Finding Text
Finding No. HUD 2022-001; Section 202 Capital Advance, CFDA 14.157 Statement of Condition During the year ended December 31, 2022, the project did not make the required monthly deposits to the replacement reserve in the amount of $5,926. The project is required to make monthly deposits to the reserve in the amount of $2,963. Criteria The program documents with HUD require that the project make monthly deposits to its replacement reserve. Cause Management did not make timely deposits to the replacement reserve established by HUD. Effect or Potential Effect Failure to make monthly payments resulted in an underfunding of the replacement reserve and a violation of the HUD agreement. Recommendation Management should review the HUD contract and make the required monthly deposits in a timely manner. Auditor Noncompliance Code: N. Reserve for replacement deposits; Special tests and provisions Finding Resolution Status: Resolved Views of Responsible Officials Management concurs with the finding. Management funded the $5,926 shortfall on March 22, 2023. In addition, management has communicated with the staff the importance of timely replacement reserve deposits and compliance with this requirement to ensure that all required deposits are made as established by HUD.