Finding Text
2022-001 ? Criteria ? Hamilton Manor, Inc. (the Project) operates an apartment complex under the Section 811 Capital Advance Program of the Department of Housing and Urban Development (HUD). This federal program requires monthly deposits into a Replacement Reserve Account. Funds in this separate bank account may only be spent with HUD?s approval. ? Condition ? Three (3) of the required twelve (12) monthly deposits to the Replacement Reserve were missed. ? Cause ? The Project?s internal controls over compliance with this requirement include assigning the responsibility to make the monthly deposits to appropriate personnel. Staff turnover occurred in this position during the fiscal year, and the responsibility for ensuring compliance with this requirement was not properly communicated to the new staff. ? Effect ? The Project was required to deposit $6,000 ($500 per month) to the Replacement Reserve, but only deposited $4,500. ? Recommendation - The Project should immediately deposit $1,500 into the Replacement Reserve and fully communicate the importance of compliance with this requirement to its staff. ? Views of Responsible Officials ? We agree with the content of this finding and the auditor?s recommendations.