Finding Text
2024-002 Required Deposit Into a Replacement Reserve Account Not Made Finding Related to: Compliance – CDFA No. 14.181 Criteria: The rules and regulations promulgated by the U.S. Department of Housing and Urban Development (HUD) require that the Organization make quarterly deposits to the replacement reserve in an amount determined by HUD. Condition: South Metro Homes, Inc. was required to deposit $3,012 into the replacement reserve during the year ended June 30, 2024. The Organization has not deposited the required reserve amount as of June 30, 2024. Cause: The Organization did not make the required replacement reserve account deposits prior to June 30, 2024. Effect: South Metro Homes, Inc. should have deposited $3,012 for the year ended June 30, 2024, in the replacement reserve. South Metro Homes, Inc. is not in compliance with HUD’s rules. Recommendation: We recommend that a deposit of $3,012 be made into the replacement reserve account in order for South Metro Homes, Inc. to be in compliance with HUD regulations. Auditee Response: South Metro Homes, Inc. concurs with the recommendation. Upon the discovery that there were amounts owed to the replacement reserve account, the Organization made a $3,012 deposit in the year ended June 30, 2025.