Finding Text
FINDING No. 2024-001: Section 207/223(f) Mortgage Insurance for the Refinancing of Existing Multifamily Housing Projects, ALN 14.155
Finding Resolution Status: Unresolved.
Information on Universe Population Size: All replacement reserve deposits for the year ended June 30, 2024.
Sample Size Information: All replacement reserve deposits for the year ended June 30, 2024.
Identification of Repeat Finding and Finding Reference Number: Yes, 2023-002.
Criteria: As required by HUD regulation, timely monthly deposits must be made to the Replacement Reserve account.
Statement of Condition: The Project underfunded the account by $436 in the current year and did not correct the prior year deficiency of $175.
Cause: The Project did not fund the reserve account with the new amount at the beginning of the year.
Effect or Potential Effect: Deficiently funded reserve for replacements.
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 the replacement reserve is properly funded on a monthly basis.
Response Indicator: Agree.
Completion Date: 06/30/2025
Response: We are researching the underfunding and will ensure the RR account is fully funded on a monthly basis. New procedures have been implemented to review the deposits each month to ensure amounts are proper.