Finding Text
Assistance Listing (Federal award identification number and year): Mortgage insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects, Assistance Listing No. 14.155 (Project identification number 073-11817 and 2015)
Auditor non-compliance code: H- Unauthorized distribution of project assets
Finding resolution status: Cleared.
Universe population size: The universal population size is not applicable to the finding.
Sample size information: The sample size information is not applicable to the finding.
Statistically valid sample: N/A
Name of Federal agency: U.S. Department of Housing and Urban Development
Pass-through entity: N/A
Questioned costs: $65,142
Statement of condition 2024-001: During the year ended July 31, 2024, the Property transferred funds in excess of the surplus cash calculated at July 31, 2023.
Criteria: Paragraph 14(d) of the Regulatory Agreement states that distributions may be made up to the calculated surplus cash amount, as defined.
Effect: The Corporation is not in compliance with the HUD requirements. At July 31, 2024, the Property's operating account is underfunded by $65,142. This amount has been considered in the computation of surplus cash, distributions and residual receipts at July 31, 2024.
Cause: Management inadvertently transferred $65,142 more cash to the entity cash account during the year ended July 31, 2024 than what was allowed by HUD.
Recommendation: Management should reimburse the Property's operating account in the amount of $65,142.
Management's response: Agree. On October 18, 2024, management reimbursed the Property's operating account.