Finding 959182 (2023-001)

Statement of Condition During the year ended June 30, 2023, the project did not make all the required monthly deposits to the replacement reserve, in the amount of $62,500. Criteria The HAP contract requires that the project make monthly deposits to its replacement reserve. Questioned Costs None Cause Delays in funding from HUD of the subsidy voucher which is directly used to fund the replacement reserve. Effect Failure to make monthly payments resulted in an underfunding the replacement reserve and a violation of the HAP contract. Identification as a Repeat Finding No. Recommendation Management should ensure that there is a mechanism and procedures in place to ensure timely funding of the replacement reserve. Auditor Noncompliance Code: N – Special tests and provisions Finding resolution status: Resolved. View of responsible officials and planned corrective actions Management has refunded the money, management should put a system in place to avoid such withdrawals in the future. We have informed the HUD about the finding of April 23 Voucher not submitted on time, and going forward HUD will make sure all the HUD vouchers are submitted timely and monthly reserve’s transfers are done on time.