Finding 1210858 (2025-002)

Condition: The Project withdrew $15,784 from the replacement reserve account without allowable costs or proper authorization from the U.S Department of Housing and Urban Development. The amount withdrawn was approved for a related HUD Project and accidently drawn from the wrong Project’s replacement reserve account in error. Criteria: The Project may only distribute funds from the replacement reserve upon approval from HUD and for costs related to repair and replacement needs for the project. Cause: Management oversight. Effect: The Project is in violation of its regulatory agreement. Recommendation: The Project should replenish the replacement reserve account for the $15,784 that was withdrawn in error. View of Responsible Officials: The Project agrees and will replenish the replacement reserve account.