Finding 1214653 (2025-001)

FINDING No. 2025-001: Section 207/223(f) Mortgage Insurance for the Refinancing of Existing Multifamily Rental Housing Projects, ALN 14.155 Finding Resolution Status: Unresolved. Information on Universe Population Size: Replacement reserve account. Sample Size Information: Replacement reserve deposits. Identification of Repeat Finding and Finding Reference Number: No. Criteria: In accordance with HUD, required monthly deposits must be made to the Project’s replacement reserve account. Statement of Condition: The Project underfunded the replacement reserve account by $330 for the current year and did not deposit $332 to clear finding 2023-001. Cause: The Project deposited the incorrect amount required during the year, resulting in a deficiency. Effect or Potential Effect: Deficiently funded reserve for replacement account. Auditor Non-Compliance Code: N – Reserve for Replacements Deposits. Reporting Views of Responsible Officials: The Project agrees with the finding and the auditor’s recommendations will be adopted. Recommendation: Management should implement procedures to ensure that the correct amount is deposited into the replacement reserve account each month and that deficiencies noted in prior audit findings are adequately addressed. Response Indicator: Agree. Completion Date: 9/30/2026 Response: The verification of the correct funding amounts is now confirmed against approved 9250s on a monthly basis, and is a step that has been added on the month-end close checklist.