Criteria - Owners shall establish and maintain a replacement reserve to aid in funding extraordinary maintenance and repair and replacement of capital items. All disbursements from the reserve must be approved by HUD (24 CFR sections 891.405 and 891.605). Condition - During the year, withdrawals amounting to $204,694 were made from the replacement reserve account for an emergency roof project without prior HUD approval. Cause The managing agent was not provided a copy of the regulatory agreement. The project owner was not aware of the HUD requirement that all withdrawals from the replacement reserve account should be approved and determined as qualified withdrawals by HUD. Effect - Required approval by HUD for replacement reserve withdrawals was not obtained before withdrawal. Questioned cost - None. Context - Withdrawals made from the replacement reserve account during the year without proper HUD approval. Recommendation - We recommend that the Project monitor the disbursements being made in relation to the withdrawal from the replacement reserve account to ensure that the said disbursements are within the HUD guidelines. Also, to ensure compliance with the requirements of 24 CFR sections 891.405 and 891.605, all withdrawals from the replacement reserve account should be reviewed and approved by HUD. View of Responsible Official and Planned Corrective Action - Managing agent subsequently obtained approval from HUD for the questioned replacement reserve withdrawal. All replacement reserve withdrawals will obtain prior approval from HUD.
Criteria - On September 2003, the HUD provided funds to the Project for the construction and initial operation of an apartment building catering to very low-income elderly persons or very low-income persons with disabilities (whichever is applicable). Under the terms of the HUD agreement and as required by the National Housing Act, the Project must submit a Cost Certification to HUD. The cost certification is used by HUD to determine the building?s actual development cost and/or the maximum insurable mortgage. Condition - The Project has not finalized and submitted a final Cost Certification as required by HUD and the National Housing Act and regulations. Cause - The Project submitted an initial Cost Certification to HUD; however, HUD did not accept the Certification because it did not have the required financial statements and was not signed by the certified public accountant who prepared it. The accountant of the accounting firm with whom the Project contracted to complete the Cost Certificate has since left the accounting firm and no known replacement has been identified. Effect - The final Cost Certification enables the mortgagor to establish the actual costs, including contractor?s cost, and the maximum insurable mortgage for final endorsement of the insured mortgage. Recommendation - We recommend that the Project seek the assistance of HUD to identify audit firms that can provide cost certification services so that the Project can finalize and submit the Cost Certification to comply with HUD requirements and the National Housing Act. View of Responsible Official and Planned Corrective Action - HUD has completed the Cost Certification for the property.
Criteria - Owners shall establish and maintain a replacement reserve to aid in funding extraordinary maintenance and repair and replacement of capital items. All disbursements from the reserve must be approved by HUD (24 CFR sections 891.405 and 891.605). Condition - During the year, withdrawals amounting to $204,694 were made from the replacement reserve account for an emergency roof project without prior HUD approval. Cause The managing agent was not provided a copy of the regulatory agreement. The project owner was not aware of the HUD requirement that all withdrawals from the replacement reserve account should be approved and determined as qualified withdrawals by HUD. Effect - Required approval by HUD for replacement reserve withdrawals was not obtained before withdrawal. Questioned cost - None. Context - Withdrawals made from the replacement reserve account during the year without proper HUD approval. Recommendation - We recommend that the Project monitor the disbursements being made in relation to the withdrawal from the replacement reserve account to ensure that the said disbursements are within the HUD guidelines. Also, to ensure compliance with the requirements of 24 CFR sections 891.405 and 891.605, all withdrawals from the replacement reserve account should be reviewed and approved by HUD. View of Responsible Official and Planned Corrective Action - Managing agent subsequently obtained approval from HUD for the questioned replacement reserve withdrawal. All replacement reserve withdrawals will obtain prior approval from HUD.
Criteria - On September 2003, the HUD provided funds to the Project for the construction and initial operation of an apartment building catering to very low-income elderly persons or very low-income persons with disabilities (whichever is applicable). Under the terms of the HUD agreement and as required by the National Housing Act, the Project must submit a Cost Certification to HUD. The cost certification is used by HUD to determine the building?s actual development cost and/or the maximum insurable mortgage. Condition - The Project has not finalized and submitted a final Cost Certification as required by HUD and the National Housing Act and regulations. Cause - The Project submitted an initial Cost Certification to HUD; however, HUD did not accept the Certification because it did not have the required financial statements and was not signed by the certified public accountant who prepared it. The accountant of the accounting firm with whom the Project contracted to complete the Cost Certificate has since left the accounting firm and no known replacement has been identified. Effect - The final Cost Certification enables the mortgagor to establish the actual costs, including contractor?s cost, and the maximum insurable mortgage for final endorsement of the insured mortgage. Recommendation - We recommend that the Project seek the assistance of HUD to identify audit firms that can provide cost certification services so that the Project can finalize and submit the Cost Certification to comply with HUD requirements and the National Housing Act. View of Responsible Official and Planned Corrective Action - HUD has completed the Cost Certification for the property.
