Finding Text
Federal agency: U.S. Department of Housing and Urban Development Federal program title: Section 202 Direct Loan and Flexible Subsidy Assistance Loan Assistance Listing Number: 14.157 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: N/A Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: Per the regulatory agreement a monthly deposit is to be made into the replacement reserve. Per HUD-9250, starting January 1, 2022 that monthly amount is $4,343.50 which equates to an annual deposit of $52,122. Condition: The Project only deposited $51,000 into the replacement reserve for the year ended December 31, 2022. Questioned costs: None Context: Management did not increase the replacement reserve deposit in accordance with HUD- 9250. Cause: Managements controls did not catch the lack of increase in payment. Effect: The replacement reserve was underfunded $1,122 at December 31, 2022. Management made the additional $1,122 deposit on February 24, 2023. Repeat Finding: Yes: 2021-001 Recommendation: Recommend that a catchup payment is made as soon or possible to make the replacement reserve whole. Views of responsible officials: There is no disagreement with the audit finding.