Finding Text
Criteria - HUD requires the project to make monthly deposits into the replacement reserve account. The total delinquent deposits for 2023 were $15,324.
Statement of Condition - Required replacement reserve deposits were not fully funded in the current year.
Cause - The project switched to a new managing agent as of August 1, 2023, which caused an oversight in making the required deposits during the transition period.
Questioned Costs - None noted.
Effect of Condition - Replacement reserve was not properly funded in a timely manner and those funds may not be available when needed at the end of the project life.
Recommendation - Supervisory management should check that required replacement reserve payments are timely made.