Finding 575949 (2024-001)

FINDING No. 2024-001: Section 207/223(f) Mortgage Insurance for the Refinancing of Existing Multifamily Housing Projects, ALN 14.155 Finding Resolution Status: Unresolved. Information on Universe Population Size: All replacement reserve deposits for the year ended December 31, 2024. Sample Size Information: Required replacement reserve deposits for the year ended December 31, 2024. Identification of Repeat Finding and Finding Reference Number: No. Criteria: Increases to the monthly deposits must be accompanied by an approved form HUD-9250. Statement of Condition: The Project overfunded the account by $800 as a result of implementing an increase to the replacement reserve account without an authorized form HUD-9250. Cause: The Project did not obtain a funding increase in a timely manner and a lump sum deposit was made at year end without HUD’s authorization. Effect or Potential Effect: Overfunded reserve for replacement. Auditor Non-Compliance Code: N – Reserve for Replacements Deposits. Reporting Views of Responsible Officials: The Project agrees with the finding and the auditor’s recommendations will be adopted. Recommendation: Management should implement the following procedures regarding its replacement reserve account: the correct authorized amount is deposited each month, requests for increases to the replacement reserve are submitted timely, and an executed approval with HUD’s signature is maintained. Response Indicator: Agree. Completion Date: 12/31/2025 Response: Staff training has been provided with additional HUD training to make sure a signed 9250 is in the file before making any increased deposit.