Finding Text
Criteria The regulatory agreement requires that the project make monthly deposits to its replacement reserve. Condition During the year ended June 30 2025, the project did not make the required monthly deposits to the replacement reserve in the amount of $6,414 The project is required to make monthly deposits to the reserve in the amount of $3,207. Cause The project does not generate sufficient cash flow to make the required monthly deposits. Effect or Potential Effect Failure to make monthly payments resulted in an underfunding the replacement reserve and a violation of the regulatory agreement. Questioned Costs $6,414 Identification as a Repeat Finding This is not a repeat finding. Recommendation Management should review the project budget to determine if nonessential costs can be cut to ensure that the replacement reserve is funded in accordance with the terms of the regulatory agreement. Auditor Noncompliance Code N. Reserve for replacements deposits Views of Responsible Officials Management has reviewed the current nonessential costs that have resulted in the community not being able to fund the replacement reserve in accordance with the regulatory agreement. We have suspended services that will be maintained by the site staff. These services includes the common area cleaning and unit turn overs. Finding Resolution Status: Unresolved