Finding 404818 (2024-001)

2024-001 Replacement Reserve Deposits Federal Program Information: Funding agency: U.S. Department of Housing and Urban Development (HUD) Title: Supportive Housing for the Elderly AL number: 14.157 Award year and number: N/A Questioned Costs: None Condition: Prairie Estates did not make the required monthly deposit to the replacement reserve for several months of it's fiscal year. A large catch-up contribution was made in March 2024 to compensate for the missed contributions. Criteria: Pursuant to Paragraph 5 of the Regulatory Agreement, Prairie Estates shall establish and maintain a reserve fund and make required monthly deposits based on amounts approved by HUD. Effect: Prairie Estates is not in compliance with the terms of the Regulatory Agreement. Cause: Management did not make the required deposits in a timely manner due to the lack of cash available to make the deposits. Auditor's Recommendation: Management should seek to implement operational changes to allow for timely deposits of reserve funds. View of Responsible Officials: Management agrees with the assessment and has prepared a corrective action plan.