Finding Text
Finding 2022-005 - U.S. Department of Housing and Urban Development, Mortgage Insurance Rental and Cooperative Housing for Moderate Income Families and Elderly, Market Interest Rate, CFDA #14.135
Statement of Condition: The Corporation did not submit the annual financial report to HUD for the year ended December 31, 2021 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 Regulatory Agreement, monetary penalties and default under the note and mortgage.
Cause: Limited available cash flow.
Context: A test was performed to review the prior year submission of the annual financial report to HUD was submitted to HUD within 90 days following the end of the prior fiscal year. For the year ended December 31, 2021, the annual financial report to HUD was submitted on November 3, 2022, which is after the due date of March 30, 2022.
Questioned Costs: N/A
Recommendation: We recommend management ensure that the annual financial reports to HUD are submitted by the required due dates.
Views of Responsible Officials and Corrective Action Plan: Management acknowledges the annual financial report to HUD for the year ended December 31, 2021 was submitted late. The project was unable to pay the prior audit fees timely due to limited available cash flow causing a delay in the audits. Management will work to improve cash flow for timely payment of the required annual audits.