Finding 1147348 (2025-001)

Supportive Housing for Persons with Disabilities CFDA No. 14.181 U.S. Department of Housing and Urban Development (“HUD”) Criteria or Specific Requirement – Special Tests and Provisions: Replacement Reserve (24 CFR section 891.405(d)) Condition – The Project’s had disbursements from the replacement reserve account that was not approved by HUD for the year ended March 31, 2025. Cause – The Project moved funds from the replacement reserve related to interest of $25 that was not an approved disbursement by HUD. Questioned cost – None Context – The Project’s had one disbursement from the replacement reserve account during the year ended March 31, 2025, that was not approved by HUD. Effect or potential effect – The Project did not obtain approval for all disbursements from the replacement reserve account for the year ended March 31, 2025. Repeat finding – Not a repeat finding. Recommendation – The Project should only withdrawal funds from the replacement reserve account that are approved by HUD. Views of Responsible Officials and Planned Corrective Action – A policy will be put in place that only funds that approved by HUD will be withdrawn from the replacement reserve account.