Finding Text
Department of Housing and Urban Development Finding 2024-002 Section 202 Supportive Housing for the Elderly, AL 14.157 Criteria The regulatory agreement requires that the project make monthly deposits to its replacement reserve. Condition During the year ended September 30, 2024, the project did not make two required monthly deposits to
the replacement reserve in the amount of $5,464. The project is required to make monthly deposits to the reserve in the amount of $2,732 per month. Cause The project inadvertently deposited the funds into another entity's cash account. Effect or Potential Effect Failure to make monthly payments resulted in an underfunding the replacement reserve and a violation of the regulatory agreement. Questioned costs $5,464 Context The project failed to make required monthly deposits to the replacement reserve during the year ended September 30, 2024, resulting in an underfunding of $5,464. This constitutes a violation of the regulatory agreement. Identification as a Repeat Finding Not a repeat finding Recommendation Management should implement procedures to ensure the funds are deposited into the correct account and to ensure that the replacement reserve is funded in accordance with the terms of the regulatory agreement. Auditor Noncompliance Code: N - Reserve for replacements deposits Finding Resolution Status: In Process Reporting Views of Responsible Officials North TX A/C refunded a one-month deposit of $2,732 to the property on September 30, 2024. They will repay the remaining one-month deposit of $2,732, and these funds will be correctly deposited into the replacement reserve account.