Finding Text
Assistance Listing (Federal award identification number and year): Supportive Housing for Persons with Disabilities, 14.181, 1995 (Project identification number 085-HD007)
Auditor non-compliance code: N – Reserve for Replacements Deposits
Finding resolution status: In process
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: N/A
Name of Federal agency: U.S. Department of Housing and Urban Development
Pass-through entity: N/A
Questioned costs: $15,598
Statement of condition 2024-002: The Corporation did not make the required monthly deposits to the reserve for replacements account and did not repay the full PRAC loan. The reserve for replacements fund is underfunded by $15,598 as of June 30, 2024.
Criteria: Pursuant to the Regulatory Agreement, the Corporation is required to make monthly deposits into a separate reserve for replacements account and ensure that the account is adequately funded.
Effect: The Corporation is not in compliance with the terms of the regulatory agreement. The reserve for replacements is underfunded by $15,598 as of June 30, 2024.
Cause: Management inadvertently omitted depositing funds in November 2023 in the amount of $598 and did not have adequate cash to repay the full PRAC loan as of June 30, 2024.
Recommendation: Management should deposit $15,598 into the reserve for replacements.
Completion date: June 30, 2025
Management's response: Agree. On September 11, 2024, management transferred $598 to the reserve for replacements. As of the report date, the remaining PRAC loan of $15,000 has not been repaid.