Finding Text
Finding Reference Number: 2023-1
Title and Federal Assistance Listing Number of Federal Program: Section 202 Capital Advance and Project Assistance Rental #14.157
Type of Finding: Federal Award Finding
Finding Resolution Status: Unresolved
Information on Universe Population Size: Not Applicable
Sample Size Information: Not Applicable
Identification of Repeat Finding and Finding Reference Number: Not Applicable
Criteria: Monthly deposits to the replacement reserve are required in the amount of $3,844.
Statement of Condition: During the year ended December 31, 2023, the required replacement reserve deposits were not made.
Cause: HUD increased the replacement reserve requirement in December 2022, the Project did not make the change until September 2023.
Effect or Potential Effect: Noncompliance with Regulatory Agreement.
Auditor Non-Compliance Code: N - Reserve for replacement deposits
Questioned Costs: $19,078
Reportable Views of Responsible Officials: Management is in agreement with the finding, and will make required deposits to the replacement reserve.
Context: Not Applicable
Recommendation: Management should review procedures surrounding monthly replacement reserve deposits and ensure amounts deposited match the amounts required by HUD.
Auditors’ Summary of the Auditee’s Comments on the Findings and Recommendations: Management will be more diligent about ensuring the accuracy of replacement reserve deposits in the future.
Response Indicator: Agree
Status Indicator: Not Cleared.
Response: Management has updated the deposit amounts as of September 2023 and will make an additional deposit for the underfunding that occured December 2022 through August 2023.