Finding 1165710 (2025-001)

Material Weakness Repeat Finding
Requirement
N
Questioned Costs
-
Year
2025
Accepted
2025-12-19

AI Summary

  • Core Issue: Pompei North Apartments failed to transfer surplus cash to the residual receipts account within the required 60 days after the fiscal year-end.
  • Impacted Requirements: This delay violates the HUD Regulatory Agreement regarding the management of residual receipts.
  • Recommended Follow-Up: Ensure timely deposits of residual receipts within the 60-day deadline to maintain compliance with HUD regulations.

Finding Text

Finding 2025-001 (Repeat Finding): Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects, Federal Assistance Listing Number 14.155 Criteria: Pompei North Apartments is required to determine surplus cash requirements annually. If surplus cash exists, the amount must be transferred from the operating account to the residual receipts account within 60 days of the Project’s fiscal year-end. Condition: The required deposit of $139,991 for the year ended March 31, 2024 was made on June 27, 2024, which is after the 60 day deadline. Context: We reviewed the residual receipts deposits during the year. Cause: Pompei North Apartments’ surplus cash was not performed timely. Effect: Pompei North Apartments is not in compliance with the HUD Regulatory Agreement as it relates to the management of the residual receipts reserve. Recommendation: Pompei North Apartments should ensure residual receipts are made within 60 days of year-end in accordance with the HUD Regulatory Agreement. Views of management and planned corrective action: Pompei North Apartments agrees with the finding and the required payment was made on June 27, 2024.

Corrective Action Plan

U.S. Department of Housing and Urban Development Pompei Housing Development Fund Company, Inc. (Pompei North Apartments), HUD Project No. 014-11249 respectfully submits the following corrective action plan for the year ended March 31, 2025. Name and address of independent public accounting firm: Bonadio & Co., LLP, 432 North Franklin Street #60, Syracuse, New York 13204 Audit period: April 1, 2024 – March 31, 2025 The finding from the 2025 schedule of findings and questioned costs is discussed below. The finding is numbered consistently with the number assigned in the schedule. FINDINGS – FINANCIAL STATEMENT AUDIT None FINDINGS – FEDERAL AWARD PROGRAM AUDIT Finding 2025-001: Mortgage Insurance for the Purchase or Refinancing of Existing Multifamily Housing Projects, Federal Assistance Listing Number 14.155 Condition: The required deposit of $139,991 for the year ended March 31, 2024 was made after the 60 day deadline. Recommendation: Pompei North Apartments should ensure residual receipts are made within 60 days of year-end in accordance with the HUD Regulatory Agreement. Action Taken: The required deposit was made on June 27, 2024. Completion Date: June 27, 2024 Name of Contact Person Responsible for Corrective Action: John Lutz, Vice President of Finance, (315) 424-1821.

Categories

HUD Housing Programs

Other Findings in this Audit

  • 1165711 2025-002
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
14.155 MORTGAGE INSURANCE FOR THE PURCHASE OR REFINANCING OF EXISTING MULTIFAMILY HOUSING PROJECTS $1.39M
14.195 PROJECT-BASED RENTAL ASSISTANCE (PBRA) $465,890