Finding 626730 (2022-001)

Significant Deficiency Repeat Finding
Requirement
P
Questioned Costs
-
Year
2022
Accepted
2023-01-18

AI Summary

  • Core Issue: The Organization failed to make required deposits into the replacement reserve account, totaling $29,109 for the year ended September 30, 2022.
  • Impacted Requirements: This non-compliance violates the regulatory agreement, which mandates monthly deposits of $2,079 and includes prior year delinquent amounts.
  • Recommended Follow-Up: Management should prioritize making the required deposits and conduct monthly reviews of reserve account activities to ensure compliance moving forward.

Finding Text

Criteria The Organization as mortgagor, in accordance with the regulatory agreement, is required to maintain a reserve for replacements. The required minimum monthly deposit into this account is $2,079. Additionally, the Organization is required to deposit all prior year required delinquent deposits. For the year ended September 30, 2022, a total of $29,109 was to be deposited into the replacement reserve account, which consists of $24,952 for current year deposits, plus $4,157 for prior year delinquent deposits; however, no deposits were made into the replacement reserve account. Condition The Organization did not make all required deposits into the replacement reserve account per the regulatory agreement. Cause Due to limited cash flow management was unable to fulfill all required deposits. Questioned Costs None noted. Context When performing our audit, we noted the Organization did not make all required deposits in the current year. Effect The Organization did not make the deposits into the replacement reserve account as required by the HUD agreement. Repeat Finding Repeat Finding of 2021-001 and 2020-001. Recommendation We recommend management make the required deposit as soon as possible and review the activity in the reserve accounts monthly to determine that deposits are being made as required. Views of Responsible Official and Planned Corrective Action Management concurs with the audit finding. Management will transfer the funds as soon as cash flow permits.

Categories

HUD Housing Programs

Other Findings in this Audit

  • 50288 2022-001
    Significant Deficiency Repeat
  • 50289 2022-002
    Significant Deficiency
  • 50290 2022-003
    Significant Deficiency
  • 626731 2022-002
    Significant Deficiency
  • 626732 2022-003
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
14.157 Supportive Housing for the Elderly $408,887