Finding Text
Criteria: Compliance with USDA bond funding requirements to fund debt service, debt service reserve, and short-lived assets. Condition: The Village has set up a debt service reserve account and a short-lived assets account, and both received $100 as initial funding. The Village was waiting for project completion to begin funding them the monthly required amounts. However, the bond ordinance states that the accounts should be funded at the earlier of project completion or the end of the interest only period. The interest only period ending during fiscal year 2025 when the bonds became subject to principal repayment. However, as stated above, the monthly funding requirements to the above three accounts did not begin. Additionally, a debt service account has not yet been set up. Cause: Village staff was unaware that the interest only period had ended and that the monthly requirements were in effect. Effect: Accounts are underfund. Recommendation: Begin funding the accounts. Response: The Village will set up a debt service account and begin funding the debt service account, the debt service reserve account, and the short-lived assets account in accordance with the bond ordinance.