Audit 340745

Finding Type: • Immaterial noncompliance with major program requirements • Material weakness in internal control over compliance Title and Assistance Listing Number of Federal Program - U.S. Department of Housing and Urban Development - Section 232 Mortgage Insurance; 14.129 Finding Resolution Status - Resolved Information on Universe and Population Size - Surplus cash calculated as of June 30, 2023 is required to be deposited within 90 days of June 30, 2023. Sample Size Information - N/A Identification of Repeat Finding and Finding Reference Number - N/At Criteria - The Corporation should deposit surplus cash within the time frame specified in the FRAG Guide. Statement of Condition - The Corporation did not deposit prior year surplus cash totaling $25,068 to the residual receipts account during the year ended June 30, 2024, which was calculated as of June 30, 2023, as required by the regulatory agreement and FRAG Guide. Cause - The Corporation failed to monitor the cash requirements of the residual receipts account as specified by the FRAG Guide. Effect or Potential Effect - The residual receipts account was not funded in accordance with the FRAG Guide. Auditor Noncompliance Code -B- Failure to make required residual receipt deposits Reporting Views of Responsible Officials - Management agrees with the finding as reported and has taken steps to improve internal controls over required deposits to the residual receipts account. Context - During our audit procedures performed over residual receipts, it was noted that prior year surplus cash totaling $25,068 was not deposited to the residual receipts account as required by the regulatory agreement and the FRAG Guide. Recommendation - The underfunded amount of surplus cash during the year ended June 30, 2024 of $25,068 should be deposited into the residual receipts account as soon as possible. In addition, management should calculate surplus cash annually and deposit the amount of surplus cash within 90 days of year end. Auditor’s Summary of the Auditee’s Comments on the Findings and Recommendations - Management should deposit surplus cash within the time frame required by the FRAG Guide Response Indicator - Agree Completion Date - November 13, 2024 Response - Management acknowledges noncompliance in the current fiscal year and has taken measures to improve internal controls over compliance. Management deposited the surplus cash amount of $25,068 into residual receipts on November 13, 2024.

Finding Type: • Immaterial noncompliance with major program requirements • Material weakness in internal control over compliance Title and Assistance Listing Number of Federal Program - U.S. Department of Housing and Urban Development - Section 232 Mortgage Insurance; 14.129 Finding Resolution Status - Resolved Information on Universe and Population Size - Surplus cash calculated as of June 30, 2023 is required to be deposited within 90 days of June 30, 2023. Sample Size Information - N/A Identification of Repeat Finding and Finding Reference Number - N/At Criteria - The Corporation should deposit surplus cash within the time frame specified in the FRAG Guide. Statement of Condition - The Corporation did not deposit prior year surplus cash totaling $25,068 to the residual receipts account during the year ended June 30, 2024, which was calculated as of June 30, 2023, as required by the regulatory agreement and FRAG Guide. Cause - The Corporation failed to monitor the cash requirements of the residual receipts account as specified by the FRAG Guide. Effect or Potential Effect - The residual receipts account was not funded in accordance with the FRAG Guide. Auditor Noncompliance Code -B- Failure to make required residual receipt deposits Reporting Views of Responsible Officials - Management agrees with the finding as reported and has taken steps to improve internal controls over required deposits to the residual receipts account. Context - During our audit procedures performed over residual receipts, it was noted that prior year surplus cash totaling $25,068 was not deposited to the residual receipts account as required by the regulatory agreement and the FRAG Guide. Recommendation - The underfunded amount of surplus cash during the year ended June 30, 2024 of $25,068 should be deposited into the residual receipts account as soon as possible. In addition, management should calculate surplus cash annually and deposit the amount of surplus cash within 90 days of year end. Auditor’s Summary of the Auditee’s Comments on the Findings and Recommendations - Management should deposit surplus cash within the time frame required by the FRAG Guide Response Indicator - Agree Completion Date - November 13, 2024 Response - Management acknowledges noncompliance in the current fiscal year and has taken measures to improve internal controls over compliance. Management deposited the surplus cash amount of $25,068 into residual receipts on November 13, 2024.