Finding Text
Criteria The Entity as mortgagor, in accordance with the regulatory agreement, is required to maintain a reserve for replacements. The required minimum monthly deposit into this account is $41,666. For the year ended December 31, 2023, deposits into the reserve for replacement account were short by $6,000. As of December 31, 2024 delinquent deposits of $6,000 remained outstanding. Condition The Entity did not fully deposit all required funds for the year ended December 31, 2023. Cause In 2022 the Entity made deposits in excess of the required amounts to the reserve for replacement. The total of the excess amount deposited was $6,000, which management believed could be attributed to the following year. Questioned Costs none noted. Context The total deposits to the account were below the required amount. Effect The Entity was not in compliance with the terms of the regulatory agreement. Recommendation We recommend that the Entity contact their HUD asset manager to discuss if the excess deposit from 2022 can be counted towards the deposit requirements for 2024.