Finding Text
Condition - The reserve for replacements account was underfunded by $58,800. Criteria - The regulatory agreement with HUD requires St. Clare Apartments Housing Development Fund Company, Inc. to deposit monthly deposits of $4,200 into the reserve for replacements account. Effect - The Company is not in compliance with regulatory agreement with HUD. Cause - St. Clare Apartments Housing Development Fund Company, Inc. did not have sufficient cash flow to make the required monthly deposits to the reserve for replacements. Statistical Sampling - The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs - None identified. Repeat finding - This is a repeat of finding 2023-001 from the prior year. Recommendation - We recommend that St. Clare Apartments Housing Development Fund Company, Inc. make a deposit of $58,800 to the reserve for replacements account as soon as possible. Management’s Response - Management understands HUD’s reserve for replacements required deposit requirements and will deposit the $58,800 as soon as cash flow allows.