The reserve account is a supervised account and every withdrawal needs prior Agency approval

rd515.financial.reserve_account_is_supervised_and_withdrawals_need_prior_approval · v1.0.0

A Section 515 borrower must establish and maintain a reserve account for major capital expenses, hold it in an interest-bearing account or securities, and operate it as a supervised account in which the Agency approves all withdrawals. The borrower must request Agency approval of a withdrawal BEFORE making it; an item already carried on the Agency-approved capital budget does not need separate pre-approval. Where the general operating account holds surplus funds at fiscal year end - a balance after all payables and priorities exceeding 20 percent of operating and maintenance expenses - the borrower must apply that surplus to capital needs, to a reserve deposit, or to reducing debt service, and third-party debt service requires prior written Agency consent.

Confidence

high

Effective from

2005-01-01

Last reviewed

2026-08-30