Finding 12239 (2022-001)

Finding number: 2022-001 Assistance Listing number: 14.181 Assistance Listing title: Supportive Housing for Persons with Disabilities (Section 811) Federal award identification number and year: HUD Section 811 Capital Grant and Project Rental Assistance Contract - issued October 2002 Name of federal agency: U.S. Department of Housing and Urban Development Name of pass-through entity: N/A Repeat finding: No Criteria: Owners shall establish and maintain a replacement reserve to aid in funding extraordinary maintenance and repair and replacement of capital items. An amount as required by HUD ($3,960) shall be deposited monthly in the reserve fund. Condition: The Organization did not make all 12 monthly deposits into the reserve fund during the year. Additional monthly deposits were set up in accounts payable, but were not deposited prior to June 30, 2022. Cause: The Organization's accounting staff experienced turnover during 2022. Possible effect: The replacement reserve is not maintained in accordance with HUD requirements. Questioned cost: None Recommendation: The Organization should establish monthly closing procedures to ensure timely monthly deposits to the replacement reserve account. Views of responsible officials: Management agrees and will establish such a monthly closing procedure. The additional monthly deposits were deposited in the reserve fund subsequent to June 30, 2022.