Finding Text
Federal Agency: U.S. Department of Housing and Urban Development
Federal Program Name: Supportive Housing for Persons with Disabilities
Assistance Listing Number: 14.181
Award Period: July 1, 2023 to June 30, 2024
Type of Finding:
• Significant Deficiency in Internal Control over Compliance
Criteria or specific requirement: Per HUD requirements, a mandated amount is required to be deposited into the R4R account each month. The entity did not increase their monthly deposit accordingly.
Condition: During our testing, we noted that Brook View Gardens, Inc. failed to make the correct monthly deposits into the Replacement for Reserve account resulting in underfunding of $7,000.
Questioned costs: None
Context: During our testing we noted that the most recent increase to the required monthly deposit had never been implemented.
Cause: The deposit increase was not adjusted due to an oversight.
Effect: Replacement Reserve is underfunded and not in compliance with HUD.
Section III – Federal Award Findings, Questioned Costs, and Recommendations (Continued)
2024 – 002 (Continued)
Repeat Finding: No
Recommendation: CLA recommends performing training regarding HUD requirements surrounding Replacement Reserve Provisions and introduce policies and procedures to prevent oversight of deposit changes. We also recommend the amount of $7,000 be deposited immediately into the Replacement for Reserve Account.
Views of responsible officials: There is no disagreement with the audit finding.