Finding Text
Criteria: Under the regulatory agreement with HUD, the Corporation is required to maintain certain cash
accounts in compliance with HUD requirements.
Condition: During testing of the reserve for replacement account, we noted incorrect deposit amounts were
being funded to the account for 7 of 12 months. This error resulted in the reserve for replacement account to be
underfunded by $1,148 as of June 30, 2023.
Cause: Due to oversight by management, the change in required monthly deposits was not properly
implemented.
Effect: The Project was not in compliance with HUD requirements as it relates to the restricted funds.
Questioned Costs: $1,148
Context/Sampling: None
Repeat Finding from Prior Year(s): No
Recommendation: We recommend that the Project comply with the HUD requirements and deposit $1,148 to
the reserve for replacement account. As of August 17, 2023, management funded the reserve for replacement
account with the underfunded amounts.
Views of Responsible Officials: Management agrees with the finding.