Finding Text
Audit Finding 2024-002 – Reserve Account Deposits
Criteria:
In accordance with the Rural Development (RD) loan agreement, the Housing Authority is required to make deposits to the reserve for replacements account in an amount approved by RD. The Housing Authority is also required to have approval of withdrawals from the reserve account.
Condition:
During the year ended December 31, 2024, the Housing Authority did not make the required deposits to the reserve for replacements account as set forth by RD.
Cause:
Required reserve for replacement deposits were not made due to operating cash shortages.
Effect:
The Authority is not in compliance with the RD loan agreement.
Recommendation:
The Authority should transfer the required deposits to the reserve for replacement account as cash flow allows.
View of Responsible Officials:
Management agrees with the finding.