Finding 1169721 (2025-001)

Material Weakness Repeat Finding
Requirement
B
Questioned Costs
-
Year
2025
Accepted
2026-01-20

AI Summary

  • Core Issue: The Project's replacement reserve account was underfunded by $738 due to missed deposits and improper withdrawals.
  • Impacted Requirements: Six monthly deposits were underpaid, and a full withdrawal was made for an invoice already partially covered by a tenant.
  • Recommended Follow-Up: Ensure a deposit of $738 is made to the replacement reserve account to rectify the underfunding.

Finding Text

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT FINDING 2025-001: SECTION 811, ASSISTANCE LISTING NUMBER 14.181 Condition: The Project's replacement reserve cash balance was underfunded at September 30, 2025. Criteria: The Project underpaid six required monthly deposits into the replacement reserve account and withdrew the full amount for an invoice that had already been partially paid by a tenant. Effect: The replacement reserve cash balance was $738 less than it should be at September 30, 2025. Context: Activity in the replacement reserve account for the year ended September 30, 2025 was tested. No sample was tested. Questioned costs - $738; Cause: HUD adjusted the Project’s monthly replacement reserve deposit requirement during the year, but the Project failed to update its deposits accordingly, resulting in an underfunded account. Additionally, the Project withdrew the full amount for a HUD approved invoice, even though a portion had already been paid by a tenant. Recommendation: The Project should deposit $738 into the replacement reserve account. Views of Responsible Officials and Planned Corrective Actions: The Project agrees with the finding. Management will deposit $738 into the replacement reserve account. Questioned Costs - Department of Housing and Urban Development - $738; Non-compliance code - N

Corrective Action Plan

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT NHHI/ASI Bloomington, Inc. respectfully submits the following corrective action plan for the year ended September 30, 2025. Name and address of independent public accounting firm: Baker Meinz & Associates, Ltd. 1000 Shelard Parkway, Suite 110 Minneapolis, MN 55426 Audit Period: September 30, 2025; The finding from the September 30, 2025 schedule of findings and questioned costs is discussed below. The finding is numbered consistently with the number assigned in the schedule. Section A of the schedule, Summary of Audit Results, does not include findings and is not addressed. FINDINGS - FINANCIAL STATEMENT AUDIT - NONE; FINDINGS - FEDERAL AWARD PROGRAMS AUDIT - DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT - FINDING 2025-001: SECTION 811, ASSISTANCE LISTING NUMBER 14.181 - Condition: The Project underpaid six required monthly deposits into the replacement reserve account and withdrew the full amount for an invoice that had already been partially paid by a tenant. Recommendation: The Project should deposit $738 into the replacement reserve account. Action Taken: The Project agrees with the finding. Management deposited $738 into the replacement reserve account in November, 2025. If the Department of Housing and Urban Development has questions regarding this plan, please call Michael Thomas at 651-639-9799.

Categories

HUD Housing Programs

Programs in Audit

ALN Program Name Expenditures
14.239 HOME INVESTMENT PARTNERSHIPS PROGRAM $250,000
14.181 SUPPORTIVE HOUSING FOR PERSONS WITH DISABILITIES $183,340