2022-005 Department of Agriculture Federal Financial Assistance Listing #10.766 Communities Facilities Loans and Grants Cluster Special Tests and Provisions Material Weakness in Internal Control over Compliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. The loan resolution security agreements state the Organization must set aside a reserve amount which may be established as a bookkeeping account or as a separate bank account. Funds may be deposited in institutions insured by state and federal government or invested in marketable securities backed by the full faith and credit of the United States. Condition: Management maintained the reserve amount in the pooled investment fund account which was not established as a separate bookkeeping account nor as a separate bank account. Although the pooled investment fund includes marketable securities backed by the full faith and credit of the United States, based on the portfolio mix of the investment pool, additional cash balances on hand need to supplement the investment pool to adequately fund the reserve. The Organization has excess cash available. Further, there is no secondary level of review being performed over the monthly reconciliation of the reserve account. Cause: The Organization was unaware the funds were required to be deposited in institutions insured by state and federal government or invested in marketable securities backed by the full faith and credit of the United States. No formal review process is in place over monthly reconciliation of reserve account. Effect: The Organization could be in violation of the reserve amount requirements if management is not monitoring compliance. Questioned Costs: None reported Context/Sampling: Sampling was not used. Repeat Finding from Prior Year: No Recommendation: We recommend management transfer the required reserve amount to a separate bookkeeping account in the trial balance or establish a separate bank account and ensure the funds are deposited in institutions insured by state and federal government or invested in marketable securities backed by the full faith and credit of the United States. Controls should be established and documented to monitor compliance with the reserve fund provision. Views of Responsible Officials: Management agrees with the finding.
2022-003 Department of Agriculture Federal Financial Assistance Listing #10.766 Communities Facilities Loans and Grants Cluster Preparation of the Schedule of Expenditures of Federal Awards Material Weakness in Internal Control Over Compliance Criteria: Proper controls over financial reporting include a system designed to prepare the schedule of expenditures of federal awards (the schedule) and the accompanying notes to the schedule. Condition: The Organization does not have an internal control system designed to provide for the preparation of the schedule. As auditors, we were requested to assist with the preparation of the schedule. Cause: Auditor assistance with preparation of the schedule is not unusual as the schedule has unique and specialized requirement and preparation is only required when the Organization meets a specified threshold of federal expenditures. Effect: There is a reasonable possibility that the Organization would not be able to draft a complete and accurate schedule that is correct without the assistance of the auditors. Questioned Costs: None reported Context: Sampling was not used. Repeat Finding from Prior Years: Yes, prior year finding 2021-003. Recommendation: While we recognize that this condition is not unusual for an organization with limited staffing, we recommend management be aware of the financial reporting requirements relating to the Organization?s schedule of expenditures of federal awards and the internal controls that impact financial reporting. Views of Responsible Officials: Management agrees with the finding.
2022-004 Department of Agriculture Federal Financial Assistance Listing #10.766 Communities Facilities Loans and Grants Cluster Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Within the letter of conditions dated June 27, 2017 for 2017 direct loan and letter of conditions dated August 12, 2011 for the 2011 direct loan, annual audited financial statements are required to be submitted to USDA. Additionally, within the letter of conditions dated May 7, 2008 for 2008 direct loan and letter of conditions dated April 20, 2006 and March 27, 2006 for the 2006 direct loans, the fiscal year operating budget must be submitted and approved by USDA. Condition: The fiscal year 2021 audit report and fiscal year 2022 operating budget were not submitted to USDA until requested during the audit. Cause: The Organization did not have an internal control process in place to ensure timely submission of required reports. Effect: The required reports were not submitted to USDA until requested during the audit. Questioned Costs: None reported. Context/Sampling: Sampling was not used. Repeat Finding from Prior Years: No Recommendation: We recommend management implement a process and controls ensuring timely submission of required reports. Views of Responsible Officials: Management agrees with the finding.
2022-005 Department of Agriculture Federal Financial Assistance Listing #10.766 Communities Facilities Loans and Grants Cluster Special Tests and Provisions Material Weakness in Internal Control over Compliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. The loan resolution security agreements state the Organization must set aside a reserve amount which may be established as a bookkeeping account or as a separate bank account. Funds may be deposited in institutions insured by state and federal government or invested in marketable securities backed by the full faith and credit of the United States. Condition: Management maintained the reserve amount in the pooled investment fund account which was not established as a separate bookkeeping account nor as a separate bank account. Although the pooled investment fund includes marketable securities backed by the full faith and credit of the United States, based on the portfolio mix of the investment pool, additional cash balances on hand need to supplement the investment pool to adequately fund the reserve. The Organization has excess cash available. Further, there is no secondary level of review being performed over the monthly reconciliation of the reserve account. Cause: The Organization was unaware the funds were required to be deposited in institutions insured by state and federal government or invested in marketable securities backed by the full faith and credit of the United States. No formal review process is in place over monthly reconciliation of reserve account. Effect: The Organization could be in violation of the reserve amount requirements if management is not monitoring compliance. Questioned Costs: None reported Context/Sampling: Sampling was not used. Repeat Finding from Prior Year: No Recommendation: We recommend management transfer the required reserve amount to a separate bookkeeping account in the trial balance or establish a separate bank account and ensure the funds are deposited in institutions insured by state and federal government or invested in marketable securities backed by the full faith and credit of the United States. Controls should be established and documented to monitor compliance with the reserve fund provision. Views of Responsible Officials: Management agrees with the finding.
