Finding Text
Statement of Condition:
HUD requires that the Company receive HUD’s approval on Form HUD-9250 prior to withdrawing money from the Replacement Reserve. During the year the Company withdrew $196,334 from the Replacement Reserve and transferred the cash to the Company’s operating bank account.
Criteria:
The Company did not obtain Form HUD-9250 prior to withdrawing the funds from the Replacement Reserve.
Effect:
The Company has more cash in its operating account and less cash in the Replacement Reserve than it should.
Cause:
The Company erroneously transferred the money from a Replacement Reserve account to the operating account.
Recommendation:
The Company should transfer $196,334 from the operating account back to the Replacement Reserve account.
Non-compliance code:
A – Unauthorized withdrawal form replacement reserve account.