The Cinco Municipal Utility District No. 1, located near Houston, has disclosed that the Internal Revenue Service is auditing $5.2 million of revenue bonds it issued in 2002 to finance water and sewer infrastructure.

In a material event notice filed last week with the Municipal Securities Rulemaking Board’s EMMA system, the district said it learned of the audit July 6, when it received a letter from the IRS announcing the examination.

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