2022-003 Department of Agriculture Federal Financial Assistance Listing #10.766 Communities Facilities Loans and Grants Cluster Preparation of the Schedule of Expenditures of Federal Awards Material Weakness in Internal Control Over Compliance Criteria: Proper controls over financial reporting include a system designed to prepare the schedule of expenditures of federal awards (the schedule) and the accompanying notes to the schedule. Condition: The Organization does not have an internal control system designed to provide for the preparation of the schedule. As auditors, we were requested to assist with the preparation of the schedule. Cause: Auditor assistance with preparation of the schedule is not unusual as the schedule has unique and specialized requirement and preparation is only required when the Organization meets a specified threshold of federal expenditures. Effect: There is a reasonable possibility that the Organization would not be able to draft a complete and accurate schedule that is correct without the assistance of the auditors. Questioned Costs: None reported Context: Sampling was not used. Repeat Finding from Prior Years: Yes, prior year finding 2021-003. Recommendation: While we recognize that this condition is not unusual for an organization with limited staffing, we recommend management be aware of the financial reporting requirements relating to the Organization?s schedule of expenditures of federal awards and the internal controls that impact financial reporting. Views of Responsible Officials: Management agrees with the finding.
2022-004 Department of Agriculture Federal Financial Assistance Listing #10.766 Communities Facilities Loans and Grants Cluster Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Within the letter of conditions dated June 27, 2017 for 2017 direct loan and letter of conditions dated August 12, 2011 for the 2011 direct loan, annual audited financial statements are required to be submitted to USDA. Additionally, within the letter of conditions dated May 7, 2008 for 2008 direct loan and letter of conditions dated April 20, 2006 and March 27, 2006 for the 2006 direct loans, the fiscal year operating budget must be submitted and approved by USDA. Condition: The fiscal year 2021 audit report and fiscal year 2022 operating budget were not submitted to USDA until requested during the audit. Cause: The Organization did not have an internal control process in place to ensure timely submission of required reports. Effect: The required reports were not submitted to USDA until requested during the audit. Questioned Costs: None reported. Context/Sampling: Sampling was not used. Repeat Finding from Prior Years: No Recommendation: We recommend management implement a process and controls ensuring timely submission of required reports. Views of Responsible Officials: Management agrees with the finding.
2022-005 Department of Agriculture Federal Financial Assistance Listing #10.766 Communities Facilities Loans and Grants Cluster Special Tests and Provisions Material Weakness in Internal Control over Compliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. The loan resolution security agreements state the Organization must set aside a reserve amount which may be established as a bookkeeping account or as a separate bank account. Funds may be deposited in institutions insured by state and federal government or invested in marketable securities backed by the full faith and credit of the United States. Condition: Management maintained the reserve amount in the pooled investment fund account which was not established as a separate bookkeeping account nor as a separate bank account. Although the pooled investment fund includes marketable securities backed by the full faith and credit of the United States, based on the portfolio mix of the investment pool, additional cash balances on hand need to supplement the investment pool to adequately fund the reserve. The Organization has excess cash available. Further, there is no secondary level of review being performed over the monthly reconciliation of the reserve account. Cause: The Organization was unaware the funds were required to be deposited in institutions insured by state and federal government or invested in marketable securities backed by the full faith and credit of the United States. No formal review process is in place over monthly reconciliation of reserve account. Effect: The Organization could be in violation of the reserve amount requirements if management is not monitoring compliance. Questioned Costs: None reported Context/Sampling: Sampling was not used. Repeat Finding from Prior Year: No Recommendation: We recommend management transfer the required reserve amount to a separate bookkeeping account in the trial balance or establish a separate bank account and ensure the funds are deposited in institutions insured by state and federal government or invested in marketable securities backed by the full faith and credit of the United States. Controls should be established and documented to monitor compliance with the reserve fund provision. Views of Responsible Officials: Management agrees with the finding.
