FAC Explorer

Finding 42370 (2022-002)

Significant Deficiency
Requirement
N
Questioned Costs
$1
Year
2022
Accepted
2023-02-12
Audit: 38247
Organization: Jerusalem Judson Meadows, Inc. (OH)
Auditor: Locey Mitchell & Associates LTD

AI Summary

  • Core Issue: There are insufficient funds for three months of required deposits in the replacement reserve, totaling $2,403 in back payments due.
  • Impacted Requirements: Monthly deposits of $801.31 are mandated by the HUD regulatory agreement, which are not being met due to poor cash flow management.
  • Recommended Follow-Up: Management should monitor cash flows monthly and address vendor overpayments to ensure future compliance and funding for the reserve.

Finding Text

Condition: Sufficient funds were not available to make three months of required deposits in the replacement reserve. Criteria: Monthly deposits of $801.31 are required to be deposited in the replacement reserve account according to the HUD regulatory agreement. Cause: Cash flow is not properly managed in order to meeting the immediate and future needs of the organization such as properly escrowing funds in the replacement reserve. Effect: $2,403 in back due deposits are due to the replacement reserve in the coming fiscal year in additional to the required monthly payments. Recommendation: Management personnel should monitor cash flows on a monthly basis in line with budget and correct the large amount of vendor overpayments that continue to occur (see finding 2020-001) in order to appropriately meet the current and future needs of the property. Views of Responsible Officials and Planned Corrective Actions: Management acknowledges the lack of cash flow management. The onsite and regional manager plan to work together to perform better monthly review of expenses compared to budget and to work with vendors to obtain refunds for overpaid invoices. Personnel will also come up with a plan for funding the current and back due deposits.

Corrective Action Plan

Recommendation: Management personnel should monitor cash flows on a monthly basis in line with budget and correct the large amount of vendor overpayments that continue to occur (see finding 2020-001) in order to appropriately meet the current and future needs of the property and pay the delinquent deposits. Action Taken: Management is reviewing the current year budget, claiming refunds from vendors, reviewing liabilities, and other cash needs of the Organization to determine the appropriate time to pay in the delinquent deposits to the replacement reserve.

Categories

Questioned Costs HUD Housing Programs

Other Findings in this Audit

  • 42369 2022-001
    Significant Deficiency
  • 42371 2022-003
    Significant Deficiency Repeat
  • 42372 2022-004
    Significant Deficiency Repeat
  • 618811 2022-001
    Significant Deficiency
  • 618812 2022-002
    Significant Deficiency
  • 618813 2022-003
    Significant Deficiency Repeat
  • 618814 2022-004
    Significant Deficiency Repeat

Programs in Audit

ALN Program Name Expenditures
14.157 Supportive Housing for the Elderly $2.44M
14.195 Section 8 Housing Assistance Payments Program $135,038
14.218 Community Development Block Grants/entitlement Grants $87,797