Audit 400779

Criteria Any funds in the project funds account (including earned interest) at the end of the fiscal year shall be deposited in a federally insured account within 60 days following the end of the fiscal year. (24 CFR section 891.400(e)). Condition During the year, the Corporation began making deposits to the residual receipts reserve based on the expected cash surplus. As of June 30, 2025, the total amount deposited was slightly below the required amount, and the remaining portion of the surplus was deposited after the 60‑day period following year-end. Cause This timing issue appears to have occurred because staff did not fully track the deadline and final surplus amount needed to complete the deposit within the required 60‑day window. Effect Because the final deposit was made after the 60‑day period, the Corporation did not fully meet the residual receipts funding requirement for the fiscal year ended June 30, 2025. Questioned Cost None. Context For the year ended June 30, 2025, most of the cash surplus was deposited to the residual receipts account on a timely basis, but a remaining portion was deposited after the required timeframe. Recommendation We recommend that the Corporation put in place straightforward procedure such as a simple year-end checklist and calendar reminders to estimate cash surplus promptly, confirm the required residual receipts amount, and complete all related deposits within 60 days after fiscal year-end to support compliance with 24 CFR § 891.400(e). View of Responsible Official and Planned Corrective Action We will regularly perform surplus calculation and comply with the required funding of the residual receipts account and will fund in within 60 days from the Corporation’s year end.