Finding Text
Statement of Condition: As of December 31, 2022, Sarum Village is ten months behind in deposits to the replacement reserve. Criteria: USDA requires that the replacement reserve account be maintained in a separate account, with monthly deposits made as required and that USDA approval is required prior to any withdrawals. Effect: Noncompliance with USDA regulations. Cause: The project had cash flow issues. Context: Review of the deposits to the replacement reserve account showed that seven deposits had been made, however, five had been for the year ended December 31, 2021. Recommendation: Management should ensure that required monthly deposits are made to the replacement reserve account. Management?s Response and Corrective Action Plan: We agree with the finding. Sarum Village is experiencing cash flow problems and will try to remedy the shortfall.