Finding Text
Criteria: HUD guidelines require cash to be maintained in financial institutions, which meet minimum Government National Mortgage Association (GNMA) ratings, when balances exceed federal insurance limits. Condition: The Organization maintains cash balances in excess of federally insured limits in a financial institution that does not meet HUD guidelines. Questioned Costs: None. Context: The cash balance at December 31, 2025 was approximately $1,400,000, held in two financial institutions, one of which had an approximate balance of $1,200,000, which exceeded federal insurance limits by approximately $950,000. Effect: No negative effect was discovered during the audit. Cause: The Organization's cash balances held at two financial institutions exceed the federal insurance limits. Repeat Finding: Yes, prior year finding 2024-001. Recommendation: The Organization should transfer all funds to a financial institution that meets HUD guidelines.