Southwell Obligated Group

Condition: Southwell Obligated Group did not timely submit its annual budget, projected cash flow, quarterly financial statements, and audited financial statements to the USDA. Criteria: Southwell Obligated Group is responsible for reporting to the USDA throughout the life of the loan, as specifically required within Southwell Obligated Group's applicable agreement, via the RD 442-2, Statement of Budget, Income, and Equity report or other acceptable report. Cause: These reports are required to be submitted, as specified in the applicable loan agreement; however, management did not maintain a list of required reports to be submitted nor was there a process in place to ensure timely filing. Context: The reports were never specifically requested throughout the year by Southwell Obligated Group's USDA representative, nor was Southwell Obligated Group notified of its tardy submission at any point during the fiscal year. The audited financial statements are available to the federal agency through Southwell Obligated Group's website. Effect: Southwell Obligated Group did not follow the guidelines as laid out in the respective loan agreement for its reporting requirements. Questioned Costs: Not applicable. Recommendations: Southwell Obligated Group should continue to improve its understanding of the reporting requirements as specified in the applicable loan document and create a process to ensure reports are submitted in a timely manner.