Finding Text
Finding 2025-001: Reportable Finding Considered a Significant Deficiency - Special Tests and Provisions Program name: Section 202 (Supportive Housing for the Elderly) Assistance Listing: 14.157 Federal award Identification number: 121-EE151-NP-WAH Federal award year: 2025 Federal awarding agency: U.S. Department of Housing and Urban Development ("HUD") Criteria: The Housing for the Elderly Section 202 of the Housing Act of 1959 Regulatory Agreement signed by the Project on December 17th, 2003 requires the Project to make twelve (12) monthly deposits to the reserve for replacements of $2,353. Condition: Reserve for replacement is underfunded by $43,149. Cause: A deficiency in controls over compliance with the compliance requirements in the Housing for the Elderly Section 202 of the Housing Act of 1959 Regulatory Agreement. Effect or Potential Effect: The Project is not in compliance with the Housing for the Elderly Section 202 of the Housing Act of 1959 Regulatory Agreement. Known Questioned Costs: No known questioned costs. Context: Reserve for replacement is underfunded by $43,149. Repeat finding: Yes, see finding 2023-001. Recommendation: We recommend that Management review their controls over compliance with the compliance requirements in the Housing for the Elderly Section 202 of the Housing Act of 1959 Regulatory Agreement. Management’s response and corrective action plan (unaudited): Management will work with new Property Management personnel and HUD account executive to improve cash flow at the project and submit required deposits to reserve accounts. -