Finding Text
2022-003: Failure to adjust monthly reserve for replacement deposit when the new amount of funds authorized by HUD became effective ? HUD entities Condition: A portion of the required monthly deposits to the reserve for replacement account are delinquent for certain HUD entities. Criteria and cause: In accordance with Paragraph 5(a) of the HUD Regulatory Agreement, the Project shall maintain a reserve fund for replacements in a separate account and deposit an amount approved by HUD. The Project was not notified by HUD of the approval of the increase in the monthly reserve for replacement deposit until subsequent to year end. Effect: The deposits to the replacement reserve account were not made in accordance with the HUD Regulatory Agreement. Recommendation: The management agent should establish a method for monthly deposits and assign an individual responsible for ensuring timely and accurate completion.