Finding Text
OTHER MATTERS
2023-001 RESERVE ACCOUNT FUNDING
Criteria: The Project’s reserve account must be fully funded in accordance with the budget as approved by USDA-RD and maintained in a separate bank account.
Condition: During our audit testing, we noted that while the Project maintained a separate bank account for reserve funds, it was not funded in accordance with the budget.
Cause: Budgeted transfers were not made before yearend to ensure the account is fully funded.
Effect: Reserve bank account is underfunded.
Questioned Costs: None noted.
Recommendation: The Project should implement controls to ensure that the reserve bank account is fully funded.
Management’s Views and Corrective Action Plan: Management will correct this when sufficient funds are able to be transferred into the reserve account.