Finding Text
Statement of Condition:
During the year under audit, the replacement reserves were underfunded by $5,154.
Criteria:
The Cooperative is required by HUD regulations to make monthly deposits into their replacement reserve. These
deposits are essential to ensure that funds are available for major repairs and replacements, maintaining the
property's condition and value.
Effect:
An underfunded replacement reserve can have adverse effects on the Cooperative.
Cause:
The lander was not notified of the increase in the replacement reserve requirement, leading to the shortfall in the
monthly deposits.
Recommendation:
It is recommended that the Cooperative ensures the replacement reserve is appropriately funded each month to
avoid future underfunding.
Response:
As of March 2025, the Cooperative has transferred the necessary funds to adequately cover the replacement
reserve shortfall.