Finding Text
Assistance Listing Number/Federal Program/Granting Agency: ALN 10.405 Farm Labor Housing Loans and Grants Criteria: Recipients are required to submit annual financial reports, including RD Forms 3560-7 and 3560- 10 with 12 months of balance sheet and actual income and expenses, to RD no later than 90 days following the close of the project fiscal year. Statement of Condition: During our test of compliance over the RD program, management did not provide RD Forms 3560-7 and 3560-10 with 12 months of balance sheet and income and expenses for Canyon East and Menta Park at the time of our review. The reports were eventually submitted to RD on 12/18/25, which was more than 90 days after fiscal year-end and therefore not within the required time frame. Questioned Costs: None. Cause: The reporting delays were due to the transition of management companies during the year, which disrupted normal reporting processes. Effect or Possible Effect: The Housing Authority did not comply with the reporting requirement set forth in the RD HB-2-3560 Chapter 4, Section 5 Annual Financial Reporting Due Dates and Agency Review of Annual Financial Reports, which could affect reserve funding availability for project maintenance or repairs. Perspective: The noncompliance identified relates to the annual financial reporting for 2 RD-funded projects, and the population tested consisted of 100% of projects subject to the annual reporting requirement. As the required reports for both projects were submitted after the required deadline, the noncompliance affected the entire population for the period under audit. No questioned costs were identified. Sampling was not applicable, as the full population was tested. Repeat Finding: Repeat finding. Recommendation: The Housing Authority should implement a formal tracking process to monitor the submission of all required RD reports and ensure that copies of RD Forms 3560-7 and 3560-10, along with supporting financial statements, are retained for each project. This process should include clear responsibilities and deadlines, particularly during management transitions, to ensure timely compliance with RD reporting requirements. Views of Responsible Officials: Agree.