Finding 1072673 (2024-001)

Auditor non-compliance code: N – Reserve for Replacements Universe population size: The universe population size is not applicable to the finding. Sample size information: The sample size information is not applicable to the finding. Noncompliance information: See statement of condition 2024-001. Statistically valid sample: N/A Name of Federal agency: U.S. Department of Housing and Urban Development Pass-through entity: N/A Questioned costs: $2,717 Statement of condition 2024-001 The Corporation used reserve for replacements funds for a nonapproved purpose. Criteria: Pursuant to HUD Management Agent Handbook 4350.1 section 4(2), disbursements from such fund, whether for the purpose of effecting replacement of structural elements and mechanical equipment of the project, for the cure of mortgage defaults, or for any other purpose, may be made only after receiving the consent in writing of the Commissioner. Effect or potential effect: The Corporation is not in compliance with the HUD Management Agent Handbook (4350.1). Cause: Management did not reimburse excess amounts withdrew from the reserve for replacements fund based on a contractor estimate. Recommendation: Management should reimburse the reserve for replacements fund all excess funds withdrew. Completion Date: August 13, 2024 Reporting views of responsible officials: Agree. Management refunded $2,717 to reserve for replacement account on August 13, 2024.