Finding Text
Federal Program – Supportive Housing for the Elderly – HUD Project No. 121-EE 012-NP-WAH Assistance Listing Number 14.157 Housing and Urban Development (HUD) Program Year 2023–2024 Criteria or Specific Requirement – Special Tests and Provisions – Replacement Reserve Condition – The HUD-required replacement reserve deposits for the Project were underfunded for a total of $2,750 for the month of February 2024. The Project is responsible for ensuring that monthly deposits are made as required in the HUD regulatory agreement. Questioned Costs – N/A Context – The Project did not make its monthly required $2,750 deposit to the replacement reserve account in February 2024. Effect – The Project’s replacement reserve account is underfunded by $2,750 at March 31, 2024 based on the required deposits in the regulatory agreement. Cause – Internal reconciliation of the replacement reserve account was not occurring to ensure monthly deposits were made. Identification as a Repeat Finding, if Applicable – N/A Recommendation – The Project should review and compare the monthly statements to the regulatory agreement to ensure its required reserve deposits are being made each month. Views of Responsible Officials and Planned Corrective Action – Management agrees with the finding. Upon recognizing the missed deposit, a transfer of $2,750 was made to the replacement reserve on June 26, 2024. The task of replacement reserve monthly funding is now on a checklist and reviewed by multiple team members to ensure payments are made.