Finding 971423 (2023-001)

Finding # 2023-001 Federal Grantor: U.S. Department of Housing and Urban Development CFDA# / Program : 14.157 - Supportive Housing for the Elderly Type of Finding: Federal Award Finding Finding Resolution Status: In Process Information on Universe Population Size: Project is required to make twelve (12) monthly deposits to the reserve for replacements of $2,353. Sample size information: Tests were performed on the 12 required monthly deposits. Criteria: The Housing for the Elderly Section 202 of the Housing Act of 1959 Regulatory Agreement signed by the Project on December 17th, 2003 requires the Project to make twelve (12) monthly deposits to the reserve for replacements of $2,353. Statement of Condition: A waiver for 3 of the 12 monthly was received from HUD, the remaining 9 of 12 deposits were not made to the reserve for replacements resulting in $21,177 of delinquent deposits due the reserve for replacements. Cause: A deficiency in controls over compliance with the compliance requirements in the Housing for the Elderly Section 202 of the Housing Act of 1959 Regulatory Agreement. Effect or Potential Effect: The Project is not in compliance with the Housing for the Elderly Section 202 of the Housing Act of 1959 Regulatory Agreement. Auditor Non-Compliance Code: N - Reserve for Replacements deposits Questioned Costs: No questioned costs associated with this finding. Reporting Views of Responsible Officials: Concur with finding. Context: The Project is not in compliance with the Housing for the Elderly Section 202 of the Housing Act of 1959 Regulatory Agreement. Recommendations: We recommend that Management review their controls over compliance with the compliance requirements in the Housing for the Elderly Section 202 of the Housing Act of 1959 Regulatory Agreement. Auditor's Summary of the Auditee's Comments on the Findings and Recommendations: Administrative delays resulted in poor cash flow in 2023. Those delays have been resolved and Management expects to fund the replacement reserve adequately for 2024 and catch up with the missed deposits from 2023. Response Indicator Agree Completion Date 12/31/2024 Response Administrative delays resulted in poor cash flow in 2023. Those delays have been resolved and we expect to fund the replacement reserve adequately for 2024 and catch up with the missed deposits from 2023.