Finding 1080354 (2024-003)

Material Weakness
Requirement
C
Questioned Costs
$1
Year
2024
Accepted
2024-10-28

AI Summary

  • Core Issue: Management failed to deposit $35,468 in residual receipts within the required 90 days and did not seek HUD approval for excess funds.
  • Impacted Requirements: This noncompliance violates HUD regulations and the Consolidated Appropriations Act of 2016 regarding residual receipts.
  • Recommended Follow-Up: Establish internal controls to ensure timely deposits and remittances of excess funds to HUD.

Finding Text

Criteria Residual receipts reserve deposits should be made within 90 days of year end and excess residual receipts are required to be remitted to HUD upon receipt of HUD approval. Condition During the year ended June 30, 2024, management did not make the required residual receipts reserve deposit in the amount of $35,468 within 90 days of year end, as required by HUD. Additionally, once funded to the residual receipts reserve, since the deposit would have exceeded the residual receipts maximum, management should have requested approval from HUD to remit the excess residual receipts funds back to HUD. Lastly, the $2,791 that was remitted to HUD for the June 30, 2022 residual receipt payment due, was paid from the operating account when it should have been paid from the residual receipts account. Management should reimburse the operating account from the residual receipts account. Cause Controls were not in place to ensure that residual receipts funds were timely deposited and remitted, if applicable. Effect or Potential Effect The Organization is not in compliance with the requirements of the regulatory agreement and of the Consolidated Appropriations Act of 2016, governing Residual Receipts for PRAC program. Questioned Costs $35,468 Identification as a Repeat Finding This is a repeat finding. Recommendation Management should establish internal controls and procedures to ensure that excess residual receipts reserve funds are remitted timely. Auditor Noncompliance Code: B. Failure to make required residual receipts deposits. Views of Responsible Officials Management agrees with the finding and has done the following: - Transferred $2,791 to the residual receipts account from the operating account. - Transferred $35,468 to the residual receipts account from the operating account. - We will ensure transfers are completed going forward and management will work with HUD to get approval to release the funds from the residual receipts account and remit them to HUD, as necessary. Finding Resolution Status: In process.

Categories

Questioned Costs HUD Housing Programs Cash Management Internal Control / Segregation of Duties

Other Findings in this Audit

  • 503908 2024-001
    Material Weakness
  • 503909 2024-001
    Material Weakness
  • 503910 2024-002
    Material Weakness
  • 503911 2024-002
    Material Weakness
  • 503912 2024-003
    Material Weakness
  • 503913 2024-003
    Material Weakness
  • 503914 2024-004
    Material Weakness
  • 503915 2024-004
    Material Weakness
  • 503916 2024-005
    Material Weakness
  • 503917 2024-005
    Material Weakness
  • 503918 2024-006
    Material Weakness
  • 503919 2024-006
    Material Weakness
  • 1080350 2024-001
    Material Weakness
  • 1080351 2024-001
    Material Weakness
  • 1080352 2024-002
    Material Weakness
  • 1080353 2024-002
    Material Weakness
  • 1080355 2024-003
    Material Weakness
  • 1080356 2024-004
    Material Weakness
  • 1080357 2024-004
    Material Weakness
  • 1080358 2024-005
    Material Weakness
  • 1080359 2024-005
    Material Weakness
  • 1080360 2024-006
    Material Weakness
  • 1080361 2024-006
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
14.157 Supportive Housing for the Elderly $6.05M
14.157 Supportive Housing for the Elderly ("prac") $367,800