Finding 1226337 (2025-001)

FINDING No. 2025-001: Section 236 Interest Reduction Payments, ALN 14.103 Finding Resolution Status: Unresolved. Information on Universe Population Size: All replacement reserve deposits for the year ended December 31, 2025. Sample Size Information: All replacement reserve deposits for the year ended December 31, 2025. Identification of Repeat Finding and Finding Reference Number: No. Criteria: In accordance with HUD, the required monthly deposit must be made to the Project's reserve for replacement account. Statement of Condition: The Project underfunded the account by $604. Cause: The Project did not implement a funding increase in a timely manner. Effect or Potential Effect: Deficiently funded reserve for replacements. 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 the correct amount is deposited into the replacement reserve account each month. Response Indicator: Agree. Completion Date: 12/31/2026 Response: We are researching the underfunding and will ensure the RR account is fully funded on a monthly basis. New procedures have been implemented to review the deposits each month to ensure amounts are proper.