Finding Text
Finding reference number: #2025-001 CFDA title and number (Federal award identification number and year): Supportive Housing for the Elderly Section No. 14.157 (122-EE078-WAH-NP and 1996) Auditor non-compliance code: B – Failure to make residual receipts deposit Universe population size: The universe population size is not applicable to the finding. Sample size information: The sample size information is not applicable to the finding. Name of Federal agency: U.S. Department of Housing and Urban Development Pass-through entity: N/A Questioned costs: $44,817 Statement of Condition #2025-001: During 2025, the Corporation did make its required residual receipts deposit of $44,817. In addition, the Corporation made a payment on the CRA loan of $44,817 without HUD approval. Criteria: Pursuant to the Regulatory Agreement, the Corporation is required to deposit its surplus cash into a residual receipts account within 90 days after year-end. Additionally, pursuant to the Regulatory Agreement, disbursements of the residual receipts fund may be made only after receiving consent in writing from HUD. Effect: The Corporation is not in compliance with the Regulatory Agreement. Cause: The Corporation received an invoice for payment on the CRA loan equal to the amount of surplus cash as calculated at December 31, 2024. Rather than making the required deposit into the residual receipts reserve and then requesting HUD approve the withdrawal on HUD Form 9250, the Corporation make the CRA loan payment directly. Recommendation: The Corporation and management should deposit surplus cash into the residual receipts reserve upon receipt of the audited financial statements. Management should then seek HUD approval via HUD Form 9250 for payment on the CRA loan after the invoice is received. Management Response: The Corporation and management agree with the recommendation. No further action is required.