Finding Text
Condition: The Organization has not deposited residual receipts reserve account funds into an account insured by the Federal Deposit Insurance Corporation (FDIC). Rather, such funds are deposited in a cash account of a large brokerage firm and are insured by the Securities Investor Protection Corporation (SIPC), which is not a government agency. Criteria: As required by the regulatory agreement, the Organization is required to establish this account at a financial institution covered under the FDIC program. Cause: During the year ended June 30, 2025, the residual receipts reserve account funds invested in an FDIC Insured certificate of deposit matured and were not re invested (either in an FDIC Insured certificate of deposit or other FDIC Insured investments). Effect: FDIC coverage is meant to act as protection to both the Organization and HUD for the account balances, and the Organization may be susceptible to risk if the account is not properly insured. Questioned Costs: $19,657 Auditor's Recommendation: The Organization should transfer this balance to a participating financial institution. Views of Responsible Officials and Planned Corrective Actions: During the year ended June 30, 2026, the Organization plans to transfer the residual receipts reserve account funds to an FDIC Insured certificate of deposit.