Finding Text
Finding # 2021-001 Federal Grantor: U.S. Department of Housing and Urban Development CFDA# / Program : 14.157- Supportive Housing for the Elderly Type of Finding: Federal Award Finding Finding Resolution Status: In Process Information on Universe Population Size: Project is required to make monthly deposits to the reserve for replacements of $2,198. Sample size: Tests were performed on the twelve required monthly deposits. Criteria: Project is required to make monthly deposits in the amount of $2,198 to the reserve for replacement as required by HUD. Statement of Condition: Reserve for replacement is underfunded by $4,396. Cause: Project only made ten months of deposits due to cash flow issues. Effect or Potential Effect: Project is not in compliance with HUD compliance requirements. Auditor Non-Compliance Code: N - Replacement Reserve Deposits Questioned Costs: $- Reporting Views of Responsible Officials: The project suffers with negative cash flow due to very small amount of monthly contract rents thus unable pay for the necessary operating expenses and unable to make required deposits into Replacement Reserves. We are working on requesting HUD to waive the funding requirements temporarily. Context: N/A Recommendation: We recommend the Project make the required deposit to the reserve for replacement account or request HUD approval to waive deposits until cashflow improves. Auditor's Summary of the Auditee's Comments on the Findings and Recommendations: The project suffers with negative cash flow due to very small amount of monthly contract rents thus unable pay for the necessary operating expenses and unable to make required deposits into Replacement Reserves. We are working on requesting HUD to waive the funding requirements temporarily. Response Indicator: Agree Completion Date: 6/30/2022 Response: We are working on requesting HUD to waive the funding requirements temporarily.