FAC Explorer

Finding 60064 (2022-001)

Material Weakness Repeat Finding
Requirement
N
Questioned Costs
-
Year
2022
Accepted
2022-10-20
Audit: 55107
Organization: Rose Arc Housing, Inc. (RI)
Auditor: Otrando Porcaro & Associates LTD

AI Summary

  • Core Issue: The project missed two out of twelve required monthly deposits to the replacement reserve account.
  • Impacted Requirements: This is a violation of HUD's replacement reserve procedures.
  • Recommended Follow-Up: Management should ensure all monthly deposits to the replacement reserve are made as required.

Finding Text

Criteria: Replacement reserve deposits should be made monthly in an amount determined by HUD. Condition: During the year ended June 30, 2022, ten of twelve deposits were made to the replacement reserve account. Cause: The project failed to make the required deposits to the replacement reserve. Effect or Potential Effect: The project is in violation of HUD replacement reserve procedures. Questioned Costs: None. Perspective: Deposits were not made for two of the twelve months in the audit period. Repeat Finding: Yes. Recommendation: We recommend that management make the required monthly deposits to the replacement reserve account. views of responsible officials: Management concurs with the finding and recommendation.

Corrective Action Plan

Comments on Finding and Recommendation: The Corporation acknowledges that the deposits were not made and agrees with the recommendation. The property manager was in communication with the local HUD office regarding this issue. The Corporation had over $4,000/unit in reserves at the time, and there were some unbudgeted expenses which required the use of operating funds that would normally have been used for the reserve deposits. Therefore, the reserve deposits were not transferred during this period. Actions Taken or Planned: The Corporation made the required reserve deposits for the year ended June 30, 2023.

Categories

HUD Housing Programs

Other Findings in this Audit

  • 636506 2022-001
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
14.181 Supportive Housing for Persons with Disabilities $775,700