Finding 555695 (2024-002)

Finding reference number: #2024-002 Assistance Listing title and number (Federal award identification number and year): Rural Rental Housing Loans, Assistance Listing No. 10.415 Auditor non-compliance code: N - Special Tests and Provisions Finding resolution status: Resolved Universe population size: The universe population size is not applicable to the finding. Sample size information: The sample size information is not applicable to the finding. Statistically valid sample: N/A Name of federal agency: U.S. Department of Agriculture Pass-through entity: N/A Questioned costs: $31,043 Repeat Finding: No Statement of condition #2024-002 (Assistance Listing No. 10.215): During the year ended September 30, 2024, the Corporation made three withdrawals from the reserve for replacements account totaling $31,043 without obtaining RD approval. Criteria: In accordance with the RD Loan Agreements, the Corporation is required to obtain RD approval prior to withdrawing funds from the reserve for replacements account. Effect or potential effect: The Corporation was not in compliance with the terms of the RD Loan Agreements. Cause: Management did not submit form 3560-12 to RD requesting authorization to withdraw funds in the amount of $31,043 from the reserve for replacements account. Recommendation: Management should request retroactive approval for the reserve for replacements withdrawals totaling $31,043 and obtain RD approval prior to making withdrawals from the reserve for replacements account in the future. Completion date: January 16, 2025 Management response: Management concurs with the finding. Management requested and received retroactive approval for the reserve for replacements withdrawals totaling $31,043 and will obtain RD approval prior to making withdrawals from the reserve for replacements account in the future.