Finding Text
Criteria: All required deposits for the replacement reserve account were made in compliance with the USDA agreements. Condition: Monthly deposits made to the replacement reserve account were not the correct amount for the year. Cause: Management did not properly implement controls over compliance to ensure that correct monthly deposits were made in the replacement reserve account during the year. Effect of Potential Effect: The replacement reserve account was underfunded as of December 31, 2025. Perspective: For all 12 deposits required, amount deposited was $24,441 instead of the required $27,083, therefore total deposits were lower than required by $2,642. Repeat Finding, if applicable: This is not a repeat finding. Recommendation: We recommend that controls are implemented to ensure the proper deposits are made to the replacement reserve account. View of Responsible Officials Management agreed with the recommendation and will ensure they confirm with the USDA and Planned Corrective representative regarding the required monthly deposit amount at the beginning of the year in Action: future. In addition, management will make a deposit for the underfunded amount of $2,642 during 2026 related to 2025 required deposits.