Finding Text
2022-001 Custodial Credit RiskCondition and criteria: The Association is permitted by the State of South Carolina to have its depositsheld at financial institutions to the extent that they do not exceed the FDIC limitof $250,000. All bank accounts with balances exceeding depository insurancelimits must be adequately collateralized. At June 30, 2022, the Association wasunder collateralized.Cause: The Association maintains operating accounts at a bank and during the year, andat year-end, its deposits exceeded $250,000 in that banking institution.Effect: The Association is required to maintain sufficient collateral for all of its depositsthrough arrangements with its financial institutions. By not maintainingsufficient collateral, the Association is at risk of losing excess deposits.Auditor?s Recommendation: The Association should make arrangements to satisfactorily collateralize itsdeposits in order to remain in compliance with state law.Auditee?s Response: The Association will arrange with its bank for its accounts to be managed so asto provide adequate insurance coverage and collateralization.