Finding 1095711 (2024-001)

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Requirement
N
Questioned Costs
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Year
2024
Accepted
2025-01-15
Audit: 337950
Auditor: Seward and Monde

AI Summary

  • Core Issue: Sharon Ridge Expansion Corporation is six months behind on required deposits to the replacement reserve.
  • Impacted Requirements: USDA mandates monthly deposits to a separate replacement reserve account and requires approval for withdrawals.
  • Recommended Follow-Up: Management must prioritize making the overdue deposits and address cash flow issues to ensure compliance.

Finding Text

Finding No. 2024-001 Program: Rural Rental Housing Loans Federal Assistance Listing No.: 10.415 Federal Grantor: Department of Agriculture Statement of Condition: As of June 30, 2024, Sharon Ridge Expansion Corporation is six months behind in deposits to the replacement reserve. Criteria: USDA requires that the replacement reserve account be maintained in a separate account, with monthly deposits made as required and that USDA approval is required prior to any withdrawals. Effect: Noncompliance with USDA Regulations. Cause: The project has cash flow issues. Context: Review of the deposits to the replacement reserve account showed that six deposits had not been made for the year ended June 30, 2024. Recommendation: Management should ensure that required monthly deposits are made to the replacement reserve account. Management’s Response and Corrective Action Plan: We agree with the finding. Sharon Ridge Expansion Corporation is experiencing cash flow issues and is working to remedy the shortfall.

Categories

Matching / Level of Effort / Earmarking

Other Findings in this Audit

Programs in Audit

ALN Program Name Expenditures
10.427 Rural Rental Assistance Payments $109,193
10.415 Rural Rental Housing Loans $16,992