Finding Text
Assistance Listing Number/Federal Program/Granting Agency: ALN 10.405 Farm Labor Housing Loans and Grants Criteria: Recipients are required to make all payments due under the RD note and mortgage in accordance with the loan agreements. Statement of Condition: During our test of compliance over the RD program, we noted missing mortgage payments totaling $10,895 for Menta Park (April – June 2025) and $4,198 for Canyon East (March – April and June 2025). Questioned Costs: None. Cause: The payment delays were due to the transition of management companies during the year, which disrupted normal payment processes. Effect or Possible Effect: The Housing Authority did not fully comply with the RD loan agreement requirements for timely mortgage payments, which could result in noncompliance with RD loan terms and potential interest or penalty accrual. Perspective: The required mortgage payments totaled $60,375 for the fiscal year, representing 12 months of required payments in accordance with the RD loan agreements. Payments were short by $15,093 due to 3 months missing payments for Menta Park and Canyon East. As both RD-funded projects were affected during this 3-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 all RD mortgage payments and ensure that payments are made timely and properly documented, particularly during management transitions. Views of Responsible Officials: Agree.