Finding 36901 (2022-001)

Significant Deficiency
Requirement
C
Questioned Costs
-
Year
2022
Accepted
2023-03-29

AI Summary

  • Core Issue: Monthly deposits into the replacement reserve were not made on time, leading to non-compliance with federal program requirements.
  • Impacted Requirements: The organization failed to adhere to the federal program 14.181, which mandates timely monthly contributions to the reserve fund.
  • Recommended Follow-Up: Implement training for new staff on compliance requirements and establish a reminder system for timely deposits.

Finding Text

Criteria: The federal program 14.181 requires that the Owner establish and maintain a replacement reserve to aid in funding extraordinary maintenance and repair and replacement of capital items. The replacement reserve funds must be deposited in a federally insured depository in an interest-bearing account. An amount as required by HUD will be deposited monthly in the reserve fund. Condition and Context: Deposits into the reserve account were not made monthly. The total required deposits were made by the end of the fiscal year, where 5 out of the 12 deposits were made late. Cause: There was turnover in staff during the year, and the new staff was not aware of the monthly deposit requirement. Effect: The Organization was not in compliance with the monthly deposit requirement.

Corrective Action Plan

Persons Responsible: Irene Math, CFO Karen Rosenthal, Controller View of Responsible Officials: To address this issue the monthly replacement reserve bank transfers have been set up in the banking system as ongoing automatic recurring transfers. A separate Financial Close and Compliance Check list will be put in place for Maple- Claremont and a step is will be added to the to reconcile cash (review and post recurring bank transfer activity) quarterly. An additional step will be added to assess any future changes to the replacement reserve transfer levels when the Contract renews annually. Estimated completion date: March 2023

Categories

HUD Housing Programs

Other Findings in this Audit

  • 613343 2022-001
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
14.181 Supportive Housing for Persons with Disabilities $801,610