
17 principles and five components outlined in the GAO Green
Book to determine whether their system of internal control
reduces the risk of not achieving their objectives related to
operations, reporting, or compliance to an acceptable level.
37
The OCME Site Visit and Desk Review SOPs document provided by the CDFI Fund was a draft
version that was still being worked on as of June 12, 2024.
Audit of the Community Development Financial Institutions Fund’s Award and Post-
Award Administration of the CDFI Equitable Recovery Program (OIG-24-037) 22
While we were able to assess the design and implementation of
the CDFI Fund’s post-award administration and monitoring
policies, procedures, and processes, the audit team was unable
to evaluate the operational effectiveness of the post-award
monitoring process as only two of the required reports, the
Financial Statement Audit Report and the A-133/Single Audit
Report, were due from recipients prior to the end of fieldwork.
Next Steps
Post-Award Compliance Review for CDFI ERP
Recipients
As of the end of our fieldwork, CDFI Fund management was in
the process of completing user acceptance testing of the CDFI
ERP Uses of Award Reports and Performance Progress Reports
in AMIS with the first reports due July 31, 2024. CDFI Fund
management anticipates the CDFI ERP recipients’ SF-425
Federal Financial Reports and ACRs by the annual deadlines of
October 15, 2024, and December 20, 2024, respectively.
******
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) 270-2766 or James Fuller, Audit
Manager, at (202) 961-1080. Major contributors to this report
are listed in appendix 3. A distribution list for this report is
provided as appendix 4.
/s/
Daniel F. Gerges
Audit Director, State and Local Fiscal Recovery, RESTORE, and
CDFI Programs
Appendices
Audit of the Community Development Financial Institutions Fund’s Award and Post-
Award Administration of the CDFI Equitable Recovery Program (OIG-24-037) 23
Appendix 1: Objective, Scope, and Methodology
The objective of this audit was to assess the Community
Development Financial Institutions (CDFI) Fund’s award process
for ensuring the accuracy of the CDFI Equitable Recovery
Program (CDFI ERP) payments and the design of the post-award
administration over recipient monitoring in compliance with
applicable laws, regulations, and policies and procedures.
The scope of our audit included, but was not limited to, the:
(1) assessment of the CDFI Fund’s allocation methodologies;
(2) determination of ERP-Eligible Geographies; (3) accuracy of
award amounts and payments; and (4) adequacy of the CDFI
ERP post-award reporting process. Our audit scope included the
CDFI Fund’s activities related to CDFI ERP applications, awards,
and payments from June 24, 2022, through November 30,
2023.
To accomplish this audit objective, we performed the following
procedures during audit fieldwork, conducted remotely from
March 2024 to July 2024:
• Reviewed applicable laws, regulations, and policies and
procedures, including:
o Public Law 116-260, Title V, Subtitle B in Division N
of the Consolidated Appropriations Act, 2021,
December 27, 2020;
o Public Law 103-325, Riegle Community Development
and Regulatory Improvement Act of 1994,
September 23, 1994;
o 12 Code of Federal Regulations Part 1805,
“Community Development Financial Institutions
Program,” August 31, 2015;
o Office of Management and Budget (OMB), Uniform
Administrative Requirements, Cost Principles, and
Audit Requirements for Federal Awards, 2 Code of
Federal Regulations 200, updated August 13, 2020
(effective November 12, 2020) and April 4, 2024
(effective October 1, 2024);
Audit of the Community Development Financial Institutions Fund’s Award and
Post-Award Administration of the CDFI Equitable Recovery Program (OIG-24-
037) 24
Appendix 1: Objective, Scope, and Methodology
o Government Accountability Office (GAO), Standards
for Internal Control in the Federal Government,
September 2014;
o GAO, Assessing Data Reliability, December 2019; and
o OMB Circular A-123, Management’s Responsibility for
Enterprise Risk Management and Internal Control,
July 15, 2016.
