Finding Text
(2023-001) Reserve for Replacements
Condition - The reserve for replacements account was underfunded by $8,400.
Criteria - The regulatory agreement with HUD requires St. Clare Apartments Housing Development Fund Company, Inc. to deposit monthly deposits of $4,200 into the reserve for replacements account.
Effect - The reserve for replacements account is underfunded by $8,400 at December 31, 2023.
Cause - Due to the change in management agents, the monthly deposits to the reserve for replacements account did not occur in November and December 2023.
Statistical Sampling - The sample was not intended to be, and was not, a statistically valid sample.
Questioned Costs - None identified.
Recommendation - We recommend that St. Clare Apartments Housing Development Fund Company, Inc. make a deposit of $8,400 to the reserve for replacements account as soon as possible.
Management’s Response - Management understands HUD’s reserve for replacements required deposit requirements and will deposit the $8,400 by December 31, 2024.