Core Issue: The organization failed to submit required year-end reports to USDA within the 150-day deadline.
Impacted Requirements: Compliance with the loan Letter of Conditions, specifically the submission of Form RD 442-2 and RD 442-3 or an annual audit report.
Recommended Follow-Up: Management should regularly review the Letter of Conditions and loan agreements to ensure all requirements are met annually.
Finding Text
Federal Agency: U.S. Department of Agriculture (USDA)
Federal Program Name: Community Facilities Loans and Grants
Assistance Listing Number: 10.766
Federal Award Identification Number and Year: CF27087L136368-2013
Pass-Through Agency: N/A
Pass-Through Number(s): N/A
Award Period: 2022
Type of Finding: Material Weakness in Internal Control and Compliance
Criteria or specific requirement: The loan Letter of Conditions of requires that a year-end
management report Form RD 442-2 and RD 442-3 or an annual audit report be submitted no later than
150 days after the end of the borrower’s fiscal year.
Condition: Management did not send the RD 442-2 and 442-3 or audited financial statements to
USDA within 150 days of year-end.
Questioned costs: None
Cause: The loan was issued under previous management and the requirements were not known by
management.
Effect: The Organization was not in compliance with the letter of conditions.
Repeat finding: No
Recommendation: The Organization should review the Letter of Conditions and loan agreement to
ensure all requirements are being met on an annual basis.
Views of responsible officials: Management will review policies and procedures to ensure
compliance
Categories
Material WeaknessMatching / Level of Effort / EarmarkingInternal Control / Segregation of Duties