An audit of the Economic Development Loan Portfolio for processes in place during the period of January 1, 2020 – December 31, 2022 was performed. The main objective was to assess the effectiveness and adequacy of policy, procedures, and controls in mitigating the risk of servicing the County’s development loan portfolio including collection of payments.Department of Internal Audit (DIA) relied on authoritative guidance to determine lending best practices that mitigate risk, providing a basis for assessing the adequacy of Department of Development’s (DoD) policies, procedures, and controls. DIA made its assessments by conducting interviews with management and staff regarding processes, reviewing the Department of Development’s (DoD) policy and procedures, and obtaining various documentation from staff. In addition, where best practices were observed, DIA performed audit procedures to determine effectiveness. The audit procedures disclosed internal control weaknesses or areas of potential process improvement relative to board oversight, loan underwriting and monitoring, risk analysis, job creation and diversity monitoring, prevailing wage compliance monitoring, disbursements and receipts reconciliations, financial reporting, and IT controls. DIA recommended DoD implement the following: risk-rating process to score new loans and a formal loan portfolio risk analysis process to monitor risk exposures, formal loan collectability and write-off review policy to ensure the timeliness of collections activities and financial reporting accuracy, monthly reconciliation of loan disbursements and receipts between financial systems, update policies and procedures, and implement additional IT controls, including a system access policy to achieve least privilege access, stronger password requirements, and policy requirement as to an expected timeframe for user deactivation.
OH
United States
