Finding 577892 (2023-001)

Significant Deficiency
Requirement
N
Questioned Costs
-
Year
2023
Accepted
2023-11-08
Audit: 2650
Organization: Eastside Home Association (WA)

AI Summary

  • Core Issue: The organization was underfunded by $17,988 in its replacement reserve as of March 31, 2023, violating HUD guidelines.
  • Impacted Requirements: Compliance with HUD guidelines for monthly replacement reserve deposits was not met due to insufficient payments.
  • Recommended Follow-Up: Implement procedures to ensure timely and accurate monthly payments to the replacement reserve escrow.

Finding Text

S3800-010 Finding Reference Number 2023-001 S3800-011 Title and CFDA Number of Federal Program U.S. Department of Housing and Urban Development Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects, 14.155 S3800-015 Type of Finding Federal Award Finding S3800-016 Finding Resolution Status Resolved S3800-017 Information on Universe Population Size N/A S3800-018 Sample Size Information N/A S3800-019 Identification of Repeat Finding and Reference Number NoS3800-020 Criteria The Organization must comply with HUD guidelines regarding monthly replacement reserve deposits. S3800-030 Statement of Condition The Organization’s replacement reserve was underfunded by $17,988 as of March 31, 2023. S3800-032 Cause Mortgagee did not increase payments as required by HUD. Organization paid amount as stated on monthly mortgage statement. S3800-033 Effect or Potential Effect Organization was not in compliance with HUD guidelines for replacement reserve deposit requirements. S3800-035 Auditor Non-Compliance Code N – Reserve for Replacement S3800-040 Questioned Costs $17,988 S3800-045 Reporting Views of Responsible Officials Management agrees with the finding and has deposited the deficiency. S3800-037 FHA/Contract Number 12711240 S3800-038 Questioned Costs $17,988 S3800-080 Recommendation Management should have procedures in place to ensure that required monthly payments are remitted to the replacement reserve escrow. S3800-090 Auditor’s Summary of the Auditee’s Comments on the Findings and Recommendations Management has corrected the deficiency. S3800-130 Response Indicator Agree S3800-140 Completion Date 05/31/2023 S3800-150 Response Management agrees with the finding and has replenished the funds.

Categories

HUD Housing Programs Procurement, Suspension & Debarment Reporting

Other Findings in this Audit

  • 1450 2023-001
    Significant Deficiency
  • 1451 2023-002
    Significant Deficiency
  • 577893 2023-002
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
14.155 Mortgage Insurance for the Purchase Or Refinancing of Existing Multifamily Housing Projects $3.47M
14.195 Section 8 Housing Assistance Payments Program $1.37M