Finding 555207 (2024-001)

-
Requirement
N
Questioned Costs
-
Year
2024
Accepted
2025-04-16

AI Summary

  • Core Issue: Monthly deposits to the reserve for replacement were missed for 3 months, violating HUD guidelines.
  • Impacted Requirements: HUD mandates monthly deposits to the reserve fund as per the Regulatory Agreement.
  • Recommended Follow-Up: Review financial management practices to enhance cash flow and ensure timely deposits.

Finding Text

Finding 2024-001 – Reserve for Replacement Required Deposits Information on the Federal Program: Department of Housing and Urban Development, AL 14.157 Supportive Housing for the Elderly Questioned Costs: None How the questioned costs were computed: N/A Condition: The required monthly deposit to the reserve for replacement was made for 9 out of 12 months during the year ended December 31, 2024. Criteria: An amount, as required by HUD, is to be deposited monthly in the reserve fund (Regulatory Agreement, item 5 A). Cause: The requirement to monthly deposit to the reserve for replacement was not met due to cash flow. Effect: The monthly deposits to the reserve for replacement was not made in accordance with HUD guidelines. Repeat Finding: No Recommendation: Financial management of the project should be reviewed to improve cash flow so the required monthly deposits to the reserve for replacement can be made. Views of Responsible Officials and Planned Corrective Actions: Beloit Assisted Living, Inc. agrees with the finding and will review policies and procedures to ensure timely remittance.

Corrective Action Plan

Beloit Assisted Living, Inc. submits the following corrective action plans for the identified finding for the audit period January 1, 2024, through December 31, 2024. Finding 2024-001: Reserve for Replacement Required Deposits Corrective Action Plan: 1. Community Action Inc, of Rock and Walworth Counties (CAI), contracts with Wisconsin Management Company Inc. (WiMCI) to provide property management services to CAI for Beloit Assisted Living Inc. 2. CAI conducts monthly meetings with WiMCI to review tenancy, financial performance and facility management. To address the Finding identified by WIPFLI, CAI will receive a monthly written confirmation from WMCI that the monthly Reserve for Replacement Deposits required by the U. S. Department of Housing and Urban Development (HUD) are made as required. 3. If WMCI anticipates that they are not able to make the deposit, CAI will be notified a minimum of 15 days prior to work with WIMCI to identify other payment options. Person(s) Responsible: Russ Enders, CEO, Wisconsin Management Company Inc. Marc Perry, Executive Director, Community Action Inc. of Rock and Walworth Counties. Timing for Implementation: Monthly meetings are currently scheduled for the 4th Monday of each month at 9:00 AM. The meeting schedule will remain with the addition of the monthly update regarding the deposit to the reserve.

Categories

HUD Housing Programs

Other Findings in this Audit

Programs in Audit

ALN Program Name Expenditures
14.157 Supportive Housing for the Elderly $2.25M
14.181 Supportive Housing for Persons with Disabilities $106,821