Finding 1205757 (2025-001)

Finding No. 2025-001 – Compliance over Timely Deposit of Annual Residual Receipts Finding #: 2025-001 Assistance Listing #: 14.157 Program (or Cluster) Name: Section 202 Supportive Housing for Elderly Persons Compliance Requirement: Residual receipts account Project Title: Development Loan Agreement Award Date: November 1, 2004 Award Period of Performance: November 2004 to October 2046 Federal Agency: U.S. Department of Housing and Urban Development Project Title: Project Rental Assistance Contract Award Date: November 1, 2006 Award Period of Performance: November 2006 to November 2028 Federal Agency: U.S. Department of Housing and Urban Development Criteria or specific requirement: The U.S. Department of Housing and Urban Development (HUD) regulations require the any surplus cash in the project funds account at the end of the fiscal year be deposited to the residual receipts cash account within 90 days following the year end. Condition: When performing procedures over residual receipts deposits, the auditor noted that the Project had surplus cash of $52,143 available for the fiscal year ended June 30, 2024. However, there were no deposits to the residual receipts account was made within 90 days after June 30, 2024. Context: The annual audit for the fiscal year ended Juen 30, 2024 was issued in October 2024, and the surplus cash was deposited into the residual receipts account in March 2025. Questioned costs: None. Effect: The Project did not comply with the HUD residual receipts compliance requirement. Cause: The final amount for the deposit of residual receipts was communicated internally; however, the deposit was not finalized. Jubilee received a notice from HUD that the receipt had not been received and immediately sent out the deposit as soon as the oversight came to light. Repeat finding from prior year: No. Recommendation: Jubilee should reevaluate its policies and procedures to ensure that required residual receipts deposits are made timely each year. Views of responsible officials and planned corrective actions: This was an isolated incident for the fiscal year ending June 30, 2024. As soon as the oversight was identified, management took action to remedy it. In addition, management has updated our process to send out residual receipts deposits once management has a draft audit completed, versus waiting until after the final audit to ensure deposits are made before the 9/30 deadline. If there are any changes post audit completion, they should be immaterial and would be deposited as soon as management have final numbers. This will ensure timely deposits. Confirmation of deposits is tracked and will be followed up on regularly to ensure management does not miss the residual receipts distributions from surplus cash in the future. Whether sampling was statistically valid: Sampling was not statistically valid for this finding.