Finding Text
Finding: The Project is eleven months delinquent on making its monthly Reserve for Replacement deposits. Criteria: The Project’s regulatory agreement requires a monthly deposit of $641 in its Reserve for Replacement account. Questioned Costs: None Effect: The Reserve for Replacement account is underfunded by $6,609. Cause: The Project had insufficient cash flow during the year due to a high vacancy rate. Other Information: 11 of 12 months. Recommendation: Management should deposit $6,609 into the Reserve for Replacement account as soon as possible or request a waiver from HUD. Reply: Management agrees with the finding.