Finding Text
FINDING #2023-001 SURPLUS CASH
Type of Finding: Compliance: Special Tests
Program: The Home Investment Partnership Program (Assistance Listing 14.239)
Condition: At December 31, 2022 the Entity had surplus cash totaling $9,162, due to Home Funds. Park Ridge Apartments, Phase 3 had surplus cash in the amount of $4,000. Park Ridge Apartments, Phase 4 had surplus cash in the amount of $2,077. Park Ridge Apartments, Phase 5 had surplus cash in the amount of $1,379. Parsk Ridge Apartments, Phase 6 had surplus cash in the amount of $1,706. The Entity did not make any payments on the loan as required by the loan agreement.
Criteria: The loan agreement between the Entity and the Home Investment Partnership Program requires the Entity to make payments of principal and interest on the note in an annual installment equal to a certain percentage of surplus cash , to the extent that surplus cash exists.
Effect: The Entity is in direct violation of the Home Funds loan agreement.
Cause: This was an oversight by the management agent.
Recommendation: The management agent should compute an estimate of surplus cash for the fiscal year upon completion of that period. In the event that surplus cash exists at the completion of the fiscal period, the management agent should make an installment payment on the HOME note.
Views of Responsible Officials and Planned Corrective Action: The management agent agrees with the finding and the auditor’s recommendations have been adopted. Surplus cash will be calculated upon the completion of an annual fiscal period. If it is concluded that surplus cash exists at the end of the annual fiscal period, an installment payment will be made on the loan.