Audit 382548

Condition The Association did not deposit the residual receipts in the amount of $21,073 for the year ended August 31, 2023, to the residual receipts account. Criteria Per the HUD regulatory agreement, residual receipts must be deposited into a designated fund within 60 days after the end of the fiscal period in which they are realized. Cause The delay is a result of the property management transition, which affected monitoring of residual receipts. Effect Failure to timely deposit residual receipts may result in noncompliance with HUD regulations, potential enforcement actions, and could impact the project's eligibility for future HUD funding or approvals. Recommendation We recommend that the Association implement monitoring processes to ensure timely identification and deposit of residual receipts in accordance with HUD requirements and to deposit $21,073 into the residual receipts reserve. Views of Responsible Officials and Planned Corrective Actions Due to a change in management, the previous management company was responsible for transferring the residual receipts but did not fulfill this obligation. The new management company, WSH Management, Inc., has acknowledged the issue and will assume responsibility for calculating and depositing residual receipts for the current year.