Issued Date
May 18, 2018
Audit Objective
Determine whether the Town used the Urban Development Action Grant (UDAG) repayment money for eligible purposes and if the corresponding financial activity was properly authorized, recorded and reported.
Key Findings
- The Board’s use of UDAG repayment money totaling $4.5 million for long-term loans to fund capital projects was not consistent with their adopted policy to use the money as revolving loans for local business development.
- Board-approved loans made from the community development (CD) fund were recorded as transfers, rather than as a receivables and due to other funds, resulting in an understatement of nearly $3.6 million in the CD fund as of December 31, 2016.
Key Recommendations
- Adopt a policy to provide guidelines for loans made from the CD fund to other Town funds.
- Maintain adequate records to account for loans made from UDAG repayment money to enable the Board to determine actual loan balances due to the CD fund.
Town officials generally agreed with our recommendations and have initiated, or indicated they planned to initiate corrective action.