Finding 923 (2023-001)

Criteria: Under the regulatory agreement with HUD, the Corporation is required to maintain certain cash accounts in compliance with HUD requirements. Condition: During testing of the reserve for replacement account, we noted incorrect deposit amounts were being funded to the account for 7 of 12 months. This error resulted in the reserve for replacement account to be underfunded by $1,148 as of June 30, 2023. Cause: Due to oversight by management, the change in required monthly deposits was not properly implemented. Effect: The Project was not in compliance with HUD requirements as it relates to the restricted funds. Questioned Costs: $1,148 Context/Sampling: None Repeat Finding from Prior Year(s): No Recommendation: We recommend that the Project comply with the HUD requirements and deposit $1,148 to the reserve for replacement account. As of August 17, 2023, management funded the reserve for replacement account with the underfunded amounts. Views of Responsible Officials: Management agrees with the finding.