2022-003 Department of Agriculture Federal Financial Assistance Listing #10.766 Communities Facilities Loans and Grants Cluster Preparation of the Schedule of Expenditures of Federal Awards Material Weakness in Internal Control Over Compliance Criteria: Proper controls over financial reporting include a system designed to prepare the schedule of expenditures of federal awards (the schedule) and the accompanying notes to the schedule. Condition: The Organization does not have an internal control system designed to provide for the preparation of the schedule. As auditors, we were requested to assist with the preparation of the schedule. Cause: Auditor assistance with preparation of the schedule is not unusual as the schedule has unique and specialized requirement and preparation is only required when the Organization meets a specified threshold of federal expenditures. Effect: There is a reasonable possibility that the Organization would not be able to draft a complete and accurate schedule that is correct without the assistance of the auditors. Questioned Costs: None reported Context: Sampling was not used. Repeat Finding from Prior Years: Yes, prior year finding 2021-003. Recommendation: While we recognize that this condition is not unusual for an organization with limited staffing, we recommend management be aware of the financial reporting requirements relating to the Organization?s schedule of expenditures of federal awards and the internal controls that impact financial reporting. Views of Responsible Officials: Management agrees with the finding.
2022-004 Department of Agriculture Federal Financial Assistance Listing #10.766 Communities Facilities Loans and Grants Cluster Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Within the letter of conditions dated June 27, 2017 for 2017 direct loan and letter of conditions dated August 12, 2011 for the 2011 direct loan, annual audited financial statements are required to be submitted to USDA. Additionally, within the letter of conditions dated May 7, 2008 for 2008 direct loan and letter of conditions dated April 20, 2006 and March 27, 2006 for the 2006 direct loans, the fiscal year operating budget must be submitted and approved by USDA. Condition: The fiscal year 2021 audit report and fiscal year 2022 operating budget were not submitted to USDA until requested during the audit. Cause: The Organization did not have an internal control process in place to ensure timely submission of required reports. Effect: The required reports were not submitted to USDA until requested during the audit. Questioned Costs: None reported. Context/Sampling: Sampling was not used. Repeat Finding from Prior Years: No Recommendation: We recommend management implement a process and controls ensuring timely submission of required reports. Views of Responsible Officials: Management agrees with the finding.
2022-005 Department of Agriculture Federal Financial Assistance Listing #10.766 Communities Facilities Loans and Grants Cluster Special Tests and Provisions Material Weakness in Internal Control over Compliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. The loan resolution security agreements state the Organization must set aside a reserve amount which may be established as a bookkeeping account or as a separate bank account. Funds may be deposited in institutions insured by state and federal government or invested in marketable securities backed by the full faith and credit of the United States. Condition: Management maintained the reserve amount in the pooled investment fund account which was not established as a separate bookkeeping account nor as a separate bank account. Although the pooled investment fund includes marketable securities backed by the full faith and credit of the United States, based on the portfolio mix of the investment pool, additional cash balances on hand need to supplement the investment pool to adequately fund the reserve. The Organization has excess cash available. Further, there is no secondary level of review being performed over the monthly reconciliation of the reserve account. Cause: The Organization was unaware the funds were required to be deposited in institutions insured by state and federal government or invested in marketable securities backed by the full faith and credit of the United States. No formal review process is in place over monthly reconciliation of reserve account. Effect: The Organization could be in violation of the reserve amount requirements if management is not monitoring compliance. Questioned Costs: None reported Context/Sampling: Sampling was not used. Repeat Finding from Prior Year: No Recommendation: We recommend management transfer the required reserve amount to a separate bookkeeping account in the trial balance or establish a separate bank account and ensure the funds are deposited in institutions insured by state and federal government or invested in marketable securities backed by the full faith and credit of the United States. Controls should be established and documented to monitor compliance with the reserve fund provision. Views of Responsible Officials: Management agrees with the finding.
2022-003 Department of Agriculture Federal Financial Assistance Listing #10.766 Communities Facilities Loans and Grants Cluster Preparation of the Schedule of Expenditures of Federal Awards Material Weakness in Internal Control Over Compliance Criteria: Proper controls over financial reporting include a system designed to prepare the schedule of expenditures of federal awards (the schedule) and the accompanying notes to the schedule. Condition: The Organization does not have an internal control system designed to provide for the preparation of the schedule. As auditors, we were requested to assist with the preparation of the schedule. Cause: Auditor assistance with preparation of the schedule is not unusual as the schedule has unique and specialized requirement and preparation is only required when the Organization meets a specified threshold of federal expenditures. Effect: There is a reasonable possibility that the Organization would not be able to draft a complete and accurate schedule that is correct without the assistance of the auditors. Questioned Costs: None reported Context: Sampling was not used. Repeat Finding from Prior Years: Yes, prior year finding 2021-003. Recommendation: While we recognize that this condition is not unusual for an organization with limited staffing, we recommend management be aware of the financial reporting requirements relating to the Organization?s schedule of expenditures of federal awards and the internal controls that impact financial reporting. Views of Responsible Officials: Management agrees with the finding.
