Issue: Disbursements from the reserve fund were made without required written consent from USDA Rural Development.
Impact: Hancock County Homes Foundation is out of compliance with USDA requirements, leading to an underfunded replacement reserve account.
Next Steps: Ensure all future disbursements receive prior approval from Rural Development, as agreed upon in the management's corrective action plan.
Finding Text
Criteria: The U.S. Department of Agriculture (USDA) Rural Development requires that disbursements from the reserve for replacement fund may be made only after written consent is received from Rural Development. Condition: Disbursements from the reserve for replacement funds were made without written consent.. Cause: Hancock County Homes Foundation failed to collect an approval from Rural Development for an automatic withdrawal of funds for the purchase of checks for that account. Effect: Hancock County Homes Foundation was not in compliance with all USDA compliance requirements and the replacement reserve account was underfunded. Recommendation: Recommend obtaining approval from Rural Developement for all disbursements. Management's Response: Management agrees with this recommendation and has provided the corrective action plan following the Single Audit report.