Finding Text
Finding 2024-001: Unauthorized Reserves Withdrawal: Condition: A withdrawal was made from a reserve for replacements account without proper authorization from HUD. Criteria: Withdrawals from the reserve for replacements account must be properly authorized by HUD. Effect: Potential noncompliance with HUD agreement provisions. Cause: A portion of the reserve for replacements balance was held in a certificate of deposit. In March 2024, the certificate of deposit matured and the funds were deposited into a money market account. A check for legal fees was written from this account. Recommendation: The Project needs to determine if these funds must be submitted to the new owner. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and recommendation. Questioned costs: $12,913