Finding Text
Finding 2023 – 002 – Compliance with Cash Reserve and other Loan Compliance Requirements Condition: The Organization’s loan agreements require the compliance with various re-payment terms, cash reserve requirements and other compliance elements. Further, the Organization signed a delinquency workout arrangement that has further specific compliance requirements that temporarily modify loan terms. Criteria: The loan agreement requires monthly deposits to the reserve account as well as other financial operating performance indicators to provide adequate financial support of operations and compliance with loan debt service. Effect: The Organization has not made the necessary principal and interest payments under the terms of its loan agreement, as well as funded the required cash reserves. Cause: The Organization has incurred significant operating losses as most of its customers are engaged in the recreational activities which had been adversely affected by reduced consumer demand caused by fear of COVID-19 infection and the rebounding post pandemic. As a result, the Organization has executed a debt workout arrangement with the USDA.