Finding Text
Criteria
Any balance in Victory Heights's residual receipts reserve account greater than $250 per unit must be remitted to HUD's Accounting Center upon termination of the PRAC, in accordance with the Consolidated Appropriations Act, 2016 enacted on December 18, 2015 applicable for projects with PRAC expiration dates through September 30, 2025. Termination is defined as expiration of the contract term which for most PRACs is the annual contract anniversary date. Victory Heights's PRAC contract expired on August 31, 2024.
Condition
During the year ended December 31, 2024, management did not submit Form HUD-9250, "Fund Authorization" to HUD upon termination of the PRAC. As a result, management did not remit excess residual receipts of $10,278 as of August 31, 2024, to HUD.
Cause
The amount held in the residual receipts reserve was not returned to HUD due to management not submitting Form HUD-9250 on a timely basis. On March 14, 2025, management submitted to HUD a request for approval to transfer $30,625 from the residual receipt reserve to HUD.
Effect or Potential Effect
The holding of the excess funds in the residual receipts reserve is a violation of HUD's required release of funds above the declared threshold of $250 per unit.
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 immediately submit the Form HUD-9250, "Fund Authorization" and disburse any excess funds from the residual receipts reserve to HUD upon approval of Form HUD-9250. Auditor Noncompliance Code: Z - Other Finding Resolution Status: In-process
Views of Responsible Officials
Current management has submitted a 9250 to HUD for approval of release of Residual Receipt funds above $250 per unit to be returned to HUD. As part of the PRAC renewal process, current management will follow HUD guidelines that require a submission of a 9250 residual receipt request with the renewal submission.