Finding 522225 (2024-001)

Finding No. 2024-001 – Replacement Reserve Funding Federal Assistance Listing Number Name of Federal Program or Cluster 14.181 Supportive Housing for Persons with Disabilities Information on the Universe Population Size Twelve (12) monthly payments. Sample Size Information Twelve (12) monthly payments. Identification of Repeat Finding Reference Number N/A Criteria The regulatory agreement requires monthly payments to fund the replacement reserve. Statement of Condition One monthly payment was not made to the replacement reserve during the year. Cause An unknown error occurred which prevented the automatic transfer for October to be made to the account. Effect or Potential Effect The replacement reserve fund is underfunded by a total of $351. Auditor Non-Compliance Code N- Reserve for Replacements Deposits Questioned Costs There were no known questioned costs.Reporting Views of Responsible Officials The Auditee agrees with this finding and will make the required deposits timely going forward. FHA/Contract Number 052-HD047 Questioned Costs $0 Context The finding represents an instance of management oversight. An unknown error occurred which prevented the automatic transfer for October to be made to the accounts. Recommendations We recommend that management fund the reserve immediately to make it current and create a better system of controls allowing for automatic debits to be made monthly from operating account to fund replacement reserve and ensure no future underfunding. Auditors’ Summary of the Auditee’s Comments on the Findings and Recommendations The Auditee agrees with the finding and has made an additional deposit to the replacement reserve account in order to fund the shortfall prior to the issuance of the financial statements. They have established a system in order to ensure no further occurrences. Response Indicator Agree Completion Date September 23, 2024 Response Management agrees with the finding and has made a deposit to the replacement reserve account to fund the shortfall prior to the issuance of the financial statements and have established a system in order to ensure no future occurrences.