Answer: The Cooperative must make monthly deposits into the replacement reserve as per the Regulatory Agreement with HUD.
Trend: Consistent compliance with this requirement is crucial for maintaining funding and support from HUD.
List: Ensure monthly deposits are made on time and verify the amounts align with HUD's determinations.
Finding Text
In accordance with the Regulatory Agreement between the Cooperative and HUD, the Cooperative is required to make monthly deposits, in an amount determined by HUD, into the replacement reserve.
Corrective Action Plan
The replacement reserve account was underfunded in the amount of $1,120 during the year ended May 31, 2025. Management will deposit the required amount into the replacement reserve and confirm all future required deposit increases are implemented.