Finding Text
Criteria: Pursuant to the Regulatory Agreement, monthly deposits to a reserve for replacement account must be made in the amount established by HUD.
Statement of Condition: Replacement reserve deposits in the amount of $17,700 were not deposited into the account as required by the Regulatory Agreement during the year ended June 30, 2023.
Cause: The Company had cash flow shortfalls after paying other operating expenses.
Effect: he Company was not in compliance with the Regulatory Agreement relative to the required replacement reserve deposits.
Context: This is not a sampling of audit procedure.
Amount of Questioned Costs: $0
Auditor’s Non-Compliance Code: N - Owners must make monthly deposits to the replacement reserve account in the amount prescribed by HUD.
Reporting Views of Responsible Officials: he Company could not make the replacement reserve deposits due to cash shortfalls.
Recommendation: Make the required delinquent deposit to the replacement reserve account, and ensure all future deposits are made as required by the Regulatory Agreement.
Auditor’s Summary of Auditee’s Comments on the Findings and Recommendations: Auditee agreed with auditor’s findings.
Response Indicator: Accepted
Completion Date: Open
Response: Management has been waiting to receive prior months delinquent PRAC voucher requests and has been unable to make the monthly replacement reserve deposits.
Contact Person: Rod Ludwig