Finding Text
Condition: The replacement reserve account was not funded in accordance with the USDA required deposits during the year.
Criteria: A good system of internal control requires proper controls in place to ensure the proper and timely monthly deposits are made for the replacement reserve account.
Cause: Management made the monthly deposits to the replacement reserve during the year; however, the monthly deposits were lower than the required deposit amounts.
Effect of Potential Effect: The replacement reserve account was underfunded by $7,317 as of December 31, 2023.
Recommendation: We recommend that the underfunded amount be deposited into the replacement reserve account and that controls are implemented to ensure the proper and timely deposits are made for the replacement reserve account.
View of Responsible Officials
and Planned Corrective
Action: Management agreed with the recommendation and made the deposit of $7,317 subsequent to year end in April 2024.