Finding 1136542 (2024-001)

Finding 2024-001: Replacement Reserve Deposits Department of Housing and urban Development (HUD) - AL #14.181 Supportive Housing for Persons with Disabilities - Capital Advance Questioned Costs: None Condition: Friendship House Apartments, Inc. did not make the required monthly deposit to the replacement reserve for the month of September 2024. The deposit was made in October 2024. Criteria: Pursuant to Paragraph 5 of the Regulatory Agreement, Friendship House Apartments, Inc. shall establish and maintain a reserve fund and make required monthly deposits based on amounts approved by HUD. Cause: Due to changes in staffing at the start of the fiscal year, the error was not identified and corrected timely. Effect: Due to the above noted condition, Friendship House Apartments, Inc. was not in compliance with this particular Regulatory Agreement requirement. Recommendation: Friendship House Apartments, Inc. should seek to implement operational changes to allow for timely deposits of reserve funds. Views of Responsible Officials: Friendship House Apartments, Inc. agrees with the audit finding and has written a correction action plan.