Finding 1151056 (2024-001)

Compliance Requirement: Special Tests and Provisions – Residual Receipts Funds Condition: The fiscal year December 31, 2023 residual receipts deposit was not made into the residual receipts account. Criteria: Following the expiration of the fiscal year, a deposit shall be made in an amount equal to the annual computation of surplus cash within 60 days following the end of the fiscal year (24 CFR section 891.600(e)). Therefore, the fiscal year end December 31, 2023 deposit should be made by February 29, 2024. Cause/Effect: Management did not deposit the residual receipts within the 60 day due date. As a result, MDBM – Epsilon Senior Housing Corporation is not in compliance with the Regulatory Agreement. Questioned Cost: Undetermined Recommendation: Every effort should be made to comply with the residual receipts requirement to make deposits into the account within 60 days following the end of the fiscal year or request waivers by the due date. Views of Responsible Officials and Planned Corrective Actions: Every effort will be made to establish and implement controls to assure that deposits are made within the 60 day allotted period.