Finding Text
Finding 2026-001: Supportive Elderly Housing Section 202 Condition: The Corporation fell short on the replacement reserve and mortgage escrow monthly payments. Criteria: The Corporation is required to have 12 monthly payments funded into the replacement reserve and mortgage escrow account. For the replacement reserve account, six out of 12 payments were missed for a total of $9,313 and seven out of 12 tax/insurance escrow payments were not made that totaled $46,322, for the year ended June 30, 2026. Payments are an ongoing obligation, unless waived by HUD. Cause: Poor cash flow from the Corporation does not always allow all bills to be paid in a timely manner. Effect: The Corporation is not in compliance with the provisions of the Regulatory agreement. Recommendation: Strengthen internal controls over cash disbursements by prioritizing replacement reserve and escrow deposits as fixed monthly obligations, funded at the start of each month before discretionary payables. Views of Responsible Officials and Planned Corrective Actions: Corrective action will be implemented immediately with