Finding 960671 (2023-001)

FINDINGS-MAJOR FEDERAL AWARDS PROGRAM AUDIT 2023-001: SIGNIFICANT DEFICIENCY Information on the Federal Program: Assistance Listing Number 14.155 – Mortgage Insurance for Purchase or Refinancing of Existing Multifamily Housing Projects. Criteria: The Project is required to deposit a certain amount into the replacement reserve account as determined by HUD. Condition: As of June 30, 2023, Atmore Senior Housing, Inc. reserve for replacement account was underfunded. Cause: Due to management oversight of a change in the deposit requirement, for nine of the twelve months during the year, the amount deposited was less than the amount required by HUD. Effect or Potential Effect: The Project could be deemed by HUD to be in default of its obligations under the Regulatory Agreement. Questioned Costs: N/A. Repeat Finding: No. Recommendation: We recommended that Atmore Senior Housing, Inc. deposit the underfunded amount into the reserve for replacement account and perform more thorough monthly reviews of deposit requirements. Views of Responsible Official: Management of Atmore Senior Housing, Inc. concurs with the audit finding. The Project has made the additional deposits to the reserve for replacement account. Management will thoroughly review all deposits to ensure that the required monthly deposits have been timely made to the replacement reserve account in the amount required by HUD.