HAWAIIAN SHORES COMMUNITY ASSOCIATION

Federal Agency: Department of Agriculture Federal Program Name: Communities Facilities Loans and Grants Assistance Listing Number: 10.766 Federal Award Identification Number and Year: 61-001-237118628 Award Period: 2019-2049 Type of Findings: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: The road project loan requires monthly transfers of $797.50 to the reserve fund until minimum balance of $95,700 is met. Condition: There were no transfers made to the road project reserve fund during fiscal year 2024 and the minimum balance has not been met. Context: A transfer was not made until December 2024, causing the Association to be behind on the required minimum transfers. Cause: The Association did not make a transfer of funds until December 2024. Effect: The Association will need to make additional transfers to the road project reserve fund in fiscal year 2025 to bring the required minimum transfers current. Recommendation: We recommend the Association implement a process whereby transfers are set up to be automatically made on a monthly basis to ensure compliance with loan requirements. Views of responsible officials: There is no disagreement with the finding.

Communities Facilities Loans and Grants – Assistance Listing No. 10.766 Recommendation: We recommend the Association implement a process whereby transfers are set up to be automatically made on a monthly basis to ensure compliance with loan requirements. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Association will make the required transfers in fiscal year 2025 to ensure compliance with loan requirements. Name of the contact person responsible for corrective action: Jeff Sargent Planned completion date for corrective action plan: May 1, 2025