Finding 1156324 (2025-001)

Finding 2025-001 – Late Deposits to Replacement Reserve and Paint Reserve Condition The Organization failed to make the required monthly deposits of $3,005 into its replacement reserve account for the months of July 2024 through June 2025. The Organization also failed to make the required monthly deposits of $375 into its paint reserve account for the months of March 2024 through June 2025. The Organization also had prior year deposits that were delinquent and are still outstanding. Criteria The Organization is required by HUD (HUD Handbook 4350.1) to deposit $3,005 per month into a federally insured account for future replacement needs. The Organization is also required by HUD (HUD Handbook 4350.1) to deposit $375 per month into a federally insured account for future painting needs. Cause The Organization has not established a procedure that ensures that the deposits are made on a monthly basis. Effect The required deposits were not made. Recommendation The Organization should develop procedures which will ensure those deposits are made in a timely manner. Also, the Organization should be reviewing the financial statements periodically. Federal Agency Program: All federal programs are affected. Questioned costs: None