Criteria The Organization as mortgagor, in accordance with the regulatory agreement, is required to maintain a reserve for replacements. The required minimum monthly deposit into this account is $2,079. Additionally, the Organization is required to deposit all prior year required delinquent deposits. For the year ended September 30, 2022, a total of $29,109 was to be deposited into the replacement reserve account, which consists of $24,952 for current year deposits, plus $4,157 for prior year delinquent deposits; however, no deposits were made into the replacement reserve account. Condition The Organization did not make all required deposits into the replacement reserve account per the regulatory agreement. Cause Due to limited cash flow management was unable to fulfill all required deposits. Questioned Costs None noted. Context When performing our audit, we noted the Organization did not make all required deposits in the current year. Effect The Organization did not make the deposits into the replacement reserve account as required by the HUD agreement. Repeat Finding Repeat Finding of 2021-001 and 2020-001. Recommendation We recommend management make the required deposit as soon as possible and review the activity in the reserve accounts monthly to determine that deposits are being made as required. Views of Responsible Official and Planned Corrective Action Management concurs with the audit finding. Management will transfer the funds as soon as cash flow permits.
Criteria Audits of financial statements of HUD projects are required to be submitted to the REAC 90 days after the end of the fiscal year and audits of financial statements and supplemental information performed under Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (?Uniform Guidance?) are required to be submitted to the Federal Audit Clearinghouse 30 days after receipt of the auditors? report, or nine months after the end of the fiscal year, whichever comes first. Condition The audited financial statements, reports and supplemental information for the year ended September 30, 2021 were not submitted to the REAC within 90 days of the Organization?s fiscal year end, and was not submitted to the Federal Audit Clearinghouse within nine months of the fiscal year end. Cause The audit of the financial statements was not completed in the specified time period. Questioned Costs None noted. Effect The Organization is noncompliant with the requirements of HUD and Uniform Guidance. Recommendation The Organization should submit the audited financial statements to the REAC and the Federal Audit Clearinghouse within the required timeframe and implement controls to ensure timely submission. Views of Responsible Official and Planned Corrective Action Management agrees with the finding.
Criteria Audits of financial statements of HUD projects are required to deposit security deposit funds received from tenants in a separate bank account, apart from all other funds of the Project. Condition The security deposits received for 2 tenants was not deposited or transferred to the security deposit bank account. Cause The security deposits were deposited into the operating account and the funds were not transferred to the security deposit account. Questioned Costs None noted. Effect The Organization is noncompliant with the requirements of HUD. Recommendation The Organization should transfer the funds from the operating account to the security deposit account. Views of Responsible Official and Planned Corrective Action Management agrees with the finding.
Criteria The Organization as mortgagor, in accordance with the regulatory agreement, is required to maintain a reserve for replacements. The required minimum monthly deposit into this account is $2,079. Additionally, the Organization is required to deposit all prior year required delinquent deposits. For the year ended September 30, 2022, a total of $29,109 was to be deposited into the replacement reserve account, which consists of $24,952 for current year deposits, plus $4,157 for prior year delinquent deposits; however, no deposits were made into the replacement reserve account. Condition The Organization did not make all required deposits into the replacement reserve account per the regulatory agreement. Cause Due to limited cash flow management was unable to fulfill all required deposits. Questioned Costs None noted. Context When performing our audit, we noted the Organization did not make all required deposits in the current year. Effect The Organization did not make the deposits into the replacement reserve account as required by the HUD agreement. Repeat Finding Repeat Finding of 2021-001 and 2020-001. Recommendation We recommend management make the required deposit as soon as possible and review the activity in the reserve accounts monthly to determine that deposits are being made as required. Views of Responsible Official and Planned Corrective Action Management concurs with the audit finding. Management will transfer the funds as soon as cash flow permits.
Criteria Audits of financial statements of HUD projects are required to be submitted to the REAC 90 days after the end of the fiscal year and audits of financial statements and supplemental information performed under Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (?Uniform Guidance?) are required to be submitted to the Federal Audit Clearinghouse 30 days after receipt of the auditors? report, or nine months after the end of the fiscal year, whichever comes first. Condition The audited financial statements, reports and supplemental information for the year ended September 30, 2021 were not submitted to the REAC within 90 days of the Organization?s fiscal year end, and was not submitted to the Federal Audit Clearinghouse within nine months of the fiscal year end. Cause The audit of the financial statements was not completed in the specified time period. Questioned Costs None noted. Effect The Organization is noncompliant with the requirements of HUD and Uniform Guidance. Recommendation The Organization should submit the audited financial statements to the REAC and the Federal Audit Clearinghouse within the required timeframe and implement controls to ensure timely submission. Views of Responsible Official and Planned Corrective Action Management agrees with the finding.
Criteria Audits of financial statements of HUD projects are required to deposit security deposit funds received from tenants in a separate bank account, apart from all other funds of the Project. Condition The security deposits received for 2 tenants was not deposited or transferred to the security deposit bank account. Cause The security deposits were deposited into the operating account and the funds were not transferred to the security deposit account. Questioned Costs None noted. Effect The Organization is noncompliant with the requirements of HUD. Recommendation The Organization should transfer the funds from the operating account to the security deposit account. Views of Responsible Official and Planned Corrective Action Management agrees with the finding.