Core Issue: The organization failed to obtain required fidelity bond coverage for individuals handling loan funds.
Impacted Requirements: Compliance with the loan Letter of Conditions, specifically regarding fidelity bonds.
Recommended Follow-Up: Annually review the Letter of Conditions and loan agreements to ensure all requirements are met.
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 position fidelity bonds are
carried on individuals entrusted with receipt and/or disbursements.
Condition: Management did not obtain an insurance policy that carried the required fidelity bond
coverage.
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 is met
Categories
Material WeaknessMatching / Level of Effort / EarmarkingInternal Control / Segregation of Duties