Finding Text
Finding No. 2024-001
Statement of Condition: The Corporation made an unauthorized withdrawal from the replacement
reserve account in a prior year.
Criteria: The Corporation is required to receive authorization from HUD prior to withdrawing funds from
the reserve account.
Questions Costs: $35,000
Effect: The replacement reserve account is underfunded causing non-compliance with the regulatory
agreement.
Cause: The Corporation withdrew cash from the reserve account to pay for operating expenses due to
delays in PRAC being renewed resulting in the account being underfunded.
Recommendation: The Corporation should reimburse the replacement reserve account when funds are
available.
Management Response: Management agrees with the finding and will reimburse the replacement
reserve account when funds are available.