Finding 370701 (2022-005)

Program Name: Community Facilities Loans and Grants Cluster Assistance Listing Numbers: 10.766 Type of Finding: Noncompliance, Significant Deficiency Compliance Requirement: Special Tests and Provisions Condition: The Organization did not meet its annual deposit requirement into the debt reserve fund. Criteria: The Organization is required to make monthly deposits of $1,495 into the debt reserve fund up until the account has been fully funded. Cause: During 2022, the Organization made monthly deposits into the debt reserve of $1,300, causing the annual deposits to be underfunded. Effect: The annual deposits into the debt reserve were underfunded by $2,070 for the year ended September 30, 2022. Recommendation: We recommend the Organization make a deposit to catchup the debt revenue fund to the correct balance had deposits of the full amount been correctly made. We also recommend the Organization adjust the monthly deposits going forward to $1,495, as stated in the USDA loan agreement. View of Responsible Officials: Management will review the loan agreements and discuss with USDA to determine if there have been any changes to the monthly reserve deposit requirement since the original loan agreement. If not, a catchup deposit will be made and the monthly deposits will be corrected.