Finding Text
S3800-010 Finding Reference Number – 2025-002 S3800-011 Title and CFDA Number of Federal Program – Section 202 Supportive Housing for the Elderly, Capital Advance and Project Rental Assistance Contract, ALN 14.157 S3800-015 Type of Finding – Federal Award Finding; Other Matters S3800-016 Finding Resolution Status – Resolved S3800-017 Information on Universe Population Size – N/A S3800-018 Sample Size Information – N/A S3800-019 Identification of Repeat Finding and Finding Reference Number – 2024-002 S3800-020 Criteria – Per the regulatory agreement Section 5(a) for a Project under the ALN 14.157, the Project is required to establish and maintain a reserve fund for replacements in a separate account. In addition, the Corporation is required to deposit an amount equal to $470.72 per month unless a different date or amount is approved in writing by HUD. S3800-030 Statement of Condition – During the year ended September 30, 2025, the Corporation underfunded the reserve for replacements by $5,630 S3800-032 Cause – During the year ended September 30, 2025, there was turnover in the accounts payable position. As a result, the deposits were not made during the year. S3800-033 Effect or Potential Effect – There are less funds available for capital repairs and improvements. S3800-035 Auditor Non-Compliance Code – N (Reserve for Replacement Deposits) S3800-037 FHA/Contract Number – 171-EE015 S3800-038 Questioned Costs – $0 S3800-040 Questioned Costs – $0 S3800-045 Reporting Views of Responsible Officials – Sessions Village 202 is in agreement with the finding. S3800-050 Context – During the year ended September 2025, no monthly recurring deposits were made into the account. S3800-080 Recommendation – We recommend Sessions Village 202 deposit the underfunded amount into the account. Also, we recommend management of Sessions Village 202 review their internal controls over the reserve for replacements deposit process with the necessary individuals involved in the process to ensure the appropriate deposits are made going forward. In addition, we recommend management review their monitoring controls to ensure a secondary review is conducted at least quarterly to ensure the appropriate deposits were made. S3800-090 Auditor’s Summary of Auditee Comments on the Findings and Recommendations – In November 2025, the amount was deposited into the account. The Executive Director/Administrator and Accountant at the management agent reviewed the process and procedures in place with the new accounts payable clerk, and implemented controls to ensure the appropriate deposits are made going forward. S3800-130 Response Indicator – Agree S3800-140 Completion Date – November 13, 2025 S3800-150 Response – In November 2025, the amount was deposited into the account. The Executive Director/Administrator and Accountant at the management agent reviewed the process and procedures in place with the new accounts payable clerk, and implemented controls to ensure the appropriate deposits are made going forward.