FAC Explorer

Finding 394322 (2023-001)

- Repeat Finding
Requirement
N
Questioned Costs
-
Year
2023
Accepted
2024-04-24
Audit: 304319
Organization: Princeville Development Corporation (NC)
Auditor: Bernard Robinson & Company LLP

AI Summary

  • Core Issue: The Corporation has $91,631.61 in funds exceeding FDIC insurance limits, violating USDA guidelines.
  • Impacted Requirements: USDA Handbook 2-3560 mandates that funds must be either insured or secured with collateral.
  • Recommended Follow-Up: Management should secure a collateral agreement or move funds to a fully insured institution to mitigate risk.

Finding Text

Finding 2023-001: U.S. Department of Agriculture, Rural Development, Rural Rental Housing Loans, Assistance Listing #10.415 Statement of Condition: During the year ended December 31, 2023, the Corporation had $91,631.61 of funds maintained in an institution that were in excess of FDIC insured limits. Criteria: USDA Handbook 2-3560, Chapter 4, states that bank account funds maintained in an institution may not exceed the limit established for Federal deposit insurance. If funds exceed the amount covered by Federal Deposit insurance, the Corporation must obtain a collateral pledge from the institution to cover all funds or move funds to an institution that will insure the funds. Effect: Noncompliance with USDA RD requirements and risk of loss of the Corporation's funds. Cause: Management and Owners do not believe the funds are at risk of loss at this time. Context: A test to verify that bank account funds maintained in an intuition were covered by Federal Deposit insurance was performed. At December 31, 2023, bank account funds in excess of the federally insured limits were $91,631.61. Recommendation: Ownership and management should obtain a collateral agreement or transfer funds to another federally insured banking institution in an amount sufficient to ensure all funds are federally insured. Questioned Costs: $0 Views of Responsible Officials and Corrective Action Plan: Management and Ownership agree with the above finding and review the financial stability of the banking institutions which hold the Corporation's funds on an ongoing basis and will continue to do so. Management and the Owners do not feel at this time that the funds are truly at risk based on current market conditions and the reviews they continually do on the financial stability of the banking institutions holding these funds. Management and the Owners will transfer the funds at any point they believe the funds are truly at risk.

Corrective Action Plan

PRINCEVILLE DEVELOPMENT CORPORATION P.O. Box 1567 Dunn, North Carolina 28335 CORRECTIVE ACTION PLAN February 23, 2024 USDA, Rural Development 403 Government Circle, Suite 3 Greenville, North Carolina 27834 Princeville Development Corporation, respectfully submits the following Corrective Action Plan for the year ended December 31, 2023. Bernard Robinson & Company, L.L.P. 1501 Highwoods Blvd., Suite 300 Greensboro, North Carolina 27410 Audit period: Year ended December 31, 2023 The finding from the December 31, 2023 Schedule of Findings and Questioned Costs is discussed below. The finding is numbered consistently with the number assigned in the schedule. Findings and Questioned Costs: Finding 2023-001: U.S. Department of Agriculture, Rural Development, Rural Rental Housing Loans, Assistance Listing #10.415 Recommendation: We recommend that management obtain a collateral agreement or transfer funds to another federally insured banking institution in an amount sufficient to ensure all funds are federally insured. Action Taken: We will review the financial stability of the banking institutions which hold the Corporation's funds on an ongoing basis. We do not feel at this time that the funds are truly at risk based on current market conditions and the reviews they continually do on the financial stability of the banking institutions holding these funds. We will transfer the funds at any point they believe the funds are truly at risk. If you have questions regarding this plan, please call Neil McLamb at 910-766-6283. Sincerely yours, Neil McLamb CFO, DTH Management Group, LTD

Categories

Matching / Level of Effort / Earmarking

Other Findings in this Audit

Programs in Audit

ALN Program Name Expenditures
10.415 Rural Rental Housing Loans $1.38M
10.427 Rural Rental Assistance Payments $263,173