Criteria - Owners shall establish and maintain a replacement reserve to aid in funding extraordinary maintenance and repair and replacement of capital items. All disbursements from the reserve must be approved by HUD (24 CFR sections 891.405 and 891.605). Condition - During the year, withdrawals amounting to $204,694 were made from the replacement reserve account for an emergency roof project without prior HUD approval. Cause The managing agent was not provided a copy of the regulatory agreement. The project owner was not aware of the HUD requirement that all withdrawals from the replacement reserve account should be approved and determined as qualified withdrawals by HUD. Effect - Required approval by HUD for replacement reserve withdrawals was not obtained before withdrawal. Questioned cost - None. Context - Withdrawals made from the replacement reserve account during the year without proper HUD approval. Recommendation - We recommend that the Project monitor the disbursements being made in relation to the withdrawal from the replacement reserve account to ensure that the said disbursements are within the HUD guidelines. Also, to ensure compliance with the requirements of 24 CFR sections 891.405 and 891.605, all withdrawals from the replacement reserve account should be reviewed and approved by HUD. View of Responsible Official and Planned Corrective Action - Managing agent subsequently obtained approval from HUD for the questioned replacement reserve withdrawal. All replacement reserve withdrawals will obtain prior approval from HUD.
Criteria - On September 2003, the HUD provided funds to the Project for the construction and initial operation of an apartment building catering to very low-income elderly persons or very low-income persons with disabilities (whichever is applicable). Under the terms of the HUD agreement and as required by the National Housing Act, the Project must submit a Cost Certification to HUD. The cost certification is used by HUD to determine the building?s actual development cost and/or the maximum insurable mortgage. Condition - The Project has not finalized and submitted a final Cost Certification as required by HUD and the National Housing Act and regulations. Cause - The Project submitted an initial Cost Certification to HUD; however, HUD did not accept the Certification because it did not have the required financial statements and was not signed by the certified public accountant who prepared it. The accountant of the accounting firm with whom the Project contracted to complete the Cost Certificate has since left the accounting firm and no known replacement has been identified. Effect - The final Cost Certification enables the mortgagor to establish the actual costs, including contractor?s cost, and the maximum insurable mortgage for final endorsement of the insured mortgage. Recommendation - We recommend that the Project seek the assistance of HUD to identify audit firms that can provide cost certification services so that the Project can finalize and submit the Cost Certification to comply with HUD requirements and the National Housing Act. View of Responsible Official and Planned Corrective Action - HUD has completed the Cost Certification for the property.
Criteria - Owners shall establish and maintain a replacement reserve to aid in funding extraordinary maintenance and repair and replacement of capital items. All disbursements from the reserve must be approved by HUD (24 CFR sections 891.405 and 891.605). Condition - During the year, withdrawals amounting to $204,694 were made from the replacement reserve account for an emergency roof project without prior HUD approval. Cause The managing agent was not provided a copy of the regulatory agreement. The project owner was not aware of the HUD requirement that all withdrawals from the replacement reserve account should be approved and determined as qualified withdrawals by HUD. Effect - Required approval by HUD for replacement reserve withdrawals was not obtained before withdrawal. Questioned cost - None. Context - Withdrawals made from the replacement reserve account during the year without proper HUD approval. Recommendation - We recommend that the Project monitor the disbursements being made in relation to the withdrawal from the replacement reserve account to ensure that the said disbursements are within the HUD guidelines. Also, to ensure compliance with the requirements of 24 CFR sections 891.405 and 891.605, all withdrawals from the replacement reserve account should be reviewed and approved by HUD. View of Responsible Official and Planned Corrective Action - Managing agent subsequently obtained approval from HUD for the questioned replacement reserve withdrawal. All replacement reserve withdrawals will obtain prior approval from HUD.
Criteria - On September 2003, the HUD provided funds to the Project for the construction and initial operation of an apartment building catering to very low-income elderly persons or very low-income persons with disabilities (whichever is applicable). Under the terms of the HUD agreement and as required by the National Housing Act, the Project must submit a Cost Certification to HUD. The cost certification is used by HUD to determine the building?s actual development cost and/or the maximum insurable mortgage. Condition - The Project has not finalized and submitted a final Cost Certification as required by HUD and the National Housing Act and regulations. Cause - The Project submitted an initial Cost Certification to HUD; however, HUD did not accept the Certification because it did not have the required financial statements and was not signed by the certified public accountant who prepared it. The accountant of the accounting firm with whom the Project contracted to complete the Cost Certificate has since left the accounting firm and no known replacement has been identified. Effect - The final Cost Certification enables the mortgagor to establish the actual costs, including contractor?s cost, and the maximum insurable mortgage for final endorsement of the insured mortgage. Recommendation - We recommend that the Project seek the assistance of HUD to identify audit firms that can provide cost certification services so that the Project can finalize and submit the Cost Certification to comply with HUD requirements and the National Housing Act. View of Responsible Official and Planned Corrective Action - HUD has completed the Cost Certification for the property.