Finding 395728 (2023-001)

S3800-011 - Title and Federal Assistance Listing: 14.157 - Supportive Housing for the Elderly; S3800-015 - Type of Finding: Federal Award Finding; S3800-016 - Finding Resolution Status: In process; S3800-020 - Criteria: Pursuant to the requirements of the regulatory agreement the Organization is required to comply with all HUD regulations and other requirements. The Regulatory Agreement establishes the requirement to fund a replacement reserve in an amount determined by HUD; S3800-030 Statement of Condition: During the year ended December 31 2023 the August through December reserve deposits totalling $22628 were not made as required by the regulatory agreement; S3800-032 - Cause: Management did not fund the replacement reserve account during August through December 2023; S3800-033 - Effect or Potential Effect: The Organization is not in compliance with the terms of the regulatory agreement; S3800-035 - Auditor Non-Compliance Code: N. Reserve for replacement deposits; S3800-040 - Questioned Costs: $22628; S3800-045 - Reporting Views of Responsible Officials: The organization did not have sufficient csh flows to make the required deposits. The management agent has reflected the delinquent reserve payments as payable at December 31 2023; S3800-050 - Context: Management did not make the monthly deposits in August through December 2023; S3800-080 - Recommendation: The Delinquent deposits should be funded and all future deposits should be made timely; S3800-090 - Auditor's Summary of the Auditee's Comments on the Findings and Recommendations: Auditor agrees with auditee's comments on the finding and recommendations; S3800-130 - Response Indicator: Agree; S3800-140 - Completion Date: 12/31/2024; S3800-150 - Response: Management if preparing documentation to submit for a Budget Based Rent Increase to alleviate cash flow issues and fund the Reserve.