2022-004 Department of Agriculture Federal Financial Assistance Listing #10.766 Communities Facilities Loans and Grants Cluster Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Within the letter of conditions dated June 27, 2017 for 2017 direct loan and letter of conditions dated August 12, 2011 for the 2011 direct loan, annual audited financial statements are required to be submitted to USDA. Additionally, within the letter of conditions dated May 7, 2008 for 2008 direct loan and letter of conditions dated April 20, 2006 and March 27, 2006 for the 2006 direct loans, the fiscal year operating budget must be submitted and approved by USDA. Condition: The fiscal year 2021 audit report and fiscal year 2022 operating budget were not submitted to USDA until requested during the audit. Cause: The Organization did not have an internal control process in place to ensure timely submission of required reports. Effect: The required reports were not submitted to USDA until requested during the audit. Questioned Costs: None reported. Context/Sampling: Sampling was not used. Repeat Finding from Prior Years: No Recommendation: We recommend management implement a process and controls ensuring timely submission of required reports. Views of Responsible Officials: Management agrees with the finding.
2022-005 Department of Agriculture Federal Financial Assistance Listing #10.766 Communities Facilities Loans and Grants Cluster Special Tests and Provisions Material Weakness in Internal Control over Compliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. The loan resolution security agreements state the Organization must set aside a reserve amount which may be established as a bookkeeping account or as a separate bank account. Funds may be deposited in institutions insured by state and federal government or invested in marketable securities backed by the full faith and credit of the United States. Condition: Management maintained the reserve amount in the pooled investment fund account which was not established as a separate bookkeeping account nor as a separate bank account. Although the pooled investment fund includes marketable securities backed by the full faith and credit of the United States, based on the portfolio mix of the investment pool, additional cash balances on hand need to supplement the investment pool to adequately fund the reserve. The Organization has excess cash available. Further, there is no secondary level of review being performed over the monthly reconciliation of the reserve account. Cause: The Organization was unaware the funds were required to be deposited in institutions insured by state and federal government or invested in marketable securities backed by the full faith and credit of the United States. No formal review process is in place over monthly reconciliation of reserve account. Effect: The Organization could be in violation of the reserve amount requirements if management is not monitoring compliance. Questioned Costs: None reported Context/Sampling: Sampling was not used. Repeat Finding from Prior Year: No Recommendation: We recommend management transfer the required reserve amount to a separate bookkeeping account in the trial balance or establish a separate bank account and ensure the funds are deposited in institutions insured by state and federal government or invested in marketable securities backed by the full faith and credit of the United States. Controls should be established and documented to monitor compliance with the reserve fund provision. Views of Responsible Officials: Management agrees with the finding.
2022-003 Department of Agriculture Federal Financial Assistance Listing #10.766 Communities Facilities Loans and Grants Cluster Preparation of the Schedule of Expenditures of Federal Awards Material Weakness in Internal Control Over Compliance Criteria: Proper controls over financial reporting include a system designed to prepare the schedule of expenditures of federal awards (the schedule) and the accompanying notes to the schedule. Condition: The Organization does not have an internal control system designed to provide for the preparation of the schedule. As auditors, we were requested to assist with the preparation of the schedule. Cause: Auditor assistance with preparation of the schedule is not unusual as the schedule has unique and specialized requirement and preparation is only required when the Organization meets a specified threshold of federal expenditures. Effect: There is a reasonable possibility that the Organization would not be able to draft a complete and accurate schedule that is correct without the assistance of the auditors. Questioned Costs: None reported Context: Sampling was not used. Repeat Finding from Prior Years: Yes, prior year finding 2021-003. Recommendation: While we recognize that this condition is not unusual for an organization with limited staffing, we recommend management be aware of the financial reporting requirements relating to the Organization?s schedule of expenditures of federal awards and the internal controls that impact financial reporting. Views of Responsible Officials: Management agrees with the finding.
2022-004 Department of Agriculture Federal Financial Assistance Listing #10.766 Communities Facilities Loans and Grants Cluster Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Within the letter of conditions dated June 27, 2017 for 2017 direct loan and letter of conditions dated August 12, 2011 for the 2011 direct loan, annual audited financial statements are required to be submitted to USDA. Additionally, within the letter of conditions dated May 7, 2008 for 2008 direct loan and letter of conditions dated April 20, 2006 and March 27, 2006 for the 2006 direct loans, the fiscal year operating budget must be submitted and approved by USDA. Condition: The fiscal year 2021 audit report and fiscal year 2022 operating budget were not submitted to USDA until requested during the audit. Cause: The Organization did not have an internal control process in place to ensure timely submission of required reports. Effect: The required reports were not submitted to USDA until requested during the audit. Questioned Costs: None reported. Context/Sampling: Sampling was not used. Repeat Finding from Prior Years: No Recommendation: We recommend management implement a process and controls ensuring timely submission of required reports. Views of Responsible Officials: Management agrees with the finding.
