Finding 393179 (2023-002)

Criteria: Withdrawals from reserve for replacements account should be executed timely. Statement of Condition: Withdrawals approved in October 2022 and March 2023 were not transferred from the reserve for replacements account until February 2024. Cause of Condition: The Corporation’s internal controls to ensure the proper tracking of reserve for replacements requests, approvals and withdrawals were not effective. Effect of Condition: Due to the delay in transfer of funds from the reserve for replacements account there was a shortage of cash available for operating needs. Recommendation: Procedures should be established to properly track requests, approvals and withdrawals of reserve for replacements funds. Views of Responsible Officials: Management agrees with the findings and will implement procedures to ensure that reserve for replacements funds are handled in accordance with HUD guidelines.