Finding Text
2022-002. Debt Reserve Requirement CFDA#: 10.766 US Department of Agriculture (USDA) Community Facilities Block Grant Cluster Award Year: 2022 Finding Type: Significant Deficiency in Internal Control over Major Programs Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) the University to maintain a debt reserve account related to the loans held by the USDA. Condition: The debt reserve balance was under funded by approximately $2,400. Context: We addressed the matter with University management who is aware of the requirements to maintain a proper reserve balance for the USDA loan. Effect: Failure to properly review and adhere to policies and procedures can lead to noncompliance with the requirement. Cause: The lack of compliance is due to the University failing to calculate the reserve amount and transfer of funds to the account in a timely fashion. Recommendation: We recommend the University review and update its policies and procedures to ensure the proper amount is transferred to the reserve account each month. Views of Responsible Officials and Planned Corrective Action: We concur with the finding. The University is in the process of implementing controls and procedures to ensure that the proper amount of funds are transferred to the reserve account accordance with applicable compliance requirements.