2022-005 Department of Agriculture Federal Financial Assistance Listing #10.766 Communities Facilities Loans and Grants Cluster Special Tests and Provisions Material Weakness in Internal Control over Compliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. The loan resolution security agreements state the Organization must set aside a reserve amount which may be established as a bookkeeping account or as a separate bank account. Funds may be deposited in institutions insured by state and federal government or invested in marketable securities backed by the full faith and credit of the United States. Condition: Management maintained the reserve amount in the pooled investment fund account which was not established as a separate bookkeeping account nor as a separate bank account. Although the pooled investment fund includes marketable securities backed by the full faith and credit of the United States, based on the portfolio mix of the investment pool, additional cash balances on hand need to supplement the investment pool to adequately fund the reserve. The Organization has excess cash available. Further, there is no secondary level of review being performed over the monthly reconciliation of the reserve account. Cause: The Organization was unaware the funds were required to be deposited in institutions insured by state and federal government or invested in marketable securities backed by the full faith and credit of the United States. No formal review process is in place over monthly reconciliation of reserve account. Effect: The Organization could be in violation of the reserve amount requirements if management is not monitoring compliance. Questioned Costs: None reported Context/Sampling: Sampling was not used. Repeat Finding from Prior Year: No Recommendation: We recommend management transfer the required reserve amount to a separate bookkeeping account in the trial balance or establish a separate bank account and ensure the funds are deposited in institutions insured by state and federal government or invested in marketable securities backed by the full faith and credit of the United States. Controls should be established and documented to monitor compliance with the reserve fund provision. Views of Responsible Officials: Management agrees with the finding.
2022-003 Department of Agriculture Federal Financial Assistance Listing #10.766 Communities Facilities Loans and Grants Cluster Preparation of the Schedule of Expenditures of Federal Awards Material Weakness in Internal Control Over Compliance Criteria: Proper controls over financial reporting include a system designed to prepare the schedule of expenditures of federal awards (the schedule) and the accompanying notes to the schedule. Condition: The Organization does not have an internal control system designed to provide for the preparation of the schedule. As auditors, we were requested to assist with the preparation of the schedule. Cause: Auditor assistance with preparation of the schedule is not unusual as the schedule has unique and specialized requirement and preparation is only required when the Organization meets a specified threshold of federal expenditures. Effect: There is a reasonable possibility that the Organization would not be able to draft a complete and accurate schedule that is correct without the assistance of the auditors. Questioned Costs: None reported Context: Sampling was not used. Repeat Finding from Prior Years: Yes, prior year finding 2021-003. Recommendation: While we recognize that this condition is not unusual for an organization with limited staffing, we recommend management be aware of the financial reporting requirements relating to the Organization?s schedule of expenditures of federal awards and the internal controls that impact financial reporting. Views of Responsible Officials: Management agrees with the finding.
2022-004 Department of Agriculture Federal Financial Assistance Listing #10.766 Communities Facilities Loans and Grants Cluster Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Within the letter of conditions dated June 27, 2017 for 2017 direct loan and letter of conditions dated August 12, 2011 for the 2011 direct loan, annual audited financial statements are required to be submitted to USDA. Additionally, within the letter of conditions dated May 7, 2008 for 2008 direct loan and letter of conditions dated April 20, 2006 and March 27, 2006 for the 2006 direct loans, the fiscal year operating budget must be submitted and approved by USDA. Condition: The fiscal year 2021 audit report and fiscal year 2022 operating budget were not submitted to USDA until requested during the audit. Cause: The Organization did not have an internal control process in place to ensure timely submission of required reports. Effect: The required reports were not submitted to USDA until requested during the audit. Questioned Costs: None reported. Context/Sampling: Sampling was not used. Repeat Finding from Prior Years: No Recommendation: We recommend management implement a process and controls ensuring timely submission of required reports. Views of Responsible Officials: Management agrees with the finding.
2022-005 Department of Agriculture Federal Financial Assistance Listing #10.766 Communities Facilities Loans and Grants Cluster Special Tests and Provisions Material Weakness in Internal Control over Compliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. The loan resolution security agreements state the Organization must set aside a reserve amount which may be established as a bookkeeping account or as a separate bank account. Funds may be deposited in institutions insured by state and federal government or invested in marketable securities backed by the full faith and credit of the United States. Condition: Management maintained the reserve amount in the pooled investment fund account which was not established as a separate bookkeeping account nor as a separate bank account. Although the pooled investment fund includes marketable securities backed by the full faith and credit of the United States, based on the portfolio mix of the investment pool, additional cash balances on hand need to supplement the investment pool to adequately fund the reserve. The Organization has excess cash available. Further, there is no secondary level of review being performed over the monthly reconciliation of the reserve account. Cause: The Organization was unaware the funds were required to be deposited in institutions insured by state and federal government or invested in marketable securities backed by the full faith and credit of the United States. No formal review process is in place over monthly reconciliation of reserve account. Effect: The Organization could be in violation of the reserve amount requirements if management is not monitoring compliance. Questioned Costs: None reported Context/Sampling: Sampling was not used. Repeat Finding from Prior Year: No Recommendation: We recommend management transfer the required reserve amount to a separate bookkeeping account in the trial balance or establish a separate bank account and ensure the funds are deposited in institutions insured by state and federal government or invested in marketable securities backed by the full faith and credit of the United States. Controls should be established and documented to monitor compliance with the reserve fund provision. Views of Responsible Officials: Management agrees with the finding.
