Finding Text
Condition: Sufficient funds were not available to make three months of required deposits in the replacement reserve. Criteria: Monthly deposits of $535 are required to be deposited in the replacement reserve account according to the HUD regulatory agreement. Cause: Cash flow is not properly managed in order to meeting the immediate and future needs of the Organization such as properly escrowing funds in the replacement reserve. Effect: $1,605 in back due deposits are due to the replacement reserve in the coming fiscal year in additional to the required monthly payments. Recommendation: Management personnel should monitor cash flows on a monthly basis in line with budget and monthly required deposits in order to appropriately meet the current and future cash flow needs of the property. Views of Responsible Officials and Planned Corrective Actions: Management acknowledges the lack of cash flow management. The onsite and regional manager plan to work together to perform better monthly review of expenses compared to budget and work to fund the delinquent and current deposits as soon as cash is available.