Finding 986264 (2022-001)

- Repeat Finding
Requirement
C
Questioned Costs
-
Year
2022
Accepted
2023-08-27
Audit: 311944
Organization: Destiny Towers, INC (MO)

AI Summary

  • Core Issue: The Project did not make required monthly deposits into the reserve for replacement account in 2022, continuing a pattern from the last four years.
  • Impacted Requirements: This violates the Regulatory Agreement under Section 202 of the Housing Act, which mandates timely deposits into a federally insured reserve account.
  • Recommended Follow-Up: The Project should request a waiver from HUD to suspend or modify the monthly deposit requirements.

Finding Text

Program: Assistance Listing Number ? 14.157Section 202 Insured MortgageCFDA# and Program Expenditures 14.157 ($4,918,487)Award number NoneFederal Award Year January 1, 2021 to December 31, 2021Questioned Costs $28,068Criteria: The Regulatory Agreement, Housing for Elderly or Handicapped (Nonprofit) Section 202 of the Housing Act of 1959, in essence, stipulates that the Mortgagor will establish and maintain a reserve fund for replacement in a separate account in a bank which is insured by the Federal Deposit Insurance Corporation. The Mortgagor will deposit an amount which is stipulated by HUD monthly unless a different amount and date is approved in writing by HUD.Condition: During our testing, we noted that the Project failed to make the required monthly deposits into the reserve for replacement for the year 2022. This is a repeat finding from the last four (4) years.Effect: The Project failed to make deposits to the reserve for replacement account as required by the Regulatory Agreement.Cause: Management indicated that the required monthly deposits to the reserve for replacement account were not made timely because of delays in receiving HUD rent payments.Recommendation: The Project should seek a waiver from HUD to suspend the required monthly reserve for replacement deposits or request a modification of the required monthly deposit amount.

Categories

HUD Housing Programs

Other Findings in this Audit

Programs in Audit

ALN Program Name Expenditures
14.157 Supportive Housing for the Elderly $4.92M
14.195 Section 8 Housing Assistance Payments Program $273,527