Finding 1215595 (2025-002)

Finding No. 2025-002 Department of Housing and Urban Development Federal Assistance Listing Number 14.157 Supportive Housing for the Elderly (Section 202) Criteria The regulatory agreement requires that the project make monthly deposits to its replacement reserve. Condition During the year ended December 31, 2025, the project did not make the required monthly deposits to the replacement reserve in the amount of $2,521. Cause Management failed to implement adequate internal controls to ensure that replacement reserve deposits were made in full and on a timely basis. Effect or Potential Effect Failure to make monthly payments resulted in an underfunding of the replacement reserve and a violation of the regulatory agreement. Questioned Costs $0 Context One of the twelve required replacement reserve deposits was not made during the year. Identification as a Repeat Finding This is not a repeat finding. Recommendation Management should immediately deposit delinquent monthly deposit to ensure that the replacement reserve is funded in accordance with the terms of the regulatory agreement. Management should also review and update internal controls to ensure that all twelve monthly replacement reserve deposits are timely made during the year in accordance with the regulatory agreement. Auditor Noncompliance Code: N - Reserve for replacement deposits Finding Resolution Status: Completed Views of Responsible Officials and Planned Corrective Actions Management agrees with the finding and has made the delinquent replacement reserve deposit.