2022-003 Department of Agriculture Federal Financial Assistance Listing #10.766 Communities Facilities Loans and Grants Cluster Preparation of the Schedule of Expenditures of Federal Awards Material Weakness in Internal Control Over Compliance Criteria: Proper controls over financial reporting include a system designed to prepare the schedule of expenditures of federal awards (the schedule) and the accompanying notes to the schedule. Condition: The Organization does not have an internal control system designed to provide for the preparation of the schedule. As auditors, we were requested to assist with the preparation of the schedule. Cause: Auditor assistance with preparation of the schedule is not unusual as the schedule has unique and specialized requirement and preparation is only required when the Organization meets a specified threshold of federal expenditures. Effect: There is a reasonable possibility that the Organization would not be able to draft a complete and accurate schedule that is correct without the assistance of the auditors. Questioned Costs: None reported Context: Sampling was not used. Repeat Finding from Prior Years: Yes, prior year finding 2021-003. Recommendation: While we recognize that this condition is not unusual for an organization with limited staffing, we recommend management be aware of the financial reporting requirements relating to the Organization?s schedule of expenditures of federal awards and the internal controls that impact financial reporting. Views of Responsible Officials: Management agrees with the finding.
2022-004 Department of Agriculture Federal Financial Assistance Listing #10.766 Communities Facilities Loans and Grants Cluster Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Within the letter of conditions dated June 27, 2017 for 2017 direct loan and letter of conditions dated August 12, 2011 for the 2011 direct loan, annual audited financial statements are required to be submitted to USDA. Additionally, within the letter of conditions dated May 7, 2008 for 2008 direct loan and letter of conditions dated April 20, 2006 and March 27, 2006 for the 2006 direct loans, the fiscal year operating budget must be submitted and approved by USDA. Condition: The fiscal year 2021 audit report and fiscal year 2022 operating budget were not submitted to USDA until requested during the audit. Cause: The Organization did not have an internal control process in place to ensure timely submission of required reports. Effect: The required reports were not submitted to USDA until requested during the audit. Questioned Costs: None reported. Context/Sampling: Sampling was not used. Repeat Finding from Prior Years: No Recommendation: We recommend management implement a process and controls ensuring timely submission of required reports. Views of Responsible Officials: Management agrees with the finding.
2022-005 Department of Agriculture Federal Financial Assistance Listing #10.766 Communities Facilities Loans and Grants Cluster Special Tests and Provisions Material Weakness in Internal Control over Compliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. The loan resolution security agreements state the Organization must set aside a reserve amount which may be established as a bookkeeping account or as a separate bank account. Funds may be deposited in institutions insured by state and federal government or invested in marketable securities backed by the full faith and credit of the United States. Condition: Management maintained the reserve amount in the pooled investment fund account which was not established as a separate bookkeeping account nor as a separate bank account. Although the pooled investment fund includes marketable securities backed by the full faith and credit of the United States, based on the portfolio mix of the investment pool, additional cash balances on hand need to supplement the investment pool to adequately fund the reserve. The Organization has excess cash available. Further, there is no secondary level of review being performed over the monthly reconciliation of the reserve account. Cause: The Organization was unaware the funds were required to be deposited in institutions insured by state and federal government or invested in marketable securities backed by the full faith and credit of the United States. No formal review process is in place over monthly reconciliation of reserve account. Effect: The Organization could be in violation of the reserve amount requirements if management is not monitoring compliance. Questioned Costs: None reported Context/Sampling: Sampling was not used. Repeat Finding from Prior Year: No Recommendation: We recommend management transfer the required reserve amount to a separate bookkeeping account in the trial balance or establish a separate bank account and ensure the funds are deposited in institutions insured by state and federal government or invested in marketable securities backed by the full faith and credit of the United States. Controls should be established and documented to monitor compliance with the reserve fund provision. Views of Responsible Officials: Management agrees with the finding.
