Finding 498748 (2024-001)

- Repeat Finding
Requirement
N
Questioned Costs
-
Year
2024
Accepted
2024-09-26

AI Summary

  • Core Issue: The project is underfunded by $26,376 in the reserve for replacement, violating HUD compliance requirements.
  • Impacted Requirements: Monthly deposits of $2,198 to the reserve are mandatory, and failure to comply can lead to further financial issues.
  • Recommended Follow-Up: The project should make the required deposits or seek HUD approval for a waiver, while also working on the Budget Based Rent Increase (BBRI) to improve cash flow.

Finding Text

Finding # 2024-001 Federal Grantor: AL# / Program : Type of Finding: Finding Resolution Information on Universe Population Size: Sample size: Criteria: Statement of Condition: Cause: Effect or Potential Effect: Auditor Non-Compliance Code: Questioned Costs: $ - Reporting Views of Responsible Officials: Context: Recommendation: Auditor's Summary of the Auditee's Comments on the Findings and Recommendations: Response Indicator: Completion Date: Response: We recommend the Project make the required deposit to the reserve for replacement account or request HUD approval to waive deposits until cash flow improves. Reserve for replacement is underfunded by $26,376. Project is not in compliance with HUD compliance requirements. N - Replacement Reserve Deposits N/A 6/30/2025 Mission Housing and Property Management are actively working on the Budget Based Rent Increase (BBRI) and project to submit before the due date of February 2025 for next FY. This will increase cash flow and allow the project to make the required monthly reserve deposits, as well as the past due reserve deposit amount. Previously, the project was unable to obtain a waiver of deposits due to not submitting the BBRI. When the BBRI is obtained, we have the option to submit a waiver for replacement deposits if needed. Project did not make payments due to cash flow issues. In Process Project is required to make monthly deposits in the amount of $2,198 to the reserve for replacement as required by HUD. U.S. Department of Housing and Urban Development 14.157- Supportive Housing for the Elderly under Section 202 Federal Award Finding Agrees Project is required to make monthly deposits to the reserve for replacements of $2,198. Tests were performed on the twelve required monthly deposits. Mission Housing and Property Management are actively working on the Budget Based Rent Increase (BBRI) and project to submit before the due date of February 2025 for next FY. This will increase cash flow and allow the project to make the required monthly reserve deposits, as well as the past due reserve deposit amount. Previously, the project was unable to obtain a waiver of deposits due to not submitting the BBRI. When the BBRI is obtained, we have the option to submit a waiver for replacement deposits if needed. Mission Housing and Property Management are actively rent increase to increase cash flow and allow the project to make the required monthly reserve deposits and have the option to submit a waiver for replacement deposits if needed.

Corrective Action Plan

Management is working on requesting HUD to increase rents to increase cash flow and waive the replacement reserve funding requirements.

Categories

HUD Housing Programs Reporting

Other Findings in this Audit

Programs in Audit

ALN Program Name Expenditures
14.218 Community Development Block Grants/entitlement Grants $978,000
14.157 Supportive Housing for the Elderly $175,996