EIN: 856000114
UEI: WBVJSV8AHH75
Audited by: FIERRO & FIERRO, P.A.
Oversight agency: 10 [Department of Agriculture]
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Data as of August 31, 2026
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on March 21, 2023. Under 2 CFR 200.521(d), a pass-through entity that provided federal funds to this organization for this audit period must issue a management decision on these findings by September 21, 2023 (1077 days ago).
What is a management decision? →Finding 2022-001 (2021-001)?Significant Deficiency?Compliance with USDA Loan Requirements Federal Program Information: Federal agency: U.S. Department of Agriculture Title: Water & Waste Disposal Systems for Rural Communities Assistance Listing No: 10.760 Award Number: 04-19-0088 Award Year: 2020 Questioned Costs: $29,833 Statement of Condition ? The Village?s water treatment plant rehabilitation project is funded through the United States Department of Agriculture?s (USDA) Rural Utilities Services (RUS) with a loan of $617,000 and a grant of $1,757,800. On September 28, 2018, the USDA wrote a letter to the Village to indicate the terms and conditions for this project?s funding. As part of the loan terms, the Village was required to create two new funds once the loan was finalized. The loan was finalized in April 2021. The two new funds are: 1) Debt Service Reserve and 2) Short-Lived Asset Reserve. Based on the loan terms, as of June 30, 2022, the Debt Service Reserve Fund should have had a balance of $7,774 and the Short-Lived Asset Reserve Fund should have had a balance of $50,666. During the fiscal year, the Village set up and funded these two funds. As of June 30, 2022, the Village?s Debt Service Reserve Fund had a balance of $23,916 and the Short-Lived Asset Reserve Fund has a balance of $20,833. The Village failed to deposit the annual requirement amount of $29,833 to the Short-Lived Asset Reserve Fund. Criteria ? Within the funding documents, Section II discusses loan terms. Number 8 within this section discussions reserves. The loan documents state, Reserves must be properly budgeted to maintain the financial viability and sustainability of any operation. Reserves are important to fund unanticipated emergency maintenance and repairs and assist with debt service should the need arise. The following reserves are required to be established as a condition of this loan: a) Short-Lived Asset Reserve ? In addition to the debt service reserve fund, you must establish a short-lived asset reserve fund. Based on the preliminary engineering report, you must deposit at least $29,833 into the short-lived asset reserve fund annually for the life of the loan to pay for repairs and/or replacement of major system assets. It is your responsibility to assess your facility?s short-lived asset needs on a regular basis and adjust the amount deposited to meet those needs. The Village failed to deposit the annual requirement amount within the Short-Lived Asset Reserve Fund. Effect ? The Village is not in compliance with 2 CFR 255, which could result in the loss or delay of future federal grant or loan awards. Cause ? Village staff misunderstood the loan terms as they believed after the two funds had been created, no additional funding was needed in either fund, unless funds were expended within either fund. Recommendation ? We recommend the Village staff to review the USDA loan/grant documents to ensure the amount within the funds meets the requirements. Further, we recommend the Village to transfer the annual funding requirements for the Short-Lived Asset Reserve Fund for this fiscal year. Finally, we recommend the Village to create a schedule of transfers to ensure the annual funding requirements is met for the Short-Lived Asset Reserve Fund.
