Finding Text
2023-002 - Insurance Escrow
Program: Rural Rental Housing Loans
Criteria: Per RD loan agreement, the property is required to establish an insurance escrow account equal to the amount of the premium due.
Condition: As of December 31, 2023, the insurance escrow account was not properly funded to cover the insurance premium.
Questioned Cost: Not applicable.
Context: The property does not have property insurance and has not established an insurance escrow.
Effect: The property does not have an escrow set aside to purchase required insurance.Information: Isolated instance.
Prior Year Finding: This was not a prior year finding.
Recommendation: Properly fund insurance escrow account.
Management’s Response: An account is set up for the insurance escrow. Deposits will be made on a monthly basis to cover the annual cost of the insurance.