Finding 45708 (2022-001)

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Requirement
N
Questioned Costs
-
Year
2022
Accepted
2023-05-29
Audit: 40630
Organization: Greenfield Commons, INC (CT)

AI Summary

  • Core Issue: The Project failed to deposit the required $2,167 into the replacement reserve.
  • Impacted Requirements: This noncompliance violates the Project Rental Assistance Contract (PRAC) guidelines.
  • Recommended Follow-Up: Immediate deposits are needed, and management should prioritize these payments in the future.

Finding Text

U.S DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT 2022-001 ? Replacement Reserves Special Tests and Provisions Supportive Housing for the Elderly (Section 202) Assistance Listing #14.157 Reportable Noncompliance Statement of Condition The Project did not make replacement reserve deposits in the required amount, of which, $2,167 was not funded. Criteria The Project Rental Assistance Contract (PRAC) requires the Project to make monthly deposits of $2,167 to its replacement reserve. Cause Management did not prioritize the replacement reserve deposit ahead of monthly payables. Effect or Potential Effect The Project is not in compliance with the PRAC, and the lack of a sufficient replacement reserve puts the Project at risk. Recommendation The Project should make the required replacement reserve deposits immediately to bring the account into compliance and management should establish a procedure to ensure that reserve deposits are given priority payment treatment going forwards. Management?s Response Management agrees with the finding, see Corrective Action Plan for plan of action.

Corrective Action Plan

This letter serves as the Greenfield Commons, INC written corrective action plan to address the fiscal year 2022 Independent Auditor's Report (IPA) letter prepared by Maletta & Company. Listed below is the :finding and Greenfield Commons, INC's corrective action plan which as of the date of this letter has been implemented. 2022-001 - Replacement Reserves Special Tests and Provisions Supportive Housing for the Elderly (Section 202) Assistance Listing #14.157 Reportable Noncompliance Statement of Condition The Project did not make replacement reserve deposits in the required amount, of which, $2,167 was not funded. Criteria The Project Rental Assistance Contract (PRAC) requrres the Project to make monthly deposits of $2,167 to its replacement reserve. Cause Management did not prioritize the replacement reserve deposit ahead of monthly payables. Effect or Potential Effect The Project is not in compliance with the PRAC, and the lack of a sufficient replacement reserve puts the Project at risk. Recommendation The Project should make the required replacement reserve deposits immediately to bring the account into compliance and management should establish a procedure to ensure that reserve deposits are given priority payment treatment going forwards. Management's Response Management agrees with the finding, see Corrective Action Plan for plan of action. Corrective Action Plan The replacement deposit noted in the finding has been made and an automatic transfer has been set up from the property's operating account to the replacement reserve account once a month to eliminate this error occurring in the future.

Categories

Special Tests & Provisions

Other Findings in this Audit

Programs in Audit

ALN Program Name Expenditures
14.157 Supportive Housing for the Elderly $1.39M