2022-003 Department of Agriculture Federal Financial Assistance Listing #10.766 Communities Facilities Loans and Grants Cluster Preparation of the Schedule of Expenditures of Federal Awards Material Weakness in Internal Control Over Compliance Criteria: Proper controls over financial reporting include a system designed to prepare the schedule of expenditures of federal awards (the schedule) and the accompanying notes to the schedule. Condition: The Organization does not have an internal control system designed to provide for the preparation of the schedule. As auditors, we were requested to assist with the preparation of the schedule. Cause: Auditor assistance with preparation of the schedule is not unusual as the schedule has unique and specialized requirement and preparation is only required when the Organization meets a specified threshold of federal expenditures. Effect: There is a reasonable possibility that the Organization would not be able to draft a complete and accurate schedule that is correct without the assistance of the auditors. Questioned Costs: None reported Context: Sampling was not used. Repeat Finding from Prior Years: Yes, prior year finding 2021-003. Recommendation: While we recognize that this condition is not unusual for an organization with limited staffing, we recommend management be aware of the financial reporting requirements relating to the Organization?s schedule of expenditures of federal awards and the internal controls that impact financial reporting. Views of Responsible Officials: Management agrees with the finding.
2022-004 Department of Agriculture Federal Financial Assistance Listing #10.766 Communities Facilities Loans and Grants Cluster Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Within the letter of conditions dated June 27, 2017 for 2017 direct loan and letter of conditions dated August 12, 2011 for the 2011 direct loan, annual audited financial statements are required to be submitted to USDA. Additionally, within the letter of conditions dated May 7, 2008 for 2008 direct loan and letter of conditions dated April 20, 2006 and March 27, 2006 for the 2006 direct loans, the fiscal year operating budget must be submitted and approved by USDA. Condition: The fiscal year 2021 audit report and fiscal year 2022 operating budget were not submitted to USDA until requested during the audit. Cause: The Organization did not have an internal control process in place to ensure timely submission of required reports. Effect: The required reports were not submitted to USDA until requested during the audit. Questioned Costs: None reported. Context/Sampling: Sampling was not used. Repeat Finding from Prior Years: No Recommendation: We recommend management implement a process and controls ensuring timely submission of required reports. Views of Responsible Officials: Management agrees with the finding.
2022-005 Department of Agriculture Federal Financial Assistance Listing #10.766 Communities Facilities Loans and Grants Cluster Special Tests and Provisions Material Weakness in Internal Control over Compliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. The loan resolution security agreements state the Organization must set aside a reserve amount which may be established as a bookkeeping account or as a separate bank account. Funds may be deposited in institutions insured by state and federal government or invested in marketable securities backed by the full faith and credit of the United States. Condition: Management maintained the reserve amount in the pooled investment fund account which was not established as a separate bookkeeping account nor as a separate bank account. Although the pooled investment fund includes marketable securities backed by the full faith and credit of the United States, based on the portfolio mix of the investment pool, additional cash balances on hand need to supplement the investment pool to adequately fund the reserve. The Organization has excess cash available. Further, there is no secondary level of review being performed over the monthly reconciliation of the reserve account. Cause: The Organization was unaware the funds were required to be deposited in institutions insured by state and federal government or invested in marketable securities backed by the full faith and credit of the United States. No formal review process is in place over monthly reconciliation of reserve account. Effect: The Organization could be in violation of the reserve amount requirements if management is not monitoring compliance. Questioned Costs: None reported Context/Sampling: Sampling was not used. Repeat Finding from Prior Year: No Recommendation: We recommend management transfer the required reserve amount to a separate bookkeeping account in the trial balance or establish a separate bank account and ensure the funds are deposited in institutions insured by state and federal government or invested in marketable securities backed by the full faith and credit of the United States. Controls should be established and documented to monitor compliance with the reserve fund provision. Views of Responsible Officials: Management agrees with the finding.
2022-003 Department of Agriculture Federal Financial Assistance Listing #10.766 Communities Facilities Loans and Grants Cluster Preparation of the Schedule of Expenditures of Federal Awards Material Weakness in Internal Control Over Compliance Criteria: Proper controls over financial reporting include a system designed to prepare the schedule of expenditures of federal awards (the schedule) and the accompanying notes to the schedule. Condition: The Organization does not have an internal control system designed to provide for the preparation of the schedule. As auditors, we were requested to assist with the preparation of the schedule. Cause: Auditor assistance with preparation of the schedule is not unusual as the schedule has unique and specialized requirement and preparation is only required when the Organization meets a specified threshold of federal expenditures. Effect: There is a reasonable possibility that the Organization would not be able to draft a complete and accurate schedule that is correct without the assistance of the auditors. Questioned Costs: None reported Context: Sampling was not used. Repeat Finding from Prior Years: Yes, prior year finding 2021-003. Recommendation: While we recognize that this condition is not unusual for an organization with limited staffing, we recommend management be aware of the financial reporting requirements relating to the Organization?s schedule of expenditures of federal awards and the internal controls that impact financial reporting. Views of Responsible Officials: Management agrees with the finding.
