Finding 42086 (2022-003)

-
Requirement
N
Questioned Costs
-
Year
2022
Accepted
2023-09-25

AI Summary

  • Core Issue: The Agency has not established a required Reserve Account for its USDA-RD loan, which should have a balance of $3,271.44 as of December 31, 2022.
  • Impacted Requirements: The failure to record the USDA-RD loan liability led to non-compliance with loan terms regarding the Reserve Account.
  • Recommended Follow-Up: The Agency needs to set up the Reserve Account and make regular contributions to meet the required balance.

Finding Text

2022-003 ? Maintenance of Reserve Account Condition: In 2016 the Agency closed on a U.S. Department of Agriculture Rural Development (?USDA-RD?) loan. This loan requires that the Agency establish and maintain a Reserve Account, contributing to it until the account balance equals one annual payment amount. The balance as of December 31, 2022, should be $3,271.44. The Agency has not yet established such a Reserve Account. Criteria: Provisions of USDA-RD loan document Cause: The liability associated with the USDA-RD note payable was not recorded in the Agency?s financial records. Therefore, the Agency did not establish the required Reserve Account. Effect: As a result of this condition, the Agency did not have the Reserve Account required by the terms of its USDA-RD loan. Recommendation: The Agency should establish a Reserve Account, contribute an amount so as to meet the required balance at that date and continue monthly contributions until the maximum required balance is met. Response: The Agency will establish a Reserve Account and contribute the required amounts on a regular basis.

Corrective Action Plan

2022-003 ? Maintenance of Reserve Account Condition: In 2016 the Agency closed on a U.S. Department of Agriculture Rural Development (?USDA-RD?) loan. This loan requires that the Agency establish and maintain a Reserve Account, contributing to it until the account balance equals one annual payment amount. The balance as of December 31, 2022, should be $3,271.44. The Agency has not yet established such a Reserve Account. As a result of this condition, the Agency did not have the Reserve Account required by the terms of its USDA-RD loan. Corrective Action Planned: The Agency will establish a Reserve Account, contribute an amount so as to meet the required balance at that date and continue monthly contributions until the maximum required balance is met. Name of Contact Person Responsible for Corrective Action: Deborah E. Clyburn, Deputy/Fiscal Director Anticipated Completion Date: October 31, 2023

Categories

Matching / Level of Effort / Earmarking Special Tests & Provisions

Other Findings in this Audit

  • 42084 2022-001
    Material Weakness
  • 42085 2022-002
    Material Weakness
  • 618526 2022-001
    Material Weakness
  • 618527 2022-002
    Material Weakness
  • 618528 2022-003
    -

Programs in Audit

ALN Program Name Expenditures
93.568 Low-Income Home Energy Assistance $261,267
93.600 Head Start $260,371
10.558 Child and Adult Care Food Program $247,471
10.766 Community Facilities Loans and Grants $135,048
93.569 Community Services Block Grant $113,601
81.042 Weatherization Assistance for Low-Income Persons $78,384