Issued Date
December 22, 2021
Audit Objective
Determine whether the Warren County Local Development Corporation (Corporation) officials provided adequate oversight of the revolving loan program.
Key Findings
Corporation officials did not provide adequate oversight of the revolving loan program. For the 15 active loans, we found:
- Fourteen loan files did not have required and/or other supporting documentation.
- Eleven loan files did not contain any evidence that annual site visits occurred, annual financial statements were reviewed or whether jobs were created and/or retained.
- Twelve loan files lacked documentation to support the loan proceeds were used properly.
- Four active loan agreements were altered, and three loans were made without Board approval.
- Loan agreements did not have enforcement mechanisms to ensure funds were used for appropriate purposes and job creation and/or retention goals were met.
Key Recommendations
- Ensure loan files contain all required information and site visits are conducted and documented in the loan files.
- Forward all loan modification requests to the Board for approval.
- Develop written policies and procedures outlining actions to take when job creation and/or retention goals are not met.
Board officials generally agreed with our recommendations and indicated they planned to initiate corrective action.