Finding Text
U.S. Department of Agriculture
Community Facilities Loan & Grants Cluster
Award No: N/A – Year ended December 31, 2023
Prior Year Audit Finding Reference Number: N/A
2023-003 Criteria: The Organization is required to maintain a calculated debt reserve fund based on annual debt
payments each year as stated in the Letter of Conditions.
Condition: During the audit, we identified the Organization did not maintain sufficient funds in the debt
reserve account.
Cause: The required monthly transfers did not occur during the fiscal year.
Effect: As a result of the absent transfers, the debt reserve fund was not funded to the required amount
as of December 31, 2023.
Recommendation: The Organization should create a plan to bring the balance into the required amount
and have procedures in place to make the monthly transfers.
Client Response: We have discussed our plan to bring the debt reserve fund back to current with the
governing authority and have established a process to have the monthly transfers completed.