Finding 1208398 (2024-003)

Criteria: The Organization is required to make monthly deposits to a reserve for replacements account which is to be used for replacements to structural elements or mechanical equipment in the facility. Statement of Condition: The Organization did not make all of its monthly deposits during the year. Cause of condition:The Organization did not properly reconcile its deposits during the year and incorrectly thought it had too many deposits. The Organization returned one deposit during the year due to this, resulting in the reserve for replacement receiving one too few deposits. Effect of condition: The reserve for replacement did not receive all the deposits required by the Regulatory agreement. Recommendation: The design of the current controls should be reviewed to ensure proper reconciliation of the reserve for replacement is performed. The Organization should ensure that all required deposits to the reserve for replacement are made during the year. Views of Responsible Officials: Management agrees with the finding and will implement procedures to ensure that all required deposits are made to the reserve for replacement. A deposit has been made to correct this shortage.