Finding Text
2022-003 - Underfunding the Replacement Reserve Federal Agency: U.S. Department of Housing and Urban Development Federal Program: Section 8 - Lower Income Housing Assistance Program Section 8 - Special Claims Vacancy Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects CFDA #14.195 14.155 Questioned Costs: NoneCondition: The project did not deposit the required amounts into the reserve for replacements for each month during the year ended December 31, 2022. Criteria or Specific Requirement: HUD regulations and the regulatory agreement required deposits into the reserve for replacements of $5,706 per month from January 2022 through November 2022 and a deposit of $5,837 for December 2022.Context: The Project did not deposit the required amounts into the reserve for replacements for each month during the year ended December 31, 2022. Cause: Management oversight. Effect: The Project?s reserve for replacements was underfunded by $131 at December 31, 2022. Repeat Finding: Yes. Recommendation: Management should ensure the Project makes the required payment to the reserve for replacements on a monthly basis.