• Reviewed GAO’s Standards for Internal Control in the
Federal Government to identify the components and
principles of internal control that were significant in the
context of the audit objective. Specifically, we evaluated the
control environment, risk assessment, control activities,
information and communication, and monitoring internal
control components; and assessed policies, procedures, and
guidance against the following principles:
o Principle 3: Management should establish an
organizational structure, assign responsibility, and
delegate authority to achieve the objectives;
o Principle 8: Management should consider the potential
for fraud when identifying, analyzing, and responding
to risks;
o Principle 9: Management should identify, analyze, and
respond to significant changes that could impact the
internal control system;
o Principle 10: Management should design control
activities to achieve objectives and respond to risks;
o Principle 11: Management should design the entity’s
information system and related control activities to
achieve objectives and respond to risks;
o Principle 12: Management should implement control
activities through policies;
o Principle 13: Management should use quality
information to achieve the entity’s objectives;
o Principle 14: Management should internally
communicate the necessary quality information to
achieve the entity’s objectives;
Audit of the Community Development Financial Institutions Fund’s Award and Post-
Award Administration of the CDFI Equitable Recovery Program (OIG-24-037) 25
Appendix 1: Objective, Scope, and Methodology
o Principle 15: Management should externally
communicate the necessary quality information to
achieve the entity’s objectives;
o Principle 16: Management should establish and
operate monitoring activities to monitor the internal
control system and evaluate the results; and
o Principle 17: Management should remediate identified
internal control deficiencies on a timely basis.
• Reviewed the CDFI Fund’s policies, procedures, and
guidelines related to the administration of the CDFI ERP,
including, but not limited to:
o CDFI Equitable Recovery Program Standard Operating
Procedures Fiscal Year (FY) 2022 Steps A Thru E,
November 1, 2022;
o FY 2022 CDFI Equitable Recovery Program Step 1:
Eligibility Review Job Aid, October 18, 2022;
o FY 2022 CDFI Equitable Recovery Program Step 2:
Financial Analysis and Compliance Risk Evaluation Job
Aid, October 7, 2022;
o FY 2022 CDFI Equitable Recovery Program External
Review Guide, (undated), provided on February 9,
2024;
o CDFI ERP Internal Review Guidance: Federal Reviewer,
Reviewing Official and Selecting Official,
October 25, 2022;
o FY 2022 CDFI Equitable Recovery Program: Debriefing
Report Creation Job Aid, May 17, 2023;
o CDFI ERP Regulator Data Job Aid, (undated), provided
on February 9, 2024;
o CDFI Equitable Recovery Program Job Aid – Award
Workflow: Program Manager Guidance, August 1,
2023;
o CDFI Equitable Recovery Program Job Aid –
Assistance Agreement Closing Process – First Level
Review, August 1, 2023;
o FY 2022 Community Development Financial
Institutions Equitable Recovery Program Assistance
Audit of the Community Development Financial Institutions Fund’s Award and Post-
Award Administration of the CDFI Equitable Recovery Program (OIG-24-037) 26
Appendix 1: Objective, Scope, and Methodology
Agreement Generation and Distribution Guidance,
(undated), provided on February 9, 2024;
o Community Development Financial Institutions Fund
Standard Operating Procedures Monetary
Programs - Award Accounting, (undated), provided on
March 1, 2024;
o CDFI Equitable Recovery Program Assistance
Agreement Modification Policy, September 6, 2023;
o CDFI Equitable Recovery Program Job Aid –
Subsequent Payment Requests, November 29, 2023;
o Grant Refund Process, (undated), provided on
February 2, 2024;
o CDFI ERP Notice of Funds Availability (NOFA),
June 24, 2022;
o CDFI ERP Key Staff List, as of January 25, 2024;
o CDFI Fund Organizational Chart, as of March 21,
2024; and
o Memorandum of Understanding Between the
Community Development Financial Institutions Fund
and the National Credit Union Administration,
January 21, 2016.
