Finding 1137947 (2024-004)

Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Section 811 Capital Advance Assistance Listing Number: 14.181 Type of Finding: • Material Weakness in Internal Control over Compliance Criteria or specific requirement: Project is required to deposit funds into the repair and replacement escrow monthly, with amount set by U.S. Department of Housing and Urban Development. Condition: The Project made an annual deposit instead of monthly deposits. The Project also didn’t have the expected amount in the replacement reserve account. Questioned costs: $23,110 Context: During our testing, it was noted that the Project was making one annual deposit into the replacement reserve instead of the required monthly deposits. The FY24 deposit was made outside of the fiscal period. Also noted the replacement reserve accounts was $23,110 lower than expected. Cause: Management oversight. Effect: The interest amounts accrued on the replacement reserve account were less than expected. Recommendation: We recommend the Project deposit the proper amount monthly and maintain the proper amount in the account. Views of responsible officials: There is no disagreement with the audit finding.