Finding Text
Finding 2022-001: U.S. Department of Agriculture, Rural Development, Rural Rental Housing Loans, Assistance Listing #10.415 Statement of Condition: During the year ended December 31, 2022, the Corporation had $71,322.74 of funds maintained in an institution that were in excess of FDIC insured limits. Criteria: USDA Handbook 2-3560, Chapter 4, states that bank account funds maintained in an institution may not exceed the limit established for Federal deposit insurance. If funds exceed the amount covered by Federal Deposit insurance, the Corporation must obtain a collateral pledge from the institution to cover all funds or move funds to an institution that will insure the funds. Effect: Noncompliance with USDA RD requirements and risk of loss of the Corporation's funds. Cause: Management and Owners do not believe the funds are at risk of loss at this time. Context: A test to verify that bank account funds maintained in an intuition were covered by Federal Deposit insurance was performed. At December 31, 2022, bank account funds in excess of the federally insured limits were $71,322.74. Recommendation: Ownership and management should obtain a collateral agreement or transfer funds to another federally insured banking institution in an amount sufficient to ensure all funds are federally insured. Questioned Costs: $0 Views of Responsible Officials and Corrective Action Plan: Management and Ownership agree with the above finding and review the financial stability of the banking institutions which hold the Corporation's funds on an ongoing basis and will continue to do so. Management and the Owners do not feel at this time that the funds are truly at risk based on current market conditions and the reviews they continually do on the financial stability of the banking institutions holding these funds. Management and the Owners will transfer the funds at any point they believe the funds are truly at risk.