Finding Text
US Department of Housing and Urban Development HUD Section 811 Capital Advance and Rental Assistance Payments Assistance Listing No. 14.181 Criteria: HUD requires the Project to make monthly deposits to the replacement reserve in accordance with the regulatory agreement. Condition: The Project did not make the required monthly deposits to the replacement reserve during the year under audit. Cause: Management oversight resulted in deposits not being made. The Project did not have adequate procedures in place to monitor compliance with the monthly deposit requirement. Effect: The Project was not in compliance with HUD requirements regarding monthly deposits to the replacement reserve. Perspective Information: At June 30, 2025, cumulative deposits to the replacement reserve were $3,168 less than required. Recommendation: Management should make a catch-up deposit of $3,168 to the replacement reserve and strengthen controls to ensure monthly deposits are made as required. View of Responsible Officials: Management concurs with the finding and agrees with the auditors' recommendation. Management made a deposit of $3,168 on September 29, 2025. No further action is required.