Audit 407826

Federal Agency: U.S. Department of Agriculture Federal Program: 10.766, Rural Development, Community Facilities Direct Loan Criteria or Specific Requirement – 2 CFR § 200.512, Report Submission, requires completion of an audit and submission of the data collection form and reporting package within the earlier of thirty calendar days after receipt of the auditors’ report, or nine months after the end of the audit period. Condition - The audit and data collection form are being submitted after the required due date. Cause - The Corporation had not maintained appropriate levels of staff to ensure compliance with regulatory filing requirements with the prior year audit which delayed the start and completion of this year’s audit on a timely basis. Effect - Noncompliance with the requirements of 2 CFR § 200.512. There is a potential for suspension or cessation of federal funding under the federal award. Repeat Finding - This is a repeat finding from the prior year. See prior year finding 2023-002. Recommendation - The Corporation should take steps to ensure that its financial records are maintained on a current basis, reconciled timely, and audited within nine months after year-end. View of Responsible Officials and Planned Corrective Actions – See corrective action plan.

Federal Agency: U.S. Department of Agriculture Federal Program: 10.766, Rural Development, Community Facilities Direct Loan Criteria or Specific Requirement – The Compliance Supplement (Part 4 – Agency Program Requirements) for the Community Facilities Direct Loan program requires borrowers to fund reserves, maintain insurance, deposit funds in Federally insured banks, meet financial covenants, and maintain sufficient debt service ratios as part of continuing compliance requirements that Community Facilities borrowers must meet. Condition – During our testing of Special Tests and Provisions, we noted that two of seven monthly deposits to the debt service reserve account did not comply with required timing. Cause - The Corporation has not implemented appropriate controls over timely deposit requirements for the debt service reserve account. Effect - Noncompliance with program-specific requirements related to Special Tests and Provisions. There is a potential for suspension or cessation of federal funding under the federal award. Repeat Finding - This is not a repeat finding. Recommendation - The Corporation should establish appropriate controls over its required funding of the debt service reserve account to ensure compliance with the Special Tests and Provisions requirements. View of Responsible Officials and Planned Corrective Actions – See corrective action plan.