Finding Text
Finding reference number: 2025-001
Assistance Listing title and number (Federal award identification number and year):
Supportive Housing for the Elderly, Assistance Listing 14.157 (Project identification number 085-EE-090, 2008)
Auditor non-compliance code: A – Unauthorized withdrawal from reserve for replacements
Finding resolution status: Resolved
Universe population size: The universe population size is not applicable to the finding.
Sample size information: The sample size information is not applicable to the finding.
Statistically valid sample: N/A
Name of Federal agency: U.S. Department of Housing and Urban Development
Pass-through entity: N/A
Questioned costs: $14,376
Statement of condition 2025-001: During the year ended March 31, 2025, management submitted a 9250 to withdraw funds from the reserve for replacements fund that included the same invoice as a previously approved 9250. The reserve for replacements account was not reimbursed for the duplicate withdrawal.
Criteria: Pursuant to the Regulatory Agreement, withdrawals from the reserve for replacements account may be made only after receiving written consent from HUD and for the purpose of replacing structural elements and mechanical equipment of the Property. Pursuant to HUD regulations, expenditures covered by withdrawals from the reserve for replacements fund are to be used for the purpose authorized by HUD.
Effect: The Corporation is not in compliance with the Regulatory Agreement. At March 31, 2025, the reserve for replacements is underfunded by $14,376. This amount will be included on Line 13 of the computation of surplus cash, distributions, and residual receipts.
Cause: Management inadvertently requested reimbursement for the same invoice twice from the reserve for replacements.
Recommendation: Management should transfer $14,376 from the operating cash account to the reserve for replacements account.
Completion date: May 29, 2025
Management response: Management concurs with the finding and recommendation. On May 29, 2025, management transferred $14,376 from the operating cash account to the reserve for replacements account.