• Reviewed the CDFI Fund’s policies, procedures, and
guidelines related to the post-award administration and
monitoring of the CDFI ERP, including, but not limited to:
o Compliance Monitoring and Evaluation Unit Standard
Operating Procedures, August 10, 2023;
o Compliance Monitoring and Evaluation Unit Internal
Controls Framework Manual, August 10, 2023;
o Awards Management Information System (AMIS)
Training Manual: Certification of Material Events Form
for all CDFI Fund Programs, September 2023;
o AMIS Training Manual: Standard Form 425 Federal
Financial Report Completion Guidance
September 2023; and
o Compliance Monitoring and Evaluation Unit Site Visit
and Desk Review Standard Operating Procedures,
Draft version, April 2024.
Audit of the Community Development Financial Institutions Fund’s Award and Post-
Award Administration of the CDFI Equitable Recovery Program (OIG-24-037) 27
Appendix 1: Objective, Scope, and Methodology
• Reviewed the Department of the Treasury (Treasury) Office
of Inspector General (OIG) reports and GAO reports,
including, but not limited to:
o Treasury OIG, Audit of the Community Development
Financial Institutions Fund’s Implementation of the
CDFI Equitable Recovery Program, OIG-23-033
(September 13, 2023);
o Treasury OIG, Audit of the Community Development
Financial Institutions Fund’s Award and Post-Award
Administration of the CDFI Rapid Response Program,
OIG-23-032 (September 13, 2023);
o Treasury OIG, Audit of the Community Development
Financial Institutions Fund’s Implementation of the
CDFI Rapid Response Program, OIG-22-023
(December 21, 2021);
o Treasury OIG, Audit of the Community Development
Financial Institutions Fund’s Financial Statements for
Fiscal Year 2023, OIG-24-024 (January 29, 2024);
and
o GAO, Community Development Financial Institutions:
Analysis of Annual and Emergency Assistance and
Treasury Efforts to Address Program Risks,
GAO-23-105952 (December 21, 2022).
• Assessed the reliability of CDFI ERP payment data as of
January 26, 2024, from the Bureau of the Fiscal Service’s
accounting system and CDFI ERP award data as of
November 30, 2023, from the CDFI Fund’s AMIS. Both sets
of information were provided to us by the CDFI Fund. We
assessed the reliability of data by (1) performing electronic
testing and reconciliation of the selected data elements for
accuracy and completeness; (2) reviewing existing
information about the payment data and systems that store
the data; and (3) obtaining written statements from CDFI
Fund officials knowledgeable about the data. We determined
that the data was sufficiently reliable for the purposes of this
audit report, therefore the data can be used for sampling.
• Obtained a statistical sample of 27 CDFI ERP payment
recipients out of a universe of 596 CDFI ERP initial award
payments issued prior to November 30, 2023, with a total
outlay amount equal to $1.4 billion. The sample selection
Audit of the Community Development Financial Institutions Fund’s Award and Post-
Award Administration of the CDFI Equitable Recovery Program (OIG-24-037) 28
Appendix 1: Objective, Scope, and Methodology
was based on a 90 percent confidence level with a +/-
7 percent precision rate and a 5 percent anticipated error
rate. We used a statistical sample instead of a judgmental
sample because a statistical sample could be used to project
results to the universe population of 596 CDFI ERP initial
payments, whereas a judgmental sample could not be
projected.
• Reviewed documentation related to the CDFI Fund’s
issuance of CDFI ERP payments to test for accuracy,
including, but not limited to:
o Payment Approval Process Flowchart, (undated),
provided on February 9, 2024;
o CDFI ERP Assistance Agreement (Assistance
Agreement) template, July 2023;
o CDFI ERP Award Sizing Workbook, April 7, 2023;
o CDFI Certification List as of June 24, 2022, and
March 15, 2024;
o For each of the 27 sampled recipients, we reviewed
each CDFI ERP recipient’s:
2022 CDFI ERP Application;
OMB Standard Form 424;
Unique Entity Identifier Profile;
CDFI ERP Scorecard;
Internal Review Record;
Executed Assistance Agreement;
Initial Payment Request; and
Award Detail Page.
