Finding 10198 (2022-003)

Finding 2022-003 - U.S. Department of Housing and Urban Development, Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects, Market Interest Rate, Assistance Listing #14.155 Statement of Condition: The Corporation did not submit the annual financial report to HUD for the year ended June 30, 2022 by the required deadline. Criteria: The Regulatory Agreement requires the Corporation to submit to HUD the annual financial report within 90 days following the end of each fiscal year. Effect: Noncompliance with HUD regulations and mortgage default. Cause: Prior management oversight. Context: The engagement letter for the audit was executed after the required due date for the HUD annual financial report due date. Questioned Costs: N/A Recommendation: We recommend the board of directors and management ensure that the annual financial reports to HUD are submitted by the required due dates. Views of Responsible Officials and Corrective Action Plan: The board of directors acknowledges the annual financial report to HUD for the year ended June 30, 2022 is past the required due date. Effective June 1, 2023, the board of directors contracted with a new management company. The new management company will ensure the annual financial reports to HUD are submitted once the audits are back on track with the scheduled due dates.