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 the entity must make established monthly deposits into the Reserve for Replacement account.
Condition: During our testing, we noted that ORE failed to increase the required deposit for the Reserve for Replacement account when it became effective September 1, 2023.
Questioned costs: None
Context: During our testing we noted that there had been no increase in monthly deposits made into the reserve for replacement account.
Cause: ORE had a change in personnel in February 2024 in the accounting department and the deposit increase was missed due to oversight during the first portion of the fiscal year.
Effect: The Replacement for Reserve account is not in compliance with HUD Reserve for Replacement Provisions and is underfunded by $430.
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 and deposit the underfunded amount immediately.
Views of responsible officials: There is no disagreement with the audit finding.