Finding Text
(2024-001) Reserve for Replacements
Condition - The reserve for replacements account is underfunded by $6,000 for the year ended December 31, 2024.
Criteria - As part of Special Tests and Provisions related to Assistance Listing Number 14.157-Supportive Housing for the Elderly, the Company is required to deposit $3,000 in a reserve for replacements account on a monthly basis.
Effect - The Company was not in compliance with the above HUD regulations.
Cause - The reserve for replacements account was not adequately funded during the year ended December 31, 2022 and the underfunded amount of $6,000 has yet to be deposited.
Statistical Sampling - The sample was not intended to be, and was not, a statistically valid sample.
Repeat Finding - This is a repeat of finding 2023-001 from the prior year.
Recommendation - We recommend that the delinquent deposit totaling $6,000 for the year ended December 31, 2024 be deposited into the reserve for replacements account as soon as possible.
Management’s Reply -Finding 2024-001
(a) Comments on the finding and recommendation: Management agrees with the finding. Management also agrees with the recommendation, please see below for action taken.
(b) Action taken: Management will take action to deposit the underfunded amount of $6,000 into the reserve for replacements account in February 2025.