Finding 405782 (2023-001)

Federal agency: U.S. Department of Housing and Urban Development Federal program title: Supportive Housing for the Elderly Section 202 Assistance Listing Number: 14.157 Award Period: Year Ended September 30, 2023 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: Failure to make all required reserve for replacement deposits. Condition: The Organization failed to timely make all of its required deposits to its reserve for replacement account during the year ended September 30, 2023. In accordance with the Organization's regulatory agreement, the Organization is required to make all deposits on a monthly basis. Cause: The Organization failed to make the December 2022 reserve for replacement required deposit in a timely manner (amount was subsequently deposited in January 2023). In addition, the reserve for replacement required deposits for March 2023 to September 2023 were not made prior to September 2023. Effect: All required monthly deposits were not made to the reserve for replacement account in accordance with the Organization's regulatory agreement with HUD. Questioned costs: $ 13,712 Context: Two required reserve for replacement deposits were not made in a timely manner. Recommendation: The Organization should establish procedures to ensure all required reserve for replacement amounts are deposited in a timely fashion. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with the audit finding. The Organization has made a corrective deposit to the reserve for replacement for the month of December 2022. The Organization will make a catch-up deposit to the reserve for replacement account for all of the monthly deposits previously not made.