Finding Text
2022-001 Finding Type - Immaterial noncompliance with major program requirements Title and CFDA Number of Federal Program - 14.157 - Supportive Housing for the Elderly (Section 202) - Capital Advance Finding Resolution Status - In Process Information on Universe and Population Size - All replacement reserve deposits were audited which totals twelve monthly deposits Sample Size Information - All replacement reserve deposits were audited which totals twelve monthly deposits Identification of Repeat Finding and Finding Reference Number - n/a Criteria - The Corporation should have made 12 monthly deposits of $11,000 into the reserve for replacements account as required by the regulatory agreement. Statement of Condition - The Corporation failed to make two of the required reserve for replacements deposits in the current fiscal year. Cause - The Corporation was aware of a cash shortfall and requested a retroactive suspension of deposits from HUD which was not approved. The Corporation did not make the required deposits per the regulatory agreement due to cash shortfalls. Effect or Potential Effect - The replacement reserve account was underfunded in the current fiscal year by $22,000 Auditor Noncompliance Code - N - Reserve for replacements deposits Reporting Views of Responsible Officials - Management agrees with the underfunded amount at September 30, 2022. Context - The replacement reserve deposit was not able to be made due to cash flow shortages. Recommendation - All required deposits should be made in accordance with the regulatory agreement. Management should continue to seek relief from the requirement with HUD in the form of a suspension in deposit or change of the deposit amount Auditor's Summary of the Auditee's Comments on the Findings and Recommendations - Management should make the required reserve for replacements deposits in the current fiscal year. Response Indicator - Agree Completion Date - September 30, 2023 Response - Management acknowledges noncompliance in the current fiscal year and has taken measures to rectify the cash shortfall. Management will be making payments during the year ended September 30, 2023 in order to correct the funding of the replacement reserve account.