Finding 560070 (2024-002)

Federal Agency: U.S. Department of Housing and Urban Development Federal Program: Section 8 – Lower Income Housing Assistance Program Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects Assistance Listing #: 14.195 14.155 Type of Finding: • Other Matters Condition: The Corporation did not deposit the required amounts into the reserve for replacements for each month during the year ended December 31, 2024. Criteria or specific requirement: HUD regulations and the regulatory agreement required deposits into the reserve for replacements of $3,940 per month from January 2024 through November 2024 and a deposit of $4,209 for December 2024. Questioned Costs: None Context: The Corporation did not deposit the required amount into the reserve for replacements during December 2024. Cause: Management oversight. Effect: The Corporation’s reserve for replacements was underfunded by $269 at December 31, 2024. Repeat Finding: No Recommendation: Management should ensure the Corporation makes the required payment to the reserve for replacements on a monthly basis. Views of responsible officials and planned corrective actions: There is no disagreement with the Finding. Management made an additional deposit to make up for the deficit in February 2025.