Finding Text
Criteria Any withdrawal from the replacement reserve account requires HUD approval. Condition During the year ended June 30, 2025, management withdrew $30,336 from the replacement reserve account without HUD approval. Cause The amount was withdrawn from the replacement reserve account in error since the HUD approval was for a different project. Effect or Potential Effect The withdrawal of $30,336 is an unauthorized withdrawal from the replacement reserve account. Questioned Costs $30,336 Identification as a Repeat Finding This is not a repeat finding. Recommendation Management should immediately deposit $30,336 into the replacement reserve account. Auditor Noncompliance Code: A. Unauthorized withdrawals from replacement reserve account. Views of Responsible Officials Management agrees with the findings and recommendation is working with ownership on reimbursement to property. Management will gain prior approval for replacement reserve withdraw in accordance with HUD going forward. Finding Resolution Status: Unresolved.