Recovery.gov - Track the Money

The CDFI Fund anticipates announcing the CDFIs that have been selected to receive the $90 million in Recovery Act-related CDFI Program grants in June of 2009.

In keeping with the three program objectives noted above, the following are examples of how CDFIs intend to use CDFI Program awards: (1) to provide loans and equity investments to small businesses and micro-enterprises; (2) mortgage loans to low-income and first-time homebuyers; pre-development and construction financing for developers of low-income housing and community facilities, including charter schools, health clinics and child care facilities; and (3) financial services such as credit counseling, homebuyer education, low-cost depository accounts, Individual Development Accounts (IDAs), and check-cashing services that bring unbanked individuals into the financial mainstream.

CDFIs have a great deal of flexibility with respect to how they use the award dollars. Unlike many other Federal programs, these funds are not tied to specific projects or transactions; instead, CDFI Program dollars build recipient capacity to serve their target markets in flexible and individualized ways. For example, CDFIs typically use award funds in a manner that enables them to increase their net assets or loan loss reserves so that they may borrow additional private capital and significantly increase their lending capacity. Alternatively, CDFIs may use the dollars to significantly subsidize more costly operations, allowing them to offer more affordable loan products to borrowers that have been turned away from mainstream financial institutions; to sponsor financial and homebuyer counseling and education initiatives; and to offer lower-cost financial services to their customers.

5.1 RISK MANAGEMENT/INTERNAL CONTROL PLAN
• For each Recovery Act program involving implementation of provisions or obligations of Recovery Act funds in FY 2009, the bureaus will perform actions 5.1.1 through 5.1.4 by April 15, 2009, with completion of 5.1.6 shortly thereafter
• Step 5.1.5 will be ongoing
• Supporting documentation will be maintained by each bureau so that it is readily accessible in the event of an audit or other needs

5.1.1 Identify and Document Program-Specific Risks
• Review pertinent existing risk assessments
• Review pertinent OMB Circular A-123/Appendix A test results, Improper Payments Information Act assessments, etc.
• Review pertinent GAO/OIG/TIGTA audit reports and related corrective action plans

5.1.2 Identify and Document Applicable Current Process Internal Controls

5.1.3 Assess Program-Specific Risks in View of Existing Controls
• Take the Risk/Impact Questionnaire to rate risks and impacts, taking into consideration the findings identified in 5.1.1 and all OMB-prescribed Recovery Act transparency and accountability objectives
• Use the “Consequence-Probability Table” (Risk/Impact Matrix) to determine the overall (combined) Risk/Impact rating
• Document assessments

5.1.4 Mitigate Risks and Impacts
• For each Program with an overall Risk/Impact rating of “High” or “Medium”:
• Identify and update existing risk mitigation plans to implement Recovery Act-related controls; plans should include regularly scheduled monitoring and testing of risk mitigation plans and controls
• Develop and execute new risk mitigation plans as needed; plans should include regularly scheduled monitoring and testing of risk mitigation plans and controls

5.1.5 Monitor Risk Mitigation Plans
• As outlined in each risk mitigation plan (per 5.1.4), each risk mitigation plan must be monitored regularly for timely and effective implementation of corrective actions and testing of controls
• Bureaus with responsibility for Recovery Act programs will leverage existing organizations and entities (e.g., A-123/Appendix A Senior Assessment Team, Senior Management Council, et al) to review, assess, and manage Recovery Act risk
• Bureaus will provide monthly progress reports on risk management to the Treasury DCFO for each program

5.1.6 Certify Completion of Risk Assessment/Development of Mitigation Plan
• Bureau Recovery Act Senior Accountable Official will sign/date a certification for each program
• Submit signed certification to Treasury DCFO

The CDFI Fund aggregates the data presented by CDFIs and releases this information. Its most recent release of information was a trend report that was released in December of 2007, which is available on the CDFI Fund’s website:

http://www.cdfifund.gov/impact_we_make/ciis/CDFI3yearTrend.pdf

This report analyzes and reports out data across the spectrum of CDFIs in a number of key areas, pertaining to both the performance of the CDFIs and the impact on the low-income communities, including:

1. CDFI Characteristics – Size and type of CDFIs; staffing levels; markets served.

2. Portfolio Data – Size and quality of outstanding loan portfolios.

3. Capital under Management – Size of capital; sources of capital; costs of capital.

4. Operating Revenue – Size and sources of operating revenue, both earned capital and contributed capital.

5. Loan and Equity investments originated.

6. Financial Strength of CDFIs – Analysis of various capital ratios and liquidity measurements.

7. Community Benefits – Jobs created and maintained; development services provided; etc.

This report is in the process of being updated with more recent data and, beginning in 2009, will be updated annually.

The CDFI Fund’s Chief Operating Officer has been designated as the CDFI Fund’s Accountable Official (AO) with respect to the Recovery Act dollars. The AO has established a working group consisting of representatives from the CDFI Fund’s CDFI Program office, the Resource Management office, the office of Legal Counsel, the Compliance office, and the Research office to ensure that all Recovery Act requirements are coordinated across the various units. To further this coordination, the CDFI Fund has posted a position announcement for a senior level staff person to serve as Recovery Act Program Manager. This person will be directly responsible for implementing all aspects of the Recovery Act program requirements.

The AO has daily conference phone calls with Treasury’s Senior Accountable Official (SAO) to monitor the program. During these conference calls and on a monthly basis, the AO and the SAO monitor and review several items including obligations and outlays, acquisitions, performance measures, and accountability metrics. Corrective and/or preventive actions that are established as a result of the reviews will be tracked for implementation.

CDFI Program awards will not be used to invest in Federal infrastructure projects.