Finding Text
Federal Program: Water and Waste Disposal Systems for Rural Communities (10.760). Criteria: The City is required to deposit monthly amounts into debt reserve accounts until the reserve accounts reach a threshold established within the bond agreement. Condition: As of the end of the year the City did not have established debt service and reserve accounts that were in compliance with the bond agreements. Between the water and sewer funds the City was short of the required amount by over $150,000. Cause: The City was not aware of the reserve account requirements. Effect: The City is not in compliance with the USDA Bond agreements. Questioned Costs: None. Context: Annual requirements to fund reserve accounts total $28,572. Repeat Finding: No. Recommendation: The City should make the required deposits and monitor the balance to ensure they are in compliance with the bond agreements. Views of Responsible Officials and Planned Corrective Actions: The City understands the recommendation and will monitor the funding of these accounts more closely.