Finding Text
Finding Reference Number: 2025-001 Title and Assistance Listing Number of Federal Program: 14.181 Supportive Housing for Persons with Disabilities (Section 811 Capital Advance) and Project Rental Assistance Contract Type of Finding: Federal Award Finding Finding Resolution Status: Resolved Information on Universe and Population Size: N/A Sample Size Information: The finding represents a systemic problem. Identification of Repeat Finding and Finding Reference Number: Not a repeat finding. Criteria: Per program requirement and the project’s Regulatory Agreement, the owner is required to make monthly deposits to the replacement reserve account in amounts prescribed by HUD. Statement of Condition: Six of the twelve monthly required deposits, totaling $3,284, were not made to the replacement reserve account, and no prior written approval was obtained from HUD. Cause: Management indicated that they were suspending payments to cover certain expenses. Effect or Potential Effect and Perspective: The Organization is in non-compliance with specific requirements of a major HUD-assisted program. Auditor Non-Compliance Code: N - Reserve for replacements deposits Questioned Costs: $ - Reporting Views of Responsible Officials: Management and ownership agreed with the finding and has implemented a corrective action plan. Please identify the property(s) and associated questioned costs this finding applies to: Meadowlark Apartments FHA/Contract Number: 126-HD038 Context: As noted above, the issue noted was found in 6 out of 12 monthly required deposits due to prioritizing cash for other operating payments. Recommendation: We recommend to the management for them to implement a monthly review of the replacement reserve balances, with documented confirmation that balances meet required threholds. Auditor's Summary of Auditee's Comments on the Findings and Recommendations: Management and ownership agreed with the auditor and made catch-up deposits totaling $3,284 on April 30, 2026. Response Indicator: Agree Completion Date: 4/30/2026 Response: Ownership agreed with the finding and has implemented a corrective action plan. Contact Person First Name: Matthew Contact Person Middle Initial: Contact Person Last Name: Wrigley