Finding Text
Assistance Listing (Federal award identification number and year):
Operating Assistance for Troubled Multifamily Housing Projects, Assistance Listing No. 14.164 (Section
201 loan identification number 109-SH-005, year 1991)
Auditor non-compliance code: N – Reserve for Replacements Deposits
Finding resolution status: Resolved
Universe population size: 12 monthly deposits to the reserve for replacements account.
Sample size information: 12 monthly deposits to the reserve for replacements account.
Statistically valid sample: Not applicable.
Name of Federal agency: U.S. Department of Housing and Urban Development
Pass-through entity: Not applicable
Questioned costs: $623
Statement of condition #2024-003: The Corporation did not make the total required reserve for
replacement deposits during the year ended June 30, 2024. Additionally, the required monthly deposits
for the period from August 1, 2022 through June 30, 2023 were not made in the amounts specified
by HUD which resulted in the reserve for replacements account being underfunded by $623 as of June
30, 2024.
Criteria: Pursuant to the Section 202 Regulatory Agreement and communications from HUD, the
Corporation is required to make monthly deposits into a separate reserve for replacements account in
the amounts specified by HUD.
Effect: The Corporation is not in compliance with the Section 202 Regulatory Agreement and
communications from HUD. The reserve for replacements account is underfunded by $623.
Cause: The Corporation was not notified by HUD in a timely manner of the change in required monthly
reserve for replacement deposits.
Recommendation: The management agent should transfer $623 from the operating account in order
to bring the reserve for replacements account current, and confirm with HUD monthly reserve for
replacement deposits requirements at least annually.
Completion date: September 25, 2024
Management response: Management agrees with the recommendation. Management transferred
$623 from the operating account in order to bring the reserve for replacements account current on
September 25, 2024. No further action is required.