Finding Text
Questioned Costs: $7,486 Repeat Finding: This is a repeat finding. The prior year finding reference number was 2021-006. Condition: Due to an administrative error, too much was distributed from the replacement reserve in 2021. Criteria: All releases from the replacement reserve should be for qualified expenses and should be approved by HUD. Effect or Potential Effect: The replacement reserve is underfunded by $7,486 at June 30, 2022. Cause: Form HUD-9250 was submitted by management. The mortgage company transferred the amount from the replacement reserve to the insurance escrow. In addition, the mortgage company issued a check to the Company. Recommendation: Due to cash flow constraints, the Company was not able to repay the replacement reserve for the duplicate release. The Company will repay the replacement reserve when cash is available. Reporting Views of Responsible Officials: Management agrees with the finding. The company will repay the replacement reserve when cash is available.