Finding Text
Criteria: Per the United States Department of Agriculture (USDA) Rural Development (RD) Water and Waste Loans and Grants Rural Utilities Service (RUS) guidelines subsection 1780.47(a), "Borrowers are required to provide RUS an annual audit or financial statements." RD guidelines state that an annual audit under the Single Audit Act is required if you spend $750,000 or more in federal financial assistance per fiscal year. Further, per subsection 1780.47(d), "audits are to be submitted to the processing office as soon as possible after receipt of the auditor's report but no later than nine months after the end of the audit period." Condition: The Association's fiscal year in which more than $750,000 of federal funds were expended ended on December 31, 2021. Per the USDA RD RUS guidelines, the auditor's report should have been completed and submitted to USDA/RD by September 30, 2022. The audit report was not completed until October 2025. Cause: The Association did not have controls in place to ensure that the audit was completed and submitted in compliance with the USDA/RD requirement. Effect: This condition creates a weakness in internal controls which could result in noncompliance with loan and/or grant reporting compliance requirements. Views of responsible officials and planned corrective actions: The Association concurs with the finding. The Association has committed to ensuring that any future reporting compliance requirements related to the expenditure of federal funds are completed on a timely basis.