Finding Text
Finding No. 2024-001
Program: Rural Rental Housing Loans Federal Assistance Listing No.: 10.415 Federal Grantor:
Department of Agriculture
Statement of Condition: As of June 30, 2024, Sharon Ridge Expansion Corporation is six
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 has cash flow issues.
Context: Review of the deposits to the replacement reserve account showed that six deposits had not
been made for the year ended June 30, 2024.
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. Sharon Ridge
Expansion Corporation is experiencing cash flow issues and is working to remedy the
shortfall.