Finding Text
2022-003 Required Deposit Into a Replacement Reserve Account Not Made Finding Related to: Compliance ? CDFA No. 14.181 Criteria: The rules and regulations promulgated by the U.S. Department of Housing and Urban Development (HUD) require that the Organization make quarterly deposits to the replacement reserve in an amount determined by HUD. Condition: South Fulton Homes, Inc. was required to deposit $2,958 into the replacement reserve during the year ended June 30, 2022. The Organization has not deposited the required reserve amount as of June 30, 2022. Cause: The Organization deposited past due arrearages to the replacement reserve account during the year ended June 30, 2022 and did not realize until after year end that there was an additional $2,958 owed. Effect: South Fulton Homes, Inc. should have deposited $2,958 for the year ended June 30, 2022, in the replacement reserve. South Fulton Homes, Inc. is not in compliance with HUD?s rules. Recommendation: We recommend that a deposit of $2,958 be made into the replacement reserve account in order for South Fulton Homes, Inc. to be in compliance with HUD regulations. Auditee Response: South Fulton Homes, Inc. concurs with the recommendation. South Fulton Homes, Inc. management had thought it made all the necessary past arrearages. Upon the discovery that there were amounts owed to the replacement reserve account, the Organization made a $2,958 deposit in October 2022.