Finding Text
Criteria - HUD requires that the reserve for replacements account be funded by $290.58 monthly in accordance with the regulatory agreement. Condition - The reserve for replacements account was underfunded by $872 during the year ended December 31, 2022. Cause - The Company's accountant failed to make 3 months of required deposits. Effect - The Company was not in compliance with the above HUD regulations and the reserve for replacements account was underfunded by $872. Questioned Costs - None identified. Recommendation - We recommend that the delinquent deposits totaling $872 for the year ended December 31 2022 be deposited into the reserve for replacements account as soon as possible. Management's Response - Management understands HUD's required deposit requirement and will deposit 12 months going forward.