Finding 1156326 (2025-001)

Finding 2025-001 – Late Deposits to Replacement Reserve and Paint Reserve Condition The Organization failed to make the required monthly deposits of $3,825 into its replacement reserve account for the months of June 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 November 2024 through June 2025. Criteria The Organization is required by HUD (HUD Handbook 4350.1) to deposit $3,825 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