Finding Text
2024-001 Funding of Replacement Reserve
Criteria:
According to 24 CFR 891.605, the Project shall make monthly deposits to the replacement reserve account in an amount determined by HUD. Condition:
Through our testing of the 12 monthly replacement reserve deposits, we noted the Project did not make 9 monthly deposits totaling $41,243 within the year under audit.
Cause:
The Project experienced cash flow shortages that caused delay of the Project's replacement reserve deposits. Effect:
The Project replacement reserve account was underfunded during the year.
Questioned Cost:
None noted
Recommendation:
Establish effective budgeted cash flow projections for the fiscal year in order to plan for and timely resolve any liquidity issues.
Management's Views and Corrective Action Plan
Management's response is included in "Management's View and Corrective Action Plan" at the end of this report after the schedule of findings and questioned cost.