Finding 1132157 (2024-001)

Criteria Residual receipts reserve deposits should be made within 90 days of year end in accordance with the HUD regulatory agreement. Condition During the year ended December 31, 2024, management did not make the required residual receipts reserve deposit in the amount of $253,054 within 90 days of year end, as required by HUD. The residual receipts amount of $153,054 was deposited on April 22, 2024. Subsequent to year-end, the residual receipts amount of $100,000 was deposited on February 5, 2025. Cause Controls are not in place to ensure that required residual receipts reserve deposits are made timely. Effect or Potential Effect Andrew Kim is not in compliance with the requirements of the regulatory agreement. Questioned Costs: None Context Isolated instance which was not part of a statistical sample. 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 Views of Responsible Officials Management agrees that prior management agent did not deposit full amount of residual receipts within the prescribed time frame. Current management will follow HUD guidelines that require deposit within 90 days of year end.