Finding Text
2024-002: Failure to place reserve for replacement and residual receipts into interest-bearing accounts – HUD entities
Condition: The reserve for replacement and residual receipts bank accounts are not interest‐bearing accounts.
Criteria and cause: The Project’s bank moved the reserve and residual receipts accounts into non-interest-bearing accounts to reduce bank fees.
Effect: The Project is not in compliance with HUD Handbook 4350.1 Chapter 4 and 24 CFR 880 & 881.
Recommendation: The management agent should monitor accounts to ensure they are continuously maintained in interest-bearing accounts.