Finding Text
Finding No.: 2024-002: Failure to Make the Required Replacement Reserve Deposits Information on the Federal Program: U.S. Housing of Urban Development (HUD) - 14.157 Supportive Housing for Elderly. Finding Type: Significant Deficiency and Non-Compliance Criteria: The Organization, in accordance with the Regulatory Agreement, is required to maintain a reserve for replacements. The required minimum monthly deposit into this account is $892 for the year ended December 31, 2024. Condition and Context: For the year ended December 31, 2024 , a total of $26,760 ($16,056 pertaining to prior years and $10,704 pertaining to 2024) was to be deposited into the replacement reserve account. However, only $3,568 was deposited. Cause: Due to turnover in the accounting department staff, the required monthly deposits were not made in a timely fashion. Effect or Potential Effect: The Organization did not make the deposits into the replacement reserve account as required by the Regulatory Agreement. Questioned Costs: None Recommendation: The Organization should have procedures in place to ensure all required monthly deposits are made to the reserve for replacements. Management’s Response: Management agrees with the finding above. Both the CEO and Director of Finance have been replaced by a new transitional CEO and Director of Finance and they will review the existing accounting policies and procedures and implement appropriate procedures and controls to incorporate the recommendations above. Planned Implementation Date of Corrective Action: December 2025 Person Responsible for Corrective Action: David Fazio, Director of Finance