Finding Text
2024-002 (repeat of 2023-002) Loan Reserve Requirement
Non-Compliance
Criteria
In accordance with USDA loan covenants, the Board is required to set aside an amount equal to one-tenth of one yearly payment until one average annual loan installment is reached.
Condition & Cause
As a result of significant financial difficulties, the Board has been unable to meet the requirement to fund the reserve account.
Effect
As a result, the Board is not in compliance with the reserve requirement.
Recommendation
We recognize that it may not be possible for the Board to meet this requirement.
View of Responsible Officials and Planned Corrective Actions
Please see the last page of this report for the written response from the Board.