Finding Text
Statement of Condition During the year ended June 30, 2022, the project failed to make required monthly deposits to the replacement reserve in the amount of $1,000. Criteria The regulatory agreement requires that the project make monthly deposits to its replacement reserve in the amount of $1,000. Cause Insufficient cash flow caused the replacement reserve to be underfunded. Questioned Costs $1,000 Effect Failure to make monthly payments resulted in underfunding the replacement reserve and a violation of the regulatory agreement. Auditor Noncompliance Code N- Reserve for replacements deposits Recommendations Management should ensure all monthly required deposits to the replacement reserve are made in a timely manner. Views of Responsible Officials Management agrees with the finding. As disclosed in Note 12, the Trustees are working on replacing the current Board Members of the Corporation.