Finding Text
Criteria: The Capital Advance Program Regulatory Agreement requires that the replacement reserve account be maintained for funding extraordinary maintenance and repair and replacement of capital items. Monthly deposits in an amount required by HUD must be made with disbursements made only with the approval of HUD. Condition: The Company made an unauthorized withdrawal of $12,817 from the replacement reserve account. Cause: Documentation of a HUD authorization for the withdrawal was not maintained by the Company. Effect: The Company is not in compliance with the Capital Advance Program Regulatory Agreement and the replacement reserve is underfunded by $12,817. $ -- Identification as a Repeat Finding, if applicable: Not applicable. Recommendation Management should transfer $12,817 from the operating cash account to the replacement reserve fund and maintain documentation of HUD authorizations. Views of Responsible Officials and Planned Corrective Action The Company agrees with the finding and the recommendation. See Part V Corrective Action Plan