Finding Text
Finding reference number: #2024-001
Assistance Listing title and number (Federal award identification number and year): Supportive Housing for the Elderly, Assistance Listing No. 14.157 (Project identification number 143-EE060-WAH-NP, 2002)
Auditor non-compliance code: N – Reserve for replacement deposits
Finding resolution status: Completed
Universe population size: The universe population size is not applicable to the finding.
Sample size information: The sample size information is not applicable to the finding.
Statistically valid sample: Not applicable
Name of federal agency: U.S. Department of Housing and Urban Development
Pass-through entity: N/A
Questioned costs: $16,430
Statement of condition #2024-001 (Assistance Listing No. 14.157): Effective December 1, 2023, the required monthly deposit to the reserve for replacements is $8,215; however, the Corporation did not make the monthly deposits when two months of the replacement reserve deposits were returned by the bank. As of June 30, 2024, the reserve for replacements is underfunded by $16,430.
Criteria: Pursuant to the Regulatory Agreement, the Corporation shall establish and maintain a reserve for replacements in a separate account and make monthly deposits in amounts as approved in writing by HUD.
Effect or potential effect: The Corporation is not in compliance with the terms of the Regulatory Agreement. At June 30, 2024, the Property's replacement reserve is underfunded by $16,430.
Cause: Management did not make all of the required monthly deposits when two months of the replacement reserve deposits were returned by the bank.
Recommendation: Management should transfer $16,430 from the operating account to bring the reserve for replacements current.
Completion date: July 29, 2024
Management's response: Agreed. Management made a deposit to the reserve for replacement on July 29, 2024 for $16,430.