Show full finding ▾Hide full finding ▴Finding 2022-001 (2021-001)?Significant Deficiency?Compliance with USDA Loan Requirements Federal Program Information: Federal agency: U.S. Department of Agriculture Title: Water & Waste Disposal Systems for Rural Communities Assistance Listing No: 10.760 Award Number: 04-19-0088 Award Year: 2020 Questioned Costs: $29,833 Statement of Condition ? The Village?s water treatment plant rehabilitation project is funded through the United States Department of Agriculture?s (USDA) Rural Utilities Services (RUS) with a loan of $617,000 and a grant of $1,757,800. On September 28, 2018, the USDA wrote a letter to the Village to indicate the terms and conditions for this project?s funding. As part of the loan terms, the Village was required to create two new funds once the loan was finalized. The loan was finalized in April 2021. The two new funds are: 1) Debt Service Reserve and 2) Short-Lived Asset Reserve. Based on the loan terms, as of June 30, 2022, the Debt Service Reserve Fund should have had a balance of $7,774 and the Short-Lived Asset Reserve Fund should have had a balance of $50,666. During the fiscal year, the Village set up and funded these two funds. As of June 30, 2022, the Village?s Debt Service Reserve Fund had a balance of $23,916 and the Short-Lived Asset Reserve Fund has a balance of $20,833. The Village failed to deposit the annual requirement amount of $29,833 to the Short-Lived Asset Reserve Fund. Criteria ? Within the funding documents, Section II discusses loan terms. Number 8 within this section discussions reserves. The loan documents state, Reserves must be properly budgeted to maintain the financial viability and sustainability of any operation. Reserves are important to fund unanticipated emergency maintenance and repairs and assist with debt service should the need arise. The following reserves are required to be established as a condition of this loan: a) Short-Lived Asset Reserve ? In addition to the debt service reserve fund, you must establish a short-lived asset reserve fund. Based on the preliminary engineering report, you must deposit at least $29,833 into the short-lived asset reserve fund annually for the life of the loan to pay for repairs and/or replacement of major system assets. It is your responsibility to assess your facility?s short-lived asset needs on a regular basis and adjust the amount deposited to meet those needs. The Village failed to deposit the annual requirement amount within the Short-Lived Asset Reserve Fund. Effect ? The Village is not in compliance with 2 CFR 255, which could result in the loss or delay of future federal grant or loan awards. Cause ? Village staff misunderstood the loan terms as they believed after the two funds had been created, no additional funding was needed in either fund, unless funds were expended within either fund. Recommendation ? We recommend the Village staff to review the USDA loan/grant documents to ensure the amount within the funds meets the requirements. Further, we recommend the Village to transfer the annual funding requirements for the Short-Lived Asset Reserve Fund for this fiscal year. Finally, we recommend the Village to create a schedule of transfers to ensure the annual funding requirements is met for the Short-Lived Asset Reserve Fund.
During the fiscal year ended June 30, 2022, the Village opened two cash deposits for this reserve requirement but they were not the correct reserve amounts. The funds will be deposited in the USDA checking account where they will be tracked in their own line item for the reserve requirements. The Village will be making quarterly deposits to the USDA account to ensure all requirements are met for this program. Estimated Completion Date: June 30, 2023. Responsible Parties: Clerk Administrator and Finance Clerk.
2021-001
FAC accepted this audit on March 30, 2022 — management decision was due September 30, 2022.
Finding FA 2021-001 ? Significant Deficiency ? Compliance with USDA Loan Requirements Federal Program Information: Federal Agency: U.S. Department of Agriculture Title: Water & Waste Disposal Systems for Rural Communities Federal Assistance Listing No: 10.760 Award Number: 04-19-0088 Award Year: 2020 Questioned Costs: $21,431 Statement of Condition ? The Village?s water treatment plant rehabilitation project is funded through the United States Department of Agriculture?s (USDA) Rural Utilities Services (RUS) with a loan of $617,000 and a grant of $1,757,800. On September 28, 2018, the USDA wrote a letter to the Village to indicate the terms and conditions for this project?s funding. As part of the loan terms, the Village was required to create two new funds once the loan was finalized. The loan was finalized in April 2021. The two new funds are: 1) Debt Service Reserve and 2) Short-Lived Asset Reserve. Based on the loan terms, as of June 30, 2021, the Debt Service Reserve Fund should have had a balance of $598 and the Short-Lived Asset Reserve Fund should have had a balance of $20,833. The Village failed to set up these two new funds once the loan was finalized. Criteria ? Within the funding documents, Section II discusses loan terms. Number 8 within this section discusses reserves. The loan documents state, Reserves must be properly budgeted to maintain the financial viability and sustainability of any operation. Reserves are important to fund unanticipated emergency maintenance and repairs and assist with debt service should the need arise. The following reserves are required to be established as a condition of this loan:a) Debt Service Reserve ? As a part of this Agency loan proposal, you must establish a debt service reserve fund equal to at least one annual loan installment that accumulates at the rate of 10% of one annual payment per year for ten years or until the balance is equal to one annual loan payment. Ten percent of the proposed loan installment would equal $199.30 per month; this amount should be deposited monthly until a total of $23,916 has accumulated. Prior written concurrence from the Agency must be obtained before funds may be withdrawn from this account during the life of the loan. When funds are withdrawn during the life of the loan from the debt service reserve account, deposits of $199.30 a month will continue to be deposited until the fully-funded amount of $23,916 is reached once again. b) Short-Lived Asset Reserve ? In addition to the debt service reserve fund, you must establish a short-lived asset reserve fund. Based on the preliminary engineering report, you must deposit at least $29,833 into the short-lived asset reserve fund annually for the life of the loan to pay for repairs and/or replacement of major system assets. It is your responsibility to assess your facility?s short-lived asset needs on a regular basis and adjust the amount deposited to meet those needs. Effect ? The Village is not in compliance with 2 CFR 255, which could result in the loss or delay of future federal grant or loan awards. Cause ? Village staff misunderstood the loan terms as they believed the two funds were required to be created once the project was completed and not when the loan was finalized. Recommendation ? We recommend the Village staff establish the two new funds as required by the USDA. Further, we recommend the Village determine the amount that needs to fund each of the two new funds on the day that they are established.
