Finding 1138652 (2024-002)

FINDINGS - MAJOR FEDERAL AWARD PROGRAM AUDIT (CONTINUED) Department of Housing and Urban Development Finding, 2024-002: Section 202 Supportive Housing for the Elderly Program, Capital Advance - Accumulated Balance, CFDA 14.157 STATEMENT OF CONDITION The surplus cash calculated for the year ended December 31, 2024, is required to be deposited by the Project within 60 days after year end. CRITERIA The HUD Audit Guide considers this to be an unauthorized use of project funds. EFFECT OF CONDITION The surplus cash amount of $4,695 was not deposited into the residual receipts account by February 28, 2025. CONTEXT The Project’s surplus cash amount calculated for the year ended December 31, 2024, was required to be deposited by February 28, 2025. CAUSE OF CONDITION The 60-day surplus cash deposit requirement of the Regulatory Agreement was not made on time. The Project did not calculate the correct surplus cash amount for the year ended December 31, 2024, due to late accounting adjustments. RECOMMENDATION The auditor recommends depositing the surplus cash amount of $4,695 into the residual receipts account immediately. The auditor also recommends that the management company continue to monitor the 60 days after year-end deadline and transmit the funds to the residual receipts account prior to this deadline, if applicable, in future years. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS Management has deposited the surplus cash amount of $4,695 into the residual receipts account on March 31, 2025.