Finding Text
Finding 2024-001: U.S. Department of Agriculture, Rural Development, Rural Rental Housing Loans, Assistance Listing Number #10.415
Statement of Condition: At December 31, 2024, the Corporation had $10,731.13 of funds maintained in an institution that were in excess of FDIC insured limits.
Criteria: USDA Handbook 2-3560, Chapter 4, states that bank account funds maintained in an institution may not exceed the limited established for federal deposit insurance. If funds exceed the amount covered by federal deposit insurance, the Corporation must obtain a collateral pledge from the institution to cover all funds or move funds to an institution that will insure the funds.
Cause of Condition: Management did not transfer funds to separate financial institutions in a timely manner to provide for continuous FDIC insurance coverage.
Effect of Condition: Noncompliance with USDA RD requirements and risk of loss of the Organization's funds.
Recommendation: The Organization should continuously monitor cash balances to ensure that funds are always covered by FDIC insurance limits, collateral agreements are obtained, or funds are invested in government securities.
Questioned Costs: $0
Information based on Universe and Population Size: The finding noted above was not a result of sampling.
Sample Size Information: The finding noted above was not a result of sampling.
Noncompliance Information: The finding noted above was not a result of sampling.
Reporting Views of Responsible Officials: Management agrees with the above finding and is in the process of transferring funds to provide adequate FDIC insurance coverage for the reserve for replacements account. Management will re-evaluate its policies and procedures to determine any necessary changes.