Finding Text
Reserve requirement
U.S. Department of Agriculture – CFDA # 10.760 – Water and Waste Disposal Systems for Rural Communities
Criteria: The grant and loan agreements with the USDA require the Town to maintain and annually fund a short-lived asset reserve account (of at least $6,200 per year).
Condition: The Town failed to meet the reserve requirement in the current year.
Cause: The failure to meet the reserve requirement was primarily attributed to not transferring money to the reserve account.
Effect or potential effect: Failure to meet the reserve requirements could result in regulatory penalties.
Auditor recommendation: We recommend the Town make the required deposit into the reserve fund as soon as reasonably possible and develop a plan to ensure the reserve requirement is met on an annual basis.
Town’s Response: Please see the corrective action plan issued by the Town.