Finding Text
Finding 2023-001 – Compliance and Internal Control Over Compliance – Deposit Insurance Coverage of Intermediary Relending Program Funds (ALN 10.767)
Significant Deficiency
Condition:
Intermediary Relending Program (IRP) funds on deposit with a local financial institution were not fully insured by the Federal Deposit Insurance Corporation (FDIC).
Questioned Costs: None.
Criteria:
The U.S. Department of Agriculture, as outlined in 7 CFR Part 4274.332(b), requires all reserves and cash in the IRP revolving fund to be fully insured or collateralized with U.S. Government obligations.
Cause:
Management was aware of the requirement but due to the influx of cash received during the year, it was inadvertently overlooked.
Effect:
Inadequate internal controls over compliance could result in noncompliance with grantor agency requirements and could jeopardize LAIC’s continued participation in the program.
Recommendation:
Management and those charged with governance should be aware of all program requirements and take appropriate action to correct deficiencies.
Views of Responsible Officials:
See the corrective action plan that accompanies the schedule of findings and questioned costs.