Condition: The Organization funded its reserve for replacement account in the amount of $36,000 during
the year ended December 31, 2023. This amount meets the annual funding requirement and reduces the
cumulative underfunded amount. However, the reserve for replacement account is underfunded by $71,681 as
of December 31, 2023, due to the cumulative effect of underfunding the reserve in previous years.
Criteria: As required by the Regulatory Agreement with HUD, the Organization must fund a reserve for
replacement account in the amount of $30,005 on an annual basis.
Cause: The Organization did not possess adequate cash flow to meet the requirement in previous years.
Effect: The reserve for replacement account was underfunded during the years ended December 31, 2017
through 2021. During those years, the Organization was not in compliance with the reserve for replacement
requirement as stated in the Regulatory Agreement. As of December 31, 2023, the reserve for replacement
account was underfunded by a total of $71,681.
Recommendation: As cash flow allows, we recommend that the Organization continue making additional
payments to the reserve for replacement account to correct the cumulative underfunded amount.
Condition: During the year ended December 31, 2022, the Organization requested retroactive adjustments
on their 2022 Housing Assistance Payment (HAP) voucher requests to account for the increase in contract
rent per unit that was not appropriately requested in 2021. The Organization mistakenly requested these
adjustments twice, and therefore, received subsidy revenue from HUD in excess of what they were entitled
to. As of December 31, 2023, the Organization had not contacted HUD to rectify the situation.
Criteria: Internal controls should be in place to ensure the Organization is utilizing the proper contract rental
rate in the monthly HAP vouchers, and to ensure the amounts received per tenant do not exceed the
maximum amount allowed. The Organization should have contacted HUD to evaluate if there is an obligation
to return the excess rent subsidies that were received during the year ended December 31, 2022.
Cause: Human error during 2022 in incorporating the contract rent increase adjustments into the monthly
HAP voucher requests submitted to HUD.
Effect: The Organization requested and received $12,098 more of HUD rent subsidies than they were
entitled to during the year ended December 31, 2022.
Recommendation: We recommend the Organization contact HUD to evaluate if there is an obligation to
return the excess rent subsidies that were received during the year ended December 31, 2022.
Condition: The Organization funded its reserve for replacement account in the amount of $36,000 during
the year ended December 31, 2023. This amount meets the annual funding requirement and reduces the
cumulative underfunded amount. However, the reserve for replacement account is underfunded by $71,681 as
of December 31, 2023, due to the cumulative effect of underfunding the reserve in previous years.
Criteria: As required by the Regulatory Agreement with HUD, the Organization must fund a reserve for
replacement account in the amount of $30,005 on an annual basis.
Cause: The Organization did not possess adequate cash flow to meet the requirement in previous years.
Effect: The reserve for replacement account was underfunded during the years ended December 31, 2017
through 2021. During those years, the Organization was not in compliance with the reserve for replacement
requirement as stated in the Regulatory Agreement. As of December 31, 2023, the reserve for replacement
account was underfunded by a total of $71,681.
Recommendation: As cash flow allows, we recommend that the Organization continue making additional
payments to the reserve for replacement account to correct the cumulative underfunded amount.
Condition: During the year ended December 31, 2022, the Organization requested retroactive adjustments
on their 2022 Housing Assistance Payment (HAP) voucher requests to account for the increase in contract
rent per unit that was not appropriately requested in 2021. The Organization mistakenly requested these
adjustments twice, and therefore, received subsidy revenue from HUD in excess of what they were entitled
to. As of December 31, 2023, the Organization had not contacted HUD to rectify the situation.
Criteria: Internal controls should be in place to ensure the Organization is utilizing the proper contract rental
rate in the monthly HAP vouchers, and to ensure the amounts received per tenant do not exceed the
maximum amount allowed. The Organization should have contacted HUD to evaluate if there is an obligation
to return the excess rent subsidies that were received during the year ended December 31, 2022.
Cause: Human error during 2022 in incorporating the contract rent increase adjustments into the monthly
HAP voucher requests submitted to HUD.
Effect: The Organization requested and received $12,098 more of HUD rent subsidies than they were
entitled to during the year ended December 31, 2022.
Recommendation: We recommend the Organization contact HUD to evaluate if there is an obligation to
return the excess rent subsidies that were received during the year ended December 31, 2022.