Finding 1098693 (2024-001)

Department of Housing and Urban Development Finding No. 2024-001; Section 202 Capital Advance – Supportive Housing for the Elderly Criteria Residual receipts reserve deposits should be made within 90 days of year end. Condition During the year ended June 30, 2024, management did not make the required residual receipts reserve deposit in the amount of $12,574 within 90 days of year end, as required by HUD. The residual receipts amount was deposited on September 23, 2024. Cause Controls are not in place to ensure that required residual receipts reserve deposits are made timely. Effect or Potential Effect The Corporation is not in compliance with the requirements of the regulatory agreement. Questioned Costs There were no questioned costs. Context In connection with the procedures applied to test compliance with reserve requirements, there was one instance where management did not timely make the required residual receipts deposit in the amount of $12,574 for the year ended June 30, 2023 within 90 days of year end, as required by HUD. Identification as a Repeat Finding Not a repeat finding. Recommendation Management should establish internal controls and procedures to ensure that required residual receipts reserve deposits are made timely. Auditor Noncompliance Code: B - Failure to make required residual receipts deposits. Finding Resolution Status: Resolved. The Project completed the required residual receipts deposit via wire transfer on September 23, 2024. Views of Responsible Officials Management concurs that the Project did not timely complete the required residual receipts deposit in the amount of $12,574 for the year ended June 30, 2023. Management further notes that they have re-trained staff, reaffirmed the review and approval process to ensure required residual receipt reserve deposits are completed timely. Management has made changes to internal controls to identify and make required residual receipt reserve deposits. It has completed the required residual receipt deposit.