Finding Text
Statement of Condition: As a result of our audit procedures, we noted that High Street Homes, Inc. did not
make the monthly required deposits for eight months. (Repeat Finding #2023-002)
Criteria: Management is responsible for reconciling the replacement reserve account on a monthly basis to
ensure the activity is accurately recorded on a monthly basis.
Cause: There was significant turnover of key personnel in the Finance department during the year, causing
new personnel who were inexperienced with the HUD replacement reserve process to have to assume these
duties. Effect: The HUD required monthly deposits were not made.
Recommendation: Replacement reserve account should be reconciled monthly and reviewed to ensure all
required deposit activity is made.
Views of Responsible Officials and Planned Corrective Actions: The projects Replacement Reserve monthly
deposit Is now made every month starting in March 2024 and continuing into the present. Staff are now
compliant on this topic. (All HUD bank reconciliations are fairly current at this time as an additional PRN
employee has been hired to help with project work. This PRN employee works on Saturdays. Again, a
formal internal monthly meeting with a checklist will help with the HUD review process. Access to a CPA
firm for or other provider of training would also help.)