Audit 409560

Finding Reference Number: 2025-001 Finding Reference Number 2025-001 Statement of Condition As of December 31, 2025, the Project had not paid three out of twelve 2025 monthly replacement reserve deposits. Criteria The Project is required to make monthly replacement reserve deposits. Effect Failure to make replacement reserve deposits results in noncompliance with the regulatory agreement. Cause Lack of funds Recommendation The Project should discuss with HUD how to become current on replacement reserve amounts owed. Auditor Non-Compliance Code N – Reserve for replacement deposits. Amount of Questioned Costs $7,828 Auditor’s Summary of Auditee’s Comments on the Findings and Recommendations Management agrees with this finding. The Project discussed with HUD how to become current on replacement reserve amounts owed. The Project made the replacement reserve deposits as soon as funds were available. Going forward, the Project will ensure there are enough funds available to make timely deposits to the replacement reserve. Response Indicator Agrees Actual Completion Date April 3, 2026 Actions Taken or Planned on the Finding The three late replacement reserve deposits were made and procedures were implemented to ensure funds are available to fund the replacement reserve timely in the future. This finding has been closed.