Finding Text
Finding Type: - Significant deficiency in internal control over financial reporting - Immaterial noncompliance with major program requirements None Title and ALN of Federal Program - 14.155 - U.S. Department of Housing and Urban Development - Insured Loan Section 223(f); 14.195 - U.S. Department of Housing and Urban Development - Section 8 Housing Assistance Payments Finding Resolution Status - In Process Information on Universe and Population Size - Total required deposits to the reserve for replacement for the year ended December 31, 2022. Sample Size Information - N/A Identification of Repeat Finding and Finding Reference Number - N/A Criteria - The Corporation should have made 11 monthly deposits of $5,231.36 during January through November 2022 and 1 monthly deposit of $5,351.16 during December 2022 into the reserve for replacements account as required by the regulatory agreement, for a total annual funding of $62,896.12. Statement of Condition - The Corporation failed to make the required reserve for replacements deposits in the current fiscal year. Cause - The Corporation failed to adjust the January 2022 deposit for the change in required reserve deposit effective December 1, 2021. The January 2022 deposit was made in accordance with the prior monthly requirement of $5,118.75 rather than the newly effective requirement of $5,231.36. Effect or Potential Effect - The replacement reserve account was underfunded in the current fiscal year by $113. Auditor Noncompliance Code - N - Reserve for replacements deposits Reporting Views of Responsible Officials - Management acknowledges non-compliance in the current fiscal year and will take measures to improve internal controls over compliance. Context - Monthly deposits were made to the reserve for replacements throughout the year, but not adjusted for a change in required deposit until February 2022. The change in deposit requirement as of December 1, 2022 was made appropriately. Recommendation - All required deposits should be made in accordance with the regulatory agreement. Changes in required deposits should be monitored and year-end deposits reviewed for any catch up deposits required. Auditor's Summary of the Auditee's Comments on the Findings and Recommendations - Management acknowledges non-compliance in the current fiscal year and will take measures to improve internal controls over compliance. Response Indicator - Agree Completion Date - March 31, 2023 Response - Management acknowledges noncompliance in the current fiscal year and has taken measures to improve internal controls over compliance. Management will deposit the underfunded amount of $113 to the reserve for replacements account during the fiscal year ended December 31, 2023.