Finding Text
a. Statement of Condition: Gethsemane Manor Apartments did not make all twelve required deposits to the replacement reserve account.
b. Criteria: Mortgagor must deposit a HUD-determined amount into the reserve fund for replacements each month per the HUD Regulatory Agreement.
c. Effect of Condition: The project is not in compliance with the HUD Regulatory Agreement.
d. Cause of Condition: Gethsemane Manor Apartments experienced operating cash flow issues during 2023 due to vacancies.
e. Recommendation: Gethsemane Manor Apartments should deposit the necessary funds as soon as possible to ensure that the replacement reserve is fully funded in accordance with the HUD Regulatory Agreement.
f. Views of Responsible Officials and Planned Corrective Action: Gethsemane Manor Apartments agrees with the finding and the auditor’s recommendations have been adopted.