Finding 392139 (2023-003)

Material Weakness
Requirement
P
Questioned Costs
-
Year
2022
Accepted
2024-04-02

AI Summary

  • Core Issue: The organization failed to fund the required debt service account of $99,820 as specified in the loan Letter of Conditions.
  • Impacted Requirements: Non-compliance with the loan agreement's stipulations regarding the establishment and funding of the debt service fund.
  • Recommended Follow-Up: Management should annually review the Letter of Conditions and loan agreement to ensure all requirements are met and implement necessary policy changes.

Finding Text

Federal Agency: U.S. Department of Agriculture (USDA) Federal Program Name: Community Facilities Loans and Grants Assistance Listing Number: 10.766 Federal Award Identification Number and Year: CF27087L136368-2013 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: 2022 Type of Finding: Material Weakness in Internal Control and Compliance Criteria or specific requirement: The loan Letter of Conditions requires a separate debt service fund to be established and funded up to $99,820. Condition: Management did not fund the debt service account in accordance with the Letter of Conditions. Questioned costs: None Cause: The loan was issued under previous management and the requirements were not known by management. Effect: The Organization was not in compliance with the letter of conditions. Repeat finding: No Recommendation: The Organization should review the Letter of Conditions and loan agreement to ensure all requirements are being met on an annual basis. Views of responsible officials: Management will review policies and procedures to ensure compliance is met going forward. Management is in the process of implementing changes to correct the issue.

Corrective Action Plan

Material Weakness in Internal Control and Compliance Recommendation: The Organization should review the Letter of Conditions and loan agreement to ensure all requirements are being met on an annual basis. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Management will review policies and procedures to ensure compliance is met going forward and will establish a debt service fund in accordance with the letter of conditions. Name(s) of the contact person(s) responsible for corrective action: Lori Guenther, CFO Planned completion date for corrective action plan: Q2 of 2023

Categories

Material Weakness Matching / Level of Effort / Earmarking Internal Control / Segregation of Duties

Other Findings in this Audit

  • 392137 2023-001
    Material Weakness
  • 392138 2023-002
    Material Weakness
  • 968579 2023-001
    Material Weakness
  • 968580 2023-002
    Material Weakness
  • 968581 2023-003
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
10.766 Community Facilities Loans and Grants $2.02M