Finding 577178 (2023-001)

Finding 2023-001 Type of Findings: Significant deficiency in internal control over compliance and instance of immaterial noncompliance. Federal Program: HUD Supportive Housing for Persons with Disabilities (Section 811) Assistance Listing #14.181. Compliance Requirement: Replacement Reserve Criteria: Renaissance Court, Inc.'s regulatory agreement with HUD requires monthly deposits of $873 into the replacement reserve fund. Total deposits required annually is $10,476. Condition: The monthly required deposit of $873 and the total annually required deposit of $10,476 were not deposited into replacement reserve fund. Cause: The organization has suffered recuring losses from operations which have negatively impacted cash flows. Effect: The effect is immaterial non-compliance with the terms of the HUD programs listed above. Questioned Costs: None Repeat Finding: No. Context: We reviewed the Replacement Reverse Fund and noticed there was no monthly required deposit made in the Fund during fiscal year 2023. Recommendation: We recommend management design and implement internal controls over compliance to ensure the amount of $873 is deposited monthly into the Replacement Reserve account as required by HUD. Views of Responsible Officials: Management agrees with the finding. See Corrective Action Plan.