Finding 618024 (2022-001)

-
Requirement
N
Questioned Costs
-
Year
2022
Accepted
2022-12-11
Audit: 33606
Organization: Nlh6 (NM)
Auditor: Palmer & CO PA

AI Summary

  • Core Issue: The Reserve for Replacement account was underfunded by $2,072 as of June 30, 2022, failing to meet the required deposit of $3,552.
  • Impacted Requirements: Non-compliance with HUD regulations and Capital Advance requirements due to insufficient funds in the Reserve for Replacement account.
  • Recommended Follow-Up: Management should establish internal controls to ensure timely deposits into the Reserve for Replacement account before year-end deadlines.

Finding Text

Finding 2022-001 ? Special Tests and Provisions ? Reserve for Replacement Federal program information: Title: Section 811 Capital Advance CFDA Number: 14.181 Resolution Status: Resolved Information on Universe Population Size: Population size is the total amount in the Reserve for Replacement account at year-end, June 30, 2022. Sample Size Information: Reserve for Replacement ending balance at June 30, 2022. Identification of Repeat Finding and Finding Reference Number: This is a new finding. Criteria: Total cash of $3,552 was required to be deposited into the Reserve for Replacement account by June 30, 2022. Statement of Condition: As of June 30, 2022, the Reserve for Replacement only had $1,480 deposited during the year. Cause: Management did not meet the annual funding requirement for the Reserve for Replacement account. Effect or Potential Effect: The project was not in compliance with the Capital Advance and current HUD regulations, the project?s Reserve for Replacement was under-funded for the current year by $2,072. Auditor Non-Compliance Code: N Questioned Cost: $2,072 Reporting Views of Responsible Officials: Management agrees with the Reserve for Replacement calculations and is aware of the current deposit required to the Reserve for Replacement. Recommendation: Management should implement internal controls to make any required deposits before the year-end deadline. Auditor?s Summary of Auditee?s Comments on the Findings and Recommendations: Management transferred $1,776 on 9/20/2022 but still owes $296 to the Reserve for Replacement account as of September 23, 2022 due to insufficient funds. This finding is therefore, unresolved. Completion Date: n/a Response: Management transferred $1,776 on 9/20/2022 bust still owes $296 to the Reserve for Replacement account as of September 23, 2022 due to insufficient funds. The rest of the funds will be transferred as soon as cash flow allows.

Categories

HUD Housing Programs Reporting Special Tests & Provisions Internal Control / Segregation of Duties

Other Findings in this Audit

Programs in Audit

ALN Program Name Expenditures
14.181 Supportive Housing for Persons with Disabilities $1.22M
14.195 Section 8 Housing Assistance Payments Program $64,551