Finding Text
FINDINGS - MAJOR FEDERAL AWARD PROGRAM AUDIT (CONTINUED) Department of Housing and Urban Development Finding, 2025-003: Major Programs: Flexible Subsidy Assistance Loan and Section 8 Project-Based Cluster - Section 8 Housing Assistance Payments Program, Federal Assistance Listing Number 14.195 STATEMENT OF CONDITION Payments on the Flexible Subsidy Assistance Loan are to be made from surplus cash. CRITERIA The Project’s Flexible Subsidy Assistance Loan requires payments of principal and interest to be made only from surplus cash. EFFECT OF CONDITION A loan payment with the Project’s surplus cash amount of $9,168 for the year ended December 31, 2024, was not made and was instead deposited into the Project’s residual receipts account. CONTEXT The Project’s surplus cash amount calculated for the year ended December 31, 2024, was required to be paid towards the Flexible Subsidy Assistance Loan. CAUSE OF CONDITION The required Flexible Subsidy Assistance Loan payment was not made with the surplus cash from the year ended December 31, 2024. The Project deposited the surplus cash of $9,168 into the residual receipts account due to a misunderstanding of the loan requirements. RECOMMENDATION The auditor recommends the Project contact HUD regarding the surplus cash that was deposited into the residual receipts account and not paid towards the loan. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS The Project will be contacting HUD regarding the surplus cash that was deposited into the residual receipts account and not paid towards the loan.