Finding 1144436 (2024-001)

Finding: 2024-001 CFDA Number: 14.157 Program Name: Supportive Housing for the Elderly (Section 202) Federal Agency Department of Housing and Urban Development Federal Award Type: Significant Deficiency and Noncompliance Compliance Requirement: Special Tests Questioned Costs: N/A Criteria The Project is required to fund $826 monthly into the replacement reserve account. Condition The Project did not fund the required $9,912 into the replacement reserve. Cause The Project failed to fund the yearly requirement of $9,912 into the replacement reserve account. Effect of Condition The Project is out of compliance with HUD regulations. Recommendation We recommend that policies and procedures be reviewed and updated to ensure that monthly deposits to the replacement reserve are made in accordance with HUD regulations. We also recommend that the Project deposit the total amount owed to the replacement reserve account of $19,824: $9,912 for the current period’s unfunded deposits and an additional $9,912 for unfunded deposits from prior period, as reported in finding 2023-01. Management's Response Management agrees with the recommendation and will update policies and procedures to ensure all monthly deposits to the replacement reserve are made. Additionally, management will fund $19,824 of additional reserve deposits for 2024 and 2023 to make the account whole.