Finding Text
Finding # 2024-004 – Special Tests and Provisions
Repeat Finding: No
AL# 14.195 U.S. Department of Housing and Urban Development
Questioned Cost: $0
Criteria: For deposits held at institutions which exceed federally insured limits, HUD
Handbook 4370.2, paragraph 2-6 requires that the management agent or entity owner
monitor the financial institution’s rating on a quarterly basis to ensure consistency with
minimally acceptable ratings as established by the Government National Mortgage
Association and maintain documentation of the rating for at least 3 years.
Condition: Combined deposits on hand at Clinton Savings Bank exceed federally insured
limits and no monitoring of the institution was documented.Effect: The assets of the project could be subject to risk.
Auditor’s Recommendation: A monitoring policy should be instituted to properly
document that balances in excess of FDIC are not subject to significant risk.
View of Responsible Officials: Management agrees with the finding and has implemented
a corrective action plan.
Cause: The account balances at Clinton Savings Bank exceed $250,000 and no formal
policy is in place for monitoring.