2022-004 Department of Agriculture Federal Financial Assistance Listing #10.766 Communities Facilities Loans and Grants Cluster Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Within the letter of conditions dated June 27, 2017 for 2017 direct loan and letter of conditions dated August 12, 2011 for the 2011 direct loan, annual audited financial statements are required to be submitted to USDA. Additionally, within the letter of conditions dated May 7, 2008 for 2008 direct loan and letter of conditions dated April 20, 2006 and March 27, 2006 for the 2006 direct loans, the fiscal year operating budget must be submitted and approved by USDA. Condition: The fiscal year 2021 audit report and fiscal year 2022 operating budget were not submitted to USDA until requested during the audit. Cause: The Organization did not have an internal control process in place to ensure timely submission of required reports. Effect: The required reports were not submitted to USDA until requested during the audit. Questioned Costs: None reported. Context/Sampling: Sampling was not used. Repeat Finding from Prior Years: No Recommendation: We recommend management implement a process and controls ensuring timely submission of required reports. Views of Responsible Officials: Management agrees with the finding.
2022-005 Department of Agriculture Federal Financial Assistance Listing #10.766 Communities Facilities Loans and Grants Cluster Special Tests and Provisions Material Weakness in Internal Control over Compliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. The loan resolution security agreements state the Organization must set aside a reserve amount which may be established as a bookkeeping account or as a separate bank account. Funds may be deposited in institutions insured by state and federal government or invested in marketable securities backed by the full faith and credit of the United States. Condition: Management maintained the reserve amount in the pooled investment fund account which was not established as a separate bookkeeping account nor as a separate bank account. Although the pooled investment fund includes marketable securities backed by the full faith and credit of the United States, based on the portfolio mix of the investment pool, additional cash balances on hand need to supplement the investment pool to adequately fund the reserve. The Organization has excess cash available. Further, there is no secondary level of review being performed over the monthly reconciliation of the reserve account. Cause: The Organization was unaware the funds were required to be deposited in institutions insured by state and federal government or invested in marketable securities backed by the full faith and credit of the United States. No formal review process is in place over monthly reconciliation of reserve account. Effect: The Organization could be in violation of the reserve amount requirements if management is not monitoring compliance. Questioned Costs: None reported Context/Sampling: Sampling was not used. Repeat Finding from Prior Year: No Recommendation: We recommend management transfer the required reserve amount to a separate bookkeeping account in the trial balance or establish a separate bank account and ensure the funds are deposited in institutions insured by state and federal government or invested in marketable securities backed by the full faith and credit of the United States. Controls should be established and documented to monitor compliance with the reserve fund provision. Views of Responsible Officials: Management agrees with the finding.
2022-003 Department of Agriculture Federal Financial Assistance Listing #10.766 Communities Facilities Loans and Grants Cluster Preparation of the Schedule of Expenditures of Federal Awards Material Weakness in Internal Control Over Compliance Criteria: Proper controls over financial reporting include a system designed to prepare the schedule of expenditures of federal awards (the schedule) and the accompanying notes to the schedule. Condition: The Organization does not have an internal control system designed to provide for the preparation of the schedule. As auditors, we were requested to assist with the preparation of the schedule. Cause: Auditor assistance with preparation of the schedule is not unusual as the schedule has unique and specialized requirement and preparation is only required when the Organization meets a specified threshold of federal expenditures. Effect: There is a reasonable possibility that the Organization would not be able to draft a complete and accurate schedule that is correct without the assistance of the auditors. Questioned Costs: None reported Context: Sampling was not used. Repeat Finding from Prior Years: Yes, prior year finding 2021-003. Recommendation: While we recognize that this condition is not unusual for an organization with limited staffing, we recommend management be aware of the financial reporting requirements relating to the Organization?s schedule of expenditures of federal awards and the internal controls that impact financial reporting. Views of Responsible Officials: Management agrees with the finding.
2022-004 Department of Agriculture Federal Financial Assistance Listing #10.766 Communities Facilities Loans and Grants Cluster Reporting Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Within the letter of conditions dated June 27, 2017 for 2017 direct loan and letter of conditions dated August 12, 2011 for the 2011 direct loan, annual audited financial statements are required to be submitted to USDA. Additionally, within the letter of conditions dated May 7, 2008 for 2008 direct loan and letter of conditions dated April 20, 2006 and March 27, 2006 for the 2006 direct loans, the fiscal year operating budget must be submitted and approved by USDA. Condition: The fiscal year 2021 audit report and fiscal year 2022 operating budget were not submitted to USDA until requested during the audit. Cause: The Organization did not have an internal control process in place to ensure timely submission of required reports. Effect: The required reports were not submitted to USDA until requested during the audit. Questioned Costs: None reported. Context/Sampling: Sampling was not used. Repeat Finding from Prior Years: No Recommendation: We recommend management implement a process and controls ensuring timely submission of required reports. Views of Responsible Officials: Management agrees with the finding.