Finding Text
Assistance Listing (Federal award identification number and year): Supportive Housing for the Elderly (Assistance Listing No. 14.157, 2003) Auditor non-compliance code: N - Reserve for Replacements Deposits Finding resolution status: Resolved Universe population size: 12 months of deposits to the reserve for replacement Sample size information: 12 months of deposits to the reserve for replacement Name of Federal agency: U.S. Department of Housing and Urban Development Pass-through entity: N/A Questioned costs: $3,535 Statement of condition #2025-001: During the year ended September 30, 2025, the Corporation did not make the HUD required number of deposits to the reserve for replacements. Criteria: Pursuant to item 10(b) of the Regulatory Agreement (form HUD-92466), the Corporation shall make monthly deposits into a separate reserve for replacements account. Effect: The Corporation is not in compliance with the terms of the Regulatory Agreement. The reserve for replacements account is underfunded by $3,535 at September 30, 2025. Cause: Cash flow shortages at the Community did not allow for additional replacement reserve deposits to be made. Recommendation: Management should transfer $3,535 from the operating account to the reserve for replacements account when there is cash available. Management's response: Management concurs with the finding and recommendation. Management deposited $3,535 into the replacement reserve on November 7, 2025, and will continue to make monthly deposits to the reserve as cash flow allows to ensure compliance.