Show full finding ▾Hide full finding ▴Finding FA 2021-001 ? Significant Deficiency ? Compliance with USDA Loan Requirements Federal Program Information: Federal Agency: U.S. Department of Agriculture Title: Water & Waste Disposal Systems for Rural Communities Federal Assistance Listing No: 10.760 Award Number: 04-19-0088 Award Year: 2020 Questioned Costs: $21,431 Statement of Condition ? The Village?s water treatment plant rehabilitation project is funded through the United States Department of Agriculture?s (USDA) Rural Utilities Services (RUS) with a loan of $617,000 and a grant of $1,757,800. On September 28, 2018, the USDA wrote a letter to the Village to indicate the terms and conditions for this project?s funding. As part of the loan terms, the Village was required to create two new funds once the loan was finalized. The loan was finalized in April 2021. The two new funds are: 1) Debt Service Reserve and 2) Short-Lived Asset Reserve. Based on the loan terms, as of June 30, 2021, the Debt Service Reserve Fund should have had a balance of $598 and the Short-Lived Asset Reserve Fund should have had a balance of $20,833. The Village failed to set up these two new funds once the loan was finalized. Criteria ? Within the funding documents, Section II discusses loan terms. Number 8 within this section discusses reserves. The loan documents state, Reserves must be properly budgeted to maintain the financial viability and sustainability of any operation. Reserves are important to fund unanticipated emergency maintenance and repairs and assist with debt service should the need arise. The following reserves are required to be established as a condition of this loan:a) Debt Service Reserve ? As a part of this Agency loan proposal, you must establish a debt service reserve fund equal to at least one annual loan installment that accumulates at the rate of 10% of one annual payment per year for ten years or until the balance is equal to one annual loan payment. Ten percent of the proposed loan installment would equal $199.30 per month; this amount should be deposited monthly until a total of $23,916 has accumulated. Prior written concurrence from the Agency must be obtained before funds may be withdrawn from this account during the life of the loan. When funds are withdrawn during the life of the loan from the debt service reserve account, deposits of $199.30 a month will continue to be deposited until the fully-funded amount of $23,916 is reached once again. b) Short-Lived Asset Reserve ? In addition to the debt service reserve fund, you must establish a short-lived asset reserve fund. Based on the preliminary engineering report, you must deposit at least $29,833 into the short-lived asset reserve fund annually for the life of the loan to pay for repairs and/or replacement of major system assets. It is your responsibility to assess your facility?s short-lived asset needs on a regular basis and adjust the amount deposited to meet those needs. Effect ? The Village is not in compliance with 2 CFR 255, which could result in the loss or delay of future federal grant or loan awards. Cause ? Village staff misunderstood the loan terms as they believed the two funds were required to be created once the project was completed and not when the loan was finalized. Recommendation ? We recommend the Village staff establish the two new funds as required by the USDA. Further, we recommend the Village determine the amount that needs to fund each of the two new funds on the day that they are established.
Administrator Shawn Jeffrey and Finance Clerk Renee LeDoux will ensure the funds are created and the balances recorded. The project requirements will be reviewed so there are no others tasks that need to be completed before the project is done. Estimated Completion Date: January 2022. Responsible Parties: Administrator and Finance Clerk.
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