Finding Text
Condition - The reserve for replacements account is underfunded by $115,273 for the year ended June 30, 2024.
Criteria - As part of Special Tests and Provisions related to Assistance Listing Number 14.157-Supportive Housing for the Elderly, the Company is required to deposit $12,916 in a reserve for replacements account on a monthly basis.
Effect - The Company was not in compliance with the above HUD regulations.
Cause - The reserve for replacements account was not adequately funded during the year.
Statistical Sampling - The sample was not intended to be, and was not, a statistically valid sample.
Repeat Finding - This is a repeat of finding 2023-002 from the prior year.
Recommendation - We recommend that the delinquent deposit totaling $115,273 for the year ended June 30, 2024 be deposited into the reserve for replacements account as soon as possible.
Management’s Reply -(a) Comments on the finding and recommendation: Management agrees with the finding. Management also agrees with the recommendation, please see below for action taken.(b) Action taken: The Company currently does not have enough operating funds to deposit the underfunded amount of $115,273 into the reserve for replacements account. Management will deposit funds as they become available.