• Reviewed the entire universe of 92 CDFI ERP applicants who
did not receive an award to assess whether the CDFI Fund
correctly determined the applicants’ ineligibility in
accordance with the applicable requirements in the CDFI ERP
NOFA. Specifically, we reviewed the criteria set forth in the
NOFA and compared the CDFI Fund’s actions and
justifications for determining whether CDFI ERP applicants
who did not receive an award and evaluated whether it was
justified. We reviewed the CDFI Fund’s written explanations,
Audit of the Community Development Financial Institutions Fund’s Award and Post-
Award Administration of the CDFI Equitable Recovery Program (OIG-24-037) 29
Appendix 1: Objective, Scope, and Methodology
applicants’ Internal Review Records, and CDFI ERP
applications to determine whether the applicants were
properly excluded from receiving a CDFI ERP award.
• Reviewed reporting requirements and other documentation
relevant to the post-award administration and monitoring of
the CDFI ERP, including, but not limited to:
o Required Annual Reports outlined in the Assistance
Agreement:
Financial Statement Audit Report;
A-133/Single Audit Report (if applicable);
Performance Progress Report;
Transaction Level Report;
Uses of Award Report;
Annual Certification and Data Collection Report;
and
Standard Form 425 Federal Financial Report.
o Annual Report submission deadlines outlined in the
Assistance Agreement; and
o Performance Goals and Measures outlined in the
Assistance Agreement.
• Performed walkthroughs of the CDFI Fund’s award
determination, award sizing, and the AMIS to gain an
understanding of the CDFI Fund’s award process and post-
award administration and monitoring process related to the
CDFI ERP. Additionally, we performed a walkthrough to test
the design of the CDFI Fund’s post-award administration and
monitoring CDFI ERP grant recipients in AMIS.
• Interviewed key CDFI Fund personnel responsible for the
award and post-award administration of the CDFI ERP:
o Deputy Director for Policy and Programs and Program
Manager for the CDFI ERP;
o Senior Advisor to the Deputy Director of Policy and
Programs;
o Manager for Financial Strategies and Research;
o Research Analyst for Financial Strategies and
Research;
Audit of the Community Development Financial Institutions Fund’s Award and Post-
Award Administration of the CDFI Equitable Recovery Program (OIG-24-037) 30
Appendix 1: Objective, Scope, and Methodology
o Program Manager for the Office of Compliance
Monitoring and Evaluation;
o Program Manager for the Capital Magnet Fund and
Closing Manager for the CDFI ERP;
o Associate Program Manager, CDFI ERP Compliance;
o Senior Accountant; and
o Legal Counsel.
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 objectives.
We believe that the evidence obtained provides a reasonable
basis for our findings and conclusions based on our audit
objectives.
Audit of the Community Development Financial Institutions Fund’s Award and Post-
Award Administration of the CDFI Equitable Recovery Program (OIG-24-037) 31
Appendix 2: Management Response
Audit of the Community Development Financial Institutions Fund’s Award and
Post-Award Administration of the CDFI Equitable Recovery Program (OIG-24-
037) 32
Appendix 3: Major Contributors to This Report
James Fuller, Audit Manager
Lawrence Delva-Gonzalez, Auditor-in-Charge
Kristin Prestel, Auditor
Clint Hoellrigl, Auditor
Kenna Stroop, Referencer
Audit of the Community Development Financial Institutions Fund’s Award and
Post-Award Administration of the CDFI Equitable Recovery Program (OIG-24-
037) 33
Appendix 4: Report Distribution
Department of the Treasury
Secretary
Deputy Secretary
Under Secretary for Domestic Finance
Assistant Secretary for Domestic Finance
Assistant Secretary for Financial Institutions
Deputy Assistance Secretary for Community and Economic
Development
Chief Program Officer, Office of Capital Access
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
Acting 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
U.S. House of Representatives
Chairman and Ranking Member
Committee on Financial Services
Audit of the Community Development Financial Institutions Fund’s Award and
Post-Award Administration of the CDFI Equitable Recovery Program (OIG-24-
037) 34
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