Finding Text
Assistance Listing title and number (Federal award identification number and year): Supportive Housing for the Elderly, Assistance Listing No. 14.157 (Project identification number 044-EE011, 1997)
Auditor non-compliance code: O – Investment of Reserve for Replacements
Finding resolution status: In process
Universe population size: The universe population size is not applicable to the finding.
Sample size information: The sample size information is not applicable to the finding.
Statistically valid sample: Not applicable
Name of federal agency: U.S. Department of Housing and Urban Development
Pass-through entity: N/A
Questioned costs: N/A
Statement of condition #2024-002 (Assistance Listing No. 14.157): The replacement reserve balance was not maintained in an interest bearing account during the year ended December 31, 2024.
Criteria: Under Section 202 of the National Housing Act of 1959, management is required to maintain replacement reserve funds in a interest bearing account.
Effect or potential effect: As a result of this condition, the reserve for replacements account was underfunded during the year ended December 31, 2024 as no interest was earned.
Cause: Management has not properly implemented procedures to comply with HUD program requirements related to holding the reserve balance in an interest bearing account.
Recommendation: Management should move funds to an interest bearing account.
Expected completion date: Year ended December 31, 2025
Management's response: Agree. The new management agent has gained access to the replacement reserve account and will move replacement reserve funds to an interest bearing account.