Finding Text
Condition - The reserve for replacements account is underfunded by $9,435 for the year ended September 30, 2023.
Criteria:
1) As part of Special Tests and Provisions related to Assistance Listing Number 14.157 - Supportive Housing for the Elderly, the Company is required to deposit $12,600 in a reserve for replacements account on a monthly basis.
2) As stated in the HUD funds authorized for withdrawal, a loan advance from the reserve for replacements account is to be repaid upon receipt of respective funds.
Effect - The Company was not in compliance with the above HUD regulations.
Cause - The reserve for replacements account was not adequately funded for 1 month’s deposit of $1,050 and $8,385 of funds to be repaid, totaling a delinquent deposit of $9,435 for the year ended September 30, 2023.
Repeat Finding - This is a repeat of finding 2022-001 from the prior year.
Recommendation - We recommend that the delinquent deposit totaling $9,435 for the year ended September 30, 2023 be deposited into the reserve for replacements account as soon as possible.
Management's Reply - (a) Comments on the finding and recommendation: Management agrees with the finding. Management also agrees with the recommendation. Please see below for action taken.
(b) Action taken: Management is in the process of depositing funds, however, it currently does not have enough operating funds to deposit the underfunded amount of $9,435 into the reserve for replacements account. Management will deposit funds as they become available.