Finding Text
Federal Agency: U.S. Department of Housing and Urban Development (HUD) Federal Program Name: Supportive Housing for Persons with Disabilities (Section 811) Assistance Listing Number: 14.181 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: Deposits required by HUD were not made in full during fiscal year 2025 to the reserve fund. Condition: During the 2025 audit, we noted that the Project had not deposited the full amount required by HUD to be deposited monthly in the reserve fund. Questioned Costs: $3,137 in reserve fund deposits not made. Context: Through audit compliance testing procedures, three months of bank reconciliations were tested and it was identified that the required monthly deposit was not made during one of the months. Through further inquiry and review it was identified that a portion of the deposits of fiscal year 2025 were not made. Cause: Due to cash constraints caused by rental income delays the Project was unable to make the deposits. Effect: The Project did not make sufficient deposits. Repeat Finding: None. Recommendation: We recommend the Project make all fiscal year 2025 deposits as soon as funds allow. Views of Responsible Officials: There is no disagreement with the audit finding. During fiscal 2026, management deposited the remaining funds.