Finding Text
Finding 2024-002
Questioned Costs: $16,000
Information on Universe and Population Size: N/A
Sample Size Information: N/A
Noncompliance Information: The Project did not make sufficient required deposits to the Reserve for
Replacements (RFR) account during the year ended December 31, 2024.
Condition: The RFR account is deficient deposits in the amount of $16,000 for the year ending December
31, 2024.
Criteria: The HUD Regulatory Agreement requires that the Project make monthly deposits to the RFR
account as approved by HUD.
Cause: The Project experienced a shortfall in available operating cash to make the RFR deposits because
HUD delayed subsidy payments for the months September - December 2024 while not communicating to
Management in a timely matter during Management’s repeated attempts to respond to HUD and resolve
the situation that the Project's UEI number needed re-verified.
Effect or Potential Effect: The Project RFR account is underfunded as of December 31, 2024.
Recommendation: Management should make the required deposits as soon as operating cash is sufficient
to do so.
Reporting Views of Responsible Officials: Management made a $11,400 deposit on 1/17/2025. The
Project finally received the outstanding 2024 subsidy payments in February 2025 and Management made
the additional deposit of $4,600 on 3/25/2025. The finding is cleared.