2023-001 - Property Insurance
Program: Rural Rental Housing Loans
Criteria: Per Title 7 CFR Part 3560.105, the property must purchase and maintain property insurance on all buildings included as security for an Agency loan.
Condition: The insurance policy lapsed as of September 15, 2023, and the property was left uninsured.
Questioned Cost: Not applicable.
Context: Property insurance is required as security for an Agency loan. The property does not have property insurance.
Effect: Without property insurance, the property is not covered for damages or other liabilities impacting the property.
Information: Isolated instance.
Prior Year Finding: This was not a prior year finding.
Recommendation: Obtain property insurance for the property.
Management’s Response: Insurance was force placed by Rural Development effective 12/26/2023, bid accepted on 3/5/2024 by the board, for a replacement policy that will be effective when the fire damage in building 141 is completed.
2023-002 - Insurance Escrow
Program: Rural Rental Housing Loans
Criteria: Per RD loan agreement, the property is required to establish an insurance escrow account equal to the amount of the premium due.
Condition: As of December 31, 2023, the insurance escrow account was not properly funded to cover the insurance premium.
Questioned Cost: Not applicable.
Context: The property does not have property insurance and has not established an insurance escrow.
Effect: The property does not have an escrow set aside to purchase required insurance.Information: Isolated instance.
Prior Year Finding: This was not a prior year finding.
Recommendation: Properly fund insurance escrow account.
Management’s Response: An account is set up for the insurance escrow. Deposits will be made on a monthly basis to cover the annual cost of the insurance.
2023-001 - Property Insurance
Program: Rural Rental Housing Loans
Criteria: Per Title 7 CFR Part 3560.105, the property must purchase and maintain property insurance on all buildings included as security for an Agency loan.
Condition: The insurance policy lapsed as of September 15, 2023, and the property was left uninsured.
Questioned Cost: Not applicable.
Context: Property insurance is required as security for an Agency loan. The property does not have property insurance.
Effect: Without property insurance, the property is not covered for damages or other liabilities impacting the property.
Information: Isolated instance.
Prior Year Finding: This was not a prior year finding.
Recommendation: Obtain property insurance for the property.
Management’s Response: Insurance was force placed by Rural Development effective 12/26/2023, bid accepted on 3/5/2024 by the board, for a replacement policy that will be effective when the fire damage in building 141 is completed.
2023-002 - Insurance Escrow
Program: Rural Rental Housing Loans
Criteria: Per RD loan agreement, the property is required to establish an insurance escrow account equal to the amount of the premium due.
Condition: As of December 31, 2023, the insurance escrow account was not properly funded to cover the insurance premium.
Questioned Cost: Not applicable.
Context: The property does not have property insurance and has not established an insurance escrow.
Effect: The property does not have an escrow set aside to purchase required insurance.Information: Isolated instance.
Prior Year Finding: This was not a prior year finding.
Recommendation: Properly fund insurance escrow account.
Management’s Response: An account is set up for the insurance escrow. Deposits will be made on a monthly basis to cover the annual cost of the insurance.
2023-001 - Property Insurance
Program: Rural Rental Housing Loans
Criteria: Per Title 7 CFR Part 3560.105, the property must purchase and maintain property insurance on all buildings included as security for an Agency loan.
Condition: The insurance policy lapsed as of September 15, 2023, and the property was left uninsured.
Questioned Cost: Not applicable.
Context: Property insurance is required as security for an Agency loan. The property does not have property insurance.
Effect: Without property insurance, the property is not covered for damages or other liabilities impacting the property.
Information: Isolated instance.
Prior Year Finding: This was not a prior year finding.
Recommendation: Obtain property insurance for the property.
Management’s Response: Insurance was force placed by Rural Development effective 12/26/2023, bid accepted on 3/5/2024 by the board, for a replacement policy that will be effective when the fire damage in building 141 is completed.
2023-002 - Insurance Escrow
Program: Rural Rental Housing Loans
Criteria: Per RD loan agreement, the property is required to establish an insurance escrow account equal to the amount of the premium due.
Condition: As of December 31, 2023, the insurance escrow account was not properly funded to cover the insurance premium.
Questioned Cost: Not applicable.
Context: The property does not have property insurance and has not established an insurance escrow.
Effect: The property does not have an escrow set aside to purchase required insurance.Information: Isolated instance.
Prior Year Finding: This was not a prior year finding.
Recommendation: Properly fund insurance escrow account.
Management’s Response: An account is set up for the insurance escrow. Deposits will be made on a monthly basis to cover the annual cost of the insurance.
2023-001 - Property Insurance
Program: Rural Rental Housing Loans
Criteria: Per Title 7 CFR Part 3560.105, the property must purchase and maintain property insurance on all buildings included as security for an Agency loan.
Condition: The insurance policy lapsed as of September 15, 2023, and the property was left uninsured.
Questioned Cost: Not applicable.
Context: Property insurance is required as security for an Agency loan. The property does not have property insurance.
Effect: Without property insurance, the property is not covered for damages or other liabilities impacting the property.
Information: Isolated instance.
Prior Year Finding: This was not a prior year finding.
Recommendation: Obtain property insurance for the property.
Management’s Response: Insurance was force placed by Rural Development effective 12/26/2023, bid accepted on 3/5/2024 by the board, for a replacement policy that will be effective when the fire damage in building 141 is completed.
2023-002 - Insurance Escrow
Program: Rural Rental Housing Loans
Criteria: Per RD loan agreement, the property is required to establish an insurance escrow account equal to the amount of the premium due.
Condition: As of December 31, 2023, the insurance escrow account was not properly funded to cover the insurance premium.
Questioned Cost: Not applicable.
Context: The property does not have property insurance and has not established an insurance escrow.
Effect: The property does not have an escrow set aside to purchase required insurance.Information: Isolated instance.
Prior Year Finding: This was not a prior year finding.
Recommendation: Properly fund insurance escrow account.
Management’s Response: An account is set up for the insurance escrow. Deposits will be made on a monthly basis to cover the annual cost of the insurance.