Finding 37076 (2022-002)

Assistance listing title and number (Federal award identification number and year): Section 8 Housing Assistance Program, Assistance Listing No. 14.195, IL060061003, 2011 Finding resolution status: In process Universe population size: 12 months of deposits to the reserve for replacements. Sample size information: 12 months of deposits to the reserve for replacements. Noncompliance information: See statement of condition #2022-002 for noncompliance information. Statistically valid sample: Not applicable Name of Federal Agency: U.S. Department of Housing and Urban Development Pass-through entity: N/A Questioned costs: $0 Statement of condition #2022-002 (Assistance Listing No. 14.195): During the year ended December 31, 2022, monthly deposits to the reserve for replacement account have not been made for Liberty Lake. Criteria: Pursuant to section 2.6(c) of the original HAP Contract (form HUD-52522D), Liberty Lake shall make monthly deposits into a separate reserve for replacements account. Effect: Liberty Lake is not in compliance with the terms of the original HAP contract. The reserve for replacements account is underfunded at December 31, 2022. Cause: The Corporation purchased the Property on September 24, 2021 and has not received correspondence from HUD related to required deposits to the reserve for replacements. Recommendation: Management should inquire with HUD to determine the amount of monthly funding required and transfer funds from the operating account to the reserve for replacements account to fully fund the reserve. Reporting views of the responsible officials: Management concurs with the finding and recommendation and will work with HUD to determine the funding required for the reserve for replacements.