Audit 373160

Section 3 - Major Federal Awards Findings and Questioned Costs Finding No.: 2024-002: Failure to Make the Required Residual Receipt Deposit Timely Information on the Federal Program: U.S. Housing of Urban Development (HUD) -14.155 Mortgage Insurance for the Purchase or Refinance of Existing Multi-Family Housing Projects; January 1, 2024 – December 31, 2024. Finding Type: Significant Deficiency Criteria: Per the regulatory agreement, the Organization must calculate surplus cash as of the last day of the fiscal year. Surplus cash is required to be deposited within 90 days after the close of the fiscal year. Condition and Context: Based on the testing performed, the Organization did not deposit the required residual receipts deposit of $107,481 within 90 days after the close of the fiscal year. Cause: The Organization was had significant turnover in its finance department and did not made the necessary deposit. Effect or Potential Effect: The required deposit was not made on a timely basis. Questioned Costs: $107,481 Recommendation: The Organization should deposit amounts due to residual receipts as soon as possible and implement a process to ensure compliance with the required deposit timing. Management’s Response: Management will initiate controls to ensure that the funds from the calculation of the prior year surplus cash calculation are deposited in the residual receipts reserve for the year ended December 31, 2025. Planned Implementation Date of Corrective Action: September 2025 Person Responsible for Corrective Action: David Fazio, Director of Finance