Finding Text
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Name: Section 223(f) Mortgage Insurance for the Purchase or Refinance of Existing Multi-Family Housing Units
Assistance Listing Number: 14.155
Federal Award Identification Number and Year: 092-EH098-WAC-L8 - 2024
Pass-Through Agency: N/A
Pass-Through Number(s): N/A
Award Period: 2024
Type of Finding: Significant Deficiency in Internal Control over Compliance and immaterial noncompliance.
Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards requires compliance with the provisions of regulatory agreement. Chaska Manor dba: Talheim should have internal controls designed to ensure compliance with those provisions.
Condition: During our testing, we noted that Chaska Manor dba: Talheim did not have adequate internal controls designed to ensure replacement reserve deposits were updated based on the provisions of the regulatory agreement.
Questioned costs: $3,205
Context: During our testing, it was noted that Chaska Manor dba: Talheim did not update the October and November 2024 replacement reserve deposits as prescribed in the regulatory agreement.
Cause: Chaska Manor dba: Talheim was unaware the bank did not update the October and November 2024 replacement reserve deposits.
Effect: Noncompliance with the HUD regulatory agreement.
Recommendation: We recommend that management develop procedures to ensure replacement reserve deposits are updated timely to ensure compliance with the HUD regulatory agreement.
Views of responsible officials: There is no disagreement with the audit finding.