Core Issue: Management withdrew $7,140 from the replacement reserve that was not supported by actual expenses, leading to a duplication of funds.
Impacted Requirements: Withdrawals from the replacement reserve must be based on actual expenses to ensure compliance.
Recommended Follow-Up: Management should adjust future reserve requests to account for the excess withdrawn or reimburse the reserve accordingly.
Finding Text
Federal program - Neighborhood Stabilization: Criteria - Withdrawals from the replacement reserve should be supported by actual expenses; Condition - management requested and received $7,140 of reserve funds that were duplicated; Cause - management oversight; Recommendation - management should reduce future reserve withdrawal requests by the excess or reimburse the replacement reserve for the excess funds withdrawn. Response: Management will reduce future requests by the excess withdrawn.
Corrective Action Plan
The Asset Manager/Financial Analyst, Ellen Quinn (quinn@wdchoc.org) and Senior Accountant responsible for this property, Corey Krajewski (krajewski@wdchoc.org) will ensure that replacement reserve withdrawals will be supported by actual expenses.