Audit 398304

Material Weakness – Reserve for Replacement Criteria The Program is required to make monthly deposits to a Reserve for Replacement account in accordance with their regulatory agreement. Condition: The Program did not comply with requirement related to deposits into the reserve for replacement account. The Program made three of twelve deposits in the current year, the required deposits in to the reserve for replacement account for the year ended June 30, 2024 were $18,024 and only $4,506 was deposited. Per review of required deposits, the ending balance as of June 30, 2024 should be $144,403. Cause: The Program had turnover in staff and missed making monthly deposits into the reserve account. Questioned Costs: Not Applicable. Effect: Non-compliance with Reserve for Replacement requirements. Repeat Finding: No. Recommendation: The Program should implement controls to ensure monthly deposits are being made as required. Response: Management will request a waiver from HUD to cease deposits to the RFR Account until such time that the account falls before the HUD recommended minimum required deposits.

Material Weakness– Reporting Criteria The Uniform Guidance requires that all entities that expend in excess of $750,000 to file audited financial statements and Data Collection Form within 9 months of year-end. (2 CFR Section 200.512). Condition: The Project’s June 30, 2024 audited financial statements were not filed with the Federal Audit Clearinghouse within nine months of year-end. Cause: Turnover in staffing and lack of oversight led to information not being ready for audit in a timely manner. Questioned Costs: Not Applicable. Effect: The Program could have had federal funding delayed or reduced. Repeat Finding: No. Recommendation: We recommend the Program review its internal control policies and procedures to ensure timely reporting. Response: The Program agrees with the finding and will implement controls to ensure timely reporting for future submissions.