Finding Text
2023-001 Other Matter – Other compliance requirements
Condition: Reserve account approval
Criteria and effect: Disbursements from the projects replacement reserve account require approval from USDA Rural Development. One instance was noted where the payment was disbursed prior to receiving the signed approval from USDA Rural Development.
Cause: The reserve approval request was submitted to USDA Rural Development for approval in December 2023. Due to the request being submitted over the traditional Christmas and New Year holiday no one was available at USDA to approve the request by the invoice due date so the Organization issued payment in advance of receiving the approval.
Questioned costs: Less than $25,000.
Repeat finding: This finding was reported as finding 2022-001 in the most recent audit.
Recommendation: We recommended that management monitor approval requests to ensure that they are submitted timely and to anticipate delays in the approval process. Also, management should ensure that approval is received prior to issuing any checks drawn on the replacement reserve account.
Views of responsible officials and planned corrective actions: Management agrees and will implement the corrective action plan found on page 34 of this report. Because the amount in question is not material and not pervasive and was ultimately approved by USDA Rural Development it has been reported in the Other Matters section of the auditors’ Report on Compliance for each Major Federal Program and Report on Internal Control over Compliance Required by the Uniform Guidance and the auditor’s report was not modified with respect to this matter.