Finding 970779 (2023-001)

-
Requirement
N
Questioned Costs
-
Year
2023
Accepted
2024-04-24

AI Summary

  • Core Issue: The Corporation did not make all required monthly deposits into the reserve for replacements, missing 2 out of 12 deposits due to cash flow shortages.
  • Impacted Requirements: The regulatory agreement mandates 12 monthly deposits of $35,030, totaling $420,360 for the fiscal year.
  • Recommended Follow-Up: Ensure all required deposits are made to meet regulatory obligations, with a completion target of September 30, 2024.

Finding Text

Finding Type - Immaterial noncompliance with major program requirements Title and Assistance Listing Number of Federal Program - 14.157 - Supportive Housing for the Elderly (Section 202) - Capital Advance Finding Resolution Status - In Process Information on Universe and Population Size - All required reserve deposits were audited which totals twelve monthly deposits. Sample Size Information - All required reserve deposits were audited which totals twelve monthly deposits. Identification of Repeat Finding and Finding Reference Number - n/a Criteria - The Corporation should have made 12 monthly deposits of $35,030 into the reserve for replacements account as required by the regulatory agreement. Statement of Condition - The Corporation failed to make the required reserve for replacements deposits in the current fiscal year. The Corporation made 10 deposits, therefore 2 months were underfunded. Cause - The Corporation monitored the cash requirements of the reserve for replacement account as specified by the Regulatory Agreement, however the Corporation was unable to make the required deposits due to cash flow shortages. Effect or Potential Effect - The replacement reserve account was underfunded in the current fiscal year by $70,060. Auditor Noncompliance Code - N - Reserve for replacements deposits Reporting Views of Responsible Officials - Management agrees the with the unfunded amount at September 30, 2023. Context - The replacement reserve monthly deposits were not able to be made due to cash flow shortages at the property. Recommendation - All required deposits should be made in accordance with the regulatory agreement. Auditor's Summary of the Auditee's Comments on the Findings and Recommendations - Management should make the required reserve for replacements deposits in the current fiscal year. Response Indicator - Agree Completion Date - September 30, 2024 Response - Management acknowledges noncompliance in the current fiscal year and has taken measures to rectify the cash shortfall. Management has made two deposits during the year ended September 30, 2024 in order to correct the funding of the reserve for replacement account.

Categories

Reporting

Other Findings in this Audit

Programs in Audit

ALN Program Name Expenditures
14.157 Supportive Housing for the Elderly $1,757