Finding Text
Federal agency: U.S. Department of Housing and Urban Development Criteria or specific requirement: Per the regulatory agreement a monthly deposit is to be made into the replacement reserve. Per HUD-9250, starting January 1, 2022 that monthly amount is $1,846 which equates to an annual deposit of $22,152. Condition: The Project only deposited $20,306 into the replacement reserve for the year ended December 31, 2022. Context: Management did not make the December 2022 deposit. Cause: Managements controls did not identify and correct the lack of payment on a timely basis. Effect: The replacement reserve was underfunded $1,846 at December 31, 2022. Repeat Finding: No Recommendation: Recommend that a catchup payment is made as soon or possible to make the replacement reserve whole. Views of responsible officials: There is no disagreement with the audit finding. Management made the required catchup payment on February 27, 2023.