Finding Text
Finding 2025-001 Significant Deficiency Submission of surplus cash to the residual receipt account Criteria: In accordance with HUD Multifamily programs and the Projects HUD Regulatory Agreement under Section 207 the Project is required to submit any surplus cash within sixty-days of year end. Conditiion: During our audit, we identified that the Project did not deposit its surplus cash within the required deadline for the years 2025 and 2024. This resulted in non-compliance with the established financial controls and reporting requirements. The delay in deposit could have impacted the Project's compliance with Major Federal Award Programs. Cause: The Project's internal control procedures did not ensure that surplus cash deposits were made within the required timeframe. Effect: The Project is in noncompliance with the specific requirements of its HUD Regulatory Agreement. Identification of Repeat Finding: 2024-001 Recommendation: Management should implement stronger internal controls to ensure surplus cash deposits are made in accordance with the required deadlines. This may include setting up automated reminders, improving oversight, or assigning clear responsibilities to ensure compliance. Views of Responsible Officials and Planned Corrective Actions: Management has reviewed the audit finding and acknowledges the delay in depositing surplus cash. Management has submitted a request to HUD to retain the surplus cash for future capital improvements to the property.