Finding Text
Finding 2022-001- Replacement Reserve Deposits Federal Agency U. S. Department of Housing and Urban Development Pass through Entity Not applicable Program Name: Section 811 Capital Advance Program CFDA# and Program Expenditures: 14.181 ($1,616,600) Federal Award Year July1, 2021 to June 30, 2022 Questioned Costs 5,700 Condition Found Monthly deposits were not made to the replacement reserve account as required by the Project?s regulatory agreement. Monthly deposits of $475 were required, however there is no evidence that they were made. Criteria: The regulatory agreement requires that $475 is deposited in the replace reserve account each month from July 2021 to June 2022. Cause The required deposits were not transferred from the operating account to the replacement reserve account on a monthly basis. Effect: The Project did not follow the regulatory agreement. The replacement reserve account did not earn as much interest income as it possibly could have if the deposits were made monthly. Repeat Finding In fiscal year 2021, the replacement reserve deposits were not made. Recommendation: The Project should create an automatic monthly transfer of $475 from the operating account to the reserve replacement account. Management?s response Agrees with the recommendation