Finding Text
Finding 2023-001 – Special Tests and Provisions – Reserve for Replacement
Federal program information:
Title: Section 811 Capital Advance
CFDA Number: 14.181
Resolution Status: Resolved
Information on Universe Population Size: Population size is the total amount in the Reserve for Replacement account at year-end, June 30, 2023.
Sample Size Information: Reserve for Replacement ending balance at June 30, 2023.
Identification of Repeat Finding and Finding Reference Number: This is a new finding for the property.
Criteria: Total cash of $5,022 was required to be deposited into the Reserve for Replacement account by June 30, 2023.
Statement of Condition: As of June 30, 2023, the Reserve for Replacement only had $4,604 deposited during the year.
Cause: Management did not perform the Reserve for Replacement deposit for one month.
Effect or Potential Effect: The project was not in compliance with the Capital Advance and current HUD regulations, the project’s Reserve for Replacement was under-funded for the current year by $418.
Auditor Non-Compliance Code: N Questioned Cost: $418
Reporting Views of Responsible Officials: Management agrees with the Reserve for Replacement calculations and is aware of the current deposit required to the Reserve for Replacement.
Recommendation: Management should implement internal controls to make any required deposits before the year-end deadline.
Auditor’s Summary of Auditee’s Comments on the Findings and Recommendations:
Completion Date: Management transferred an additional $418 on July 12, 2023.
Response: Funds will be transferred from the operating account to the reserve for replacement account as soon as they are available.