Finding Text
U.S. Deparbnent of Housing & Urban Development
Finding 2024-001 -Reserve for Replacements, Federal Asset Listing Number 14.181
Finding Resolution Status - Unresolved
Information on Universe Population Size - N/A
Sample Size Information - N/A
Identification of Repeat Finding and Finding Reference Number - N/A
Criteria - HUD requires monthly deposits to be made to the replacement reserve account on
a timely basis.
Statement of Condition - The replacement reserve account is underfunded in the amount of
$23,525 for the year ended June 30, 2024.
Cause - In November 2023, the required Reserve for Replacement deposit was changed to
be $4,705. The present cash flow of the property does not support this increase.
Effect or Potential Effect - The Organization's replacement reserve account is underfunded
$23,525 at year end.
Auditor Non-Compliance Code - N - Reserve for Replacements Deposits
Questioned Costs - Zero
Reporting views of Responsible Officials - Agrees with finding. Management expects an
additional rent increase in November 2024 that will allow the property to catch up on the
required deposits.
Recommendation - Deposit shortage should be funded as soon as possible.
Auditor's Summary of the Auditee's Comments on the findings and Recommendations -
The auditee's comments appear to be accurate and consistent with the auditor finding.
Response indicator - Agree
Completion date - June 30, 2025
Response - Shortage will be funded prior to June 30, 2025.