Finding Text
Assistance Listing Number/Federal Program/Granting Agency: ALN 10.405 Farm Labor Housing Loans and Grants Criteria: Recipients are required to make deposits into the Replacement Reserve account in accordance with the requirements set forth in the projects’ RD loan agreements Statement of Condition: During our test of compliance over the RD program, we noted that deposits for Canyon East and Menta Park were missing for the period March 2025 through June 2025, totaling $16,617. Questioned Costs: None. Cause: The deposit delays were due to the transition of management companies during the year, which disrupted normal deposit processes. Effect or Possible Effect: The Housing Authority did not fully comply with the RD loan agreement requirements for timely Replacement Reserve deposits, which could affect reserve funding availability for project maintenance or repairs. Perspective: The required Replacement Reserve deposits totaled $49,852 for the fiscal year, representing 12 months of required deposits in accordance with the RD loan agreements. Deposits were underfunded by $16,617, as no deposits were made from March 2025 through June 2025. As both RDfunded projects were affected during this four-month period, the noncompliance impacted 100% of the population for that portion of the year. No questioned costs were identified. Sampling was not applicable, as the full population was tested. Repeat Finding: Not a Repeat finding. Recommendation: We recommend the Housing Authority implement a formal monitoring process to track Replacement Reserve deposits and ensure that all required deposits are made timely, even during management transitions. Views of Responsible Officials: Agree.