Finding Text
Federal Agency: United States Department of Housing and Urban Development Federal Program Title: Section 223(f) Capital Advance Assistance Listing Number(s): 14.155 Award Periods: October 1, 2024, through September 30, 2025 Type of Finding: - Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or Specific Requirement: An amount as required by HUD will be deposited monthly in the reserve fund (Regulatory Agreement, item 5 A). Condition: The Project reduced the required monthly deposit in the replacement reserve account from $994 to $50 without HUD approval. Questioned Costs: $4,720.00 Context: The Project reduced required monthly deposits in the replacement reserve account without HUD approval. Cause: While the Project has internal controls to mitigate the risk of noncompliance, an unapproved change in required monthly deposits was identified. Effect: An unapproved change in required monthly deposit was made for the replacement reserve account. Recommendation: We recommend that processes and procedures be evaluated to strengthen internal control over compliance relating to HUD accounts. Views of Responsible Officials and Planned Corrective Actions: Management will review compliance requirements for HUD programs related to replacement reserve withdrawals to ensure they are followed in the future.