Finding Text
FINDING No. 2024-002: Section 207/223(f) Mortgage Insurance for the Refinancing of Existing Multifamily Rental Housing Projects, ALN 14.155
Finding Resolution Status: Unresolved.
Information on Universe Population Size: All replacement reserve deposits for the year ended March 31, 2024.
Sample Size Information: All replacement reserve deposits for the year ended March 31, 2024.
Identification of Repeat Finding and Finding Reference Number: No.
Criteria: In accordance with HUD, required monthly deposits must be made to the Project’s reserve for replacement account.
Statement of Condition: The Project underfunded the account by $120.
Cause: The Project did not fund the replacement reserve account by $120.
Effect or Potential Effect: Deficiently funded reserve for replacement account.
Auditor Non-Compliance Code: N – Reserve for Replacements Deposits.
Reporting Views of Responsible Officials: The Project agrees with the finding and the auditor’s recommendations will be adopted. Recommendation: Management should implement procedures to ensure that the correct amount is deposited into the replacement reserve account each month.
Response Indicator: Agree.
Completion Date: 3/31/2025
Response: Escrows were underfunded due primarily to a high increase in insurance rates. The project will fund the shortfall. Escrow balances will be reviewed on a regular basis to ensure adequate funding.