Finding Text
STATEMENT OF CONDITION:
The management company did not make required monthly transfers to the reserve account in accordance with RD regulations.
CRITERIA:
RD regulations require that the owners must maintain proper reserve account balances for project capital needs in accordance with 7 CFR 3560.302.
EFFECT:
The projects reserve account is underfunded.
CAUSE:
The management company did not make transfers to the reserve account.
RECOMMENDATION:
Management should make monthly transfers to the reserve account.
RESPONSE:
Management is in contact with Rural Development regarding this finding and will proceed based on Rural Development’s recommendation.