Finding Text
Finding No. 2024-003 – Reserve Account Funding – Other Matter Criteria: The Project’s reserve account must be fully funded in accordance with the budget as approved by USDA-RD and maintained in a separate bank account. Condition: During our audit testing, we noted that while the Project maintained a separate bank account for reserve funds, it was not funded in accordance with the budget. As of December 31, 2024, the reserve balance was approximately $51,000 below the required threshold. Effect: Reserve bank account is underfunded. Cause: Budgeted transfers were not made before year-end to ensure the account is fully funded. Recommendation: The Project should implement controls to ensure that the reserve bank account is fully funded and work with USDA-RD to establish a reasonable repayment plan. Reporting Views of Responsible Officials: Management agrees with the finding, see the Corrective Action Plan.