Finding Text
2025-002 USDA REQUIREMENTS Federal Agency: U.S. Department of Agriculture Program Title: Community Facilities Loans and Grants Assistance Listing Number: 10.766 Award Period: July 1, 2024 to June 30, 2025 Type of Finding: Compliance and Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Under the terms and conditions of the agreements with the USDA the Medical Center is required to fund a Replacement and Extension Account. Condition: The Medical Center failed to fund the required reserve accounts for the year ended June 30, 2025. Questioned costs: None Cause: The Medical Center understood that the USDA did not require them to fund the required account under the agreement however no documentation was formalized with the USDA. Effect: The Medical Center is not in compliance with the terms and conditions of the agreement. Recommendation: The Medical Center should work with the USDA to determine what reserve accounts are required, or to the extent they are not required, properly document that understanding in writing with the USDA. Views of responsible officials and planned corrective actions: There is no disagreement with the audit finding. Management will continue to work with the USDA to document the requirements around the reserve funding. In addition, subsequent to year-end the Medical Center funded the Replacement and Extension Account as required by the agreement.