Finding 1092410 (2024-001)

Finding 2024-001: Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects, Federal Assistance Listing Number 14.155 Criteria: Pompei North Apartments is required to determine surplus cash requirements annually. If surplus cash exists, the amount must be transferred from the operating account to the residual receipts account within 60 days of the Project’s fiscal year-end. Condition: The required deposit of $16,832 for the year ended March 31, 2023 was made in December 2023, which is after the 60 day deadline. Context: We reviewed the residual receipts deposits during the year. Cause: Pompei North Apartments’ surplus cash was not performed timely. Effect: Pompei North Apartments is not in compliance with the HUD Regulatory Agreement as it relates to the management of the residual receipts reserve. Recommendation: Pompei North Apartments should ensure residual receipts are made within 60 days of year-end in accordance with the HUD Regulatory Agreement. Views of management and planned corrective action: Pompei North Apartments agrees with the finding and the auditor’s recommendations have been adopted.