Finding 1075517 (2023-003)

Finding 2023-003 Program Assistance Listing Number and Title: 10.766 Community Facilities Loans and Grants Federal Agency: U.S. Department of Agriculture (USDA) Pass-Through Agency: Not applicable Award Number/Year: Not applicable / 2019, 2022 Criteria: According to the debt covenants of the USDA loan, the Village is required to fund its Reserve Account in the amount of $13,603, annually by March 1, beginning on March 1, 2023, until the Reserve Account is fully funded. Condition: The annual deposit to the Reserve Account was tested and found to have been made on March 14, 2023, which is after the required deposit date. This (1 of 1) sample was not statistically valid. Cause: Due to staffing limitations, controls to ensure a timely deposit to the Reserve Account were not in place. Effects: Without proper controls in place, the Village may not be in compliance with required debt covenants. Recommendation: We recommend enhancing internal controls to ensure that annual deposits to the Reserve Account are made timely and in accordance with the debt covenants in future periods. Management Response: The Village staff was new and not aware of the deadline. The transfer was made as soon as possible after the error was discovered and a shared calendar event has now been added to ensure this entry is made in a timely manner moving forward.