Finding 399074 (2023-002)

-
Requirement
N
Questioned Costs
-
Year
2023
Accepted
2024-05-30
Audit: 307684
Organization: The Pinemont Apartments, Inc. (TX)

AI Summary

  • Core Issue: A $26 shortfall in the Reserve for Replacement Account due to a delay in implementing a HUD-approved increase in monthly deposits.
  • Impacted Requirements: Compliance with the regulatory agreement mandating timely deposits to the Reserve for Replacement Account.
  • Recommended Follow-Up: Management should issue a $26 check to rectify the shortfall by the completion date of 12/31/2024.

Finding Text

Findings reference number: 2023-002 Title and AL Number of Federal Program: Mortgage Insurance for Purchase or Refinancing of Existing Multifamily Housing Projects (Sec 223(f)), AL 14.155 Type of finding: Compliance Resolution Status: In process Population size: N/A Sample size: N/A Repeat finding: No. Criteria: The regulatory agreement stipulates that a monthly deposit be made to the Reserve for Replacement Account of the amount determined by HUD. Condition: HUD approved an increase to the monthly required deposit to the Reserve for Replacement Account from $2,600 to $2,626 effective August 1, 2023. However, the increased amount was drafted beginning in September 2023. Cause: This was an oversight. Effect: The Reserve for Replacement Account has a shortfall of $26. Noncompliance code: N. Questioned costs: N/A. Reporting views of officials: This was an inadvertent error in timing and the correct amount was drafted one month late. Contract number: 114-11392 Context: The shortfall was noted at the time of performing the audit. Recommendation: Management should make an additional deposit of $26 to cover the shortfall. Auditors' summary of auditee's comments: They are in agreement. Completion date: 12/31/2024 Response: Management will issue a check for $26 to the lender for credit to the Reserve for Replacement Account to cover the shortfall.

Corrective Action Plan

The shortfall of $26 was deposited to the reserve for replacement on May 10, 2024. In the future, we will ensure that the proper monthly deposits are made to the reserve for replacement account.

Categories

HUD Housing Programs Procurement, Suspension & Debarment Reporting

Other Findings in this Audit

Programs in Audit

ALN Program Name Expenditures
14.155 Mortgage Insurance for the Purchase Or Refinancing of Existing Multifamily Housing Projects $2.97M
14.195 Section 8 Housing Assistance Payments Program $13,847