Finding 1131365 (2024-001)

Finding 2024-001: Mortgage Insurance – Rental Housing (Section 207), federal assistance listing number 14.134 Criteria: East Main Street 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 $18,913 for the year ended December 31, 2023 was not made within the 60 day timeline. Context: We reviewed the residual receipts deposits during the year. Cause: East Main Street Apartments’ surplus cash was not performed timely. Effect: East Main Street Apartments is not in compliance with the HUD Regulatory Agreement as it relates to the management of the residual receipts reserve. Recommendation: East Main Street 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: East Main Street Apartments agrees with the finding and the required payment was made after the 60-day timeline.