Finding 538653 (2024-001)

2024-001 Special Tests and Provisions Federal Agency United States Department of Agriculture Assistance Listing Number 10.766 – Community Facilities Loans and Grants Cluster Criteria [ ] Significant Deficiency [X] Material Weakness [X] Compliance Finding Under the terms and conditions of the Center’s loan with the United States Department of Agriculture (USDA), the Center is required to maintain a separate debt reserve account. Condition The Center has not established or funded a debt reserve account. Context This finding appears to be an isolated problem. Cause The Center’s internal controls over compliance did not include adequate controls over maintenance of a debt reserve funds. The Center has not established policies and procedures over compliance with Uniform Guidance and USDA compliance requirements. Effect The Center is not in compliance with the USDA compliance requirements and the terms and conditions of the loan. Recommendation We recommend the Center establish separate general ledger accounts for the debt reserve funds. Written policies and procedures should be established related to Uniform Guidance and USDA compliance requirements. Views of responsible officials and planned corrective actions Management agrees with the Compliance Finding related to the USDA Loan, as a separate debt reserve account was not previously established.