2022-001: Replacement Reserve Deposits, AL #14.155 Condition: The required deposit amount to the replacement reserve increased effective March 1, 2021, from $4,075 to $4,177, and then again effective April 1, 2022, from $4,177 to $4,277. Chesterfield Square Mutual Homes did not increase their deposit amount for either of these increases. As a result, deposits for March, 2021, through July, 2022, were deficient. The total deficiency for the period is $2,134. Criteria: An amount as required by HUD should be deposited monthly in the replacement reserve. Cause: Management relied upon the mortgage company to invoice monthly for replacement reserve deposits and did not have processes or procedures in place to detect deficiencies in those deposits. Effect: The Project is not compliance with its regulatory agreement. Recommendation: Management should take immediate steps to make deposits in arrears and should develop processes and procedures to ensure that mortgage and reserve payments are made in accordance with HUD requirements. Views of Responsible Officials and Planned Corrective Action: Management agrees with auditor recommendations. See Corrective Action Plan prepared by management.