Finding 1130234 (2024-002)

Finding No. 2024-002: Section 202 Supportive Housing for the Elderly, ALN 14.157 Finding Resolution Status: Resolved. Information on Universe Population Size: Residual receipts. Sample Size Information: Residual receipts in excess of $250 per unit. Identification of Repeat Finding and Finding Reference Number: No. Criteria: As required by HUD regulations, residual receipts account balances in excess of $250 per unit must be remitted to HUD at the PRAC expiration date. A payable should be established until the funds are remitted to HUD. Statement of Condition: The Project delayed requesting the excess residual receipts available for remittance five months beyond the PRAC expiration date, and did not establish a payable for the amount due in the amount of $23,352. Cause: The Project did not follow HUD regulations for timely requesting the excess residual receipts available for remittance, nor establish a payable for the amount due. Effect or Potential Effect: The Project is not adhering to HUD regulations for the request and remittance of excess residual receipts in a timely manner. Furthermore, the Project understated liabilities and expenses as it relates to the remittance due. Auditor Non-Compliance Code: R – Section 8 Program Admin. Reporting Views of Responsible Officials: The Project agrees with the finding and the auditor’s recommendations have been adopted. Recommendation: Management should keep track of the balance in the residual receipts account in excess of $250 per unit at the PRAC expiration date and ensure a timely request for remittance of the excess amount due to HUD. Furthermore, the Project should establish a payable for the amount due until payment is remitted. Response Indicator: Agree. Completion Date: 09/12/2024 Response: The Project agrees with the finding and the auditor’s recommendations have been adopted. Excess funds are monitored on a monthly basis going forward.