Finding 46527 (2022-001)

- Repeat Finding
Requirement
P
Questioned Costs
-
Year
2022
Accepted
2023-04-18
Audit: 41194
Organization: 607 Concord Avenue Hdfc (NY)

AI Summary

  • Core Issue: Monthly deposits to the replacement reserve were missed for two months and delayed for another two, violating compliance requirements.
  • Impacted Requirements: The project failed to meet HUD's regulations regarding timely deposits into the replacement reserve fund.
  • Recommended Follow-Up: Ensure monthly deposits are made on time and monitor cash flow to prevent future delays.

Finding Text

Finding No. 2022-001: HUD Supportive Housing for Persons with Disabilities Section 811 program, Assistance Listing Number 14.181 Criteria: The owner shall establish and maintain a replacement reserve to aid in funding extraordinary maintenance and repairs and replacement of capital items. The replacement reserve funds must be deposited in an interest bearing account. All earnings including interest on the reserve must be added to the reserve. All disbursements from the reserve must be as approved or directed by HUD or the State Agency for 24 CFR part 883 projects, as applicable. An amount as required by HUD or the State Agency for 24 CFR part 883 projects, as applicable, shall be deposited monthly in the reserve fund in accordance with the Regulatory Agreement or HAP contract 24 CFR sections 880-601, 880-602, 881-601 and 883-701. Condition: The required monthly deposits to the replacement reserve were not made on a timely basis for two months and the amount was not deposited for another two months. Context: A review of deposits to the replacement reserve was performed. Cause: The Organization had insufficient cash flows. Effect: The Project is not in compliance with the Regulatory Agreement. Recommendation: The Project should make the required deposit into the replacement reserve account each month. Response: Management concurs with the finding and has implemented procedures to resolve the issue.

Corrective Action Plan

Finding Number 2022-001: The required monthly deposits to the replacement reserve were not made on a timely basis for two months and the amount was not deposited for another two months. 607 Concord Avenue HDFC's Response: Management concurs with the finding. Monthly deposit is being made to the replacement reserve account. Name of Responsible Person: Steve Kadin Name of contact: Steve Kadin, Executive Vice President of Finance Anticipated Date of Completion: 5/1/2023

Categories

HUD Housing Programs

Other Findings in this Audit

Programs in Audit

ALN Program Name Expenditures
14.181 Supportive Housing for Persons with Disabilities $877,561