Finding Text
Criteria: The funds set aside for debt service reserve are to be used to make USDA loan payments,
but must be approved by the USDA before they can be used.
Condition: During our review of compliance requirements for the Community Facilities Loans &
Grants Cluster, we identified funds were used during the year for operational purposes and did not
ask or receive permission from the USDA to use the funds.
Cause: The requirement was not met due to an oversight of management.
Potential Effect: As a result, the Agency reserves the right to withdraw Agency funding.
Recommendation: The Organization should request permission before using reserve funds.
Client Response: The Organization will request permission in the future.