Finding 503166 (2024-003)

FINDING No. 2024-003: Section 207/223(f) Mortgage Insurance for the Refinancing of Existing Multifamily Housing Projects, ALN 14.155 Finding Resolution Status: Unresolved. Information on Universe Population Size: Replacement reserve account. Sample Size Information: Replacement reserve deposits. Identification of Repeat Finding and Finding Reference Number: No. Criteria: As required by HUD regulation, timely monthly deposits must be made to the Replacement Reserve account. Statement of Condition: The Project underfunded the account by $338. Cause: The Project did not implement the increase to the required monthly deposit in a timely manner. Effect or Potential Effect: Deficiently funded reserve for replacement account. Auditor Non-Compliance Code: N – Reserve for Replacements Deposits. Reporting Views of Responsible Officials: The Project agrees with the finding and the auditor’s recommendations will be adopted. Recommendation: The Project should implement procedures to ensure that the correct amount is deposited into the replacement reserve account each month and make a retro deposit for the underfunded amount. Response Indicator: Agree. Completion Date: 03/31/2025. Response: Management has provided additional training on HUD regulations, inclusive of correctly depositing funds into replacement reserves.