Finding Text
Information on the Universe Population Size Replacement reserve activity for the year ended December 31, 2024. Sample Size Information N/A Criteria The regulator agreement requires monthly payments to find the replacement reserve. Statement of Condition The Replacement Reserve account was underfunded by twelve monthly payments of $1,268, totaling $15,216. Cause The cause of the insufficient required deposits was due to a limited amount of funds caused by delinquent tenant rental subsidy payments by HUD under the PRAC. Effect or Potential Effect The Replacement Reserve account was underfunded by $15,216, which is a violation of the regulatory agreement. Auditor Non-Compliance Code N- Reserve for Replacements Deposits Questioned Costs There were no known questioned costs. Perspective The finding represents the property’s lack of funds to cover the required deposits. Repeat finding Yes, prior year finding 2023-001 Recommendations Auditor recommends that the Entity fund the reserve immediately and fund the account for delinquent replacement reserve deposits as soon as the property has sufficient funds. Views of Responsible officials For the year ended December 31, 2025, management submitted a suspension of replacement reserve deposits to the replacement reserve waiver and will communicate with their HUD representative on options to ensure that the property is properly funded.