Finding Text
Finding reference number: 2025-002 Assistance Listing (Federal award identification number and year): Supportive Housing for the Elderly, Assistance Listing No. 14.157, 122-EE166-WAH-NP and 2002 Auditor non-compliance code: N – Reserve for Replacement Deposits Finding resolution status: Unresolved Universe population size: The universe population size is not applicable to the finding. Sample size information: The sample size information is not applicable to the finding. Statistically valid sample: N/A Name of Federal agency: U.S. Department of Housing and Urban Development Pass-through entity: N/A Questioned costs: $62,856 Statement of condition 2025-002: During the year ended December 31, 2025, management submitted a 9250 to withdraw funds from the reserve for replacements fund that included 16 of the same invoices as a previously approved 9250. The reserve for replacements account was not reimbursed for the duplicate withdrawal. In addition, management submitted and received approval for two proposals for work that was not completed. Criteria: Pursuant to the Regulatory Agreement, reserve for replacements withdrawal may be made only after receiving written consent from HUD. Pursuant to HUD regulations, expenditures covered by withdrawal from the reserve for replacements fund are to be used for the purpose authorized by HUD. Effect: The Corporation is not in compliance with the term of the Regulatory Agreement. The reserve for replacements account is underfunded by $62,856. Cause: Management submitted 16 invoices for reimbursement from the reserve for replacements twice in error and did not complete work for two proposals. Recommendation: Management should transfer $62,856 from the operating account to the reserve for replacements account. Management's response: Management concurs with the finding and the auditor's recommendation. Management will deposit the $62,856 during 2026.