Finding Text
Condition: Management failed to make two required monthly deposits in the amount of $15,000 into the reserve for replacement bank account.
Criteria: According to the Regulatory Agreement, “mortgagor will establish and maintain a reserve fund
for replacements in a separate account in a bank…Concurrently with the effective commencement of rental assistance payments under the Project Rental Assistance Contract, the Mortgagor will deposit an amount…per month unless a different date or amount is approved in writing by HUD”.
Cause: The cause is undeterminable.
Effect: The Project did not comply fully with the HUD regulatory agreement.
Recommendation: I recommend management adhere to the Regulatory Agreement as it relates to required monthly deposits into the reserve for replacement account.