diff --git a/pkg/auditserver/server.go b/pkg/auditserver/server.go
index 611431a..bb6dafe 100644
--- a/pkg/auditserver/server.go
+++ b/pkg/auditserver/server.go
@@ -236,6 +236,7 @@ func New(logger *slog.Logger) (*AuditServer, error) {
 			fwd, err = forwarder.NewUDPForwarder(rgConfig.Forwarding.Address)
 			if err != nil {
 				logger.Error("Failed to create UDP forwarder", "error", err)
+				return nil, fmt.Errorf("failed to create UDP forwarder: %w", err)
 			}
 		}
 
diff --git a/pkg/auditserver/server_test.go b/pkg/auditserver/server_test.go
index efa75f6..5d0d302 100644
--- a/pkg/auditserver/server_test.go
+++ b/pkg/auditserver/server_test.go
@@ -412,6 +412,97 @@ func TestNew_WithInvalidRuleGroups(t *testing.T) {
 	assert.Contains(t, logOutput, "ERROR")
 }
 
+func TestNew_WithValidForwarder(t *testing.T) {
+	// Set up a mock configuration with a valid forwarder address
+	viper.Reset()
+	viper.Set("rule_groups", []map[string]interface{}{
+		{
+			"name": "test_group",
+			"rules": []string{
+				"Request.Operation == 'read'",
+			},
+			"log_file": map[string]interface{}{
+				"file_path": "/tmp/test.log",
+				"max_size":  10,
+			},
+			"forwarding": map[string]interface{}{
+				"enabled": true,
+				"address": "127.0.0.1:9000",
+			},
+		},
+	})
+
+	server, err := New(nil)
+
+	assert.NoError(t, err)
+	assert.NotNil(t, server)
+	assert.Len(t, server.ruleGroups, 1)
+	assert.NotNil(t, server.ruleGroups[0].Forwarder)
+}
+
+func TestNew_WithInvalidForwarder(t *testing.T) {
+	// Set up a mock configuration with an invalid forwarder address
+	viper.Reset()
+	viper.Set("rule_groups", []map[string]interface{}{
+		{
+			"name": "test_group",
+			"rules": []string{
+				"Request.Operation == 'read'",
+			},
+			"log_file": map[string]interface{}{
+				"file_path": "/tmp/test.log",
+				"max_size":  10,
+			},
+			"forwarding": map[string]interface{}{
+				"enabled": true,
+				"address": "invalid:address:9000",
+			},
+		},
+	})
+
+	var buf bytes.Buffer
+	logger := slog.New(slog.NewJSONHandler(&buf, &slog.HandlerOptions{Level: slog.LevelDebug}))
+
+	server, err := New(logger)
+
+	assert.Error(t, err)
+	assert.Nil(t, server)
+	assert.Contains(t, err.Error(), "failed to create UDP forwarder")
+
+	// Verify error was logged
+	logOutput := buf.String()
+	assert.Contains(t, logOutput, "Failed to create UDP forwarder")
+	assert.Contains(t, logOutput, "ERROR")
+}
+
+func TestNew_WithDisabledForwarder(t *testing.T) {
+	// Set up a mock configuration with forwarding disabled
+	viper.Reset()
+	viper.Set("rule_groups", []map[string]interface{}{
+		{
+			"name": "test_group",
+			"rules": []string{
+				"Request.Operation == 'read'",
+			},
+			"log_file": map[string]interface{}{
+				"file_path": "/tmp/test.log",
+				"max_size":  10,
+			},
+			"forwarding": map[string]interface{}{
+				"enabled": false,
+				"address": "127.0.0.1:9000",
+			},
+		},
+	})
+
+	server, err := New(nil)
+
+	assert.NoError(t, err)
+	assert.NotNil(t, server)
+	assert.Len(t, server.ruleGroups, 1)
+	assert.Nil(t, server.ruleGroups[0].Forwarder)
+}
+
 func TestRuleGroup_shouldLog(t *testing.T) {
 	// Define a sample audit log
 	auditLog := &AuditLog{