Finding 1136361 (2024-001)

Significant Deficiency: Finding 2024-001 Criteria: The U.S. Department of Housing and Urban Development (HUD) required that the Organization transfer surplus cash of $720,497 to a residual receipts account within 90 days after December 31, 2023. Condition: The Organization did not establish a residual receipts account and deposit the required funds within 90 days after December 31, 2023. Cause: The delay in completing the transfer was due to the Organization being in communications with HUD in consideration of refinancing their debt and, therefore, no longer having the residual receipt requirement. Effect: The failure to complete the transfer within the specified timeframe could result in noncompliance with regulatory requirements and potential financial penalties. Additionally, it may impact the Organization’s financial reporting accuracy and reliability. Recommendation: It is recommended that the Organization reviews and strengthens its internal controls and procedures to ensure timely transfers to the residual receipts account. This may include implementing additional oversight to ensure compliance with the established timelines. Management Response: Management is in agreement with this finding. Winslow Gardens is actively working with HUD to determine next steps for the residual receipts and a solution to the outstanding Flex Subsidy Loan.